Ronald Dwight Kunde v. Estate of Arthur D. Bowman and Diane Engelkins
920 N.W.2d 803
| Iowa | 2018Background
- Kunde leased Bowman’s 102-acre farm (2008–2013 leases) and made substantial improvements (tile, fertilizer, converting acreage) costing about $52,000. Leases allocated all input/expense costs to tenant and provided that tenant-made improvements would inure to landlord and required landlord consent for expenses.
- Kunde alleges Bowman orally promised an option to sell the land to Kunde at $3,000/acre, and that Kunde made improvements in reliance on that promise.
- Kunde sued after Bowman’s heirs sold the farm, asserting breach of an option contract; alternatively he pleaded promissory estoppel, unjust enrichment, and quantum meruit.
- A jury awarded Kunde $52,000 on the contract claim, but the district court granted a directed verdict for defendants on the contract claim and later granted summary judgment to defendants on the equitable claims.
- The Iowa Supreme Court affirmed summary judgment for defendants on unjust enrichment and quantum meruit but reversed summary judgment on promissory estoppel, holding Kunde presented a triable claim that he relied on a clear and definite promise of an option.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unjust enrichment/quantum meruit permits recovery for improvements despite an express lease allocating improvement costs | Kunde: implied contract recovery is allowed for matters not fully covered by the express lease | Bowman: express lease provisions allocating costs and treating improvements as landlord property bar implied-contract recovery | Held: No—express contract covering improvements precludes unjust enrichment/quantum meruit recovery |
| Whether promissory estoppel is barred by existence of the farm leases | Kunde: option promise is separable from the lease; reliance on the option can support promissory estoppel | Bowman: leases (and prior rulings finding no enforceable option contract) preclude estoppel relief | Held: Promissory estoppel is not necessarily barred by the lease; option and lease can be separate and Kunde raised a triable reliance issue |
| Whether promissory estoppel requires a "clear and definite agreement" or only a "clear and definite promise" | Kunde: statute-of-frauds/contract-formalities aside, estoppel requires a promise and detrimental reliance, not full agreement | Bowman: Iowa caselaw requires a clear and definite agreement; absence of an enforceable agreement defeats estoppel | Held: A "clear and definite promise" plus reasonable, detrimental reliance suffices; no requirement that a complete enforceable agreement exist |
| Whether summary judgment was proper on the promissory estoppel claim | Kunde: factual disputes on promise and reliance preclude summary judgment | Bowman: no clear promise or reasonable reliance as a matter of law | Held: Reversed summary judgment — material factual disputes remain on promise and reliance requiring further proceedings |
Key Cases Cited
- Mason v. Vision Iowa Bd., 700 N.W.2d 349 (Iowa 2005) (summary judgment standard; errors of law reviewed de novo)
- Murtha v. Cahalan, 745 N.W.2d 711 (Iowa 2008) (evidence viewed in favor of nonmoving party on summary judgment)
- Chariton Feed & Grain, Inc. v. Harder, 369 N.W.2d 777 (Iowa 1985) (an express contract and implied contract cannot coexist as to same subject matter)
- Legg v. W. Bank, 873 N.W.2d 763 (Iowa 2016) (reinforcing that express contract bars implied-contract recovery on same subject)
- Schoff v. Combined Ins. Co. of Am., 604 N.W.2d 43 (Iowa 1999) (formulation of promissory estoppel elements emphasizing a "clear and definite promise" and reliance)
- Kolkman v. Roth, 656 N.W.2d 148 (Iowa 2003) (promissory estoppel protects reliance interests and can be an exception to statute of frauds)
- McKee v. Isle of Capri Casinos, Inc., 864 N.W.2d 518 (Iowa 2015) (promissory estoppel claim fails if plaintiff cannot show detrimental reliance)