Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in finding, after bench trial, that defendants-dealers breached contract with plaintiff's predecessor-in-interest that called for defendants' payment of $808,663 for 21 RVs manufactured by predecessor, where defendants had failed to pay anything for said RVs. Plaintiff, which had purchased predecessor's debt to entity that had loaned money to predecessor, was proper plaintiff, where entity had first priority blanket security interest in predecessor's accounts receivable that included instant RVs. Moreover, Dist. Ct. did not err in admitting parole evidence from two witnesses to establish that plaintiff had paid off predecessor's loan to entity in exchange for entity's assignment of security's interest in said RVs. Also, fact that predecessor had failed to pay defendants for certain rebates and warranty obligations did not create material breach of contract so as to excuse defendants' obligation to pay purchase price of said RVs, and thus Dist. Ct. properly subtracted cost of said obligations from RVs purchase price.

Dist. Ct. did not err in dismissing on limitations grounds plaintiff's lawsuit seeking declaration that parties' 1992 settlement agreement allowed plaintiff to retain shares of stock that plaintiff had owned in closely-held corporation. Under Indiana law, plaintiff had two years to bring instant lawsuit, and record showed that: (1) corporation had cancelled plaintiff's shares of stock in 1992; (2) at some point between 1992 and 1998, plaintiff stopped identifying himself as one of corporation's investors who was entitled to corporation's profits for income tax purposes; and (3) after January of 1998, plaintiff never tried to learn from corporation how much income he should report and otherwise did not pay any federal tax on any of corporation's profits. At some point after 2017, instant lawsuit was filed, and Dist. Ct. could properly find that plaintiff's cause of action accrued no later than 1998. Moreover, Ct. rejected plaintiff's contention that corporation's refusal to recognize him as shareholder was continuing wrong, such that he could bring instant lawsuit at any time.

In action seeking declaration that plaintiff was excused from its obligation to purchase eggs under contract it had with defendant, Dist. Ct. did not err in granting  summary judgment on defendant's counterclaim seeking damages for plaintiff's repudiation of contract based on defendant's theory of damages under Iowa Commercial Code, section 554.2706 that pertained to resale of eggs that plaintiff should have purchased from defendant, where defendant sold eggs at price that was lower than what defendant would have received under contract. Ct. rejected plaintiff's contention that defendant could not use resale remedy, where eggs at issue under contract never came into existence, since: (1) Iowa Code section 554.2706(2) explicitly makes resale remedy available to sellers, even when goods had not come into existence at time of breach; and (2) question as to whether defendant acted in commercially reasonable manner following plaintiff's repudiation of contract was resolved in defendant's favor by jury, and plaintiff had not otherwise challenged jury's finding on appeal. Also, plaintiff's argument that jury lacked evidence to calculate defendant's damages based on market price was waived, where plaintiff failed to bring timely post-verdict motion challenging jury's verdict. Too, Dist. Ct. erred in denying defendant's request for pre-judgment interest at rate set forth in contract, plus attorney's fees, even though Dist. Ct. determined that interest rate set forth in contract violated Iowa's usury law, where Business Credit Exception under Iowa Code section 535.2(2)(a)(5) to usury law applied to interest rates set forth in instant contract that essentially involved extension of credit arising out of plaintiff's failure to pay amounts set forth in invoices.