                   IN THE COURT OF APPEALS OF IOWA

                                   No. 18-1428
                            Filed September 25, 2019


JACQUELINE GEIGER and BRUCE TRACY,
    Plaintiffs-Appellants,

vs.

PEOPLES TRUST AND SAVINGS BANK, CHRIS GOERDT and COUNTRY
BANCORPORATION,
     Defendants-Appellees.
________________________________________________________________


      Appeal from the Iowa District Court for Washington County, Joel D. Yates,

Judge.



      Plaintiffs appeal from the district court’s grant of defendants’ motions for

summary judgment on their claims against a bank and bank president for

fraudulent misrepresentation and interference with contract. AFFIRMED.



      Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellants.

      Matthew Preston of Brady, Preston & Gronlund PC, Cedar Rapids, for

appellees Peoples Trust and Savings Bank and Country Bancorporation.

      Raymond R. Rinkol Jr. of Bradley & Riley PC, Cedar Rapids, for appellee

Chris Goerdt.



      Heard by Doyle, P.J., Blane, S.J.* and Lloyd, S.J.*

      *Senior judges assigned by order pursuant to Iowa Code section 602.9206 (2019).
                                         2


BLANE, Senior Judge.

       Plaintiffs brought an action for fraudulent misrepresentation and

interference with contract when a bank allegedly breached an agreement to lend

them money. The plaintiffs claimed this damaged their limousine business and a

yet-to-be-developed wedding venue.       The district court granted the bank, its

holding company, and the bank’s former president’s motions for summary

judgment because the plaintiffs’ claims were barred by the statutes of frauds found

in Iowa Code sections 535.17 and 622.32 (2017) and because it concluded the

plaintiffs could not prove damages. Plaintiffs appeal contending the district court

misapplied these statutes or an unsigned document authored by the bank

president takes their claims outside the statutes of frauds.

       We conclude that plaintiffs’ claims were a greater stretch than one of their

limousines and that the district court correctly granted defendants summary

judgment.

   I. BACKGROUND FACTS AND PROCEEDINGS

       The plaintiffs, Jacqueline Geiger and Bruce Tracy, allege Peoples Trust and

Savings Bank (Peoples Bank) and its then-president, Chris Goerdt, made either a

written or oral agreement to lend them money to develop property in Illinois into a

wedding venue and event center, to be named Prairie Rose Event Center.

Peoples Bank has its headquarters in Washington County, Iowa.

       Tracy once operated a long-held family farm in Illinois and currently

operates a limousine business, Classic Thunder Limousine, in Riverside, Iowa.

Tracy has “unresolved credit issues” that prevent him from obtaining a loan,
                                          3


including tax liens, bankruptcy, and repossessions. Tracy had not filed personal

or business income tax returns for seventeen years.

       Tracy had sold his Illinois farm to his friend and investor, William Reichow.

Reichow, Tracy, and Geiger agreed that Geiger should take out a loan to purchase

the farm from Reichow, which Geiger and Tracy could then, with improvements,

operate as the events center. Tracy was to run the financial end of the business.

Geiger would hold the title in the farm and be named in all business documents.

She would also run the operations side of the business.           Meanwhile, Geiger

purchased Classic Thunder, which Tracy continued to operate.

       Goerdt, president of Peoples Bank, learned of the planned event center in

2014. He became familiar with Geiger, Tracy, and Reichow. Tracy testified that

in August 2015, Goerdt called him and Geiger to his office at the bank and

presented them with a document labeled, “Easy & Simple Solution” (ESS). The

document, handwritten on lined notebook paper, appears to set out a plan of action

for refinancing the farm and Classic Thunder. Tracy testified Goerdt induced them

to take out the loans for the farm land and Classic Thunder by saying they were

“recommend[ed] from the FDIC” (Federal Deposit Insurance Corporation) and

“already ha[d] the concurrence . . . [of] the bank board.” Later on, in interrogatories

and depositions, Geiger and Tracy reported they understood the document and

their conversation with Goerdt as an agreement for Peoples Bank to lend them

money to develop Prairie Rose Events Center.

       Geiger and Tracy executed two promissory notes with Peoples Bank. One

note for $240,000 was against the debt in Classic Thunder and named Tracy as

the borrower, even though he no longer had an interest in the business. With a
                                          4


second note of $252,000, Geiger bought the farm from Reichow. Geiger used the

farm as collateral for the second note. Tracy was no longer owner of either the

limousine business or the farm.1

       In December 2015, Goerdt resigned his position at the bank.              In his

resignation letter, he pointed to some organizational and management complaints

with the bank’s holding company, Country Bancorporation. In July 2016, Peoples

Bank sent Tracy an acceleration notice telling him he was in default on the loans

and demanding full payment. When it also became clear to Geiger and Tracy they

were not going to receive a loan to develop the farm into the Prairie Rose Event

Center, they filed a petition at law alleging fraudulent misrepresentation and

interference with existing and prospective contracts and seeking a temporary

injunction to prohibit Peoples Bank from initiating any proceedings against them in

Illinois on the defaulted notes.

       Geiger and Tracy specifically claimed the ESS document and the

conversation they had with Goerdt constitute a written and oral agreement for the

bank to lend them enough money to fund the development of Prairie Rose. They

joined Country Bancorporation as a defendant based on negligence in hiring,

supervising, and retaining Goerdt at Peoples Bank. As damages, Geiger and

Tracy alleged an “offset or judgment for any amount owed to Peoples” from the




1
 In his deposition, Tracy admitted he has no claim in this case related to Prairie Rose
because he does not own the land or the business. He would not, therefore, claim any
damages related to lost profits from Prairie Rose due to the bank’s claimed failure to
provide funding. He was only the business manager for Geiger, the owner. Tracy’s
understanding was that his only involvement in the case was that the bank named him the
borrower in the loan regarding Classic Thunder.
                                           5


defaulted loans, lost profits from the unfinished Prairie Rose project, and lost profits

from the limousine business.

       The defendants filed for summary judgment, asserting several affirmative

defenses. Following a hearing, the trial court granted Goerdt and Peoples Bank’s

motions for summary judgment, which the court found rendered the claims against

Country Bancorporation moot. Although Geiger and Tracy sought enlargement of

the findings, the district court denied their motion. Geiger and Tracy appeal.

   II. SCOPE AND STANDARD OF REVIEW

       “Our review of a district court ruling on a motion for summary judgment is

for correction of errors at law.” Albaugh v. The Reserve, 930 N.W.2d 676, 682

(Iowa 2019). “Summary judgment is proper when the moving party has shown

there is no genuine issue as to any material fact and the moving party is entitled

to judgment as a matter of law.” Id. (quotations and citations omitted). There is a

“genuine issue of material fact” if “the evidence is such that a reasonable jury could

return a verdict for the nonmoving party.” Fees v. Mut. Fire & Auto. Ins. Co., 490

N.W.2d 55, 57 (Iowa 1992). “We view the evidence in the light most favorable to

the nonmoving party.” UE Local 893/IUP v. State, 928 N.W.2d 51, 59 (Iowa 2019)

(citation omitted). “The court must consider . . . every legitimate inference that can

be reasonably deduced from the record.” Id. (quotations and citations omitted).

   III. ANALYSIS

       On the motions for summary judgment, the district court found there were

no genuine issues of material fact and the defendants were entitled to judgment

on three independent grounds, each comprising a complete defense for the

defendants. Since we agree with the district court as to the two bases found in the
                                             6


statutes of frauds, we find no need to address the third ground, failure of proof of

damages.

            A. Whether the trial court correctly determined the claims were
               barred by Iowa Code sections 535.17 and 622.32.

       We start by noting the parties do not dispute Geiger was the proposed

borrower in this alleged loan transaction to fund Prairie Rose. Tracy acknowledged

in his deposition, because of his lack of ownership and his financial history, he was

not going to be named in the Prairie Rose loan or business documents.

       Turning next to the claims, we assess whether Iowa’s statute-of-frauds

provisions prevent raising the plaintiffs’ claims as torts.2         Iowa Code section

535.17(1) provides, “A credit agreement is not enforceable in contract law by way

of action or defense by any party unless a writing exists which contains all of the

material terms of the agreement and is signed by the party against whom

enforcement is sought.” The district court found, “The requirements of Iowa Code

[s]ection 535.17 have not been established.” Geiger testified the agreement was

verbal. This failed to meet the requirement that the agreement be in writing and

signed. So the court held the oral credit agreement was not enforceable.

       The district court also determined Iowa Code section 622.32(4) barred

Geiger and Tracy’s claims. That section provides, “[N]o evidence of the following

enumerated contracts is competent, unless it be in writing and signed by the party

charged or by the party’s authorized agent: . . . Those that are not to be performed



2
  We assume without deciding that “interference with contract and business” is a valid tort
claim. The plaintiffs presented no evidence of any contract allegedly interfered with, other
than their own with Peoples Bank, or business prospects they lost. Tracy testified some
members of the public had approached him about Prairie Rose hosting their event but did
not produce any contracts, agreements, invoices, estimates, or similar documentation.
                                         7


within one year from the making thereof.” In her deposition, Geiger admitted the

loan agreement could not be performed within one year from when made:

              Q: And that loan, whatever agreement there was to fulfill that
       loan was, no matter what, that was going to take place over the
       course of more than the year, correct? A: Correct.
              Q: There was no way that the understanding you had reached
       with any of these Defendants orally would be fulfilled within one year,
       am I correct? A: Correct, because it was in phases.

       On appeal, Geiger and Tracy argue sections 535.17 and 622.32 do not

apply to their tort claims, only claims and defenses in contract law.

       1. Section 622.32 performance within one year

       Dealing first with the second statute of frauds provision, Iowa Code section

622.32(4) requires the plaintiffs to produce a written and signed document as

competent evidence of the agreement existing over one year. The plaintiffs assert

a written agreement does exist—the ESS document. However, the ESS does not

mention or set out an agreement regarding Prairie Rose or contain signatures.

Therefore, it does not satisfy the section 622.32(4) requirements. The agreement

here was oral only, at best.

       Geiger and Tracy respond, “The statute does not apply to contracts which

are likely to be performed over a period of more than one year. Rather, it only

applies to contracts that will not, under any circumstances, be performable in one

year.” See Pavone v. Kirke, 801 N.W.2d 477, 491 (Iowa 2011) (“In deciding

whether a particular oral contract is governed by the performance within one year

rule, the question is not whether performance must actually be completed within a

year but whether it would be possible to perform the contract within that time frame.

Put another way, contracts of uncertain duration are simply excluded; the provision
                                          8


covers only those contracts whose performance cannot possibly be completed

within a year.” (Cleaned up for readability.)).

       We agree with Geiger and Tracy’s interpretation of the “within one year”

language. But the evidence presented by Geiger herself in deposition was that

“[t]here was no way” the contract “would be fulfilled within one year.” On the

undisputed evidence, section 622.32(4) applies, and the plaintiffs cannot enforce

the oral agreement. See id. (“The Iowa statute of frauds does not render oral

promises invalid. Rather the statute is a rule of evidence that renders incompetent

oral proof of such promises.” (quoting Olson v. Nextel Partners, Inc., 317 F. Supp.

2d 972, 978 (S.D. Iowa 2004))).

       2. Section 535.17 credit agreements in writing

       Returning to the first claim, Geiger and Tracy point out section 535.17

defines “credit agreement” as “any contract made or acquired by a lender to loan

money, finance any transaction, or otherwise extend credit for any purpose.” Iowa

Code § 535.17(5)(c). A “contract” is in the statute as “a promise or set of promises

for the breach of which the law would give a remedy or the performance of which

the law would recognize a duty, and includes promissory obligations based on

instruments and similar documents or on the contract doctrine of promissory

estoppel.” Id. § 535.17(5)(b). They argue the statute’s omission of the doctrine

of equitable estoppel, what they consider as “the defensive side of an affirmative

claim of fraudulent misrepresentation,” suggests the legislature did not include

misrepresentation claims within section 535.17.

       The district court disagreed with Geiger and Tracy’s characterization of

section 535.17 finding,
                                          9


               The fact that Plaintiffs have cast their claims as fraud and
       interference with contracts does not save them from the
       requirements of Iowa Code [s]ection 535.17. Iowa Code [s]ection
       535.17 has its own specific definitions of “credit agreement,”
       “contract,” and “lender,” which are broad and cover any promise or
       set of promises made by a lender or person primarily in the business
       of loaning money to finance any transaction or otherwise extend
       credit for any purpose the breach of which the law would set forth a
       remedy.

The alleged fraudulent conduct is an inducement to a loan agreement the

defendants later broke. In other words, the defendants broke a promise to lend

them money. They want to recover damages resulting from this broken promise.

Thus, they are seeking to enforce “a promise . . . for the breach of which the law

would give a remedy.” The district court was correct that the definition of “contract”

is broad under section 535.17. It encompasses the agreement Geiger and Tracy

seek to enforce.

       Geiger and Tracy try to end run section 535.17 by arguing their claims

sound in tort, not contract. They emphasize the language “[a] credit agreement is

not enforceable in contract law.” Iowa Code § 535.17(1) (emphasis added). The

district court impliedly rejected this argument. It refused to allow the plaintiffs to

“cast their claims as fraud and interference with contracts.”

       We must carefully examine what the plaintiffs are claiming caused their

damages. In her deposition, Geiger explained the plaintiffs’ claims: “The bank in

Riverside, when we started out it was to fund the Prairie Rose Event

Center . . . and they never went through with that. They never—they stopped

financing . . . .” Their amended complaint also describes the alleged “fraudulent

misrepresentation”:
                                         10


       The statements that were made to Geiger and Tracy in connection
       with financing, including but not limited to the statements concerning
       the Skinner appraisals, all of the statements concerning the alleged
       refinancing with Sweeting, and the promises in connection with the
       August 21, 2015 handwritten agreement [the ESS document] were
       false.

In other words, the defendants made a false promise to perform. The “interference

with contract and business” claim simply states, “The actions of Defendant Goerdt

constitute an interference with existing and prospective contracts that Geiger and

Tracy had.” Besides communicating about the two promissory notes, Geiger,

Tracy, and Goerdt talked about getting more loans to develop and operate Prairie

Rose. But nowhere were those discussions reduced to writing.

       The question before us, then, is whether the statute of frauds applies to cut

off a fraudulent misrepresentation claim that is based on an alleged oral contract.

The defendants point to Clinton National Bank v. Saucier, 580 N.W.2d 717, 718

(Iowa 1998), where a bank sued to recover on several defaulted promissory notes.

The debtor filed counterclaims alleging breach of contract, interference with

contract, misrepresentation, and defamation. Saucier, 580 N.W.2d at 718. The

debtor alleged the bank had made an oral agreement to honor overdrafts, and the

bank’s refusal to keep the agreement caused him damage. Id. The bank argued

on summary judgment that section 535.17 applied to bar the claims because it

required such agreements to be in writing. Id. The district court granted the bank

summary judgment on this claim involving the overdrafts. Id. at 720. The bank

also filed a second summary judgment to dismiss the debtors’ counterclaims,

which the district court also granted. Id. at 718. But the supreme court specifically

noted in the opinion that the debtors had not appealed the district court summary
                                         11

judgment on its counterclaims. Id. Thus, the supreme court did not directly

address the issue before us here. Even so, the court wrote:

       We also conclude that Iowa Code section 535.17(6) controls over
       any ambiguity in the provisions of section 535.17 and clearly requires
       that any alleged credit agreements must be in writing to be
       enforceable “to ensure that contract actions and defenses on credit
       agreements are supported by clear and certain written proof of the
       terms of such agreements to protect against fraud and to enhance
       the clear and predictable understanding of rights and duties under
       credit agreements.”

Id. at 722 (emphasis added) (quoting Iowa Code § 535.17(6)).

       Other than Saucier, we see no on-point Iowa case.               Nonetheless,

persuasive authority from other states with similar statutes shows the statute of

frauds does cut off a tort claim based on an unenforceable contract. See, e.g.,

Dixon v. Countrywide Fin. Corp., 664 F. Supp. 2d 1304, 1309 (S.D. Fla. 2009)

(“Florida courts consistently hold that the statute of frauds also serves to bar any

claims that are premised on the same conduct and representations that were

insufficient to form a contract and are merely derivative of the unsuccessful

contract claim.” (Cleaned up for readability.)); see also Horseshoe Entm’t, L.P., v.

Gen. Elec. Capital Corp., 990 F. Supp. 737, 743 (E.D. Mo. 1997) (conducting a

survey of other jurisdictions with credit agreement statutes and concluding, “The

majority of the cases hold that a credit agreement statute of frauds bars all actions

based on an alleged oral credit agreement, regardless of the theory of recovery

asserted. The reasoning behind these decisions is that to accept such allegations

as affording recovery, grounded in concepts other than breach of contract, simply

provides an easy avenue for resourceful attorneys to circumvent the credit

agreement statute, thus defeating the legislative intent to prohibit claims stemming
                                         12

from hard-to-defend oral representations.” (Cleaned up for readability.)); Ohio

Valley Plastics, Inc. v. Nat’l City Bank, 687 N.E.2d 260, 264–65 (Ind. Ct. App. 1997)

(“[T]he statute of frauds at issue in the present case applies broadly, even to an

action upon an agreement with a creditor to enter into a new credit

agreement. . . . Regardless of whether the present cause of action is labeled as a

breach of contract, misrepresentation, fraud, deceit, promissory estoppel, its

substance is that of an action upon an agreement by a bank to loan money.

Therefore, the statute of frauds applies.” (Cleaned up for readability.));.

       We find this rationale persuasive and conclude the district court did not err

in declining to allow the plaintiffs’ end run by arguing their claims are torts. This

“contract made . . . by a lender to loan money . . . or otherwise extend credit” was

a “credit agreement” as defined in section 535.17(5). Thus, the provisions of

section 535.17(1) apply. The plaintiffs must show a “writing” containing “all of the

material terms of the agreement” along with signatures by the defendants to

establish a contract existed in the first place. Geiger and Tracy cannot raise in tort

what they cannot prove in contract: the existence of an enforceable contract.

       Geiger and Tracy make the alternative argument the ESS document Goerdt

handwrote was a “writing” satisfying the requirements of section 535.17. The

district court rejected this argument too. The document lacked any of the “material

terms of the agreement,” signatures, and even the names of the parties.

       The ESS document is a “writing,” fair enough.         But it is not a written

agreement related to the funding of Prairie Rose. First, Geiger admitted there was

no written agreement. She thought, “[I]t was pretty much just verbal.” When
                                          13


pressed for details, Geiger stated she simply assumed all the parties “were on the

same page.”

       Second, Goerdt’s handwritten document lacks any material terms of the

agreement to lend money for Prairie Rose. It does not even mention Prairie Rose.

And, third, it lacks a signature by any of the defendants or agents of the

defendants. Even though the authenticity of the document is not in question—

Goerdt agreed he handwrote the document—we reject Geiger and Tracy’s

suggestion that Goerdt’s handwriting can stand in as his signature—he did not

even write his name.3

       We find no error of law in the court’s ruling that there is no genuine issue of

material fact about the nature of this agreement, in particular that it is not contained

in any writing and not performable within a year. That is, since evidence of the

claimed agreement is not admissible under the statute of frauds in either section




3
  Geiger and Tracy suggest because the bank extended the first two loans, there was an
implied agreement to continue with further loans to fund Prairie Rose. The Saucier court
addressed this question squarely noting in that case the bank had paid some overdrafts
but stopped doing so and did not notify Saucier. 580 N.W.2d at 720–21. Nonetheless,
the court said,
        [T]he fact that the Bank honored defendants’ overdrafts in the past does
        not make the Bank obligated to honor future overdrafts. . . . [The bank]
        may allow credit to another, if [the bank] sees fit to do so, but this does not
        oblige [the bank] to extend that credit to any and all time thereafter. The
        banker, like the butcher, the baker, and the grocer, extends credit when
        [the bank] thinks the customer is good for the amount of the credit, but [the
        bank] shuts it off when [the bank] thinks the customer is no longer able to
        respond to [their] obligations.
Id. (cleaned up for readability). We cannot, therefore, read the discussions and written
agreements for the first two notes as agreements for a further, future loan for the
development of Prairie Rose.
                                            14


535.17 or section 622.32, no reasonable jury could be convinced this agreement

is enforceable. Thus, the defendants were entitled to judgment as a matter of law.4

            B. Whether Country Bancorporation was liable for the conduct of
               Goerdt.

       Because we find Goerdt was entitled to summary judgment on both claims,

we need not address whether Country Bancorporation was liable for his conduct.

    IV. CONCLUSION

       For all the reasons enunciated above, we conclude the district court

committed no error when it granted summary judgment to the defendants.

       AFFIRMED.




4
  As their final prayer, Geiger and Tracy requested the district court stay any proceedings
by the bank against them during these proceedings. Because the district court dismissed
the other claims, it found the injunction was unnecessary and dismissed that request as
well. We see no error in this logical disposition of the injunction request.
