Kiepe v. Goslar

958 N.W.2d 619 (Table)

Chad KIEPE, Plaintiff-Appellee/Cross-Appellant,

v.Chad GOSLAR, Defendant-Appellant/Cross-Appellee.

No. 20-0765

Court of Appeals of Iowa.

Filed March 17, 2021

Maura Sailer of Reimer, Lohman, Reitz, Sailer & Ullrich, Denison, for appellant.

Nathan Vos of Vos Law Firm, PLC, West Des Moines, for appellee.

Heard by Vaitheswaran, P.J., and Tabor and Ahlers, JJ.

AHLERS, Judge.

Chad Goslar appeals the district court judgment finding him liable to Chad Kiepe for unpaid wages under the Wage Payment Collection Act. On appeal, Goslar argues (1) the doctrine of judicial estoppel barred Kiepe from arguing Goslar owed him for unpaid wages because Kiepe previously claimed in bankruptcy proceedings that he was not owed any such unpaid wages; (2) the district court's finding that the parties agreed to an hourly component to Kiepe's employment with Goslar was not supported by substantial evidence; and (3) the district court abused its discretion by awarding Kiepe attorney fees. On cross-appeal, Kiepe argues the district court erred by improperly calculating liquidated damages under Iowa Code section 91A.2(6) (2018) and by improperly concluding Goslar modified the employment agreement rather than repudiating it.

I. Factual Background

The parties in this case have known each other for decades. Both owned farms in the same community and had been friendly since high school. In 2015, Kiepe decided to sell his farm. Goslar learned Kiepe was selling the farm and contacted him to ask Kiepe if he would be interested in a job on his farm. Kiepe expressed interest, so Kiepe and Goslar met to discuss terms in March 2015. Kiepe's son, Dylan, was present during the discussion.

The terms of the agreement produced by this meeting is the source of this litigation. The parties do not dispute an agreement was reached that created an employment relationship between Goslar and Kiepe in which Kiepe was to be employed by Goslar, Goslar was to pay Kiepe bi-weekly, and the relationship could be terminated at any time by either party. However, the number of months Kiepe was to work each year and the payment terms of the contract are heavily disputed.

Kiepe and Dylan testified that Kiepe and Goslar reviewed a document written on Hawkeye-branded letterhead that spelled out the terms of the agreement. According to Kiepe, the agreement provided he was to work six months of the year and be compensated for that six months via bi-weekly payments throughout the entire year at a net amount of $1042.50. During the six months Kiepe was not obligated to work, Kiepe asserts the agreement called for Kiepe to essentially be open to requests to work from Goslar when Goslar needed him and Kiepe was available. For any work performed during this six-month "off" period, Kiepe was to be paid $14 per hour. Kiepe asserts he and Goslar both signed the document at the meeting. Kiepe then took the document home and showed it to his wife, Rachael, who testified to looking over the agreement. In his own testimony, Goslar maintained that, while he did agree to pay the $1042.50 net bi-weekly payments, he never agreed that Kiepe would receive an hourly rate and never agreed that Kiepe did not have to work six months of the year.

Kiepe began working for Goslar in April 2015. He was paid his agreed biweekly salary during the remainder of 2015. In January 2016, Kiepe presented Goslar with a handwritten log of the hours he had worked during the "off" period during 2015 and claimed a total owed on an hourly basis of $9627. Goslar complained to Kiepe that the amount was high, but paid nonetheless. According to Kiepe, Goslar then asked to see the written contract and the log tracking the hours worked during 2015. Kiepe testified that he gave Goslar the documents.

Kiepe maintained the same practice as he worked throughout 2016 and once again submitted a log of hours worked in 2016 to Goslar in January 2017. This time, Goslar told Kiepe that he would not be paying Kiepe for any hourly wages claimed. In spite of not being paid for his hourly work in the off months of 2016, Kiepe kept working for Goslar in 2017. Kiepe explained that he felt he had no choice but to continue working for Goslar in order to provide for his family.

Kiepe quit on September 6, 2017. When he requested payment for the off-period hours he worked during 2017, Goslar refused to pay. For Kiepe's final biweekly pay period in August, Goslar provided Kiepe with a check in the amount of $415.18, which was less than the agreed upon amount of $1042.05. Kiepe refused to cash the check because it was not for the agreed amount, and Goslar refused to issue a new check.

II. Procedural History

Kiepe filed the petition in this litigation in December 2018, alleging Goslar intentionally withheld wages for the hours Kiepe worked during the off-period months in 2016 and 2017. Kiepe requested the following damages:

2016 Unpaid Hourly Wages:	$15,983.50
2016 Liquidated Damages:	$15,983.50
2017 Unpaid Hourly Wages:	$13,821.50
2017 Unpaid Salary Wages:	$ 1,280.001
2017 Liquidated Damages:	$15,101.50
Total Damages:	$62,170.00

Goslar attempted to defend himself, in part, by pointing to Kiepe's bankruptcy proceedings from earlier in 2018. Kiepe filed for bankruptcy in March 2018, and as part of his bankruptcy petition had included schedules stating he had no "[c]laims against third parties" and no "[o]ther amounts someone owe[d]" him. Kiepe explained in his testimony that at the time he filed the bankruptcy petition, he did not believe that he had any claim against Goslar for the unpaid wages.

Following a bench trial, the district court determined an oral contract existed between Kiepe and Goslar to pay Kiepe on an hourly basis for the off-season hours he worked in 2016. The court awarded damages for unpaid wages of $15,983.50 for 2016.

As for 2017, the court found Goslar had disavowed any agreement to pay on an hourly basis in January 2017 during the meeting in which Goslar refused to pay Kiepe for hourly wages in 2016. As a result of that disavowal, the court concluded there was no agreement to pay hourly wages during the off-season months in 2017, so Kiepe was not entitled to any unpaid hourly wages for 2017. The court further found Goslar inappropriately withheld Kiepe's last salary check from 2017, so awarded Kiepe damages for that year in the amount of $1280.00.

The court also awarded liquidated damages of $863.17, calculated as five percent of the total unpaid wages for both years of $17,263.50. The court also awarded Kiepe attorney fees and expenses of $33,568.38. This appeal followed.

III. Standards of Review

"[W]e ... review questions of judicial estoppel for an abuse of discretion." Kinseth v. Weil-McLain , 913 N.W.2d 55, 66 (Iowa 2018). "An abuse of discretion occurs when the ‘decision is based on a ground or reason that is clearly untenable or when the court's discretion is exercised to a clearly unreasonable degree.’ " Anderson v. Anderson Tooling, Inc. , 928 N.W.2d 821, 826 (Iowa 2019) (quoting Pexa v. Auto Owners Inc. , 686 N.W.2d 150, 160 (Iowa 2004) ).

We review judgments entered after bench trials for correction of legal errors. Metro. Prop. & Cas. Ins. Co. v. Auto-Owners Mut. Ins. Co. , 924 N.W.2d 833, 839 (Iowa 2019). "The district court's factual findings have the effect of a special verdict and are binding on us if supported by substantial evidence." Id. "In determining whether substantial evidence exists, we view the evidence in the light most favorable to the district court's judgment." Chrysler Fin. Co. v. Bergstrom , 703 N.W.2d 415, 418 (Iowa 2005).

"Review of a district court's grant of attorney fees is for an abuse of discretion." Homeland Energy Sols., LLC v. Retterath , 938 N.W.2d 664, 684 (Iowa 2020). "We will reverse a court's discretionary ruling only when the court rests its ruling on grounds that are clearly unreasonable or untenable." NevadaCare, Inc. v. Dep't of Human Servs. , 783 N.W.2d 459, 469 (Iowa 2010).

IV. Judicial Estoppel

Goslar first argues that, under the doctrine of judicial estoppel, Kiepe should have been barred from arguing that Goslar owed Kiepe unpaid wages because Kiepe indicated he had no outstanding claims in his bankruptcy petition. While Goslar did not raise judicial estoppel in the court below, the doctrine "is intended to protect the integrity of the fact-finding process by [the] courts" and "the issue may properly be raised by courts, even at the appellate stage, on their own motion." Winnebago Indus., Inc. v. Haverly , 727 N.W.2d 567, 573 (Iowa 2006).

The doctrine of judicial estoppel "prohibits a party who has successfully and unequivocally asserted a position in one proceeding from asserting an inconsistent position in a subsequent proceeding." Tyson Foods, Inc. v. Hedlund , 740 N.W.2d 192, 196 (Iowa 2007). The doctrine "addresses the incongruity of allowing a party to assert a position in one tribunal and the opposite in another, thereby creating the perception that at least one court has been misled." Kinseth , 913 N.W.2d at 74. However, judicial estoppel is also an equitable doctrine, which we may invoke at our discretion. Id. at 66 ; New Hampshire v. Maine , 532 U.S. 742, 750 (2001).

We do not find it appropriate to invoke judicial estoppel to bar Kiepe's unpaid-wage claim in this case. Goslar used Kiepe's claimed inconsistent positions on cross-examination to impeach Kiepe. The district court, sitting as factfinder, heard this testimony and addressed the effects of the judgment by directing the clerk of court to inform Kiepe's bankruptcy trustee of the judgment in Kiepe's favor. See 11. U.S.C. § 350(b) (2020) (permitting reopening a previously closed bankruptcy case to administer assets). Furthermore, it is unclear from the record whether Kiepe intended to mislead either the bankruptcy court or the district court by making contradictory assertions about unpaid wage claims. See Kinseth , 913 N.W.2d at 74 ("[Judicial estoppel] aims ‘to protect the integrity of the judicial process by...