Van Sickle Construction v. Wachovia Commercial Mortgage, Inc.

Wachovia Commercial Mortgage, Inc. (Wachovia) (defendant) sold the property of Ivan and Jeanne Van Loon at auction after a substantial deficiency judgment remained following a sheriff’s sale of their foreclosed commercial real estate. Wachovia had planned to sell the Van Loons’ personal property, including two trucks, at a sheriff’s sale. Four days before the sheriff’s sale, the Van Loons and Wachovia agreed, and a district court ordered, that the property would be sold at a public auction instead. Wachovia did not get the titles to the vehicles from Ivan prior to the auction. At the auction, Wachovia’s agent announced that until the auction company was in possession of titles to the vehicles, a buyer’s money would not be transferred to Wachovia. Matthew Van Sickle of Van Sickle Construction (collectively, Van Sickle) (plaintiffs) purchased the trucks at the auction. Van Sickle was advised that the titles would be transferred to him after his check was processed. Van Sickle thought the titles would be transferred in a matter of weeks, so he made repairs to both vehicles by pulling parts from his other vehicles, making those vehicles nonfunctioning. Van Sickle received one title after about a month, and it took five months to receive the other. The delay was because Ivan was not cooperating. Wachovia sought a contempt order, which a court granted, but Ivan still would not cooperate. Wachovia had to get a court order instructing the county treasurer to effect the transfer of title. Van Sickle sued Wachovia for fraudulent misrepresentation and negligent misrepresentation, seeking punitive and compensatory damages. After Wachovia moved unsuccessfully for a directed verdict, a jury found in Van Sickle’s favor on both claims, awarding $27,000 in compensatory damages and $250,000 in punitive damages. Wachovia moved unsuccessfully for judgment notwithstanding the verdict. Wachovia appealed. An appellate court reversed, and the Iowa Supreme Court (the court) granted review. On appeal, Wachovia argued that the economic-loss doctrine should have prevented the negligent-misrepresentation claim from going to the jury. The court dismissed this argument and considered Wachovia’s argument that Van Sickle had not proved all the elements of fraudulent misrepresentation.