Cheryl Albaugh v. The Reserve, 930 N.W.2d 676

Background

Shirley Voumard (through daughter and POA Cheryl Albaugh) paid a $64,975 entrance fee and $63,557 supplemental amount to join The Reserve, a nonprofit member‑owned senior adult congregate living facility governed by Iowa Code chapter 523D.
The written membership/application agreement disclosed the fees were generally nonrefundable, tied recovery to the member’s ability to transfer/assign membership, and allowed forfeiture on default; it also appointed Albaugh to receive notices under chapter 523D.
Voumard moved out in 2014 after becoming unable to live independently; she did not transfer or sell the membership interest, the Reserve continued billing, declared default, and refused to refund the entrance/supplemental amounts.
Albaugh sued asserting (inter alia) that the entrance/supplemental fees were unlawful rental deposits under the Iowa Uniform Residential Landlord and Tenant Act (IURLTA, ch. 562A), plus claims for consumer fraud, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, impossibility/frustration, and unconscionability.
The district court granted summary judgment for the Reserve, concluding chapter 523D’s entrance‑fee regime is not subject to the IURLTA and that Albaugh’s other claims lacked factual or legal support; the Iowa Supreme Court affirmed the judgment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Applicability of IURLTA to entrance/supplemental fees	Fees functioned as security/rental deposits and therefore must be treated under ch. 562A deposit rules (refunds, limits).	Chapter 523D separately authorizes entrance fees for retirement facilities; those fees are a distinct statutory species and not rental deposits under IURLTA.	Fees authorized by ch. 523D are not rental deposits under the IURLTA; IURLTA inapplicable to those chapter 523D fees.
Consumer fraud (Iowa Code ch. 714H)	The Reserve’s later marketing, price reductions and leasing effectively defrauded members who expected refunds or stable fee structure.	Agreement expressly disclosed nonrefundability/transfer conditions; no evidence Reserve knew its practices were unfair or intended deception.	Summary judgment for Reserve: no evidence of deceptive/unfair practice knowing it was unfair; contract disclosures undermine claim.
Breach of fiduciary duty	Reserve owed fiduciary duty to protect members’ fee interests because members relied on it to preserve membership value.	Relationship was an arms‑length contractual deal; no indicia of trust, dominance, or special influence establishing fiduciary status.	No fiduciary relationship as a matter of law; summary judgment for Reserve.
Implied covenant / Unconscionability	Reserve’s actions (price cuts, leasing) defeated members’ expectations and agreement terms are one‑sided/unconscionable.	The contract contains explicit terms limiting recovery and warning of no guarantee; member negotiated and assented; statute (ch. 523D) authorizes such fees.	No breach of implied covenant (no contract term to attach) and no evidence of unconscionability at formation; summary judgment for Reserve.

Key Cases Cited

Jahnke v. Deere & Co., 912 N.W.2d 136 (Iowa 2018) (standard and review of summary judgment)
Homan v. Branstad, 887 N.W.2d 153 (Iowa 2016) (statutory interpretation principles)
Citizens' Aide/Ombudsman v. Miller, 543 N.W.2d 899 (Iowa 1996) (rules for reconciling overlapping statutes)
Cemen Tech, Inc. v. Three D Indus., L.L.C., 753 N.W.2d 1 (Iowa 2008) (existence of fiduciary duty depends on facts)
Weltzin v. Cobank, ACB, 633 N.W.2d 290 (Iowa 2001) (factors indicating fiduciary relationship)
Alta Vista Properties, LLC v. Mauer Vision Ctr., PC, 855 N.W.2d 722 (Iowa 2014) (implied covenant of good faith and fair dealing)
C & J Vantage Leasing Co. v. Wolfe, 795 N.W.2d 65 (Iowa 2011) (unconscionability framework)
DeStefano v. Apts. Downtown, Inc., 879 N.W.2d 155 (Iowa 2016) (distinction re: refundable vs. nonrefundable fees under landlord‑tenant law)