Paul Yakel and Therese Yakel v. Randall W. Wheeler

IN THE COURT OF APPEALS OF IOWA

No. 23-0795
Filed July 3, 2024

PAUL YAKEL and THERESE YAKEL,
Plaintiffs-Appellants,

vs.

RANDALL W. WHEELER,
Defendant-Appellee.
________________________________________________________________

Appeal from the Iowa District Court for Pottawattamie County, James S.

Heckerman, Judge.

Homeowners appeal the district court’s grant of summary judgment

dismissing their breach-of-contract, breach-of-implied-warranty, and negligent-

construction claims arising from a home-siding-replacement project. AFFIRMED.

Olivia R. McDowell and Sean A. Minahan of Lamson Dugan & Murray LLP,

Omaha, Nebraska, and Theodore T. Appel of Lamson Dugan & Murray LLP, West

Des Moines, for appellants.

Brody D. Swanson of Peters Law Firm, P.C., Council Bluffs, for appellee.

Heard by Schumacher, P.J., and Badding and Langholz, JJ.
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LANGHOLZ, Judge.

Paul and Therese Yakel believe that the replacement siding on their home

was installed defectively. So, as one might expect, the Yakels sued the company

that installed the siding—Lightwine Construction. But this appeal is not about

those claims against Lightwine. The Yakels voluntarily dismissed them.

Rather, the Yakels ask us to consider whether they may recover for their

damages caused by the improper installation from Randy Wheeler, whom they

paid $800 to design their home improvements and help find contractors, including

Lightwine. They allege that their oral contract with Wheeler also included his

services as their general contractor. And so they seek to hold him liable for claims

of breach of contract, breach of implied warranty, and negligent construction for

his allegedly negligent conduct selecting Lightwine and directing the installation.

But the Yakels have a problem in surviving summary judgment. They both

testified in two depositions each—in sync on a critical fact: “Randy [Wheeler] was

not our general contractor.” And the undisputed evidence shows that they selected

Lightwine and contracted with Lightwine directly rather than paying Wheeler under

a general contract. Thus, regardless of Wheeler’s precise involvement in the

installation, no reasonable jury could find that the parties contracted for Wheeler

to be the general contractor on the project. So their breach-of-contract and breach-

of-implied-warranty claims based on the contrary theory fail as a matter of law.

Because their negligence claim also seeks to remedy their defeated expectations

on the construction project, the economic-loss doctrine forecloses it as well.

Therefore, the district court did not err in granting summary judgment to Wheeler

and dismissing all the Yakels’ claims.
3

I. Factual Background and Proceedings

The Yakels are homeowners in Council Bluffs. In 2014, they embarked on

several home-improvement projects, including replacing their siding. They

contacted Carson Stone & Supply, LLC, seeking installation and design consulting.

From there, the Yakels were referred to Randy Wheeler for design work.

Wheeler was tasked with the “overall design” of the Yakels’ improvements,

specifically the “curb appeal” of their home and ensuring the “new porch,”

“pergolas,” and other aspects were “blended together.” To that end, Wheeler and

the Yakels agreed orally to work together on selecting visually appealing materials

for the siding. The Yakels paid Wheeler $800 for design services and assistance

finding contractors to perform the work, including installing the siding.

Wheeler contacted contractors and received multiple bids, presenting them

to the Yakels and offering his advice. Ultimately, the Yakels made the contractor

selection—choosing Lightwine. And Lightwine installed their siding. Lightwine’s

representative believed he was hired by Wheeler and not the Yakels, so he sent

the bills to Wheeler. But Wheeler forwarded the bills to the Yakels, who in turn

paid Lightwine directly. Over the course of the project, the Yakels communicated

directly with Lightwine about concerns. And sometimes they asked Wheeler for

his help in working with Lightwine to resolve them, and he did so.

The project was completed in 2015. But roughly a year and a half later, the

Yakels noticed the panels bowing, causing the siding and nails to pull away from

the house. The Yakels first tried to fix the siding on their own, but to no avail. The

damaged siding required removal and replacement with new siding.
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In July 2018, the Yakels thus sued Lightwine, alleging that it breached their

contract for replacing their siding “by failing to properly install the siding in a

workmanlike manner.” They also brought breach-of-implied warranty and

negligent-construction claims based on the same conduct.

During discovery, the Yakels learned that Wheeler had been more involved

in directing Lightwine’s work than they had realized. Indeed, Therese Yakel

eventually testified that she was unaware of the “depth” of Wheeler’s involvement

in the project until she “read [Wheeler’s] deposition.” Wheeler and Lightwine’s

employees inspected the Yakels’ property together, crafted a project timeline for

Lightwine, and established he would be “orchestrating the job.” Wheeler instructed

Lightwine employees on nail placement, fastener color, the location and size of

unique siding pieces, and ensuring joints were caulked with clear silicone.

Lightwine stated they had to get confirmation on every decision from Wheeler and

they communicated regularly. Lightwine thus places the blame for any defective

installation with Wheeler rather than itself.

And so, in August 2019, the Yakels amended their petition to add the same

three claims against Wheeler that they first brought against only Lightwine. First,

they claimed that they contracted with Wheeler “for design work and contractor

services regarding the design and execution of the design on [their] home” and

Wheeler breached that contract “when he negligently instructed Defendant

Lightwine how to install the siding, and/or when [he] negligently hired Defendant

Lightwine.” Second, they claimed that Wheeler breached an implied warranty that

“the work performed by him and his subcontractors would be performed in a

workmanlike manner” by “selecting and instructing [his] subcontractors
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negligently.” And third, they asserted a claim of negligent construction, claiming

that Wheeler breached his “duty of care to properly and carefully select [his]

subcontractors and to properly instruct [his] subcontractors, exercising the degree

of care, skill, and knowledge ordinarily exercised by general contractors.” The

Yakels also added the same three claims against Carson Stone, asserting that it

was vicariously liable for Wheeler’s conduct.

Wheeler moved for summary judgment, seeking dismissal of all the Yakels’

claims against him. He argued that the breach-of-contract and breach-of-implied

warranty claims fail because the claims are based on damage for “construction

services, not design services.” And that the undisputed facts—including the

Yakels’ own testimony in two depositions each—show that they contracted with

Wheeler only “for design services and to help them find a contractor, and they

absolutely did not hire him as a general contractor.” Wheeler also argued that the

negligent-construction claim is barred by the economic-loss doctrine because it

seeks recovery for the Yakels’ defeated expectations under the various contractual

relationships in this construction project.

In resistance, the Yakels argued that a fact dispute still exists over the terms

of their contract despite their testimony that Wheeler was not their general

contractor because Wheeler’s conduct acting as a general contractor could be

found to have “created contractual obligations above and beyond his design work.”

And since a fact dispute exists as to whether Wheeler was their general contractor,

they contended that they should be able to maintain a claim for his breach of the

implied warranty of workmanship applicable to general contractors. They also

argued that the economic-loss doctrine does not apply to their negligent-
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construction claim for two reasons. First, because “none of [their] damages involve

an economic loss but instead involve damages to property.” And second, because

they viewed their negligent-construction claim as an alternative theory applicable

if they had no contract with Wheeler covering his conduct and they reasoned that

the doctrine cannot apply if the parties have no contract.

The district court agreed with Wheeler, granted summary judgment, and

dismissed the claims against him. The court reasoned that the Yakels’ “primary

claims stem from a breach of contract claim, and based off the Yakels[’] own

depositions and the amount paid to Wheeler, it is clear to this Court that Wheeler

was never hired as a general contractor” and there was no “disputed material fact”

on this point. The court also seemed to reject the Yakels’ argument that the

economic-loss doctrine does not apply, explaining it was “not persuaded” that “this

case was not about a contract, but more about property damage.”

The Yakels moved for reconsideration of the dismissal of all their claims

under rule 1.904. Among other arguments, they contended that the court did not

expressly address whether “the economic loss doctrine barred the negligence

claim.” And they again argued that the doctrine cannot apply because they allege

not just “purely economic” damages but also physical damage to their home and

because their negligence claim should be permitted as an alternative theory.1 The

district court summarily denied the motion for reconsideration.

1 They also made a new argument that they could have a claim of negligence

based on a duty arising out of agency law and that such a claim is an exception to
the economic-loss doctrine. See Annett Holdings, Inc. v. Kum & Go, L.C., 801
N.W.2d 499, 504 (Iowa 2011). But they do not pursue this argument on appeal so
we need not consider its merits or whether it was preserved for our review.
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The Yakels then successfully sought to stay the district court proceedings

on their remaining claims while they pursued an immediate appeal of the summary-

judgment ruling on their claims against Wheeler. But our court dismissed their

appeal. We reasoned that the ruling was “not final and ripe for appeal as a matter

of right” and that granting permission for an interlocutory appeal would not “serve

the interests of sound and efficient judicial administration.” Yakel v. Wheeler, No.

20-1432, 2022 WL 122353, at *3 (Iowa Ct. App. Jan. 12, 2022).

So the case continued on against the other defendants in the district court.

Six months later, the district court granted summary judgment to Carson Stone and

dismissed those claims. In April 2023, the Yakels voluntarily dismissed their last

remaining claims—the original ones against the siding installer, Lightwine. And

then they filed this appeal, again seeking review of the summary judgment ruling

dismissing their claims against Wheeler.2

II. Appellate Jurisdiction

At the start, Wheeler disputes whether we have jurisdiction over this appeal.

He argues that the Yakels did not appeal from a final judgment because the Yakels’

voluntary dismissal of Lightwine—the last remaining defendant—cannot serve as

a final appealable order under our rules without the district court issuing an order

addressing the dismissal. Wheeler is incorrect.

“A notice of appeal must be filed . . . within 30 days after the filing of the

final order or judgment.” Iowa R. App. P. 6.101(1)(b). “An order disposing of some

but not all of the parties or issues in an action may be appealed within the time for

2 The Yakels appealed the ruling dismissing the claims against Carson Stone too.

But they voluntarily dismissed that appeal. See Iowa R. App. P. 6.1201(1).
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appealing from the judgment that finally disposes of all remaining parties and

issues to an action, even if the parties' interests or the issues are severable.”

Iowa R. App. P. 6.101(1)(d). And a voluntary dismissal of the last remaining claim

in a case, except in the days just before trial, is “self-executing and mark[s] the

date of finality for appeal” of any of those previous interlocutory orders. Valles v.

Mueting, 956 N.W.2d 479, 484 (Iowa 2021); see also Iowa R. Civ. P. 1.943.

Here, the district court first dismissed Wheeler from this suit in August 2020,

then later dismissed Carson Stone. This left Lightwine as the sole remaining

defendant. Once the Yakels voluntarily dismissed Lightwine on April 17, 2023,

that dismissal was self-executing. See Valles, 956 N.W.2d at 484. It matters not

that the dismissal included a request that the court “deem their claims against”

Lightwine dismissed and “recognize [their] continued claims against” the other

defendants—no court order was needed to finalize the case for appeal. See id.

Thus, the Yakels timely appealed from the dismissal of the last remaining

defendant. And so, this court has jurisdiction to review the August 2020 summary

judgment ruling.

III. Breach of Contract

Turning to the merits, we first consider whether the district court erred in

granting summary judgment on the Yakels’ breach-of-contract claim against

Wheeler. We review this ruling for correction of errors at law. See Peak v. Adams,

799 N.W.2d 535, 542 (Iowa 2011).

Under Iowa Rule of Civil Procedure 1.981, the district court must grant a

motion for summary judgment when the evidence in the record “show[s] that there

is no genuine issue as to any material fact and that the moving party is entitled to
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a judgment as a matter of law.” Iowa R. Civ. P. 1.981(3). The nonmoving “party

may not rest upon the mere allegations or denials in the pleadings, but the

response, by affidavits or as otherwise provided in this rule, must set forth specific

facts showing that there is a genuine issue for trial.” Iowa R. Civ. P. 1.981(5).

The record must be viewed in the light most favorable to the nonmoving

party. See Peak, 799 N.W.2d at 542. But our supreme court has warned,

“Summary judgment is not a dress rehearsal or practice run for trial but rather the

put up or shut up moment in a lawsuit, when a nonmoving party must show what

evidence it has that would convince a trier of fact to accept its version of the

events.” Buboltz v. Birusingh, 962 N.W.2d 747, 754–55 (Iowa 2021) (cleaned up).

“And if, after considering all that evidence in the light most favorable to the

nonmoving party, no reasonable mind could differ on how the factual issues should

be resolved—and the law applied to those facts compels judgment for the moving

party—summary judgment must be granted.” In re Est. of River, 6 N.W.3d 13, 17–

18 (Iowa Ct. App. 2024).

The Yakels argue that they presented sufficient evidence to generate a jury

question on whether they orally contracted with Wheeler to have him serve as a

general contractor, which in turn generates a jury question as to whether he should

be held liable for the project’s deficiencies. But like the district court, we see no

evidence from which a reasonable juror could conclude the parties intended for

Wheeler to serve as a general contractor.

It is undisputed that Wheeler was hired to design the project and solicit bids

for the necessary construction work. It is also undisputed that the Yakels chose to

hire Lightwine and paid Lightwine directly. And to remove any remaining doubt,
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the Yakels both testified—twice each—that they did not hire Wheeler to be a

general contractor, nor did they believe him to be their general contractor during

the project. As Therese Yakel herself succinctly phrased it, “Randy [Wheeler] was

not our general contractor.”

“If a party testifies deliberately to a concrete fact, not as a matter of opinion,

estimate, appearance, inference, or uncertain memory, but as a considered

circumstance of the case, his adversary is entitled to hold him to it as an informal

judicial admission.” Snittjer Grain Co. v. Koch, 71 N.W.2d 29, 34 (Iowa 1955); see

also Yockey v. State, 540 N.W.2d 418, 421 (Iowa 1995) (same). This is true of

deposition testimony submitted at summary judgment the same as trial testimony

on a directed verdict. See Glen Haven Homes, Inc. v. Mills Cnty. Bd. of Rev., 507

N.W.2d 179, 181–82 (Iowa 1993) (affirming grant of summary judgment on a claim

of “substantial change of circumstances” because it “was negated by the

deposition testimony of [the claiming party’s] managing agent” that conceded there

had been “no change in material facts,” which was “a vicarious admission binding”

on the party “unless altered or withdrawn”); C&F Maint. & Prop. Mgmt., Inc. v.

Eliason & Knuth Drywall Co., 418 N.W.2d 44, 47 (Iowa 1988) (recognizing that

“deposition testimony” of a contracting party “might be binding as a judicial

admission” on the meaning of a contract but only in a suit between the contracting

parties). Wheeler is entitled to hold the Yakels to their consistent testimony—not

just once, but each of them twice—that they did not intend to orally contract with

him to be a general contractor.

The Yakels acknowledge this testimony, but still argue that Wheeler’s

conduct overseeing the project and Lightwine’s belief that Wheeler was the general
11

contractor is enough to generate a jury question on whether the Yakels and

Wheeler entered into a general-contractor contract. And true, Wheeler took an

active role in the project, and Lightwine’s representative testified that the company

largely followed Wheeler’s decisions and presumed Wheeler was the general

contractor. But evidence of what other people believed the arrangement to be is

not probative of what relationship the parties themselves intended to create. Nor

does evidence of Wheeler’s intent generate a fact question as to the Yakels’ intent.

“A contract requires a meeting of the minds.” Peak, 799 N.W.2d at 544. So we

look for the parties’ “mutual intent” not “some secret, undisclosed intention they

may have had in mind, or which occurred to them later.” Id. (cleaned up).

Thus, even if the Yakels’ deposition testimony does not foreclose the

introduction of other evidence on their intent, they have presented no other

conflicting evidence on that point that generates a fact dispute. And again, their

testimony is not the only undisputed evidence showing that the Yakels did not

intend to contract with Wheeler to be their general contractor. A general contractor

is one “who contracts for the completion of an entire project, including purchasing

all materials, hiring and paying subcontractors, and coordinating all the work.”

General Contractor, Black’s Law Dictionary (11th ed. 2019). Wheeler did not enter

into a contract with or pay Lightwine anything for this project. The Yakels selected

Lightwine and paid Lightwine directly. They paid Wheeler only $800, which could

not possibly be confused with payment for completion of the entire project.

In arguing otherwise, the Yakels point to Anita Dairy, L.C. v. Kooiman, No.

03-0966, 2004 WL 1854006 (Iowa Ct. App. Jul. 14, 2004), as a case where we

reversed the grant of summary judgment and concluded there was a fact dispute
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on the question whether a business was hired as a general contractor. But that

opinion was vacated on rehearing by this court. And the new opinion issued on

rehearing came out the other way—affirming the grant of summary judgment. See

Anita Dairy, L.C. v. Kooiman, No. 03-0966, 2005 WL 67126, at *2–3 (Iowa Ct. App.

Jan. 13, 2005). So while the Yakels’ are correct that Anita Dairy is remarkably

similar factually,3 it’s persuasive value cuts against their cause rather than

supporting it.

Bottom line—even viewing the record in the light most favorable to the

Yakels, we find no reasonable jury could find they intended to contract with

Wheeler to provide general contractor services at any point during the project. And

the Yakels’ breach-of-contract claim rests entirely on that theory. Thus, we affirm

the district court’s dismissal of the breach-of-contract claim against Wheeler.

IV. Breach of Implied Warranty

We next address the Yakels’ claim that Wheeler breached the implied

warranty of workmanship applicable to general contractors. The Yakels correctly

point out that it “has long been the law of this state” that “[i]n construction contracts

there is an implied warranty that the building to be erected will be built in a

reasonably good and workmanlike manner.” Kirk v. Ridgway, 373 N.W.2d 491,

493 (Iowa 1985). But as with the breach-of-contract claim, this claim fails because

3 Anita Dairy is in some ways a mirror image of this case. There, the plaintiff
arguably generated a fact dispute about its intent (presenting testimony that it
believed it was hiring defendant as a general contractor) but presented no
evidence that the defendant shared that intent or engaged in any conduct showing
it might be acting as a general contractor. See Anita Dairy, 2005 WL 67126, at
*2–3. Just as here, that was not enough to generate a fact dispute about a mutual
meeting of the minds to establish a general-contractor relationship.
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the undisputed facts show that the Yakels did not enter into a construction contract

with Wheeler for him to serve as a general contractor. Their contract was only for

design services and assistance in finding their contractors. Wheeler thus did not

have “ultimate responsibility” for completion of the siding. Id. at 496 (cleaned up).

And so, this claim fails as a matter of law.

True, our supreme court has extended the availability of this implied-

warranty claim beyond its contractual origins to purchasers and subsequent

purchasers of a completed home from a builder-vendor. See id.; Speight v.

Walters Dev. Co., 744 N.W.2d 108, 114–15 (Iowa 2008). But given the court’s

refusal to extend the claim any further, we see no basis in the governing

precedents to conclude that the court would further extend such liability to a party

who only provided design and contractor-finding services. See Luana Sav. Bank

v. Pro-Build Holdings, Inc., 856 N.W.2d 892, 902 (Iowa 2014) (declining to extend

the claim’s availability “to a lender acquiring apartment buildings by a deed in lieu

of foreclosure”); Rosauer Corp. v. Sapp Dev., L.L.C., 856 N.W.2d 906, 914 (Iowa

2014) (declining to extend claim to impose liability on land developer of empty lot);

Flom v. Stahly, 569 N.W.2d 135, 142 (Iowa 1997) (declining to extend liability to

homeowners who mainly constructed the house themselves for their own use).

The district court did not err in granting summary judgment on the Yakels’ breach-

of-implied-warranty claim.

V. Negligent Construction and Economic-Loss Doctrine

Finally, the Yakels argue that even if there is no general-contractor

agreement between themselves and Wheeler, the district court erred in dismissing

their negligent-construction claim against Wheeler because it is an alternative
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theory to recover for their damages caused by the improper installation of the

siding that does not rely on a contractual relationship. Wheeler counters that

dismissal of this claim can be affirmed based on the economic-loss doctrine. We

agree with Wheeler that the economic-loss doctrine precludes any tort claim.4

Iowa follows the well-established rule “that a plaintiff who has suffered only

economic loss due to another’s negligence has not been injured in a manner which

is legally cognizable or compensable.” Neb. Innkeepers, Inc. v. Pittsburgh–Des

Moines Corp., 345 N.W.2d 124, 126 (Iowa 1984). A “rationale for this limitation on

recovery is that purely economic losses usually result from the breach of a contract

and should ordinarily be compensable in contract actions, not tort actions.” Van

Sickle Constr. Co. v. Wachovia Com. Mortg., Inc., 783 N.W.2d 684, 693 (Iowa

2010) (cleaned up). We evaluate the policies behind contract law and tort law to

decide “whether a loss is compensable in tort or in contract.” Id.

As the supreme court has said, “the line to be drawn is one between tort

and contract rather than between physical harm and economic loss. When, as

here, the loss relates to a consumer or user’s disappointed expectations due to

deterioration, internal breakdown or non-accidental cause, the remedy lies in

4 Neither party raises an error-preservation concern about the district court’s
limited analysis of the economic-loss-doctrine issue. And we are independently
satisfied that error is preserved. Both parties agreed at oral argument that the
court implicitly relied on the economic-loss doctrine to dismiss the negligence
claim. The Yakels filed a rule 1.904 motion asking the court to more clearly
address the applicability of the economic-loss doctrine, and the court summarily
denied it. There was nothing more they could do to preserve the issue. See
Madden v. City of Eldridge, 661 N.W.2d 134, 138 (Iowa 2003). And as appellee,
Wheeler is entitled to seek affirmance on any basis he argued to the district court
regardless of whether the court ruled on that basis. See Jasper v. H. Nizam, Inc.,
764 N.W.2d 751, 774 (Iowa 2009). What’s more, both parties briefed the merits of
the economic-loss doctrine in the district court and again here.
15

contract.” Determan v. Johnson, 613 N.W.2d 259, 262 (Iowa 2000) (cleaned up).

So too here. The Yakels are disappointed consumers—they paid for subpar siding

replacement. Thus, the economic-loss doctrine prevents the Yakels from bringing

their negligence claim against Wheeler over their “defeated expectations.” Annett

Holdings, Inc. v. Kum & Go, L.C., 801 N.W.2d 499, 503 (Iowa 2011). Looking at

the “the nature of the defect, the type of risk, and the manner in which the injury

arose” as well as “the type of damages” the Yakels seek, they cannot recover

under a tort claim because the siding “simply failed to do what it was supposed to

do.” Determan, 613 N.W.2d at 262–63 (cleaned up). “Tort theory . . . is generally

appropriate when the harm is a sudden or dangerous occurrence, frequently

involving some violence or collision with external objects, resulting from a genuine

hazard in the nature of the product defect.” Nelson v. Todd’s Ltd., 426 N.W.2d

120, 125 (Iowa 1988). The Yakels’ damages consist of the expenses they have

incurred in repairing the siding to their home. This limits the present injury and

recovery sought to the needed repairs, not a “sudden or dangerous occurrence.”

Id.

To avoid the economic-loss doctrine, the Yakels first argue that if we hold

there was no general-contractor contract between themselves and Wheeler, then

any rule requiring them to pursue breach-of-contract remedies necessarily plays

no role. But the doctrine applies no matter if there is contractual privity between

the parties. Annett Holdings, 801 N.W.2d at 504. Indeed, our supreme court has

applied the “stranger economic loss rule” to bar claims by plaintiffs with no

contractual relationship to the defendant. Id. Contrary to the Yakels’ argument in

their brief, this does not create a “heads I win, tails you lose” outcome. Rather, it
16

would turn the doctrine on its head to allow tort claims for purely economic loss to

proceed so long as there was no contract between the parties—the doctrine aims

to prevent the “tortification of contract law” and “encourage[] parties to enter into

contracts.” Id. at 503–04; see also Village at White Birch Town Homeowners Ass’n

v. Goodman Assocs., Inc., No. 11-1842, 2012 WL 5356045, at *4–6 (Iowa Ct. App.

Oct. 31, 2012) (holding that economic-loss doctrine precluded construction

negligence claims even though plaintiff had no contract with the defendant

subcontractors), aff’d by equally divided court, 2014 WL 1351058 (Iowa Apr. 4,

2014).

Second, the Yakels also seek to avoid the doctrine by alleging they

experienced more than mere economic loss—also suffering property damage from

the defective siding. But this argument overlooks that our decision rests on a

consideration of “not only the type of risk, but also the nature of the defect, the

manner in which the injury occurred, and the specific injury for which compensation

is sought.” Determan, 613 N.W.2d at 263. From balancing these factors, we see

the Yakels’ claim as based on their disappointed expectations with the quality of

their home’s siding and later efforts to replace the siding. Accordingly, their relief

is grounded in contract law, not tort law. Their negligent construction claim is

barred by the economic-loss doctrine and was thus properly dismissed.

AFFIRMED.