David Wegner and Kelly Wegner v. Bert Schauer and Diana Schauer
17-0583
| Iowa Ct. App. | Oct 25, 2017Background
- David and Kelly Wegner owned two adjacent residential properties (955 and 965 E. Lake Shore Dr.) and agreed to sell them to Bert and Diana Schauer after months of negotiations.
- The parties met on or about July 8, 2015 and signed a written purchase agreement showing a $387,500 price, $5,000 earnest money deposit, and financing terms including a remainder on contract and a handwritten note about a balloon payment date.
- The Schauers provided $5,000 earnest money but later withdrew, saying they never agreed to the balloon term and expected a finalized contract later; their niece’s sale fell through and they did not close.
- The Wegners sued for breach of the purchase agreement; the Schauers counterclaimed (fraudulent misrepresentation, breach, tortious interference) and sought return of earnest money.
- The district court found there was never mutual assent sufficient to form an enforceable contract, considered extrinsic evidence of negotiations, rejected the Schauers’ fraud counterclaims, and ordered return of the $5,000 earnest money; the Wegners appealed.
Issues
| Issue | Plaintiff's Argument (Wegner) | Defendant's Argument (Schauer) | Held |
|---|---|---|---|
| Whether a valid, enforceable real-estate contract was formed | The signed writing (with signatures and terms) constituted a final, integrated contract showing mutual assent | The signed document was not final — parties signed a temporary writing to help Wegners secure financing and expected a later finalized contract; Schauers never agreed to balloon term | Court held no contract was formed due to lack of mutual assent; substantial evidence supports district court findings |
| Whether extrinsic (parol) evidence could be considered to show agreement status | Parol evidence should not vary an integrated written contract; Wegners objected to extrinsic reliance | Extrinsic evidence admissible to show writing was not integrated or final and thus no contract was formed | Court allowed consideration of extrinsic evidence here (formation question); Wegners’ failure to preserve objections waived the challenge; in any event extrinsic evidence properly considered |
| Whether failure to provide required disclosure rendered agreement unenforceable | Wegners did not rely on disclosure issue to void the contract | Schauers argued Wegners’ nondisclosure made agreement unenforceable | District court found Wegners’ failure to provide disclosure made agreement unenforceable (one of the bases supporting lack of enforceability) |
| Whether Schauers were entitled to return of earnest money | Wegners sought enforcement (retain deposit) | Schauers sought return after contract failure and alleged counterclaims | Court ordered return of the $5,000 earnest money to Schauers |
Key Cases Cited
- Iowa Mortg. Ctr., L.L.C. v. Baccam, 841 N.W.2d 107 (Iowa 2013) (standard of appellate review)
- Land O’Lakes, Inc. v. Hanig, 610 N.W.2d 518 (Iowa 2000) (substantial-evidence review of district court findings)
- Van Oort Constr. Co. v. Nuckoll’s Concrete Serv., Inc., 599 N.W.2d 684 (Iowa 1999) (substantial-evidence standard)
- Falczynski v. Amoco Oil Co., 533 N.W.2d 226 (Iowa 1995) (definition of substantial evidence)
- Schaer v. Webster County, 644 N.W.2d 327 (Iowa 2002) (mutual assent requirement for contract formation)
- Seastrom v. Farm Bureau Life Ins. Co., 601 N.W.2d 339 (Iowa 1999) (definiteness of contract terms)
- Montgomery Props. Corp. v. Econ. Forms Corp., 305 N.W.2d 470 (Iowa 1981) (parol evidence admissible to show writing is not integrated)
- In re Eickman Estate, 291 N.W.2d 308 (Iowa 1980) (use of extrinsic evidence when integration is disputed)
- Top of Iowa Coop. v. Sime Farms, Inc., 608 N.W.2d 454 (Iowa 2000) (error preservation rules for parol-evidence issues)
- Raper v. State, 688 N.W.2d 29 (Iowa 2004) (appellate courts defer to district court fact-findings)