Iowa Court of Appeals Reverses Dismissal of Dairy-Farm Owner’s Contract and Warranty Claims
In Van Otegham Dairy Partnership v. Spahn & Rose Lumber Co., 2025 WL 1453322 (Iowa Ct. App. May 21, 2025), the Iowa Court of Appeals reversed the district court’s dismissal of a dairy-farm owner’s contract and warranty claims against a lumber company. Van Otegham Dairy Partnership (“VODP”) “operates a dairy farm out of Victor, Iowa. VODP created plans to build an additional ‘free stall dairy loafing barn’ in 2013. VODP's plans included requirements for specific features such as a large vehicle door, humidity-controlling fans, and an automatic manure flushing system. The new barn needed to be constructed in a way that prevented elevated levels of humidity from causing corrosion.” VODP saw a Spahn & Rose Lumber Company (“S&R”) advertisement that promoted the company's “OWN PROFESSIONAL DESIGN SERVICES TO CUSTOMIZE YOUR PROJECT,” so it asked S&R to prepare a bid for the barn project. S&R did so, and it “informed Van Otegham that S&R ‘had access to engineers’ for design and confirmed that S&R ‘was capable of properly doing the work.’ Van Otegham never specified a preference for any particular subcontractors and provided no design guidance beyond interior dimensions for the barn.”
The parties then entered a written contract that “included guarantees that S&R would engage in ‘[c]onstruction of a 100’ x 234’ dairy loafing barn as per plans by L&L Sales Inc. and end elevations by Spahn & Rose LBR. Co.’ . . . that ‘[c]onstruction includes the material's [sic] as listed on estimate sheet's [sic] dated 6/7/13,” and that “[a]ll work is to be completed in a workmanlike manner according to standard practices.” The materials list included the following disclaimer: “Please examine this list carefully. This list only set [sic] forth the articles, quantities, grades and prices of materials listed and we do not warrant that the materials, quantities, and grades listed will satisfy buyer's requirements. Buyer is responsible for determining his own requirements and selecting proper materials.”
S&R subcontracted to Country Boys Construction (“CBC”) to construct the barn. Within 18 months after completion of construction, the barn roof began to leak, and it was “determined that corrosion in the metal banding bracing the metal roof caused the leaking.” There was no evidence the materials were defective, but CBC stated that “using metal banding in contact with metal roofing is not an accepted practice for the type of barn VODP contracted for, that he had never seen metal banding used in that manner for a dairy farm, and that he constructed VODP's dairy barn with those materials because that is what S&R provided him. S&R did not provide any materials or instructional design that would have allowed for a gap between the metal banding and the metal roof, such as rubber, vinyl, or some form of gasket.”
VODP filed suit against S&R for breach of express warranty and breach of contract. Before trial, the district court dismissed those claims because it concluded that the materials disclaimer modified the “express agreement to complete work in a ‘good and workmanlike manner’ and to ‘produce definite and certain results.’” VODP appealed, and the Iowa Court of Appeals reversed.
The Court of Appeals noted that “VODP's construction contract with S&R contained a provision stating that ‘[a]ll work is to be completed in a workmanlike manner according to standard practices.’” The Court explained that “the phrase ‘a good and workmanlike manner’ in a construction contract . . . mean[s] the builder should ‘produce definite and certain results,’ and that “[i]ncompatibility of building materials in a structure invokes the builder's warranty to build the structure ‘in a reasonably good and workmanlike manner, fit for the purpose intended.’” The Court found the materials disclaimer irrelevant to the dispute because the issue was not that the materials were defective but that the design and construction were flawed in allowing the metal banding to contact the metal roofing. Therefore, the Court concluded, the district court erred in relying on the materials disclaimer to dismiss the claims.
S&R countered that its scope of work did not include design services, but the Court of Appeals noted that “the contract for services had no disclaimer relative to design and installation.” The Court acknowledged that “the contract did not expressly guarantee a specific design. But it is also true that S&R held itself out as a design provider, expressly warrantied that it would construct a barn fit for dairy production, knew VODP had no design knowledge, and did, in fact, design the defective roof banding.” The Court concluded that the factual dispute concerning the scope of S&R’s design obligations should be resolved by a jury.
for more information
Contact attorney Steve Marso at 515-288-6041.