In an Order entered by the Mahaska County District Court on June 13, the Court granted Summary Judgement against Mahaska County and ruled that the Plaintiffs, The City of Pella and the City of Oskaloosa, are free to pursue the remedies specified in their 28E Agreement with the County for breach of contract. The County has 30 days to appeal the District Court’s ruling. The Court’s Order found as follows:
“The City of Pella, the City of Oskaloosa, and Mahaska County formed the South Central Regional Airport Agency (SCRAA). Plaintiffs and Defendant entered into a valid 28E agreement. The agreement was filed with the Iowa Secretary of State’s Office. The SCRAA Agreement provided that amendment or termination could only occur upon the approval of the governing boards of each party. Mahaska County is challenging Plaintiff’s interpretation of the word “each”. This demonstrates the weak position Mahaska County is in regarding their resistance to the Plaintiffs’ Motion for Summary Judgement.
The unambiguous terms of the 28E agreement require all parties to the contract to agree to amending or terminating the SCRAA agreement. Mahaska County Board of Supervisors’ resolution passed June 19, 2017, is an affirmative (no longer anticipatory) repudiation of the contract. Mahaska County’s breach of contract is further demonstrated by the removal of its representative from the SCRAA board. “If the court finds that no ambiguity exists, contract interpretation and its legal effect are questions of Law,” Van Sloun v. Agans Brothers, Inc.
A valid contract existed between the parties, Defendant breached the contract, and the Court GRANTS Petitioner’s Motion for Summary Judgement and request for Declaratory Judgement. Mahaska County is asking to be relieved from, in their current view, a bad deal. The Court is not in the business of rewriting contracts. This Court attempted to find some legal authority to find the agreement null and void. Defense counsel could not provide guidance to the Court on this issue. There is simply no rationale legal basis to invalidate this 28E agreement.
County Home Rule does not prevent Mahaska County from being a party to this contract. Rather, as Plaintiffs’ counsel argued, it allows counties and municipalities to assert control and enter into 28E agreements. This agreement is not indefinite as the completion of the project would complete the purpose of the agreement. ACRAA has not deprived Mahaska County of its legislative and governmental functions and powers.
28E agreements are to be liberally construed. In hindsight, this may not have been a wise argument for Mahaska County to enter into. The Court recognizes that the specific performance remedy in the agreement is constrictive. But under Lange, specific performance is a permissible remedy for breach of contract. The remedies for breach are clear in the 28E Agreement. Under Iowa law, parties to a contract are free to fashion their own remedies in the event of breach.
This contract grants each party “the right to equitable remedy of specific performance to enforce compliance with any provision of [the 28E] Agreement” in the event of breach.
In Iowa, “courts generally enforce contractual limitations upon remedies unless such limitations are unconscionable.” A bargain is said to be unconscionable at law if it is “such as no man in his sense and not under delusion would make on the one hand, and as no honest and fair man would accept on the other.” The Court finds that this agreement does not rise to the level of being unconscionable. Specific performance, on the record presented to the Court is permissible.
The Court further finds the agreement is binding and does not violate public policy. Mahaska County has breached the 28E Agreement contract. Plaintiffs are entitled to remedy this breach. No genuine issue of material fact exists and Plaintiff’s Motion for Summary Judgement is GRANTED.
IT IS THEREFORE ORDERED:
- Plaintiff’s Motion for Summary Judgement is GRANTED and Plaintiffs are granted Declaratory Judgement.
- Plaintiffs may pursue remedies specified in the 28E agreement for breach of contract.
- Defendants are assessed costs of this action.
