REG Washington, LLC v. Warren Bush, William Horan, Taylor Schroeder, Charles & Angela Bush, Gary Soules, Linda Bush, and Tim Burrack ( 2020 )

IN THE COURT OF APPEALS OF IOWA
No. 19-1635
Filed September 2, 2020
REG WASHINGTON, LLC,
Plaintiff-Appellee,
vs.
WARREN BUSH, WILLIAM HORAN, TAYLOR SCHROEDER, CHARLES &
ANGELA BUSH, GARY SOULES, LINDA BUSH and TIM BURRACK,
Defendants-Appellants.
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Appeal from the Iowa District Court for Sac County, James M. Drew, Judge.
The defendants appeal the district court order granting summary judgment
for REG Washington, LLC. AFFIRMED.
Warren L. Bush, Wall Lake, for appellants.
John F. Lorentzen and Thomas C. Goodhue of Nyemaster Goode, P.C.,
Des Moines, for appellee.
Considered by Bower, C.J., and Doyle and Schumacher, JJ.
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DOYLE, Judge.
Warren Bush, William Horan, Taylor Schroeder, Charles and Angela Bush,
Gary Soules, Linda Bush, and Tim Burrack (the defendants) appeal the district
court order granting summary judgment for REG Washington, LLC (REG) on its
restitution claim and dismissing their counterclaims. The action arises from REG’s
attempt to purchase the defendants’ units of ownership in Iowa Renewable Energy
(IRE). The defendants accepted REG’s offer to pay $442.50 per unit for 1895
units, and REG tendered payment.
IRE’s operating agreement prohibits the owners of its units from transferring
units unless the board of directors approves the transfer in writing and gives the
board of directors sole discretion to withhold approval. In a letter dated March 24,
2017, IRE’s president informed the defendants that the board of directors “decided
to not permit any Transfers to REG related to the REG Offer.” IRE instead offered
to pay the defendants $600 per unit for up to 2500 units. Because REG believed
it had lawfully bought the units, it instructed the defendants to reject IRE’s offer.
After unsuccessfully pursuing a mandamus action to challenge the board’s
refusal to approve the unit transfer, REG filed this action for restitution to recoup
the purchase money it paid to the defendants. The defendants counterclaimed,
alleging that REG interfered with its opportunity to sell the units to other entities.
The district court granted summary judgment for REG, ordered the defendants to
refund the purchase price to REG, and dismissed the defendants’ counterclaims.
On appeal, the defendants challenge the order granting summary judgment
for REG. We review summary judgment rulings for correction of errors at law. See
MidWestOne Bank v. Heartland Co-op, 941 N.W.2d 876, 882 (Iowa 2020).
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Summary judgment is appropriate when the only conflict concerns the legal
consequences that flow from the undisputed facts. See id. We will affirm the grant
of summary judgment if, when viewing the facts and all inferences that may be
taken from them in the light most favorable to the nonmoving party, the moving
party is entitled to judgment as a matter of law. See id.
The district court entered judgment for REG against each defendant in the
amount REG paid for IRE units under the contract after finding the contract’s clear
and unambiguous language made REG’s acquisition of the IRE units an express
condition of the sale. The record supports this finding. Under the heading
“Approval Condition,” the contract states that REG is “not obligated to purchase
any Units unless any required approval, permit, authorization, license or consent
shall have been obtained . . . from . . . the IRE Board, including approval of the
transfer of the Units tendered pursuant to this Offer to Purchaser . . . .” Because
the defendants failed to satisfy this condition, they must return REG’s payment for
the units. See Potter v. Oster, 426 N.W.2d 148, 150 (Iowa 1988) (stating restitution
requires the party in breach to disgorge what was received by returning the benefit
to the injured party who conferred it, thus returning the party in breach back to its
original position).
The defendants also contend the district court erred in rejecting their
counterclaim for tortious interference with prospective business or economic
advantage and failing to hold REG responsible for the IRE income the defendants
have been required to report on their personal income tax returns. In rejecting the
counterclaim for tortious interference with prospective business advantage, the
court found that REG told the defendants to reject IRE’s offer to purchase the units
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with the good-faith belief that it was the owner of those units. We agree the
defendants failed to show REG had the requisite bad faith to succeed on this
counterclaim. See Jones v. Univ. of Iowa, 836 N.W.2d 127, 151 (Iowa 2013)
(requiring proof that one party intentionally and improperly interfered with the other
party’s contract “with the sole or predominant purpose to injure or financially
destroy” the other party (citation omitted)). We also agree that there is no basis
for holding REG responsible for the defendants’ tax situation.
We affirm the order granting summary judgment for REG. In view of our
decision, we need not consider defendants’ other arguments.
AFFIRMED.