Northeast Community School District v. Easton Valley Community School District
2014 Iowa Sup. LEXIS 113
| Iowa | 2014Background
- Three districts Northeast Community, East Central Community, and Preston merged to form Easton Valley.
- Northeast and East Central entered a one-way whole grade sharing agreement under Iowa law before the reorganization.
- The Agreement required East Central to send grades 7–12 students to Northeast, with East Central providing transportation and paying portions of tuition and salary supplements; Northeast provided the hosting and facilities support.
- The reorganization petition proceeded, creating Easton Valley; after reorganization, Easton’s board sent notices claiming the Agreement was null because Easton was not a party.
- Northeast filed suit seeking to bind Easton to the Agreement; the district court granted summary judgment for Easton, finding no binding effect.
- Northeast appeals, arguing the successor-corporation liability principle binds Easton to the pre-merger contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Easton can be bound by the pre-merger Agreement | Northeast: Easton as successor bound by East Central's contract. | Easton: East Central could not bind Easton by contract. | Yes; Easton is bound; reversal and remand. |
Key Cases Cited
- Pancratz v. Monsanto, Co., 547 N.W.2d 198 (Iowa 1996) (liability assumptions and mergers/transactions)
- Ruthven Consol. Sch. Dist. v. Emmetsburg Cmty. Sch. Dist., 382 N.W.2d 136 (Iowa 1986) (definition of 'school districts affected' in reorganizations)
- Allis-Chalmers Corp. v. Emmet Cnty. Council of Gov’ts, 355 N.W.2d 586 (Iowa 1984) (contract liability of a municipal-like entity; general rule)
- Marco Dev. Corp. v. City of Cedar Falls, 473 N.W.2d 41 (Iowa 1991) (corporate contract liability; municipal contraction doctrine)
- In re Estate of Voss, 553 N.W.2d 878 (Iowa 1996) (affirmative authority and appellate procedure on summary judgment)
- Johnston Equip. Corp. v. Indus. Indem., 489 N.W.2d 13 (Iowa 1992) (affirmative defense/alternative grounds on appeal)
- Chauffeurs, Teamsters & Helpers, Local Union No. 238 v. Iowa Civil Rights Comm’n, 394 N.W.2d 375 (Iowa 1986) (reviewing court may decide issues fully argued)