Nationwide Agribusiness Insurance Company, as Subrogee of Farmers Cooperative Company v. Pgi International, Squibb-Taylor, Inc., Cox Manufacturing Company D/B/A Dalton Ag Products, Inc., and Cnh Corp. A/K/A Cnh American, LLC A/S/O Dmi, Inc.
882 N.W.2d 512
| Iowa Ct. App. | 2016Background
- In October 2011 a farm accident killed Richard Shaw and injured his son Michael; Farmers Cooperative Company (FCC) and its insurer Nationwide paid ~ $4 million to settle claims in November 2012 and obtained releases from the Shaws. Nationwide sued several product manufacturers/distributors (Appellees) in 2013 seeking contribution as subrogee of FCC.
- Appellees moved for summary judgment arguing the Shaws’ releases did not discharge third‑party liability, precluding Nationwide’s contribution claim. The district court granted summary judgment for Appellees; Nationwide appealed.
- The releases expressly released FCC, Nationwide, and related parties (“Settling Parties”) and contained no language identifying or discharging the Appellees or other third parties.
- Iowa law (Iowa Code § 668.7 and Aid v. Davis County) requires identification of tortfeasors to be discharged by a release, though identification may be sufficient without explicit naming.
- Nationwide offered extrinsic evidence (affidavits, settlement notes, amended releases) claiming the parties intended to release the Appellees and alternatively sought reformation of the releases to reflect that intent.
- The court affirmed summary judgment that the written releases, on their face, did not discharge the Appellees, but reversed the grant of summary judgment on Nationwide’s reformation claim because genuine factual disputes exist about the parties’ mutual intent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the written releases discharged Appellees’ liability and thus barred contribution | Releases unambiguously discharged all claims arising from the accident, including against Appellees | Releases specifically identify only FCC/Nationwide (Settling Parties); Appellees not identified and therefore not discharged | Release is unambiguous on its face and does not discharge Appellees; affirmed |
| Whether extrinsic evidence may be used to show the releases discharged Appellees | Extrinsic evidence from parties/mediator shows intent to release Appellees | Parol evidence cannot vary an unambiguous integrated writing to add discharged third parties | Extrinsic evidence cannot be used to alter an unambiguous release to discharge third parties; affirmed as to interpretation |
| Whether an ambiguity exists in the releases requiring consideration of extrinsic evidence | If release ambiguous, extrinsic evidence should be considered to determine scope | Release is not ambiguous; language is clear and excludes third parties | Court found releases unambiguous; did not permit extrinsic evidence to vary the release for interpretation; affirmed on ambiguity issue |
| Whether the releases should be reformed to reflect the parties’ true intent (mutual mistake) | Reformation is proper: affidavits and settlement records show mutual intent to preserve claims against manufacturers; relief requested to allow contribution suit | No clear, convincing proof of a prior mutual agreement to discharge Appellees; district court properly found no basis for reformation | Reversed as to reformation: genuine issue of material fact exists about mutual intent, so summary judgment on reformation improper; remanded |
Key Cases Cited
- Aid Ins. Co. v. Davis Cty., 426 N.W.2d 631 (Iowa 1988) (release must sufficiently identify third‑party tortfeasors to discharge their liability)
- Peak v. Adams, 799 N.W.2d 535 (Iowa 2011) (contract interpretation principles; extrinsic evidence and intent)
- Pillsbury Co. v. Wells Dairy, Inc., 752 N.W.2d 430 (Iowa 2008) (interpretation and construction of contracts as legal questions)
- Wellman Sav. Bank v. Adams, 454 N.W.2d 852 (Iowa 1990) (parol evidence inadmissible to vary unambiguous written agreements)
- Kufer v. Carson, 230 N.W.2d 500 (Iowa 1975) (standard for reformation: clear, satisfactory, and convincing proof of mutual mistake)