Berwyn Joe Reihe v. Midwest Viking, Inc., D/B/A Midwest Viking Trucking, and Great West Casualty Co.
17-0214
| Iowa Ct. App. | Nov 8, 2017Background
- Berwyn Reihe sustained a compensable workplace injury in Sept. 2013 while employed by Midwest Viking; Great West was the insurer.
- Midwest sent a written settlement offer on Feb. 27, 2015 calculating credit for benefits paid beginning June 3, 2014; Reihe accepted.
- The executed written compromise settlement (March 2015) mistakenly credited Midwest only from March 5, 2015, not June 3, 2014. The commissioner approved the written agreement and Midwest paid Reihe $51,350.15.
- Midwest moved for a nunc pro tunc correction before the commissioner; the motion was denied for lack of jurisdiction (parties were not informed until later).
- Reihe filed in district court under Iowa Code § 86.42 to convert the unpaid portion to judgment; Midwest counterclaimed for reformation of the settlement contract.
- The district court found a scrivener’s error, granted reformation, and remanded to the commissioner for a nunc pro tunc correction; Reihe appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether extrinsic evidence could be considered for reformation | Reihe: Written agreement is unambiguous; extrinsic evidence shouldn't be used to alter it | Midwest: Parol/extrinsic evidence is admissible in reformation actions to show true agreement | Court: Extrinsic evidence admissible in reformation; district court properly considered it |
| Whether reformation requires mutual mistake or is barred as unilateral | Reihe: Mistake was unilateral; reformation improper | Midwest: Mistake was a scrivener’s error reflecting parties’ true intent | Court: Scrivener’s mistake proven by clear, satisfactory, convincing evidence; reformation appropriate |
| Whether district court had authority/jurisdiction to grant reformation | Reihe: Relief under § 86.42 limits court authority; district court exceeded scope | Midwest: Equity jurisdiction exists for reformation; commissioner lacks equitable jurisdiction | Court: District court has equitable jurisdiction to reform the instrument and did not exceed authority |
| Whether judicial estoppel or res judicata bars reformation | Reihe: Prior approval / conduct estops reformation | Midwest: No intentional inconsistency; error not an attempt to mislead | Court: Judicial estoppel inapplicable; reformation not barred |
| Whether remand to commissioner for nunc pro tunc correction was appropriate remedy | Reihe: remand and nunc pro tunc correction proper | Midwest: sought reformation in district court; commissioner approval is separate | Court: Nunc pro tunc relief was inappropriate; court reversed remand and directed district court to enter an order reforming the agreement and voiding the commissioner's prior approval, then instructing commissioner to consider approval of the reformed agreement |
| Attorney fees | Reihe: requests fees if he prevails | Midwest: opposes | Court: Reihe did not prevail on appeal; no fees awarded |
Key Cases Cited
- Shirley v. Pothast, 508 N.W.2d 712 (Iowa 1993) (settlement agreements treated as contracts)
- Huber v. Hovey, 501 N.W.2d 53 (Iowa 1993) (contract principles govern enforcement)
- Pillsbury Co. v. Wells Dairy, Inc., 752 N.W.2d 430 (Iowa 2008) (distinguishes interpretation and construction; intent controls)
- Peak v. Adams, 799 N.W.2d 535 (Iowa 2011) (cardinal rule: intent of parties controls contract construction)
- Nationwide Agribusiness Ins. Co. v. PGI Int’l, 882 N.W.2d 512 (Iowa Ct. App. 2016) (parol evidence rule and reformation; focus on whether instrument reflects real agreement)
- Montgomery Props. Corp. v. Econ. Forms Corp., 305 N.W.2d 470 (Iowa 1981) (parol evidence admissible in reformation actions)
- Johnston Equip. Corp. v. Industrial Indem., 489 N.W.2d 13 (Iowa 1992) (extrinsic evidence admissible to prove parties’ intent for reformation)
- Gouge v. McNamara, 586 N.W.2d 710 (Iowa Ct. App. 1998) (unilateral mistake generally not ground for reformation; exception for scrivener’s error)
- First Nat. Bank in Sioux City v. Curran, 206 N.W.2d 317 (Iowa 1973) (reformation is equitable relief)
- Vennerberg Farms, Inc. v. IGF Ins. Co., 405 N.W.2d 810 (Iowa 1987) (judicial estoppel prevents intentional inconsistency)
- Headley v. Headley, 172 N.W.2d 104 (Iowa 1969) (nunc pro tunc cannot correct litigants’ mistakes)
- Hosteng Concrete & Gravel, Inc. v. Tullar, 524 N.W.2d 445 (Iowa Ct. App. 1994) (equity court may grant reformation at its discretion)