Amended January 9, 2017 Iowa Arboretum, Inc. v. Iowa 4-H Foundation ( 2016 )


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  •                IN THE SUPREME COURT OF IOWA
                                      No. 15–0740
    
                             Filed October 28, 2016
    
                           Amended January 9, 2017
    
    
    IOWA ARBORETUM, INC.,
    
          Appellee,
    
    vs.
    
    IOWA 4-H FOUNDATION,
    
          Appellant.
    
    
    
          Appeal from the Iowa District Court for Boone County, Steven J.
    
    Oeth, Judge.
    
    
    
          Defendant appeals the district court’s order denying its motion for
    
    summary judgment and granting summary judgment in favor of the
    
    plaintiff on its petition for declaratory judgment. AFFIRMED.
    
    
    
          David H. Skilton of Cronin, Skilton & Skilton, P.L.L.C., Nashua,
    
    and Thaddeus Cosgrove of Cosgrove Law Firm, Holstein, for appellant.
    
    
    
          Ryan G. Koopmans and Kristina M. Stanger of Nyemaster Goode,
    
    P.C., Des Moines, for appellee.
                                         2
    
    ZAGER, Justice.
    
          We are asked to determine whether the district court properly
    
    granted summary judgment on the plaintiff’s petition for declaratory
    
    relief and properly denied the defendant’s motion for summary judgment.
    
    Iowa Arboretum, Inc. (Arboretum) and Iowa 4-H Foundation (4-H
    
    Foundation) entered into an agreement to develop an arboretum on 300
    
    acres of land owned by the 4-H Foundation and located in Boone County,
    
    Iowa. Later, the parties entered into a ninety-nine-year lease agreement
    
    for the same tract of land, some of which included land suitable for
    
    agriculture. The majority of the land is used by the Arboretum as an
    
    arboretum open to the public.      The landowner, 4-H Foundation, now
    
    alleges the land is agricultural for purposes of article I, section 24 of the
    
    Iowa Constitution and the ninety-nine-year lease is void as it violates the
    
    constitutional proscription on agricultural leases exceeding a term of
    
    twenty years. The 4-H Foundation served the Arboretum with a notice of
    
    termination of tenancy based on this constitutional provision.           The
    
    Arboretum responded by filing a petition for declaratory judgment and
    
    injunctive relief to establish the validity of the lease. The parties filed
    
    competing motions for summary judgment.          The district court granted
    
    declaratory relief to the Arboretum and determined the subject land was
    
    not agricultural, declared the lease valid, and ordered the 4-H
    
    Foundation to comply with the terms of the lease. The 4-H Foundation
    
    appeals from the denial of its motion for summary judgment. For the
    
    reasons set forth below, we affirm the decision of the district court.
    
    Since the land in question is not agricultural land for purposes of article
    
    I, section 24 of the Iowa Constitution, the lease is valid and enforceable.
                                          3
    
          I. Background Facts and Proceedings.
    
          The Arboretum owns a forty-acre tract of land in rural Boone
    
    County, located south of the city of Boone and northwest of the town of
    
    Madrid. The 4-H Foundation owns a 300-acre tract of land immediately
    
    south of the land owned by the Arboretum, which is the subject of this
    
    case. The legal description of the land is:
    
          NE 300 acres of the Iowa 4-H Camping Center (the SE1/4 of
          SE1/4 of Section 3; the NE1/4 and SE1/4 of NE1/4 of
          Section 3; all of the SW1/4 of Section 2 and Lot 1 of NW1/4
          of NW1/4 of Section 11; all in Township 82 North, Range 26
          West of the 5th Principal Meridian, Douglas Township,
          Boone County, Iowa.
    
    The property is zoned as agricultural.         The Arboretum has rented the
    
    300-acre tract of land since 1969 and utilizes it and its own forty-acre
    
    tract of land to maintain a public arboretum.
    
          On   July   1,   1969,   the   parties    signed   a   Memorandum    of
    
    Understanding (MOU). The document begins by providing its purpose:
    
          It is the mutual desire of the Arboretum and the 4-H
          Foundation that 300 acres of land belonging to the 4-H
          Foundation . . . and adjacent to 40 acres of land owned by
          the Arboretum be utilized for public arboretum development
          by the Arboretum.
    
    In pertinent part, the Arboretum agreed “[t]o develop the NE 300 acres of
    
    the Iowa 4-H Camping Center . . . as part of the arboretum for use by the
    
    4-H Camp participants, without charge, and the general public.”           The
    
    Arboretum also agreed to allow “the 4-H Foundation to continue to farm
    
    the present crop acres . . . until the Arboretum is ready to develop any of
    
    the crop areas for arboretum purposes.”
    
          The 4-H Foundation agreed to “lease the 300 acre tract . . . to the
    
    Arboretum, Inc. for development into an arboretum.” It further agreed
    
    that, because the tract of land is adjacent to land already owned by the
                                        4
    
    Arboretum, it would “be a continuous and unified arboretum under the
    
    operation of the Arboretum.”
    
          The   parties   mutually   decided     that   the   “Memorandum    of
    
    Understanding shall comprise an agreement of long term intent for
    
    development    and    maintenance   of     the   arboretum.”   The   MOU
    
    contemplated that it would be implemented by consecutive five-year
    
    leases. The leases would be reviewed at the end of every fourth year and
    
    revised as appropriate before the parties entered into the next five-year
    
    lease. The MOU would “remain in force continuously and as modified by
    
    the detailed five year leases.” In the event that either party decided to
    
    sell their land, the other was entitled to the right of first refusal to
    
    purchase the property.      Finally, if the MOU was terminated, the
    
    Arboretum was required to “restore as nearly as practical the premises to
    
    the same condition as that existing at the time of entering into this
    
    Memorandum of Understanding.”
    
          On March 1, 1980, the parties entered into a cash-rent lease
    
    intended to supplement the MOU. The 4-H Foundation leased “to the
    
    Arboretum for development as part of the Arboretum, the 300 acre tract
    
    of property” described in the MOU. In contrast to the consecutive five-
    
    year leases contained in the MOU, the parties agreed to a lease for a term
    
    of ninety-nine years.     The 300-acre tract included 250 acres of
    
    timberland, which the Arboretum leased for $1.00 per year. In addition,
    
    with respect to the remaining fifty acres which consisted of tillable land,
    
    the Arboretum was given, in effect, an option to lease any portion thereof.
    
    If the Arboretum chose to exercise this option, the lease provided a
    
    formula for determining compensation for the tillable cropland.       This
    
    formula was based on the accrual net farm income that the 4-H
                                        5
    
    Foundation earned on the land prior to the Arboretum exercising the
    
    lease option.
    
            The parties have been operating under the MOU since 1969 and
    
    the lease since 1980. In 1983, the Arboretum’s board of directors voted
    
    to renew the lease with no changes. In 1990, the Arboretum notified the
    
    4-H Foundation that it intended to lease a portion of the tillable cropland
    
    to restore it to native prairie grasses. In 1992, the Arboretum’s board
    
    again approved the lease. In 2004, the property committees of the 4-H
    
    Foundation and the Arboretum met to discuss the lease. The members
    
    recommended meeting again in 2009. The 4-H Foundation board and
    
    the Arboretum board met in 2005 to discuss the terms of the lease but
    
    made no further changes.     At that time, one of the 4-H Foundation’s
    
    trustees suggested meeting again in five years to review the lease.
    
    However, the parties did not meet again, and neither party ever
    
    requested a meeting to review the lease. The Arboretum made its rental
    
    payments through 2013. It tendered rent payments in 2014 and 2015
    
    while this action was pending, but the 4-H Foundation did not cash the
    
    rent payments.
    
            The Arboretum developed the majority of the land for use as an
    
    arboretum. It also paid an “annual cash rent” for tillable cropland every
    
    year.   Of the 300-leased acres, 250 acres function as the arboretum.
    
    Another 7.1 acres are billed under the tillable cropland formula
    
    contained in the 1980 lease. Although this land is billed as tillable crop
    
    land, the Arboretum actually uses it as a restored prairie and a parking
    
    lot for the public visiting the arboretum. Of the remaining 39.9 acres, all
    
    but three acres remain in the possession of the 4-H Foundation under
    
    the USDA’s Conservation Reserve Program (CRP). Prior to being in the
    
    CRP, Hertz Farm Management (Hertz) farmed the acres as row crop.
                                               6
    
    Hertz currently farms the three acres that are not in the CRP for the 4-H
    
    Foundation.
    
           On or around August 28, 2013, the 4-H Foundation served a
    
    notice of termination of tenancy on the Arboretum. The notice listed the
    
    effective termination date as February 28, 2014. On February 28—the
    
    date the termination was to take effect—the Arboretum filed a petition
    
    and motion for writ of injunctive relief.            The petition alleged the 4-H
    
    Foundation termination resulted in a breach of the 1980 lease.                      The
    
    Arboretum sought injunctive relief in the form of a temporary injunction,
    
    declaratory judgment establishing the validity of the lease, and specific
    
    performance of the lease. The Arboretum also requested attorneys’ fees.
    
    The district court scheduled a hearing on the petition for March 31. On
    
    March 8, the 4-H Foundation served the Arboretum with a notice to quit,
    
    asserting that the Arboretum was an unlawful holdover tenant.                       The
    
    notice demanded the Arboretum immediately vacate the premises. 1
    
           On March 24, the 4-H Foundation filed a forcible entry and
    
    detainer (FED) action in Boone County small claims court. In the FED
    
    action, the 4-H Foundation stated that the Arboretum was served with a
    
    notice of termination of lease and a notice to quit, but had failed to
    vacate the premises and was holding over. The 4-H Foundation did not
    
    include any information about the pending action before the district
    
    court to determine the validity of the lease between the parties.                   The
    
    small claims court set a hearing for April 7.
    
           The day after filing the FED action, the 4-H Foundation filed a
    
    motion in district court to continue the hearing on the Arboretum’s
    
           1The   4-H Foundation served an amended notice to quit on March 18 because the
    first incorrectly asserted that the basis for the eviction was the Arboretum’s failure to
    pay rent.
                                             7
    
    motion for a temporary injunction. The Arboretum resisted the motion to
    
    continue on the grounds of urgency created by the 4-H Foundation filing
    
    the FED action. The Arboretum also requested that, if the district court
    
    ordered a continuance, it also order a continuance of the FED action
    
    until after it decided the declaratory judgment action. 2 The district court
    
    denied the 4-H Foundation’s motion to continue.
    
             The district court held a hearing on March 31 to consider the
    
    Arboretum’s      request    for   a   temporary     injunction     and    the   4-H
    
    Foundation’s motion to dismiss.          At the hearing, the 4-H Foundation
    
    argued the lease between the parties violated the Iowa Constitution
    
    because of its length of years and therefore its termination of tenancy
    
    was proper. The 4-H Foundation further argued that the Arboretum had
    
    no right of recovery. The Arboretum argued the terms of the lease were
    
    for nonagricultural purposes and the constitutional provision did not
    
    apply.
    
             On April 4, the district court issued its ruling denying the motion
    
    to dismiss and granting a temporary injunction. The district court noted
    
    that the terms of the MOU and the lease both state that the purpose is to
    
    develop the land for use as an arboretum. The district court granted the
    
    temporary injunction because it concluded the Arboretum demonstrated
    
    a sufficient showing of the likelihood of success on the underlying claim
    
    for the injunction to be granted. The terms of the injunction prohibited
    
    the 4-H Foundation from unlawfully interfering with the Arboretum’s
    
    control of its business on the premises, terminating the lease until the
    
    action before the district court was concluded, trespassing upon the
    
             2The Arboretum requested the continuance of the FED action because the small
    claims court would have to consider the right to possession—the same question before
    the district court in the declaratory judgment action.
                                               8
    
    premises, or interfering with the Arboretum’s nonparty contracts. The
    
    district court also ordered the Arboretum to post a $10,000 bond as
    
    required by the Iowa Rules of Civil Procedure. 3
    
           On April 9, the 4-H Foundation filed its answer to the Arboretum’s
    
    original petition.        It resisted the injunction and requested that the
    
    declaratory judgment action be dismissed. The 4-H Foundation alleged
    
    counterclaims for mediation and breach of contract.
    
           The 4-H Foundation filed a motion for summary judgment on
    
    February 19, 2015, and the Arboretum filed a competing motion for
    
    summary judgment on February 20. The 4-H Foundation requested that
    
    the district court declare the lease between the parties void because the
    
    ninety-nine-year lease term was unconstitutional.                   The Arboretum
    
    requested that the district court declare the lease valid because the
    
    purpose of the lease was nonagricultural and thus, it did not fall under
    
    the constitutional restriction.         The Arboretum also asked the district
    
    court to uphold its claims for an injunction to enforce the lease and
    
    breach of the lease, and to dismiss the 4-H Foundation’s breach-of-
    
    contract counterclaim. 4
    
           A hearing was held on March 27, and the district court issued its
    ruling on April 14.         The district court held that, although the tract of
    
    
           3The   rule provides, in part,
           The order directing a temporary injunction must require that before the
           writ issues, a bond be filed, with a penalty to be specified in the order,
           which shall be 125 percent of the probable liability to be incurred. Such
           bond with sureties to be approved by the clerk shall be conditioned to
           pay all damages which may be adjudged against the petitioner by reason
           of the injunction.
    Iowa R. Civ. P. 1.1508.
           4The 4-H Foundation voluntarily dismissed its claim for mediation and only the
    breach-of-contract claim remained.
                                         9
    
    land is suitable for agricultural purposes, it was not being used as such.
    
    It was being used for the agreed upon purpose of a public arboretum.
    
    Further, only a minimal amount of the 300-acre tract was actually
    
    utilized as agricultural land.
    
          The district court granted the Arboretum’s request for declaratory
    
    judgment, finding the lease was not constitutionally infirm and ordering
    
    the 4-H Foundation to comply with the terms of the lease. The district
    
    court found that the 4-H Foundation had breached the terms of the lease
    
    agreement and the Arboretum was entitled to specific performance as a
    
    remedy. Because the district court granted the request for declaratory
    
    judgment, declared the lease valid, and ordered the 4-H Foundation to
    
    comply with the terms of the lease, the court dismissed the injunction as
    
    moot. The district court held that the 4-H Foundation was barred from
    
    asserting its breach-of-contract counterclaim under the doctrine of
    
    estoppel by acquiescence.        Finally, the district court denied the
    
    Arboretum’s request for attorneys’ fees. The district court denied the 4-H
    
    Foundation’s motion for summary judgment.          The 4-H Foundation
    
    appealed, and we retained the appeal.
    
          II. Standard of Review.
    
          Generally, our standard of review for cases tried in equity is de
    
    novo. Bank of Am., N.A. v. Schulte, 
    843 N.W.2d 876
    , 880 (Iowa 2014).
    
    However, when an equitable proceeding is before us on a motion for
    
    summary judgment, our review is for correction of errors at law. See,
    
    e.g., McKee v. Isle of Capri Casinos, Inc., 
    864 N.W.2d 518
    , 525 (Iowa
    
    2015).
    
          “Summary judgment is appropriate when there is no genuine issue
    
    of material fact and the moving party is entitled to judgment as a matter
    
    of law.” Id. (quoting Rosauer Corp. v. Sapp Dev., L.L.C., 
    856 N.W.2d 906
    ,
                                          10
    
    908 (Iowa 2014)).         Summary judgment is proper only when “the
    
    pleadings, depositions, answers to interrogatories, and admissions on
    
    file, together with the affidavits, if any, show that there is no genuine
    
    issue as to any material fact.” Iowa R. Civ. P. 1.981(3). A question of
    
    material fact exists “if reasonable minds can differ on how the issue
    
    should be resolved.”       Cemen Tech, Inc. v. Three D Indus., L.L.C., 
    753 N.W.2d 1
    , 5 (Iowa 2008) (quoting Walker v. Gribble, 
    689 N.W.2d 104
    , 108
    
    (Iowa 2004)).    We view the record in the light most favorable to the
    
    nonmoving party.         Id.   However, if the only question is the legal
    
    consequence of undisputed facts, it is proper to resolve on summary
    
    judgment. Griffin v. Pate, 
    884 N.W.2d 182
    , 185 (Iowa 2016).
    
            III. Analysis.
    
            On appeal, the 4-H Foundation argues the district court erred in
    
    finding that the Iowa Constitution was inapplicable to the lease between
    
    the parties and thus denying its motion for summary judgment. The 4-H
    
    Foundation also contends that the district court erred in granting the
    
    Arboretum’s motion for declaratory judgment establishing the validity of
    
    the lease. Last, the 4-H Foundation asserts the district court erred in
    
    applying the doctrine of estoppel by acquiescence when it had not been
    
    pled by either party. We address each issue in turn.
    
            A. Article I, Section 24 of the Iowa Constitution.        The 4-H
    
    Foundation argues that the 300-acre tract of land it leases to the
    
    Arboretum is agricultural land under article I, section 24 of the Iowa
    
    Constitution. Because the constitution prevents agricultural leases that
    
    are longer than a period of twenty years, the 4-H Foundation argues the
    
    ninety-nine-year lease is void as unconstitutional. See Iowa Const. art. I,
    
    § 24.    The Arboretum responds that the tract is not agricultural land
                                               11
    
    because the parties agreed that its purpose is for an arboretum, and
    
    therefore the lease is valid for the full ninety-nine year term.
    
           1. History of article I, section 24 of the Iowa Constitution. The Iowa
    
    Constitution provides that “[n]o lease or grant of agricultural lands,
    
    reserving any rent, or service of any kind, shall be valid for a longer
    
    period than twenty years.” Id. When we interpret this provision, our aim
    
    is to ascertain the intent of the framers of our constitution. See Howard
    
    v. Schildberg Constr. Co., 
    528 N.W.2d 550
    , 553 (Iowa 1995). To do so, we
    
    examine the provision’s history and “the object to be attained or the evil
    
    to be remedied as disclosed by circumstances at the time of adoption.”
    
    Id. (quoting Redmond v. Ray, 
    268 N.W.2d 849
    , 853 (Iowa 1978)).
    
    Nonetheless, as we stated in Gansen v. Gansen, the application of a
    
    broadly framed constitutional provision is not limited to the specific
    
    mischief that motivated the framers. 
    874 N.W.2d 617
    , 626 (Iowa 2016).
    
           This provision was not included in the Iowa Constitution of 1846.
    
    Id. at 624. It was added to the Iowa Constitution of 1857 and was based
    
    on a similar provision in the New York Constitution of 1846. 5 See Casey
    
    v. Lupkes, 
    286 N.W.2d 204
    , 205–06 (Iowa 1979); 1 Debates of the
    
    Constitutional Convention of the State of Iowa 213 (W. Blair Lord rep.
    1857),           www.statelibraryofiowa.org/services/collections/law-library/
    
    iaconst    (“I   have copied      [the    provision],    in   substance,     from     the
    
    constitution of the State of New York.”). New York enacted the restriction
    
    on the length of leases for agricultural lands to prevent oppressive, long-
    
    
            5The New York Constitution used to include a provision that stated “No lease or
    
    grant of agricultural land, for a longer period than twelve years, hereafter made, in
    which shall be reserved any rent or service of any kind, shall be valid.” N.Y. Const. art.
    I, § 14 (1846). New York has since removed this provision from its constitution. See
    N.Y. Const. art. I, § 10 (repealed 1962) (repealing the provision on agricultural leases
    which had been renumbered in 1958).
                                         12
    
    term agricultural leases. Howard, 528 N.W.2d at 553. At the time of
    
    enactment, many of the manorial lands in New York were under
    
    agricultural leases for long periods of time.     J.W. Tarbox, Annotation
    
    Construction and Effect of Statutes Limiting Duration of Agricultural
    
    Leases, 
    17 A.L.R. 2d 566
    , at 567 (1951). “Experience proved that this
    
    mode of settling the country was prejudicial to the prosperity and
    
    interests of the state . . . .” Stephens v. Reynolds, 
    6 N.Y. 454
    , 457 (1852).
    
    These long-term agricultural leases resulted in significant unrest
    
    between lessors and lessees, with disputes sometimes becoming violent.
    
    Gansen, 874 N.W.2d at 624.         As stated by the New York Court of
    
    Appeals, “[t]he evil aimed at by the constitution is long leases of farming
    
    lands for farming purposes.”     Mass. Nat’l Bank v. Shinn, 
    57 N.E. 611
    ,
    
    613 (N.Y. 1900).
    
          Consistent with this stated purpose, the New York Court of
    
    Appeals originally concluded it was the character of the land, rather than
    
    the purpose for which the lease was made, that made a lease agricultural
    
    for purposes of the state’s constitutional provision. Odell v. Durant, 
    62 N.Y. 524
    , 525 (1875). In Odell, the court was faced with land that was fit
    
    for agricultural use but which was leased for the purposes of mining
    
    rather than farming. Id. However, the parties did not include a provision
    
    prohibiting the lessee from farming on the land.       Id.   Thus, the court
    
    determined that a lease made solely for the purpose of mining, but which
    
    did not include a provision in the lease precluding the lessee from using
    
    the land for agricultural purposes, fell under the constitutional provision
    
    and was invalid because it exceeded the constitutional term-of-years
    
    restriction. Id.
    
          The court was faced with a similar question years later, in which
    
    the parties entered into a lease for mining on land suitable for
                                            13
    
    agriculture. Mass. Nat’l Bank, 57 N.E. at 613. In this case, the court
    
    held that a lease for the purpose of mining but which encumbered land
    
    suitable for farming was not an agricultural lease that fell under the
    
    constitutional restriction.     Id.   The court reached this conclusion even
    
    though a portion of the land was used for agricultural purposes to the
    
    extent it was not being used for mining. Id. The rationale behind this
    
    conclusion was that the small amount of farming being done was “merely
    
    incidental” to the stated purpose of the lease and did not convert a lease
    
    for mining into a lease for farming. Id.
    
          This court reached a similar, though not identical, conclusion in
    
    Howard, 528 N.W.2d at 554.            In that case, the lessor owned a large
    
    family farm. Id. at 552. They leased a portion of the family farmland to
    
    the Missouri Valley Limestone Company under a “limestone and gravel
    
    lease” that was for the sole purpose of mining.           Id. at 551–52.       The
    
    remainder of the family farmland was leased to other lessees for an
    
    agricultural purpose. Id. at 552. We concluded that our constitutional
    
    provision limiting agricultural leases to a length of time no longer than
    
    twenty years does not apply to land suitable for agricultural purposes
    
    but leased for purely nonagricultural purposes. Id. at 554.
    
          Other     states   that   have    similar   constitutional    or    statutory
    
    provisions have reached the same conclusion. Michigan also based their
    
    original   constitutional     agricultural   provision   on   the        New   York
    
    Constitution.    Mich. Const. art. 18, § 12 (1850); De Grasse v. Verona
    
    Mining Co., 
    152 N.W. 242
    , 250 (Mich. 1915) (per curiam). The Michigan
    
    Supreme Court held that a lease for the sole purpose of mining, though it
    
    encompassed land suitable for agricultural purposes, did not violate the
    
    constitutional provision limiting agricultural leases to twelve years. Id.
                                         14
    
    This particular lease included a provision that expressly prevented the
    
    mining company from using the land for agricultural purposes. Id.
    
          In Montana, a statutory provision prevented leases of agricultural
    
    land longer than ten years. See Lerch v. Missoula Brick & Tile Co., 
    123 P. 25
    , 26 (Mont. 1912) (citing Mont. Revised Codes § 4465).        In Lerch, a
    
    lessor owned a large tract of land and leased a portion of it for the
    
    purpose of manufacturing brick and tile. Id. at 25. While the land was
    
    fit for agricultural purposes, the terms of the lease were that the land
    
    would be used for manufacturing purposes. Id. at 25–26. The lease did
    
    not contain an express provision prohibiting the brick company from
    
    engaging in agricultural activity.    Id. at 27.   The court rejected the
    
    argument that the lease needed to expressly prohibit agricultural
    
    purposes in order for it to be valid. Id. Instead, the court reasoned,
    
          When a lease of land is made ostensibly for purposes other
          than agricultural and the land so leased cannot by the terms
          of the lease, either express or implied, be put to agricultural
          uses by the lessee, the purpose of the statute has been
          satisfied, and the land in effect ceases to be agricultural land
          within the meaning of the law, although susceptible of use
          for agricultural purposes.
    
    Id.
          In South Dakota, a tract of land was leased to the Sioux Gun Club
    
    “for Club purpose, recreational and social purposes, and not as and for
    
    agricultural purposes.” Ryan v. Sioux Gun Club, 
    2 N.W.2d 681
    , 682 (S.D.
    
    1942). At the time the parties entered into the lease, the property was
    
    used primarily as a pasture, but had a small growth of timber. Id. After
    
    the Sioux Gun Club came into possession, it cleared the land to make it
    
    suitable for a gun club. Id. At various points, the club allowed sheep to
    
    graze on the land and grew and sold alfalfa. Id. Both of these activities
    
    were undertaken in order to hasten the clearing of the land for use as a
                                         15
    
    gun club. Id. The court concurred with the reasoning of the New York,
    
    Montana, and Michigan courts and concluded that the lease did not
    
    violate the state statutory provision because it provided that the purpose
    
    of the lease was to establish a gun club and expressly precluded
    
    agricultural activity on the land.     Id. at 683 (interpreting S.D. Code
    
    § 38.0403).
    
          In North Dakota, the owners of a farm leased a four-acre parcel of
    
    their land to a broadcasting company for the purpose of installing and
    
    maintaining a radio transmitter tower.        Berry-Iverson Co. of N.D. v.
    
    Johnson, 
    242 N.W.2d 126
    , 127–28 (N.D. 1976). Although the land was
    
    suitable for agricultural purposes, it was leased for the intended purpose
    
    of building a radio transmitter and was actually used as a site for a radio
    
    transmitter. Id. at 132. The court held that the lease did not violate the
    
    statutory prohibition on agricultural leases longer than ten years.       Id.
    
    (interpreting N.D. Cent. Code § 47-16-02).
    
          2. Whether the denial of the 4-H Foundation’s motion for summary
    
    judgment was appropriate. In order to find that the lease between the
    
    Arboretum and the 4-H Foundation violates article I, section 24 of the
    
    Iowa Constitution, three factors must be established: that a lease exists
    
    between the parties, that the lease is for a term longer than twenty years,
    
    and that the lease is for agricultural purposes. See Casey, 286 N.W.2d
    
    at 206. The parties entered into a cash rent lease in 1980, and the term
    
    was for a period of ninety-nine years. The first two elements are clearly
    
    satisfied.
    
          As to the third element, we have previously held that land suitable
    
    for agricultural use but used solely for nonagricultural purposes does
    
    not fall under the constitutional restriction contained in article I, section
    
    24.   Howard, 528 N.W.2d at 554.          We have not yet addressed the
                                             16
    
    question of whether incidental agricultural use of land leased for a
    
    nonagricultural purpose makes land agricultural for purposes of our
    
    constitutional restriction on the length of agricultural leases. 6
    
           Other states whose constitutional or statutory provisions have also
    
    been based on the New York Constitution of 1846 have faced the
    
    question of land that is suitable for agriculture but actually used for a
    
    different purpose. Those states have concluded that the lease did not fall
    
    under the term-of-years exclusion. See, e.g., Mass. Nat’l Bank, 57 N.E.
    
    at 613; Lerch, 123 P. at 27; Ryan, 2 N.W.2d at 682. In some of those
    
    states, the lessee engaged in farming that was merely incidental to the
    
    stated purpose of the lease. See Mass. Nat’l Bank, 57 N.E. at 613; Ryan,
    
    2 N.W.2d at 682.            In others, the lessee’s activities were solely
    
    nonagricultural. Lerch, 123 P. at 28; Berry-Iverson Co., 242 N.W.2d at
    
    127–28.
    
           Here, the MOU and 1980 lease both contemplate that the purpose
    
    of the lease is to establish and maintain an arboretum. The MOU begins
    
    by stating an express purpose:
    
           It is the mutual desire of the Arboretum and the 4-H
           Foundation that 300 acres of land . . . be utilized for public
           arboretum development by the Arboretum. It is the belief of
           both parties that the development of this land for use as an
           arboretum is for the mutual benefit of each organization and
           the Iowa public.
    
    Paragraph two of the 1980 lease establishes that the 4-H Foundation
    
    agrees to lease “to the Arboretum for development as part of the
    
           6We  recently heard another case arising under article I, section 24. In Gansen,
    we considered a dispute regarding two five-year leases that automatically renewed for
    four additional five-year terms. 874 N.W.2d at 618. In the event the leases did
    automatically self-renew, the lessor and lessee would be locked into a binding twenty-
    five-year contract. Id. at 626. We held that the leases were valid for the first twenty
    years but invalid once the twenty-year time limit expired. Id. We also held that both
    lessors and lessees could enforce article I, section 24 of the Iowa Constitution. Id.
                                           17
    
    Arboretum” the 300-acre tract of land in question.         While neither the
    
    MOU nor the lease expressly prohibits the Arboretum from engaging in
    
    farming activities, the terms of the lease indicate that neither party
    
    expected that the Arboretum would utilize the land as farmland. This is
    
    demonstrated     most   clearly   in   the    terms   establishing   rates   of
    
    compensation for leasing the areas of tillable cropland. In the event the
    
    Arboretum chooses to exercise its option to lease portions of the tillable
    
    cropland, “[c]ompensation for leasing the tillable crop land will be based
    
    on the accrual net farm income earned per tillable acre on the remaining
    
    tillable crop land the 4-H Foundation presently owns.” Compensation is
    
    based, therefore, on the profit the 4-H Foundation would have earned if
    
    the land were being used for agricultural production.
    
          Further, the Arboretum uses all of the land it has elected to lease
    
    for nonagricultural purposes.     This land is used for the arboretum, a
    
    restored prairie, and a parking lot.        Of the 300-acre tract, 250 acres
    
    comprise the arboretum itself. The Arboretum has exercised its option to
    
    lease 7.1 acres of tillable cropland, which it utilizes for a restored prairie
    
    and a parking lot for visitors. Of the remaining land, 36.9 acres are in
    
    the 4-H Foundation’s possession under the CRP.              Hertz farms the
    
    remaining three acres for the 4-H Foundation.
    
          Further, this lease is not “[t]he evil aimed at” by the constitutional
    
    provision preventing long leases of farming lands for agricultural
    
    purposes. Mass. Nat’l Bank, 57 N.E. at 613. The provision was enacted
    
    to prevent lengthy leases that led to oppression of tenants and violent
    
    unrest. Gansen, 874 N.W.2d at 624; Howard, 528 N.W.2d at 553. The
    
    framers intended to prevent long-term leases of agricultural land that led
    
    to stagnation and alienation of those parcels of land. Stephens, 6 N.Y. at
    
    457; see also Howard, 528 N.W.2d at 553. In contrast, this lease was
                                         18
    
    entered into by two parties who contemplated establishing an arboretum
    
    on a parcel of land. The parties further anticipated that farmland would
    
    be converted for the use of the Arboretum and included a provision for
    
    calculating compensation if and when this occurred.
    
          We conclude that the district court did not err in concluding that
    
    the Iowa Constitution was inapplicable to the lease between the parties.
    
    We reiterate that when land that can be used for agricultural purposes
    
    is, however, leased and used for nonagricultural purposes, the lease does
    
    not fall under the constitutional restriction contained in article I, section
    
    24 of the Iowa Constitution.
    
          B. Validity of Lease.      The 4-H Foundation argues the district
    
    court erred in granting the Arboretum’s motion for declaratory judgment
    
    establishing the validity of the lease. It contends that there is an issue of
    
    material fact as to whether the property is agricultural that precludes the
    
    granting of the Arboretum’s motion for summary judgment. The district
    
    court held that the land was nonagricultural and did not fall under the
    
    constitutional term-of-years restriction, therefore making the lease valid.
    
          A determination of the validity of the lease necessarily relies on a
    
    resolution of whether the lease falls under the constitutional restriction
    
    on agricultural leases. Because we find that the lease does not fall under
    
    the constitutional restriction contained in article I, section 24 of the Iowa
    
    Constitution, we likewise find that the lease is valid.
    
          C. The 4-H Foundation Breach-of-Contract Claim. The district
    
    court dismissed the 4-H Foundation’s counterclaim for breach of
    
    contract under the doctrine of estoppel by acquiescence.           The 4-H
    
    Foundation claims the Arboretum breached the lease by not meeting
    
    every four years to approve the terms.       The Arboretum did not plead
    
    estoppel by acquiescence as an affirmative defense; rather, it argued that
                                       19
    
    the breach-of-contract counterclaim was barred by estoppel, unclean
    
    hands, waiver, and laches.     The district court raised the doctrine of
    
    estoppel by acquiescence sua sponte and rejected the counterclaim on
    
    that ground.
    
          We can uphold the district court’s ruling on appeal on an
    
    alternative ground, so long as that ground was presented to the district
    
    court. Fennelly v. A-1 Machine & Tool Co., 
    728 N.W.2d 163
    , 176 (Iowa
    
    2006).   Here, the Arboretum moved for summary judgment on the
    
    alternative ground that it had not breached the contract between the
    
    parties. Generally, to establish a claim for a breach of contract, the 4-H
    
    Foundation must show
    
          (1) the existence of a contract; (2) the terms and conditions
          of the contract; (3) that it has performed all the terms and
          conditions required under the contract; (4) the defendant’s
          breach of the contract in some particular way; and (5) that
          plaintiff has suffered damages as a result of the breach.
    
    Iowa Mortgage Ctr., L.L.C. v. Baccam, 
    841 N.W.2d 107
    , 110–11 (Iowa
    
    2013) (quoting Molo Oil Co. v. River City Ford Truck Sales, Inc., 
    578 N.W.2d 222
    , 224 (Iowa 1998)). Offering evidence of damages is required
    
    to demonstrate a claim for breach of contract. Sutton v. Iowa Trenchless,
    
    L.C., 
    808 N.W.2d 744
    , 753 (Iowa Ct. App. 2011).
    
          The 4-H Foundation claims that the Arboretum breached the terms
    
    of the 1969 MOU by failing to review the agreement every four years and
    
    enter into a new lease every five years. The Arboretum responds that the
    
    1980 cash-rent lease is the controlling document.      While the parties
    
    entered into the lease to supplement the MOU, they also agreed that the
    
    lease would continue for a term of ninety-nine years rather than a
    
    number of consecutive, five-year leases.
                                        20
    
          The 4-H Foundation is unable to demonstrate that the Arboretum
    
    breached the contract. The 1980 cash-rent lease states that “[t]he intent
    
    of the parties hereto is to continue the lease for a term of ninety-nine
    
    years. The lease will be subject to review at the end of four years as per
    
    Section IV–B of the memorandum.” This section of the MOU states that
    
    it will be “implemented by detailed leases for consecutive five-year terms.
    
    Each five-year lease is to be reviewed at the end of the fourth year and
    
    revisions as appropriate made in the next detailed lease.”
    
          We must determine how to reconcile and give effect to these
    
    seemingly conflicting terms.   See, e.g., Alta Vista Props., LLC v. Mauer
    
    Vision Center, PC, 
    855 N.W.2d 722
    , 729 (Iowa 2014).
    
                  Parties may modify the terms of their agreement and if
          the terms of a subsequent agreement contradict the earlier
          agreement, the terms of the later agreement prevail, and
          supersede those of the earlier contract. Where two contracts
          are made at different times, but where the later is not
          intended to entirely supersede the first, but only to modify it
          in certain particulars, the two are to be construed as parts of
          one contract, the later superseding the earlier one wherever
          it is inconsistent.
    
    17A Am. Jur. 2d Contracts § 489, at 469–70 (2016) (footnotes omitted).
    We have generally recognized when the parties modify a contract, a new
    contract arises. See, e.g., Chapman’s Golf Ctr. v. Chapman, 
    524 N.W.2d 422
    , 426 (Iowa 1994). The parties to a contract may supersede or modify
    the contract at any time.    Recker v. Gustafson, 
    279 N.W.2d 744
    , 754
    (Iowa 1979). They “may by a new and later agreement rescind it in whole
    or in part, alter or modify it in any respect, add to or supplement it, or
    replace it by a substitute.” Id. (quoting Am. Jur. 2d Contracts § 462, now
    found at 17A Am. Jur. 2d Contracts § 489, at 469)). When the parties to
    a contract modify the terms, there must be some new and valid
    consideration. Margeson v. Artis, 
    776 N.W.2d 652
    , 657 (Iowa 2009). We
                                             21
    
    generally presume that a written and signed contract is supported by
    consideration. Id. at 656.
           Here, the terms of the lease and the MOU are inconsistent with
    
    regard to the length of the lease. A lease cannot be both for a term of
    
    ninety-nine years and made in multiple, recurring, five-year periods. The
    
    language used by the parties substitutes the consecutive five-year lease
    
    period for a new, long-term lease of the property. Adequate consideration
    
    was given for the modification because the lease was in writing and, prior
    
    to the 1980 cash-rent lease, the parties were under no obligation to
    
    continue with a long-term lease past each five-year period. To the extent
    
    that the ninety-nine-year term conflicts with the terms of the MOU, the
    
    1980 cash-rent lease controls.         We hold that the 4-H Foundation has
    
    failed to demonstrate that the Arboretum breached the terms of the
    
    lease. The district court was correct in denying summary judgment to
    
    the 4-H Foundation. 7
           IV. Conclusion.
    
           For the foregoing reasons, we hold that the district court was
    
    correct in granting the declaratory relief to the Arboretum. The district
    
    court was also correct in denying summary judgment to the 4-H
    
    Foundation on its breach-of-contract claim. We accordingly affirm the
    
    decision of the district court.
    
           AFFIRMED.
    
    
    
    
           7Because we decide that there was no breach of the contract as a matter of law,
    it is not necessary for us to decide the other affirmative defenses raised by the
    Arboretum.