The Iowa Court Of Appeals Reminds You To Prove Causation

There’s a question that sometimes seems to be overlooked in civil cases — How did the defendant’s supposed wrongdoing harm you?  You have to prove not only that the defendant violated some aspect of the law, but also that the defendant’s violation caused you injuries and damages.  That’s generally referred to as “causation.”  The standards for causation vary from one type of claim to another, but the basic principle is always that you must prove you were harmed by the defendant’s conduct or you have no claim.  The principle applies to a personal injury suit, products liability claim, motor vehicle accident claim, motorcycle accident claim, dog bite claim, employment or labor law claim, construction defect claim, business practices or contract law claim, debt collection practices law claim, nuisance law claim, or insurance law claim.

This is not an issue to be taken lightly.  Money damages do not automatically flow from a determination that a defendant violated the law.  If Point A is the defendant’s liability and Point C is your injuries and damages, you need to have a good argument for Point B, which is causation, or the connection between the defendant’s liability and your injuries and damages.

The Iowa Court of Appeals’s recent decision in Stutzman v. West Des Moines OB/GYN illustrates this concept in tragic fashion.  Stutzman was a wrongful death case involving Julie Stutzman’s death from cancer.  Her estate and surviving family claimed that her doctor committed malpractice in the manner in which the doctor handled some of Julie’s earlier doctor visits.  The plaintiffs argued that, had Julie’s doctor properly handled and responded to earlier communications from Julie, Julie’s cancer would have been detected sooner and she would have had a higher chance of survival.

The Stutzman plaintiffs lost because they could only prove one aspect of malpractice against Julie’s doctor and clinic — A charting error.  But they were unable to establish that the charting error made a difference in the course of Julie’s subsequent cancer diagnosis and death, i.e., causation.  So Stutzman is a recent, good example of the importance of having sufficient proof of causation to connect the defendant’s wrongdoing to your harm.  Even though Julie’s family proved that her doctor did something wrong, they could mot prove that the doctor’s error harmed Julie, and they lost their case.

The Impact Of Your Social Media Use On Your Legal Rights

Your social media posts are not private.  Nor is there any law that prevents a lawsuit opponent from using against you something you posted on Facebook, Twitter, Instagram, or any of countless internet websites and blogs.  If you’re involved in a personal injury suit, products liability claim, motor vehicle accident claim, motorcycle accident claim, dog bite claim, employment or labor law claim, construction defect claim, business practices or contract law claim, debt collection practices law claim, nuisance law claim or insurance law claim, that information could compromise your case.

It is routine for opposing counsel in all types of cases to request this information as part of their pretrial investigation.  They want to know if you’ve posted anything anywhere online that contradicts any part of your claim.  They also want to know if there are any photos or videos of you doing things that you shouldn’t be doing or claim that you can’t do.

Judges increasingly allow opposing counsel access to this information, even if you’ve marked it as private in your online profile or settings.  To judges, your online musings, pictures, and video are as much fair game in a lawsuit as would be a diary, journal, scrapbook with photos, etc.  So odds are good opposing counsel will get this information whether you like it or not.

And that only covers opposing counsel’s attempts to come in through the front door.  As long as opposing counsel doesn’t communicate directly with you, they’re also free to view anything that you’ve left publicly available.  So opposing counsel may be poking around your internet persona and you won’t even know it until it’s too late.

The moral of the story is to avoid putting anything online that your common sense tells you will be used against you by opposing counsel.  Chances are good counsel will eventually get that information somehow.  And they’re guaranteed to try to use it.

Legal Liability For Abuse Of Process

Invariably, when I represent someone or a company that gets sued, early questions from my client include “how can they just sue me?”, “don’t they have to have proof?,” and “can I get my attorney fees after we win the defense?”  Let me discuss the attorney fee question.  It’s extremely rare, absent a contract or statute that provides for attorney fees, for a successful party to recover attorney fees from the losing party.  Usually, upon successfully defending a case the only way you can recover your attorney fees is if the lawsuit against you had absolutely no basis in law or fact or was brought for an improper purpose.  One such claim for attorney fees is called “abuse of process.”

Abuse of process is the use of legal process, whether criminal or civil, against another primarily to accomplish a purpose for which it was not designed.  The improper purpose is ordinarily an attempt to secure from another some collateral advantage not properly includable in the process itself and is a form of extortion in which a lawfully used process is perverted to an unlawful use.  An abuse of process can occur even though there is probable cause to bring the action and the original action terminates in favor of the plaintiff.  At the same time, the mere failure of a legal claim, without more, furnish proof of some attempt to gain a collateral advantage by pursuit of the claim.  Any type of legal claim, including business or contract law cases, motor vehicle accidents, motorcycle crashes, dog bite cases, private nuisance actions, employment law matters, construction defect claims, personal injury or wrongful death claims, or products liability claims, can be improper and thus expose the party bringing the action to a later abuse of process claim.

To prove a claim of abuse of process, a plaintiff must show (1) use of the legal process, (2) in an improper or unauthorized manner, and (3) that damages were sustained as a result of the abuse.   With respect to the second element of the cause of action for abuse of process, a plaintiff must prove that the defendant used the legal process primarily for an impermissible or illegal motive.  Id. 

A very restrictive view is taken of the “impermissible or illegal motive element.”  Proof of an improper motive by the person filing the lawsuit for even a malicious purpose does not satisfy this element.  This is so to protect the right to ready access to the courts.  An ulterior motive does not alone satisfy the requirement for an action in abuse of process; a definite act or threat outside the process is required.  Consequently, this is a difficult element to establish.

All of this is true as long as the act that is alleged to be improper is in fact proper in the regular prosecution of the proceeding.  A defendant is not liable if it has done no more than carry the process to its authorized conclusion, even with bad intentions.  There is no action for abuse of process when the process is used for the purpose for which it is intended, but there is an incidental motive of spite or an ulterior purpose of benefit to the defendant.  For abuse of process to occur there must be use of the process for an immediate purpose other than that for which it was designed and intended.  The usual case of abuse of process is one of some form of extortion, using the process to put pressure upon the other to compel him to pay a different debt or to take some other action or refrain from it.

Any act that is proper in the regular prosecution of a proceeding cannot be relied upon as a basis for an abuse of process claim.  Rather, to show abuse of process, a plaintiff must show defendants took some specific action in connection with their use of process which can be characterized as unlawful or irregular.  In other words, plaintiff must show defendants committed some act in the use of process that was not proper in the regular prosecution of the proceeding.  Proof of an improper motive by the person filing a lawsuit, even a malicious purpose, does not satisfy that element.

Abuse of process will not lie for a civil action that inconveniences a defendant, or for one filed in expectation of settlement (a “nuisance” suit).  Wilson, 464 N.W.2d at 267.  Settlement is included in the goals of proper process, even if the suit is frivolous.  Id.  Additionally, there is no abuse of process when the action is filed to intimidate and embarrass a defendant knowing there is no entitlement to recover the full amount of damages sought.  Id.

 

Remedies In Construction Defect Cases

There are two main components to a construction defect case.  First, you have to prove that the builder or contractor is liable.  Second, you have to prove your damages.  The second component, damages, is often overlooked as an area that needs attention in construction defect cases.  Proving liability against the builder or contractor is great, but doesn’t do much good if you haven’t properly prepared your damages case.

Damages in defective construction cases may include diminution in value, cost of construction or completion as required under the contract, or loss of rentals.  As a general rule, the cost of correcting the defects or completing the omissions is the proper measure. Costs are limited, however, by the concept of economic waste. If the defects can be corrected only at a cost grossly disproportionate to the result or benefit obtained by the owner, or if correcting the defect would involve unreasonable destruction of the builder’s work, the proper measure of damage is the reduced value of the building.  The diminution in value is the difference between the value of the building if the contract had been fully performed and the value of the performance actually received.

In addition to these principles, you also have a duty to “mitigate” (try to reduce) your construction defect damages.  You can’t necessarily allow a construction defect to fester, thus creating even more problems, and then expect the builder/contractor to pay for everything.  Iowa law requires you to take steps to minimize any further damages beyond the initial defective construction.  So, for example, if a roofing contractor does a bad job and leaves you with a leaky roof, you need to get that roof fixed and not allow it to cause damage to the interior of your house because there’s a possibility that the roofing contractor won’t be liable for that extra damage.

Remedies In Iowa Mechanic’s Lien Cases

I discussed the basics of Iowa’s mechanic’s lien law in an earlier post.  So let’s say that you, the contractor or homeowner, are now involved in a mechanic’s lien case.  How will the judge decide whether the contractor is entitled to any money?

The general rule is that in order to enforce a mechanic’s lien, the work must be “substantially performed” by the contractor.   A technical, exact, and perfect performance is not necessary in an action to foreclose a mechanic’s lien.  “Substantial performance” permits only such omissions or deviations from the contract as are inadvertent or unintentional, are not due to bad faith, do not impair the structure as a whole, and are remediable without doing material damage to other parts of the building in tearing down and reconstructing.

A contractor that substantially performs under a building or construction contract is entitled to recover the contract price minus the cost of repairing the defects or completing the unfinished part of the work so as to bring the construction up to the level required by the contract.  A contractor that fails to substantially perform under a construction contract still has a right to be paid, but the payment may be much less than the contract called for or the contractor may even end up owing the homeowner money.

Mechanic’s lien cases often devolve into nothing more than an exercise in arithmetic for the judge.  Using the basic principles summarized above, the judge starts by determining whether the contractor has “substantially completed” the work.  If the contractor has substantially completed the work, the judge next considers the contract price for the work and subtracts any amounts the judge believes are appropriate for the cost of repairing or completing the contractor’s work.  The result is the amount that the contractor wins.  It is impossible for a contractor to not recover at least some money as long as it has substantially performed under the contract.

If the contractor has not “substantially completed” the work, the judge might also consider other damages to the homeowner, in addition to the costs of completing or remedying the contractor’s work, as part of the calculation and deduct those extra items of damages from the contract price too.  In theory, a contractor’s lack of substantial performance can cause the contractor to receive little or nothing under the contract, depending on how large the judge’s deductions become.  In fact, if the homeowner’s damages exceed the amount owed the contractor, as determined by the judge, then the contractor will get nothing and will actually owe the homeowner the difference between the homeowner’s damages and the lesser amount that the judge has decided to award the contractor.

The Basics Of Iowa’s Private Consumer Fraud Statute

For the past few years Iowans have been able to act as “private attorneys general” under Iowa’s Consumer Fraud Act, Iowa Code Chapter 714H.  That statute applies to consumers who lose money or property due to deception, misrepresentation, or other unfair selling or advertising practices, and allows them to seek damages and attorney fees if they win.  These claims can be brought for legal issues as varied as business practices or contract law claims, construction defects, personal injury or wrongful death, or products liability.  So what exactly is a private consumer fraud claim?

A person cannot engage in a practice or act that the person knows, or reasonably should know, is an unfair practice, deception, fraud, false pretense, or false promise, or a misrepresentation, concealment, suppression, or omission of a material fact, with the intent that others rely upon the unfair practice.  A claimant alleging an unfair practice must prove that the prohibited practice related to a material fact or facts; the deception cannot merely be incidental to the consumer transaction.  A consumer who suffers an ascertainable loss of money or property as the result of a prohibited practice or act in violation of this chapter may bring a private civil suit to recover actual damages and, in some cases, treble damages and attorney fees.

Actual damages may include, but are not limited to, out-of-pocket expenses caused by the prohibited act, equitable relief, reasonable attorney fees and court costs.  In addition to an award of actual damages, statutory damages up to three times the amount of actual damages may be awarded if the finder of facts finds clear and convincing evidence of willful and/or wanton disregard for the rights or safety of others pursuant to this chapter.

A suit brought under this law must be filed within two years of the occurrence giving rise to the cause of action, or within two years or longer only if it was not reasonable to discover a violation under this chapter in two years.

Liability Of Cities For Sewer Backups

You hear about this all the time.  Heavy rains hit, your city’s sewer system doesn’t do its job, and you suddenly have a swimming pool filled with sewage overflow where your basement used to be.  Like anything else involving water damage, that can be a very expensive repair project because you have the cost of cleaning everything up, the cost of repairing any portions of the basement that were ruined by the water, and the cost of replacing any property items that were lost during the flooding.  If you have insurance to cover those losses, that’s great and the flooding won’t have much of an impact on you.  But many insurance policies provide minimal coverage in these circumstances, leaving you to pay out-of-pocket for everything that’s not covered by insurance.

So do you have any legal rights to recoup your losses in that situation?  You do, and there’s various options.  The obvious choices are to assert legal claims against whatever companies were responsible for designing, constructing, and installing the sewer system or connecting it to your property.

Another possible defendant is the city you live in, and that’s what I want to talk about.  There are three main theories of liability against cities regarding sewer overflow damage: (1) negligent design or construction of the sewer system; (2) negligent inspection, including granting of permits or licenses, of the sewer system; and (3) negligent maintenance, repair, or operation of the sewer system.

The first category, negligent design or construction of a sewer system, is a very difficult claim to make.  Iowa Code 670.4(8) provides cities with broad immunity for sewer design or construction liability on “[a]ny claim based upon or arising out of a claim of negligent design or specification, negligent adoption of design or specification, or negligent construction or reconstruction of a public improvement . . . or other public facility that was constructed or reconstructed in accordance with a generally recognized engineering or safety standard, criteria, or design theory in existence at the time of the construction or reconstruction.  A claim . . . shall not be allowed for failure to upgrade, improve, or alter any aspect of an existing public improvement or other public facility to new, changed, or altered design standards.”  A sewer system is considered a “public improvement.”  Iowa’s courts have stated that a violation of engineering or safety standards existing at the time the sewer system was constructed must be proved or the city is immune.

The second category, negligent inspection and licensing and permits, is frequently implicated when a city is accused of negligently granting a building permit or something similar during a construction project.  Two laws govern those types of cases.  Iowa Code 670.4(9) provides that cities cannot be sued on “[a]ny claim based upon an act or omission by an officer or employee of the municipality or the municipality’s governing body, in the granting, suspension, or revocation of a license or permit, where the damage was caused by the person to whom the license or permit was issued, unless the act of the officer or employee constitutes actual malice or a criminal offense.”  Iowa Code 670.4(10) confers immunity to cities from “[a]ny claim based upon an act or omission of an officer or employee of the municipality, whether by issuance of permit, inspection, investigation, or otherwise, and whether the statute, ordinance, or regulation is valid, if the damage was caused by a third party, event, or property not under the supervision or control of the municipality, unless the act or omission of the officer or employee constitutes actual malice or a criminal offense.”

Iowa Code 670.4(10) and its statutory predecessors have made regular appearances in lawsuits against cities in which a third party causes physical injuries or property damage and the injured party seeks to blame the city for essentially failing to prevent the problem.  Much of the fight in those cases concerns the “supervision or control” component of Iowa Code 670.4(10) because, if the city did not have supervision or control, then the injured party must meet the almost impossible burden of proving that the city acted with actual malice or committed a crime.  So establishing a right to go after a city for regular negligence because it had supervision or control is essential.

The third and final category of city liability for sewer overflows is negligence in the maintainence, repair, or operation of a sewer system.  In this category, cities are treated like any other property owner and have a duty to maintain their property (the sewer system) so that it does not injure anyone.  Common examples in this category are claims for obstructions in sewers or failing sewers that are allowing seepage, overwhelming the system, and increasing the chance of an overflow.  The city will be liable if the injured party can prove that the city negligently addressed the obstruction or the failing sewer.

As you can see, negligence claims against cities for sewer overflow flooding and damages are complicated and require a carefully nuanced legal approach.  This is an area where the legal manner in which you present your claim can have a substantial impact on your city’s potential liability for the flooding damage to your home.  If you approach your claim from the wrong legal direction, you will likely run into one or more of the city’s immunities, summarized above, and have your case dismissed by the judge before you ever get to trial.  Please feel free to contact me if you’d like me to review a possible legal matter involving your city’s sewer system.