Syester (plaintiff) was a lonely widow in her mid-60s when she began taking dance lessons at Arthur Murray Studio, owned by Mr. Theiss and others (the owners) (defendants). The owners counseled instructors to use emotional sales techniques with customers to persuade them to buy lessons. Syester’s instructor falsely assured her that she could become a professional dancer, and awarded her in one year several dance medals that typically took up to a decade to earn. Syvester bought over 4000 hours of lessons at a cost of over $29,000, including three lifetime memberships. After the owners fired Syester’s instructor, Syester quit the studio and sued the owners to get her money back. The owners rehired her instructor, who persuaded Syester to drop her lawsuit and to sign a settlement and release of all claims for a refund of $6,090, much less than her unused balance. Syester then signed a second release promising a refund of $4,000, which was never paid. Syester sued again, alleging fraud and misrepresentation in connection with the settlement and release and the dismissal of the previous lawsuit. The trial court awarded Syester $14,300 in actual damages and $40,000 in punitive damages. The court of appeals affirmed. The owners appealed to the Iowa Supreme Court.