Hirschbach Motor Lines, Inc, et al v. Smarttruck Undertray Systems, LLC, et al--SEE #32 ORDER WHEN ENTERING FINAL JUDGMENT

Filing 32

ORDER granting in part and denying in part #20 Motion to Dismiss (See Order Text). The motion is denied with respect to Counts I, III, IV, XV, XVI and XVII. This case will proceed with regard to those six counts. Signed by Chief Judge Leonard T Strand on 1/3/2018. (des)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
EASTERN DIVISION
HIRSCHBACH MOTOR LINES, INC.,
et al.,
Plaintiffs,

No. C17-1019-LTS

vs.

ORDER

SMARTTRUCK UNDERTRAY
SYSTEMS, INC., et al.,
Defendants.
____________________
I.

INTRODUCTION

This case is before me on a motion (Doc. No. 20) to dismiss filed by defendants
SmartTruck Undertray Systems, LLC (SmartTruck), Stephen S. Ingham, Jr., Mitchell
Greenberg, Steve Wulff and Mike Henderson. Plaintiffs Hirschbach Motor Lines, Inc.
(Hirschbach) and Brad Pinchuk have filed a resistance (Doc. No. 23) and defendants have
replied (Doc. No. 28). I find that oral argument is not necessary. See N.D. Iowa L.R.
7(c).
II.

PROCEDURAL HISTORY

On August 11, 2017, plaintiffs filed a complaint (Doc. No. 1) asserting thirteen
claims for breach of contract, breach of various warranties, fraud and negligent
misrepresentation. Defendants responded on September 21, 2017, by filing a pre-answer
motion (Doc. No. 10) to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(2)
and 12(b)(6). Instead of resisting that motion, plaintiffs filed an amended complaint
(Doc. No. 14) on October 12, 2017.

The amended complaint substitutes current

defendant Mitchell Greenberg for former defendant Ron Pope and proceeds to assert 26

counts1 against the defendants.

Plaintiffs invoke this court’s diversity jurisdiction,

asserting no claims that arise under federal law. Defendants filed their present motion to
dismiss the amended complaint on November 3, 2017.
III.

APPLICABLE STANDARDS

Defendants seek dismissal of all of plaintiffs’ claims. They argue that the court
lacks personal jurisdiction over the individual defendants and that plaintiffs fail to state
claims upon which relief can be granted.
A.

Rule 12(b)(2) – Lack of Personal Jurisdiction
The Federal Rules of Civil Procedure permit a pre-answer motion to dismiss for

“lack of personal jurisdiction.” Fed. R. Civ. P. 12(b)(2). Personal jurisdiction refers to
the power of a court to hear and determine a lawsuit involving a defendant by virtue of
the defendant’s having some contact with the place where a court is located. To properly
allege personal jurisdiction, “a plaintiff ‘must state sufficient facts in the complaint to
support a reasonable inference that the defendant[ ] can be subjected to jurisdiction within
the state.’” Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004), cert.
denied, 543 U.S. 1147 (2005) (quoting Block Indus. v. DHJ Indus., Inc., 495 F.2d 256,
259 (8th Cir. 1974)). In resisting a Rule 12(b)(2) motion, the plaintiff has the burden of
proving facts supporting such jurisdiction. Wells Dairy, Inc. v. Food Movers Int’l, Inc.,
607 F.3d 515, 518 (8th Cir.), cert. denied, 131 S. Ct. 472 (2010). The court may
consider the allegations of the complaint along with any affidavits and exhibits submitted

1

Yes, 26 counts. Having carefully reviewed the amended complaint and the parties’
submissions, my best guess is that a law clerk or junior associate was tasked with conjuring up
the largest possible number of unnecessary and duplicative counts from a relatively-simple
dispute. I can think of no proper, non-vexatious reason for this practice.

2

by the parties. Id. The plaintiff’s burden, in the absence of an evidentiary hearing, is to
make a “minimal” prima facie showing of personal jurisdiction. K-V Pharm. Co. v.
Uriach & CIA, S.A., 648 F.3d 588, 592 (8th Cir. 2011). The court “must view the
evidence in the light most favorable to the plaintiff and resolve all factual conflicts in its
favor in deciding whether the plaintiff has made the requisite showing.” Id.
In a diversity case, such as this, personal jurisdiction exists “only to the extent
permitted by the long-arm statute of the forum state and by the Due Process Clause.”
Dever, 380 F.3d at 1073 (internal quotation marks omitted).

Iowa Rule of Civil

Procedure 1.306 authorizes the exercise of personal jurisdiction to the full extent allowed
by the United States Constitution, meaning the court’s inquiry is limited to whether the
exercise of personal jurisdiction comports with due process. Wells Dairy, 607 F.3d at
518 (citing Hammond v. Fla. Asset Fin. Corp., 695 N.W.2d 1, 5 (Iowa 2005)).
In general, due process requires that a nonresident defendant have at least “certain
minimum contacts” with the forum state to support the exercise of personal jurisdiction.
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Those contacts must be
sufficient that requiring the defendant to litigate in the forum state would not “offend
traditional notions of fair play and substantial justice.” Id. at 316 (internal quotations
marks and citation omitted). They “must come about by an action of the defendant
purposefully directed toward the forum State.” Asahi Metal Indus. Co. v. Super. Ct. of
Cal., 480 U.S. 102, 112 (1987) (internal citations omitted).
This “‘purposeful availment’ requirement ensures that a defendant will not be
hauled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’
contacts,” or due to “the ‘unilateral activity of another party or a third person.’” Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (citations omitted). If the defendant
made the deliberate choice to “engage[ ] in significant activities within a State,” or to
create “‘continuing obligations’ between himself and residents of the forum,” then “it is
3

presumptively not unreasonable to require him to submit to the burdens of litigation in
that forum as well.” Id. at 475-76 (citations omitted). Thus:
By requiring that individuals have “fair warning that a particular activity
may subject [them] to the jurisdiction of a foreign sovereign,” the Due
Process Clause “gives a degree of predictability to the legal system that
allows potential defendants to structure their primary conduct with some
minimum assurance as to where that conduct will and will not render them
liable to suit[.]”
Id. at 472-73 (1985) (citations omitted).
The Eighth Circuit applies a five-factor test to determine whether a defendant’s
contacts with the forum state are sufficient to establish personal jurisdiction. Myers v.
Casino Queen, Inc., 689 F.3d 904, 911 (8th Cir. 2012). Those factors are: (1) the nature
and quality of the contacts with the forum state; (2) the quantity of those contacts; (3) the
relationship of those contacts with the cause of action; (4) the forum state’s interest in
providing a forum for its residents; and (5) the convenience or inconvenience to the
parties. Id. (citing Precision Const. Co. v. J.A. Slattery Co., 765 F.2d 114, 118 (8th
Cir. 1985)). The first three factors are considered to be of primary importance. Precision
Const., 765 F.2d at 118.
Personal jurisdiction can be either general or specific. General jurisdiction arises
when a nonresident maintains “continuous and systematic” contacts with the forum state.
Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 415-16 (1984). Under
those circumstances, jurisdiction over the nonresident is appropriate even when the claims
at issue do not arise out of or relate to its activities in the forum state. Id. at 414-15.
Specific jurisdiction arises “when the defendant purposely directs its activities at the
forum state and the litigation ‘result[s] from injuries . . . relating to [the defendant’s]
activities [in the forum state.]’” Myers, 689 F.3d at 912-13 (quoting Steinbach v. Cutler,
518 F.3d 580, 586 (8th Cir. 2008)). Specific jurisdiction “requires a relationship between
the forum, the cause of action, and the defendant. Id. at 912 (citing Helicopteros
4

Nacionales, 466 U.S. at 414). The third factor of the five-factor test “distinguishes
between specific and general jurisdiction.” Id.at 911 (citing Johnson v. Arden, 614 F.3d
785, 794 (8th Cir. 2010).
B.

Rule 12(b)(6) – Failure to State a Claim
The Federal Rules of Civil Procedure authorize a pre-answer motion to dismiss

for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6).
The Supreme Court has provided the following guidance in considering whether a
pleading properly states a claim:
Under Federal Rule of Civil Procedure 8(a)(2), a pleading must
contain a “short and plain statement of the claim showing that the pleader
is entitled to relief.” As the Court held in [Bell Atlantic Corp. v. Twombly,
550 U.S. 544 (2007)], the pleading standard Rule 8 announces but does not
require “detailed factual allegations,” but it demands more than an
unadorned, the-defendant-unlawfully-harmed-me accusation. Id., at 555,
127 S. Ct. 1955 (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). A
pleading that offers “labels and conclusions” or “a formulaic recitation of
the elements of a cause of action will not do.” [Twombly,] 550 U.S. at
555. Nor does a complaint suffice if it tenders “naked assertion[s]” devoid
of “further factual enhancement.” Id., at 557.
To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to “state a claim to relief that is plausible
on its face.” Id., at 570. A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged. Id., at 556. The
plausibility standard is not akin to a “probability requirement,” but it asks
for more than a sheer possibility that a defendant has acted unlawfully. Id.
Where a complaint pleads facts that are “merely consistent with” a
defendant's liability, it “stops short of the line between possibility and
plausibility of ‘entitlement to relief.’” Id., at 557 (brackets omitted).
Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009).

5

Courts assess “plausibility” by “‘draw[ing] on [our own] judicial experience and
common sense.’” Whitney v. Guys, Inc., 700 F.3d 1118, 1128 (8th Cir. 2012) (quoting
Iqbal, 556 U.S. at 679). Courts “‘review the plausibility of the plaintiff’s claim as a
whole, not the plausibility of each individual allegation.’” Id. (quoting Zoltek Corp. v.
Structural Polymer Grp., 592 F.3d 893, 896 n.4 (8th Cir. 2010)).

While factual

“plausibility” is typically the focus of a Rule 12(b)(6) motion to dismiss, federal courts
may dismiss a claim that lacks a cognizable legal theory. See, e.g., Somers v. Apple,
Inc., 729 F.3d 953, 959 (9th Cir. 2013); Commonwealth Prop. Advocates, L.L.C. v.
Mortg. Elec. Reg. Sys., Inc., 680 F.3d 1194, 1202 (10th Cir. 2011); accord Target
Training Int’l, Ltd. v. Lee, 1 F. Supp. 3d 927, 937 (N.D. Iowa 2014).
IV.

FACTUAL BACKGROUND

The amended complaint (Doc. No. 14) includes the following allegations:
A.

The Parties
Hirschbach is an Iowa corporation with its principal place of business in Dubuque,

Iowa. Doc. No. 14 at ¶ 1. Prior to 2015, Hirschbach was headquartered in East
Dubuque, Illinois.2

Hirschbach is an interstate motor carrier offering semi-tractor

transportation services. Id. at ¶ 12. Pinchuk is the president and CEO of Hirschbach.
Id.
SmartTruck is a South Carolina limited liability company with its principal place
of business in Greenville, South Carolina. Id. at ¶ 3. SmartTruck designs, builds,
markets and sells aerodynamic design components to be affixed to semi-tractor trailers in

2

See Matthew Patane, Illinois Trucking Company Moving to Iowa, Des Moines Register, Jan.
30, 2015, https://www.desmoinesregister.com/story/money/business/2015/01/30/ hirschbachmotor-lines-iowa-headquarters/22583563/. Courts may consider additional evidence on a motion
to dismiss under Rule 12(b)(2). Wells Dairy, 607 F.3d at 518. 

6

order to reduce the size of high air flow drag-wake, resulting in fuel savings. Id. at ¶
13. Each of the individual defendants are employees and agents of SmartTruck: Ingham
is the president, Wulff is the senior vice president of product development, Henderson is
the chief scientist and Greenberg was a former president. Id. at ¶¶ 4-7. None of the
individual defendants are Iowa residents. Id. at ¶ 8.
B.

The Claims
In 2011, the parties negotiated for Hirschbach’s purchase and installation of 2,000

SmartTruck products for Hirschbach’s fleet. Id. at ¶ 14. Over the course of various
meetings and conversations in 2011, prior to Hirschbach’s purchase of SmartTruck
products, defendants Ingham, Greenberg, Wulff and Henderson verbally represented that
Hirschbach would see improved fuel efficiency of 10% at highway speeds using
SmartTruck products. Id. at ¶ 16. One of these meetings between Pinchuk, Greenberg
and Wulff occurred in Greenville, South Carolina, while another meeting occurred in
East Dubuque, Illinois. Id. at ¶¶ 15(b), 15(o). Plaintiffs assert that while Pinchuk,
Greenberg and Wulff were meeting in East Dubuque, Greenberg and Wulff stayed at
hotels and ate in restaurants in Dubuque, Iowa. Id. at ¶ 16. One sales meeting was held
over lunch at a restaurant in Dubuque, Iowa. Id. Greenberg disputes that he ever
travelled to Iowa or Illinois to visit Pinchuk. Doc. No. 20-7 at 3. Although plaintiffs
allege that Wulff travelled to Iowa on six occasions, Wulff contends that he only travelled
to Hirschbach’s headquarters once. Doc. No. 20-6 at 3. Plaintiffs do not allege that
Ingham or Henderson ever travelled to Iowa.
As part of the negotiation process, SmartTruck offered Hirschbach a discount in
exchange for Pinchuk providing a testimonial for SmartTruck to use in its advertising
materials. Doc. No. 14 at ¶¶ 25-26. Hirschbach purchased SmartTruck products and
installed them on its fleet between 2011 and 2013. Id. at ¶ 27. Plaintiffs do not identify
7

a particular written, integrated agreement governing Hirschbach’s purchase of
SmartTruck’s products. Instead, it contends that an agreement was formed and that
Hirschbach then placed written purchase orders “in reliance upon Smart Truck’s prior
written and oral representations.” Id. at ¶ 35.
In support of its motion to dismiss, SmartTruck relies on three documents that, it
contends, control the scope of its obligations to Hirschbach. SmartTruck claims that
Exhibits A and B are “the 2011 and 2013 Product Manuals with the operative limited
warranty during the 2011-2017 time period,” while Exhibit C is “the SmartTruck limited
warranty from 2015 through the present.” Doc. No. 20-1 at 4 (referencing Doc. No.
20-2 at 4, Doc. No. 20-3 at 2 and Doc. No. 20-4 at 2). Collectively, I will refer to these
documents as the Limited Warranty Documents. Details concerning the contents of the
Limited Warranty Documents will be described as necessary below.
In 2014, Pinchuk became aware of independent testing of SmartTruck’s products
by a Canadian engineering company. Id. at ¶ 30. Those results showed that SmartTruck’s
products were not as effective as claimed. Id. Plaintiffs conducted their own testing in
2016 and 2017, which revealed no meaningful difference in fuel efficiency as a result of
installing SmartTruck products. Id. at 31. Plaintiffs assert that they have been damaged
by defendants’ failure to improve the fuel efficiency of their semi-trucks to the extent
promised.

The 26 counts set forth in the amended complaint are based on these

representations, and the parties’ agreement, as follows:
Count I

Breach of Contract (Hirschbach v. SmartTruck)

Count II

Breach of Written Contract due to Poor Performance
(Hirschbach v. SmartTruck)

Count III

Breach of Implied Warranty of Fitness for Particular Purpose
(Hirschbach v. SmartTruck)

Count IV

Breach of Express Warranty (Hirschbach v. SmartTruck)

Count V

Fraud (Hirschbach v. Greenberg)
8

Count VI

Fraud (Hirschbach v. Wulff)

Count VII

Fraud (Hirschbach v. Henderson)

Count VIII

Fraud (Hirschbach v. Ingham)

Count IX

Constructive Fraud (Hirschbach v. Greenberg)

Count X

Constructive Fraud (Hirschbach v. Wulff)

Count XI

Constructive Fraud (Hirschbach v. Henderson)

Count XII

Constructive Fraud (Hirschbach v. Ingham)

Count XIII

Negligent Misrepresentation (Hirschbach v. SmartTruck)

Count XIV

Intentional Misrepresentation (Hirschbach v. SmartTruck)

Count XV

Detrimental Reliance/Promissory Estoppel (Hirschbach v.
SmartTruck)

Count XVI

Unjust Enrichment (Hirschbach v. SmartTruck)

Count XVII Unjust Enrichment (Pinchuk v. SmartTruck)
Count XVIII Fraud (Pinchuk v. Greenberg)
Count XIX

Fraud (Pinchuk v. Wulff)

Count XX

Fraud (Pinchuk v. Henderson)

Count XXI

Fraud (Pinchuk v. Ingham)

Count XXII Constructive Fraud (Pinchuk v. Greenberg)
Count XXIII Constructive Fraud (Pinchuk v. Wulff)
Count XXIV Constructive Fraud (Pinchuk v. Henderson)
Count XXV Constructive Fraud (Pinchuk v. Ingham)
Count XXVI Civil Conspiracy (Hirschbach v. All Defendants)
See Doc. No. 14. Plaintiffs seek monetary damages, punitive damages, attorneys’ fees
and any other relief deemed equitable.
V.

DISCUSSION
9

A.

Personal Jurisdiction
Defendants argue that I lack personal jurisdiction over the individual defendants

for two reasons.3 First, the individuals lack meaningful contacts with Iowa. Second,
Iowa’s corporate shield doctrine exempts them from personal jurisdiction because they
were acting as agents of SmartTruck. Plaintiffs respond that defendants’ contacts with
Iowa are sufficient to justify the exercise of specific personal jurisdiction over the
defendants and that the corporate shield doctrine does not apply. Alternatively, plaintiffs
argue that their allegation of a civil conspiracy confers personal jurisdiction over all
defendants by virtue of jurisdiction over any defendant under an agency theory.
1.

The Corporate Shield Doctrine

The Iowa Supreme Court describes the corporate shield doctrine as “a due process
limitation on the exercise of personal jurisdiction.” State ex rel. Miller v. Grodzinsky,
571 N.W.2d 1, 3 (Iowa 1997) (citing Aquadrill, Inc. v. Envt’l Compliance Consulting
Srvs., Inc., 558 N.W.2d 391, 394-95 (Iowa 1997); Whalen v. Connelly, 545 N.W.2d
284, 295-96 (Iowa 1996); State ex rel. Miller v. Baxter Chrysler Plymouth, Inc., 456
N.W.2d 371, 378 (Iowa 1990); State ex rel. Miller v. Internal Energy Mgmt. Corp., 324
N.W.2d 707, 711 (Iowa 1982); DeCook v. Envt’l Sec. Corp., 258 N.W.2d 721, 727-28
(Iowa 1997). Therefore:
[A] person’s mere association with a corporation that causes injury in the
forum state is not sufficient in itself to permit the forum to exercise
jurisdiction over the agent. Davis v. Metro Prods., Inc., 885 F.2d 515,
520 [(9th Cir. 1989)].
We have said that the rationale of the doctrine is that exercising jurisdiction
over a corporate agent solely on the court’s jurisdiction over the corporation
itself would “offend traditional notions of fair play and substantial justice.”

3

Defendants have not challenged personal jurisdiction over SmartTruck. Failure to challenge
personal jurisdiction at the appropriate time constitutes a waiver. Fed. R. Civ. P. 12(h)(1). 

10

Internal Energy Mgmt., 324 N.W.2d at 710 (quoting World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)).
Id. However,
A corporate shield does not insulate an agent under all circumstances, the
agent is still subject to personal jurisdiction of the court if the agent is a
“primary participant[ ] in an alleged wrongdoing intentionally directed at
[forum-state] resident[s], and jurisdiction over [him] is proper on that
basis.” Calder v. Jones, 465 U.S. 783, 790 (1984). If this were not so, a
person could commit fraud with impunity by simply wrapping up in a
foreign corporation. See Internal Energy Mgmt., 324 N.W.2d at 716.
Id. at 4. Therefore, “when a corporate agent acts in such a way as to be subject to
personal jurisdiction of an Iowa court, irrespective of the court’s jurisdiction over the
corporation, the corporate shield is inapplicable.” Id. at 3.
Iowa’s approach is consistent with the Supreme Court’s in Keeton v. Hustler
Magazine, Inc., 465 U.S. 770 (1984). In Keeton, the Supreme Court stated:
[W]e today reject the suggestion that employees who act in their official
capacity are somehow shielded from suit in their individual capacity. But
jurisdiction over an employee does not automatically follow from
jurisdiction over the corporation which employs him; nor does jurisdiction
over a parent corporation automatically establish jurisdiction over a wholly
owned subsidiary. Each defendant’s contacts with the forum State must be
assessed individually.
Keeton, 465 U.S. at 782 n.13 (1984). Further, in Calder, the Supreme Court held that
a federal district court sitting in California had personal jurisdiction over two Florida
residents, who were sued in their individual capacities even though they were employees
of the corporate defendant (National Enquirer), on the basis of their own contacts with
the state of California. 465 U.S. at 790 (“[The employees] are correct that their contacts
with California are not to be judged according to their employer’s activities there. On
the other hand, their status as employees does not somehow insulate them from
jurisdiction.”). To hold that a court lacks personal jurisdiction over an individual merely
because they also served as an agent of a corporation would allow the doctrine to be used
11

as a sword, rather than a shield. See, e.g., Grodzinsky, 571 N.W.2d at 3. Plaintiffs
have alleged individual liability against each defendant, based on each defendants’
actions.4 Therefore, the corporate shield is inapplicable and I will assess the contacts of
each defendant with the state of Iowa individually. Calder, 465 U.S. at 790.
2.

Civil Conspiracy

Plaintiffs also allege in their resistance (Doc. No. 23 at 9) that “civil conspiracy
claims can give rise to personal jurisdiction over all co-conspirators when at least one coconspirator commits a tort in Iowa.” While this may or may not be a correct statement
of law,5 in this case the allegation of civil conspiracy cannot satisfy the requirements of
personal jurisdiction if personal jurisdiction exists only over SmartTruck. Pursuant to
the intra-corporate immunity doctrine, a corporation cannot conspire to commit a tort
with its agents or employees.6 As the Supreme Court recently explained:

4

As a result, this case is distinguishable from Westlake Invs., L.L.C. v. MLP Mgmt. L.L.C.,
707 F.Supp.2d 904, 914 (S.D. Iowa 2010). In Westlake, the individual defendant was not
involved in the sale at the center of the dispute, was never physically present in Iowa, did not
enter into contracts in Iowa, and did not communicate with any Iowa residents. His lack of
involvement with the underlying dispute made the corporate shield doctrine applicable. Id.

5

Federal courts applying Iowa law have disagreed on this issue. Compare Remmes v. Int’l
Flavors & Fragrances, Inc., 389 F. Supp. 2d 1080, 1094-95 (N.D. Iowa 2005) (predicting Iowa
law would find personal jurisdiction on the basis of a civil conspiracy) with Brown v. Kerkhoff,
504 F. Supp. 2d 464, 514-17 (S.D. Iowa 2007) (disagreeing that Iowa would recognize a per se
rule of personal jurisdiction over co-conspirators, while acknowledging that co-conspiracy is
relevant to minimum contacts analysis). Given my resolution of the minimum contacts of each
defendant, however, I need not resolve the dispute over when a conspiracy alone is sufficient to
establish jurisdiction because, as I will discuss further, there is no jurisdictionally relevant
conspiracy alleged here.  
6

Iowa courts have not specifically considered whether the intra-corporate immunity doctrine
applies to civil conspiracy claims. See, e.g., All Energy Corp. v. Energetix, LLC, 985 F. Supp.
2d 974, 995 (S.D. Iowa 2012) (finding no “Iowa cases that stand for the proposition that a
corporation cannot conspire to commit a common law tort with its . . . employees” (citing
Cunningham v. PFL Life Ins. Co., 42 F. Supp. 2d 872, 884 (N.D. Iowa 1999))). However,

12

The rule is derived from the nature of the conspiracy prohibition.
Conspiracy requires an agreement—and in particular an agreement to do an
unlawful act—between or among two or more separate persons. When two
persons of the same legal entity make an agreement in the course of their
official duties, however, as a practical and legal matter their acts are
attributed to the principal. And it then follows that there has not been an
agreement between two or more separate people.
Ziglar v. Abassi, 137 S. Ct. 1843, 1867 (2017) (citing Copperweld Corp. v. Independence
Tube Corp., 467 U.S. 752, 769-71 (1984)); see also Johnson v. Vilsack, 833 F.3d 948,
958-59 (8th Cir. 2016); Kelly v. City of Omaha, 813 F.3d 1070, 1078 (8th Cir. 2016).
In this case, because the corporation is not a co-conspirator, jurisdiction over
SmartTruck is irrelevant for the purpose of determining jurisdiction over the individual
defendants. The individuals certainly could have conspired with each other, but personal
jurisdiction depends on each individual’s minimum contacts with the forum state. A coconspirator’s contacts with the forum state may fill the gap to establish personal
jurisdiction in some cases.

See, e.g., Brown, 504 F. Supp. 2d at 517 (“Clearly,

nonresident co-conspirator defendants cannot hunker in distant states and claim the lack
of a physical presence in the forum defeats personal jurisdiction . . . co-conspirators must
take care not to be agents of each other, lest both be haled into a forum where either
resides”). However, a bare pleading of civil conspiracy does not substitute for minimum
contacts.
3.

Minimum Contacts with the Forum State

As a starting point, “random or attenuated contacts with the forum state do not
satisfy the minimum contacts test.” Ostrem v. Prideco Secure Loan Fund, LP, 841
N.W.2d 882, 890 (Iowa 2014). The unilateral activities of a plaintiff or some other entity

given the widespread acceptance of the doctrine and its limited application here to agents within
the same corporation, I find that Iowa would apply the intra-corporate immunity doctrine.

13

cannot satisfy the minimum contacts requirement. Id. at 892 (citing Hanson v. Denckla,
357 U.S. 235, 253 (1958). A contract between an individual and an out-of-state party
alone does not establish sufficient contacts to permit the exercise of specific jurisdiction,
Burger King, 471 U.S. at 478, nor does extended contact by phone or email, e.g., Porter
v. Berall, 293 F.3d 1073, 1076 (8th Cir. 2002). Rather, a court must evaluate the parties’
“prior negotiations and contemplated future consequences, along with the terms of the
contract and the parties’ actual course of dealing” to determine “whether the defendant
purposefully established minimum contacts within” a state. Burger King, 471 U.S. at
479. It is the defendants’ contacts with the state, and not with the plaintiffs, that is
central. Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014) (the question is whether the
defendant formed any “jurisdictionally relevant” contacts with the forum state).
a.

Ingham

Ingham’s contacts with the state of Iowa are few in quantity and low in quality.
Plaintiffs do not allege that Ingham ever visited Iowa. Ingham states that he never
travelled to Iowa in connection with business between SmartTruck and Hirschbach. In
fact, plaintiffs do not allege that Ingham had any in-person meetings with Pinchuk,
whether in Iowa or at SmartTruck’s South Carolina headquarters. Doc. No. 14 at ¶¶ 1233, 107-18, 156-66, 228-34, 259-66. Although physical presence in a state is not
dispositive, it is a relevant factor to be considered. Walden, 134 S. Ct. at 1121-22.
Ingham does concede that he communicated with plaintiffs to negotiate the contract
at issue. Doc. No. 20-5 at ¶ 13. However, neither the contract itself nor knowledge that
he was entering into an agreement with an Iowa corporation is sufficient to establish
purposeful availment of the privilege of conducting activities within the forum state.
Burger King, 471 U.S. at 478-80; see also Wiese v. Legend Air Susps., Inc., 985 F.
Supp. 2d 964, 970 (S.D. Iowa 2012) (“Assuming arguendo those communications did
14

occur while [plaintiff] was in Iowa, they still fail to establish that the exercise of personal
jurisdiction comports with due process.”) (citing Viasys., Inc. v. EBM-Papst St. Georgen
GmbH & Co., 646 F.3d 589, 594 (8th Cir. 2011) (“scattered e-mails, phone calls, and a
wire transfer of money” to the forum state did “not constitute a deliberate and substantial
connection with the state” that would authorize specific jurisdiction); Porter, 293 F.3d
at 1076 (“Contact by phone or mail is insufficient to justify exercise of personal
jurisdiction under the due process clause.”); Mountaire Feeds, Inc. v. Agro Impex, S.A.,
677 F.2d 651, 656 (8th Cir. 1982) (“[T]he use of arteries of interstate mail, telephone,
railway and banking facilities is insufficient, standing alone, to satisfy due process.”))).
Simply put, mere communication with an Iowa business is an insufficient contact to
establish the minimum contacts necessary to establish specific jurisdiction in Iowa.
While Iowa has an interest in providing a forum for resident plaintiffs, this factor,
standing alone, fails to establish that the exercise of personal jurisdiction comports with
due process. See Digi-Tel Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d
519, 524 (8th Cir. 1996) (“[Iowa’s] interest in providing its residents with a forum cannot
make up for the absence of minimum contacts.”). Neither does the fact that Iowa may
be a convenient forum for plaintiffs overcome the deficiencies of the first three elements.
In view of the totality of the circumstances, the exercise of personal jurisdiction over
Ingham in Iowa is not consistent with due process.
b.

Henderson

From the complaint and from Henderson’s affidavit, it is clear that Henderson had
the same contacts with Iowa as Ingham. Accordingly, the same conclusion applies to
Henderson.

15

c.

Wulff

The plaintiffs allege that Wulff travelled to Hirschbach’s headquarters in Iowa and
that these contacts are sufficient to establish personal jurisdiction over Wulff. Plaintiffs
allege that Wulff visited Hirschbach’s headquarters on six occasions. Doc. No. 14 at ¶
17. Wulff states in his affidavit that he only did so once. Doc. No. 20-6 at ¶ 12. When
personal jurisdiction is disputed, the plaintiff bears the burden of proving facts supporting
personal jurisdiction and may not rely on the pleadings alone. See Wells Dairy, 607 F.3d
at 518. Because plaintiffs have not responded to Wulff’s affidavit with evidence, it stands
undisputed.
There is a genuine dispute over whether Wulff actually travelled to Iowa at all. In
2011, Hirschbach’s headquarters were still located in East Dubuque, Illinois. Plaintiffs
allege that the distinction between the cities of East Dubuque, Illinois, and Dubuque,
Iowa, is irrelevant because “East Dubuque, Illinois, is small and there are no hotels and
restaurants in East Dubuque, Illinois.7 Defendants necessarily had to stay in and eat in
Dubuque, Iowa, when visiting Hirschbach or Pinchuk.”8 Doc. No. 23 at 9.
Regardless of where Wulff ate or stayed, the relevant inquiry is whether there are
sufficient contacts with the forum state to satisfy the requirements of due process. The
fact that Wulff may have ate or stayed in Iowa while negotiating with Hirschbach at its
Illinois headquarters on one occasion is hardly sufficient to justify personal jurisdiction.

7

This statement is plainly untrue. A simple internet search reveals a Comfort Inn in East
Dubuque, Illinois, and East Dubuque is home to many restaurants, including Timmerman’s
Supper Club. I may take judicial notice of matters of public record, pursuant to Rule 201 of the
Federal Rules of Evidence. See Fed. R. Evid. 201(b)(2) (“The court may judicially notice a
fact that is not subject to reasonable dispute because it . . . can be accurately and readily
determined from sources whose accuracy cannot reasonably be questioned”). Regardless, as is
discussed more fully above, these facts are largely irrelevant to the jurisdictional analysis.
8

Wulff does not respond to the allegation that he necessarily stayed in Dubuque, Iowa. See
Doc. No. 20-6. For the purpose of the present motion, I will assume that he did.  

16

See, e.g., Austad Co. v. Pennie & Edmonds, 823 F.2d 223, 226-27 (8th Cir. 1987)
(although attorney-client relationship existed between South Dakota business and New
York law firm, business brought action based on law firm’s conduct as its attorney, and
two of the firm’s employees traveled to South Dakota to review and inspect documents,
there was no personal jurisdiction over law firm); Brown, 504 F. Supp. 2d at 512
(business contacts between nonresident defendants and Iowa were insufficient to support
specific personal jurisdiction even though plaintiffs alleged that each defendant made 412 visits to Iowa, and each additionally authored material directed into Iowa through the
mail or internet). A hotel stay is precisely the sort of “random” or “attenuated” contact
that is disallowed as a basis for personal jurisdiction.

Thus, exercise of personal

jurisdiction over Wulff in Iowa is not consistent with due process.
d.

Greenberg

Like Ingham, Greenberg has very few direct contacts with the state of Iowa.
Plaintiffs allege that Greenberg was in Iowa on at least one occasion. Doc. No. 14 at ¶¶
15(n), 15(o), 16. Greenberg disputes that claim in an affidavit. Doc. No. 20-7 at ¶ 10
(“To the best of my knowledge, I did not visit any Hirschbach facility in 2011 and
specifically did not attend the trip with Steve Wulff described in the Amended
Complaint.”).

Again, plaintiffs have not responded to Greenberg’s affidavit with

evidence, so it stands undisputed. There is no basis for exercising personal jurisdiction
over Greenberg.
4.

Conclusion - Personal Jurisdiction

Because none of the individual defendants are subject to personal jurisdiction in
Iowa, all four must be dismissed as defendants. This disposes of the 16 counts (Counts
V through XII and Counts XVIII  through XXV) that are brought only against the
17

individual defendants.

I must now consider SmartTruck’s contention that the ten

surviving counts fail to state a claim upon which relief may be granted.
B.

Failure to State a Claim
SmartTruck argues that plaintiffs’ various claims fail because (1) the written terms

of the various agreements between the parties do not establish a breach of contract or of
any warranty, (2) plaintiffs’ allegations do not establish either negligent or intentional
misrepresentation as a matter of law,9 and (3) plaintiffs’ are not permitted to recover
under quasi-contract theories (detrimental reliance and unjust enrichment) in the presence
of a written contract. Plaintiffs respond that they have plead sufficient facts that, when
accepted as true, allow the court to infer that SmartTruck knowingly made false promises
to plaintiffs, resulting in damages.

As this is a diversity action, I must apply the

substantive law, including choice-of-law rules, of the forum state. Bank of Am., N.A. v.
JB Hanna, LLC, 766 F.3d 841, 851-52 (8th Cir. 2014). The parties are proceeding under
the assumption that Iowa law applies. As such, I will do the same.

9

With regard to the fraud claims, SmartTruck also argues that plaintiffs have engaged in
“impermissible shotgun style” pleading “in an unsuccessful attempt to state” their claims with
insufficient particularity. Doc. No. 20-1 at 6, 21-22 (citing U.S. ex rel. Joshi v. St. Luke’s
Hosp., Inc., 441 F.3d 552, 554, 556 (8th Cir. 2006); Sagez v. Glob. Agr. Invs., LLC, No. 11CV-3059-DEO, 2015 WL 1647921 at *4 (N.D. Iowa Apr. 14, 2015)). “The typical shotgun
complaint contains several counts, each one incorporating by reference the allegations of its
predecessors, leading to a situation where most of the counts (i.e., all but the first) contain
irrelevant factual allegations and legal conclusions.” Sagez, 2015 WL 1647921at *4 (citing
Strategic Income Fund, L.L.C. v. Spear, Leeds & Kellogg Corp., 305 F.3d 1293, 1295 (11th
Cir. 1998). Although plaintiffs do in fact incorporate prior allegations by reference throughout
their complaint, perhaps meeting the technical definition for a shotgun pleading, in this case the
effect is not so confusing that the complaint “shifts onto the defendant the burden of identifying
the plaintiff’s genuine claims and determining which of those claims might have legal support.”
Id. (quoting Gurman v. Metro. Hous. & Redev. Auth., 842 F. Supp. 2d 1151, 1153 (D. Minn.
2011). Thus, while plaintiffs’ pleading style is hardly to be encouraged, each claim is sufficiently
distinguishable that I am able to determine which have merit. Id.

18

1.

Count I-II (Breach of Contract, Hirschbach v. SmartTruck and Breach
of Contract due to Poor Performance, Hirschbach v. SmartTruck)

Hirschbach claims that, from 2011 to 2017, it entered into an agreement with
SmartTruck and placed several written purchase orders for SmartTruck’s products in
reliance on SmartTruck’s prior written and oral representations as to the products’
effectiveness. Doc. No. 14 at ¶¶ 34-36. “By the terms of the contract agreement,”
Hirschbach was to realize a fuel savings of 10%. Id. at ¶¶ 36-39. Hirschbach claims
that it did not achieve any fuel savings after installation of the products, thus
demonstrating that SmartTruck breached the agreement.
In response, SmartTruck relies on the Limited Warranty Documents and contends
that they constitute an integrated written agreement that forecloses Hirschbach’s breach
of contract claims.10 Doc. No. 20-1 at 10-11. Hirschbach argues that those documents
do not constitute the entire agreement between the parties and that extrinsic evidence is
permitted to interpret the scope of the warranties, specifically the promise that the
products “SHALL BE: . . . (III) CAPABLE OF . . . FULFILLING ITS INTENDED
PURPOSE.” Doc. No. 23 at 10-11 (citing Doc. No. 20-2 at 7) (original capitalization).
Regarding that language, SmartTruck responds by pointing to other language in the
installation manuals stating that “the SmartTruck UnderTray System increases
aerodynamic efficiency by redirecting air from around the vehicle to fill in the low                                                            
10

On a motion to dismiss pursuant to Rule 12(b)(6), the court ordinarily cannot consider matters
outside of the pleadings, unless the court converts the Rule 12(b)(6) motion into a motion for
summary judgment pursuant to Rule 56. See Fed. R. Civ. P. 12(b)(6); see also Buck v. F.D.I.C.,
75 F.3d 1285, 1288 n.3 (8th Cir. 1996). However, where, as here, the plaintiffs’ claims are
based on the interpretation of the documents underlying the contract dispute, I may consider
those documents embraced by the pleading without converting the motion into a summary
judgment motion. See, e.g., Jenisio v. Ozark Airlines, Inc., 187 F.3d 970, 972 n.3 (8th Cir.
1999) (citing Silver v. H & R Block, Inc., 105 F.3d 394, 397 (8th Cir. 1997)).

19

pressure wake behind the trailer.” See Doc. No. 20-2 at 3. SmartTruck contends that
its products have fulfilled their purpose, albeit perhaps not to the level expected by the
Hirschbach.

Hirschbach, of course, point to numerous other instances in which

SmartTruck allegedly promised a fuel efficiency increase of 10%.
Under Iowa law:
[T]o establish a claim for a breach of contract, the [plaintiff] must show:
(1) The existence of a contract; (2) the terms and conditions
of the contract; (3) that it has performed all the terms and
conditions required under the contract; (4) the defendant’s
breach of the contract in some particular way; and (5) that
plaintiff has suffered damages as a result of the breach.
Iowa Arboretum, Inc. v. Iowa 4-H Found., 886 N.W.2d 695, 706 (Iowa 2016) (citing
Iowa Mortg. Ctr., L.L.C. v. Baccam, 841 N.W.2d 107, 110-11 (Iowa 2013); Molo Oil
Co. v. River City Ford Truck Sales, Inc., 578 N.W.2d 222, 224 (Iowa 1998)). The
parties do not dispute the existence of a contract, or that Hirschbach performed. Further,
Hirschbach plausibly claims that SmartTruck made the alleged representations concerning
fuel efficiency and that it was damaged by its failure to achieve meaningful fuel savings.
At issue is whether Hirschbach has plead sufficient facts giving rise to a plausible claim
that the representations regarding fuel savings were part of the contract, giving rise to a
cause of action for breach of contract.
At the outset, I note that the Limited Warranty Documents cannot, by themselves,
encompass a complete integrated agreement, in spite of their integration clauses. This is
because those documents do not include any of the terms that must accompany a contract
for the sale of goods. See, e.g., Iowa Code § 554.2201 (listing requirements of a contract
for sale of goods); see also Lenvin Leasing Co. v. Dickey Co., 380 N.W.2d 748, 750
(Iowa Ct. App. 1985) (the presence of an integration clause is one factor in determining
whether an agreement is fully integrated; however, an integration clause is not sufficient
evidence of the parties’ intent to create a complete and exclusive statement of the terms
20

of the agreement).

There is no evidence of how or when the Limited Warranty

Documents were provided to Hirschbach, or whether they were ever made part of a
contract for sale of goods.

As noted above, SmartTruck admits that the first two

documents (Docs. No. 20-2 and 20-3) were contained in its product manuals, which
presumably would have been delivered after the sale. Doc. No. 20-1 at 4. The third
document (Doc. No. 20-4) is provided with no information as to how, or if, it was ever
provided to Hirschbach. At the pleadings stage, it is absurd to argue, and impossible to
find, that the Limited Warranty Documents constitute the entirety of the agreement
between the parties.
It is possible, as SmartTruck argues, that the Limited Warranty Documents may
foreclose Hirschbach’s claims when read in context with the entire agreement. However,
taking the Hirschbach’s allegations as true, Hirschbach has plausibly stated a claim for
breach of contract. Two of the three attached warranties state that SmartTruck’s product
will be “capable of . . . fulfilling its intended purpose.”11 Doc. No. 20-2 at 7; Doc. No.
20-3 at 4. The phrase “intended purpose” is not clearly defined. SmartTruck points to
a descriptive statement contained elsewhere in the installation manual that may be

11

All three warranties additionally state: “No person or entity is authorized by seller to make
and seller shall not be bound by any statement or representation as to the performance of seller’s
products other than as contained herein.” Doc. No. 20-2 at 7, 20-3 at 4; 20-4 at 2. SmartTruck
could have disclaimed its own statements regarding the performance of its products. See Miller
v. Elliott Aviation Aircraft Sales, Inc., No. 4:13-cv-00161, 2014 WL 12601040 (S.D. Iowa Mar.
31, 2014). In Miller, the court held that the seller disclaimed its own (clearly false)
representations as to the condition of an airplane because the contract at issue was clearly
integrated, the airplane was sold “as is,” the purchaser had and took the opportunity to inspect
the airplane before purchase and the contract expressly disclaimed any and all verbal
representations as to the condition of the airplane. Id. at *6. The court had the entire contract
before it, rather than three isolated warranty documents. Further, the disclaimers in Miller were
far more encompassing than those at issue here. At this stage, I cannot say that the disclaimers
in SmartTruck’s Limited Warranty Documents encompassed SmartTruck’s own alleged
statements about the effectiveness of its aerodynamic component parts.

21

relevant, but this statement is one of several about the products’ intended purpose that
could be controlling. The pleadings and the documents before me are susceptible to an
inference that the intended purpose of SmartTruck’s products was to improve fuel
efficiency by 10%. Thus, it is plausible that a level of improved fuel efficiency became
a term of the contract, and that SmartTruck is in breach. Count I will not be dismissed.
Count II, however, appears to be entirely duplicative of Count I. Hirschbach’s
claim under Count I is that the products did not perform as promised. Hirschbach’s claim
under Count II (Breach of Contract due to Poor Performance) states that the products
performed poorly. It is not clear from the pleadings, or from Hirschbach’s arguments,
how Count II is materially different in any way from Count I. Under Rule 12(f), the
Court “may strike from a pleading . . . any redundant [or] immaterial . . . matter.” Fed.
R. Civ. P. 12(f). “[D]uplicative remedies do not necessarily make claims ‘redundant’
within the meaning of Rule 12(f), if the claims otherwise require proof of different
elements; however, a claim that merely recasts the same elements under the guise of a
different theory may be stricken as redundant pursuant to Rule 12(f).” Sioux Biochem.,
Inc. v. Cargill, Inc., 410 F. Supp. 2d 785, 804 (N.D. Iowa 2005) (citing Dethmers Mfg.
Co. v. Automatic Equip. Mfg. Co., 23 F. Supp. 2d 974, 1009 (N.D. Iowa 1998)).
Hirschbach argues in its resistance that the elements for Count II are the same as Count
I, and its theory of breach is based on the same contract and warranty terms. Thus, I
will strike Count II as redundant.
2.

Counts III & IV (Breach of Implied Warranty of Fitness for Particular
Purpose and Breach of Express Warranty, Hirschbach v. SmartTruck)

In Count III, Hirschbach states that it purchased SmartTruck’s products for the
purpose of achieving a 10% increase in fuel efficiency and that SmartTruck was aware
of this purpose.

Doc. No. 14 at ¶¶ 47-49.

Hirschbach relied on SmartTruck’s

representations that the products would achieve this purpose. Id. at ¶ 50. By selling
22

products that fail to accomplish this purpose, SmartTruck has breached the implied
warranty of fitness for a particular purpose. Id.
In Count IV, Hirschbach claims that SmartTruck’s representations that its products
would lead to increased fuel efficiency was an express warranty that SmartTruck has
breached. Doc. No. 14 at ¶¶ 53-61. SmartTruck argues, as it does above, that the
implied warranty of fitness for a particular purpose and any related express warranties
regarding the performance of its products were waived or limited by the Limited
Warranty Documents. Docs. No. 20-2 at 7, 20-3 at 4, 20-4 at 2. SmartTruck also argues
that the damages limitations contained in those documents preclude Hirschbach’s claims.
Hirschbach responds that SmartTruck’s disclaimers and limitations fail to comply with
the requirements of Iowa law.
a.

Creation of a warranty

Under Iowa law, “[w]here the seller at the time of contracting has reason to know
any particular purpose for which the goods are required and that the buyer is relying on
the seller’s skill or judgment to select or furnish suitable goods, there is unless excluded
or modified under section 554.2316 an implied warranty that the goods shall be fit for
such purpose.” Iowa Code § 554.2315. By contrast, an express warranty can be created
by any affirmation of fact or promise made by the seller to the buyer which relates to the
goods and becomes part of the basis of the bargain. Iowa Code § 554.2313; see also
Tralon Corp. v. Cedarapids, Inc., 966 F. Supp. 812, 825 (N.D. Iowa 1997).
Here, the pleadings adequately allege that SmartTruck knew Hirschbach was
buying its products for the purpose of improving fuel efficiency and that Hirschbach
relied on SmartTruck’s various statements regarding the products’ effectiveness. Under
Iowa law, this is sufficient to establish an implied warranty of fitness for a particular
purpose. See, e.g., Nationwide Agribus. Ins. Co. v. SMA Elevator Const., Inc., 816 F.
23

Supp. 2d 631, 671-72 (N.D. Iowa 2011) (to find an implied warranty of fitness for a
particular purpose the contract must respond to a particular need of the consumer (citing
Semler v. Knowling, 325 N.W.2d 395, 399 (Iowa 1982))); SmithCo Mfg., Inc. v. Haldex
Brake Prods. Corp., 708 F. Supp. 2d 816, 821-22 (N.D. Iowa 2010) (a request for the
“best product” to deal with a “specific problem” is sufficient to define a buyer's
“particular purpose” within the meaning of § 554.2315 (citing Renze Hybrids, Inc. v.
Shell Oil Co., 418 N.W.2d 634, 637 (Iowa 1988))); see also Iowa Code § 554.2315.
Additionally, Hirschbach has alleged that SmartTruck made several statements related to
the products’ performance that could have become part of the bargain. See, e.g., Ltd.
Flying Club, Inc. v. Wood, 632 F.2d 51, 56-57 (8th Cir. 1980) (logbook that set forth
the repair and inspection history of airplane formed part of the basis of the bargain as a
description of the goods).
b.

Effect of the Warranty Exclusions

Because Hirschbach has plausibly pleaded both an express warranty and an implied
warranty of fitness for a particular purpose, I must consider whether the Limited
Warranty Documents so clearly limited or excluded these warranties as to render
Hirschbach’s claims implausible. The implied warranty of fitness for a particular purpose
may be excluded only by a conspicuous writing. Iowa Code § 554.2316(2). Iowa courts
have defined conspicuous, with reference to a term, to mean that it is “written, displayed
or presented [so] that a reasonable person against which it is to operate ought to have
noticed it.” NuTech Seed, LLC v. Roup, 212 F. Supp. 3d 783, 792-93 (S.D. Iowa 2015)
(citing Iowa Code § 554.1201(2)(j)); R.J. Meyers Co. v. Reinke Mfg. Co., Inc., 885
N.W.2d 429, 438 (Iowa Ct. App. 2016) (same).
Iowa courts look to statute to determine whether terms are conspicuous:
Conspicuous terms include the following: (1) a heading in capitals equal to
or greater in size than the surrounding text, or in contrasting type, font, or
24

color to the surrounding text of the same or lesser size; and (2) language in
the body of a record or display in larger type than the surrounding text, or
in contrasting type, font, or color to the surrounding text of the same size,
or set off from surrounding text of the same size by symbols or other marks
that call attention to that language.
Id. (citing Iowa Code § 554.1201(j)).

By contrast, express waivers can be limited by

any words or conduct tending to have that effect, provided that the limitation “shall be
construed wherever reasonable as consistent with [the warranty]; but subject to the
provisions of this Article on parole or extrinsic evidence12 (section 554.2202) negation or
limitation is inoperative to the extent that such construction is unreasonable.” Iowa Code
§ 554.2316(1); see also Ltd. Flying Club, 632 F.2d at 56-57. Thus, Iowa law allows for
an express warranty that is nonetheless limited in some respects by the language of the
contract. However, if the warranty and the limitation cannot reasonably be construed
together, the warranty prevails over the limitation and the contract must be read as a
consistent and cohesive whole. Select Pork, Inc. v. Babcock Swine, Inc., 640 F.2d 147,
149 (8th Cir. 1981); Ltd. Flying Club, 632 F.2d at 56-57; Cannon v. Bodensteiner
Implement Co., 903 N.W.2d 322, 328 (Iowa 2017).
The Limited Warranty Documents are in writing, and two of the three limitations
(Doc. No. 20-3 and 20-4) are certainly “conspicuous” under Iowa law, with the text
purporting to waive the implied warranty set apart in a combination of bolded font and
capitalized letters, and in a shaded box.13 However, as I have previously discussed, it is

12

SmartTruck argues that because the Limited Warranty Documents contain an integration
clause, I am barred from considering extrinsic evidence to interpret them. This is not a correct
statement of Iowa law. As discussed above, (a) the integration clause is evidence of integration
but not conclusive of the fact and (b) it is not clear at this stage of the case when, or if, the
Limited Warranty Documents were provided to Hirschbach.

13

The parties dispute whether the limitation contained in the first attached warranty (Doc. No.
20-2) is conspicuous under Iowa law. However, given my finding that the attached warranties

25

impossible to determine at this time whether these documents constitute the entire
agreement between the parties. Iowa’s requirement that a limitation or waiver of a
warranty be read consistently with the entire agreement make it possible that in its proper
context, the Limited Warranty Documents do not waive the implied warranty of fitness
for a particular purpose. Indeed, in two of the three Limited Warranty Documents,
SmartTruck warrants that the aerodynamic component parts will be “[c]apable of . . .
fulfilling its intended purpose.” This appears to be inconsistent with a blanket waiver of
an implied warranty of fitness for a particular purchase. Thus, Count III plausibly states
a claim for breach of the implied warranty of fitness for a particular purpose and Count
IV plausibly states a claim for breach of express warranty.
c.

Effect of the Damages Limitations

Finally, I must consider SmartTruck’s argument that the damages limitations in
the Limited Warranty Documents bar Hirschbach’s claims. The first document states:
If a defect or failure occurs within the aforementioned warranty period,
buyer shall promptly notify seller in writing and, upon confirmation by an
authorized seller representative of such defect or failure, seller shall either
replace the defective UnderTray unit at no cost to the buyer or refund the
purchase price for said unit paid by buyer. The refundable purchase price
shall pro-rate for time during the second and third years of the warranty
period.
***
Where the law implies a warranty, seller expressly limits its liability under
any such warranty to the repair or replacement (at seller’s choice) of any
product supplied under this agreement.
***

do not constitute the entire agreement between the parties, I need not decide this issue to resolve
the present motion to dismiss.

26

Under no circumstances shall either party (or its officers, employees or
agents) be liable to the other for any special, incidental or consequential
loss or damage sustained by the other, including without limitation lost
profits or costs, in connection with this agreement or the UnderTray,
whether sought in tort or contract.
Doc. No. 20-2 at 7 (emphasis omitted). The other two documents contain nearly identical
limitations on damages. Doc. No. 20-3 at 4; Doc. No. 20-4 at 2.
SmartTruck’s argument regarding the damages limitations fails for two reasons.
First, as has already been explained, at this stage it is impossible to conclude that the
Limited Warranty Documents constitute the entire contract between the parties. Second,
damages limitations are not per se enforceable under Iowa law. Iowa law allows parties
to negotiate a limited remedy for breach of warranty under certain circumstances. See
Iowa Code § 554.2719(1)(a).

However, the enforceability of a replace and repair

limitation depends on the essential purpose of the contract:
Where repair or replacement can give the buyer what is bargained for, a
limitation of remedies does not fail of its essential purpose.” [Midwest
Hatchery & Poultry Farms, Inc. v. Doorenbos Poultry, Inc., 783 N.W.2d
56, 63 (Iowa Ct. App. 2010)]. Conversely, “[w]here the seller is given a
reasonable chance to correct defects and the equipment still fails to function
properly, the limited remedy of repair or replacement of defective parts
fails of its essential purpose.” John Deere Co. v. Hand, 319 N.W.2d 434,
437 (Neb. 1982). In other words, where the limited remedy fails, then the
buyer may avail itself of other remedies set forth in the UCC, including
damages.
R.J. Meyers Co., 885 N.W.2d at 437-38. Here, because Hirschbach plausibly claims
that it bargained for products that would improve its fuel efficiency by 10%, the damages
limitation fails if repair or replacement would not give it the benefit of the bargain. Thus,
at the pleadings stage the damages limitation does not foreclose Hirschbach’s damages
claims. Counts III and IV will not be dismissed.  

27

3.

Count XIII (Negligent Misrepresentation, Hirschbach v. SmartTruck)

In Count XIII, Hirschbach claims that SmartTruck negligently made incorrect
statements regarding the effectiveness of SmartTruck’s products. Doc. No. 14 at ¶ 168.
Hirschbach states that it was reasonable for it to believe that SmartTruck held itself out
as a seller of information in addition to holding itself out as a seller of products, based
on its various connections with BMI Corporation (BMI), a company that sells testing and
information related to aerodynamics, and with Henderson Industries, LLC, a company
that designs and develops aerodynamic solutions. 14

Id. at ¶ 169-70. As a result,

Hirschbach contends, SmartTruck had a duty to provide accurate information. Id. at ¶
172. Hirschbach states that it would not have purchased the products in the absence of
the misrepresentations. Id. at ¶ 173, 175. SmartTruck responds that it was not in the
business of selling or supplying information, and that Hirschbach’s alleged confusion on
that point was not justified. Doc. No. 20-1 at 18-19. As a result, SmartTruck contends
that Hirschbach’s claim fails as a matter of law. Id. at 19.
Iowa follows the Restatement (Second) of Torts approach to negligent
misrepresentation. Thus:
One who, in the course of his business, profession or employment, or in
any other transaction in which he has a pecuniary interest, supplies false
information for the guidance of others in their business transactions, is
subject to liability for pecuniary loss caused to them by their justifiable

14

BMI, according to the complaint, is listed at the same address as SmartTruck. BMI was
founded by Henderson, the Chief Scientist at SmartTruck at the time of the events giving rise to
the present complaint. Doc. No. 14 at ¶ 6. Further, BMI describes SmartTruck as a “project”
of BMI, and there is a link to SmartTruck’s website on BMI’s website. Doc. No. 14 at ¶ 169.
Henderson Industries is also listed at the same address and Henderson, Greenberg and Wulff are
all executives of Henderson Industries. Id. at ¶ 170. However, based on Hirschbach’s
allegations, Henderson Industries is not in the business of selling information. The connections
to BMI are of limited relevance as well. BMI is not named as a defendant and the connections
alleged do not advance Hirschbach’s theory that SmartTruck was in the business of selling or
providing information.

28

reliance upon the information, if he fails to exercise reasonable care or
competence in obtaining or communicating the information.
Van Sickle Const. Co. v. Wachovia Commercial Mortg., Inc., 783 N.W.2d 684, 690
(Iowa 2005) (citing Restatement (Second) of Torts § 552 cmt. a); Pitts v. Farm Bureau
Life Ins. Co., 818 N.W.2d 91, 111 (same). Iowa has limited the tort of negligent
misrepresentation to “those who are ‘in the business of supplying information to others.’”
Id. (citing Meier v. Alta-Laval, Inc., 454 N.W.2d 576, 582 (Iowa 1990). The purpose
of this limitation is to:
[P]romote[] fairness by ensuring that those liable are only those who supply
information in an advisory capacity and are “manifestly aware” of how the
information will be used and “intend[] to supply it for that purpose.” The
restriction also ensures that those liable are “in a position to weigh the use
for the information against the magnitude and probability of the loss that
might attend the use of the information if it is incorrect.”
Id. (citing Van Sickle Const., 783 N.W.2d at 691 (internal citations omitted)).
Whether a duty between two persons exists is always a question of law for the
courts.

Fry v. Mount, 554 N.W.2d 263, 265 (Iowa 1996) (citing Hoffnagle v.

McDonald’s Corp., 522 N.W.2d 808, 811 (Iowa 1994).

To determine whether a

defendant is “in the business of supplying information:”
We distinguish between relationships that are arm’s-length and adversarial
and those that are advisory. Sain [v. Cedar Rapids Cmty. Sch. Dist., 626
N.W.2d 115, 124-25 (Iowa 2001)]. We also consider whether the person
providing the information “is manifestly aware of the use that the
information will be put, and intends to supply it for that purpose.” Id. at
125. We consider whether the defendant gave the information to the
plaintiff “gratuitously or incidental to a different service.” Id. We have
also found it appropriate to consider the role the defendant was playing
when the alleged misrepresentation occurred. See Meier [v. Alfa-Laval,
Inc., 454 N.W.2d 576, 581 (Iowa 1990)] (determining whether a cause of
action would lie where the defendant supplied information in his “role as a
retail merchant”).

29

We have found accountants, appraisers, school guidance counselors and
investment brokers all fall within this class of potential defendants. Sain,
626 N.W.2d at 126; Larsen v. United Fed. Savs. & Loan Ass’n, 300
N.W.2d 281. 287-88 (Iowa 1981); Ryan [v. Kanne, 170 N.W.2d 395, 403
(Iowa 1969)]; McCracken v. Edward D. Jones Co., 445 N.W.2d 375, 376,
382 (Iowa Ct. App. 1989). However, we have refused to allow a suit for
negligent misrepresentation where the defendant was a retailer in the
business of selling and servicing merchandise, a seller who made
misrepresentations pursuant to the sale of a business, a bank officer
negotiating a loan guarantee with a bank customer, or an employer
negotiating with an employee for employment. Fry, 554 N.W.2d at 266;
Freeman v. Ernst & Young, 516 N.W.2d 835, 838 (Iowa 1994); Haupt v.
Miller, 514 N.W.2d 905, 906, 910 (Iowa 1994); Meier, 454 N.W.2d at
581.
Pitt, 818 N.W.2d at 111-112. Those in the business of selling products are almost never
“in the business of supplying information,” because “any information provided during
the course of business is incidental.” Fry, 554 N.W.2d at 266. Put another way, Iowa
courts “seek to distinguish the sale of information as a product from information given
incidentally as part of another transaction.” Dinsdale Const., LLC v. Lumber Specialties,
Ltd., 888 N.W.2d 644, 650 (Iowa 2016) (citing Pitts, 818 N.W.2d at 112).
Hirschbach does not allege that SmartTruck was in the business of selling
information as a product.

Instead, it alleges that it was confused as a result of

SmartTruck’s advertising material, representations, and association with a business that
did, in fact, supply information as a product. In support of its position that SmartTruck
owed a duty based on these factors, Hirschbach cites Nationwide Agribus. v. Structural
Restoration, Inc., 705 F. Supp. 2d 1070 (S.D. Iowa 2010), for the proposition that some
companies sell information in order to bolster their sale of products. Nationwide is
distinguishable from the present case and does not supply the duty that is missing here.
In Nationwide, the defendant provided free grain silo inspections, which it in turn used
as a marketing tool to sell grain silos. Id. at 1078-79. The court concluded that the
defendant’s pecuniary interest in making the inspections gave rise to a duty to use
30

reasonable care in making those inspections, even though the inspection was free and the
plaintiff did not make a purchase. Id.
Hirschbach’s focus on the pecuniary benefit to SmartTruck in providing
advertising material about its products misses the point of Nationwide: the defendant
sought to avoid liability because the inspection was gratuitous, not because the defendant
was a retailer of goods. By providing inspections, the Nationwide defendant was in the
business of supplying information. The Nationwide analysis focused on a different
element of the test giving rise to a duty than the element at issue here.
This case is similar to the typical arms-length, adversarial interaction between a
seller and a purchaser of goods, with the seller providing information about the goods.
As set forth above, such a relationship may give rise to contract and warranty claims if
the goods do not conform to the information provided. However, the seller in such a
situation is not in the business of supplying information. Hirschbach has not plead a
plausible claim for negligent misrepresentation under Iowa law. SmartTruck’s motion
will be granted as to Count XIII.
4.

Count XIV (Intentional Misrepresentation, Hirschbach v. SmartTruck)

In Count XIV, Hirschbach claims that SmartTruck15 knew that the representations
it made regarding the performance of its products were false and that it intentionally made
false statements for the purpose of inducing Hirschbach’s reliance. Doc. No. 14 at ¶¶
176-79. The majority of the false statements that are the subject of the complaint are
alleged to have occurred in 2011. Doc. No. 14 at ¶¶ 15(a), (g), (n) and 16. However,

15

For purposes of the present motion, I will assume that the individual defendants were acting
as agents of SmartTruck, and that SmartTruck was thus bound by their actions. See, e.g.,
Gabelmann v. NFO, Inc., 571 N.W.2d 476, 481 (Iowa 1997) (“[A] corporation . . . can only
act through its agents and employees . . . . A basic element of agency law is that whatever an
agent does . . . binds the agent’s principal.” (citation omitted)).

31

SmartTruck—through Ingham—is alleged to have made false statements on at least one
occasion in 2014, after he was confronted with the test results that Hirschbach alleges
contradict SmartTruck’s representations. Id. at ¶ 32. Hirschbach contends that it relied
on SmartTruck’s representations and that it would not have bought SmartTruck’s products
in the absence of the representations. Id. at ¶¶ 180-81. SmartTruck primarily argues
that Hirschbach has failed to plead scienter, i.e., that SmartTruck knew its statements
regarding fuel efficiency were false prior to 2014. Doc. No. 20-1 at 14.
To establish intentional misrepresentation or fraud, Hirschbach must prove “(1)
representation; (2) falsity; (3) materiality; (4) scienter; (5) intent to deceive; (6) reliance;
and (7) resulting injury and damages.” Van Sickle Const., 783 N.W.2d at 687 (citing
Lloyd v. Drake Univ., 686 N.W.2d 225, 233 (Iowa 2004). Claims for fraud are subject
to the heightened pleading requirement of Rule 9(b): “In alleging fraud or mistake, a
party must state with particularity the circumstances constituting fraud. Malice, intent,
knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R.
Civ. P. 9(b). This requires Hirschbach to plead “the who, what, when, where, and how”
of the fraud. Summerhill v. Terminix, Inc., 637 F.3d 877, 880 (8th Cir. 2011) (citing
Great Plains Trust Co. v. Union Pac. R.R. Co., 492 F.3d 986, 995 (8th Cir. 2007)).
A representation is material “if it substantially affects the interest of the party
alleged to have been defrauded,” or “if it is likely to induce a reasonable person to act.”
Dier v. Peters, 815 N.W.2d 1, 8 (Iowa 2012) (citing Kanzmeier v. McCoppin, 398
N.W.2d 826, 830 (Iowa 1987). However, mere puffery or statements of opinion—even
when incorrect—are not actionable.
material.16

Only a statement of fact may be considered

Tralon Corp. v. Cedarapids, Inc., 966 F. Supp. 812, 827-828 (N.D. Iowa

1997) (citing Hoeft v. Wis. Educ. Assoc. Ins. Trust, 470 N.W.2d 336 (Iowa 1991)).

16

SmartTruck further contends that “broken promises” are not actionable (implying that their
broken promises regarding fuel efficiency are not actionable). However, the cases SmartTruck

32

The scienter element may be established by either the defendant’s knowledge that
a representation was false or the defendant’s reckless disregard for the truth. Van Sickle
Const., 783 N.W.2d at 688 (citing Garrison v. First Realty, Ltd., 481 N.W.2d 335, 338
(Iowa 1992)). However, “a false statement innocently but mistakenly made will not
establish intent to defraud unless the statement was recklessly asserted.” Magnusson
Agency v. Pub. Entity Nat’l Co.-Midwest, 560 N.W.2d 20, 28 (Iowa 1997).
Finally, reliance must be justifiable. Union Cnty. v. Piper Jaffray & Co., 788 F.
Supp. 2d 902, 918 (S.D. Iowa 2011) (“The justifiable-reliance standard does not mean
that a plaintiff may blindly rely on a representation. Instead, the standard requires
plaintiffs to utilize their abilities to observe the obvious, and the entire context of the
transaction is to be considered to determine if the justifiable-reliance element is met.”
(citing Spreitzer v. Hawkeye State Bank, 779 N.W.2d 726, 737 (Iowa 2009))). To
determine whether a plaintiff justifiably relied on a false representation, Iowa courts
consider:
(1) the sophistication and expertise of the plaintiff . . . in financial matters;
(2) the existence of long-standing business or personal relationships; (3)
access to the relevant information; (4) the existence of a fiduciary
relationship; (5) concealment of the fraud; (6) the opportunity to detect the
fraud; (7) whether the plaintiff . . . initiated the transaction or sought to
expedite the transaction; and (8) the generality or specificity of the
misrepresentations.
Union Cnty., 788 F. Supp. 2d at 918 (quoting Spreitzer at 779 N.W.2d at 737; Davidson
v. Wilson, 973 F.2d 1391, 1400 (8th Cir. 1992). Put another way, “the issue is whether

relies on hold only that a broken promise does not prove intent to defraud. At the pleading stage,
more than a broken promise is needed to meet the heightened pleading standards of Federal Rule
of Civil Procedure 9(b). See Brown v. N. Central F.S., Inc., 987 F. Supp. 1150, 1158 (N.D.
Iowa 1997) (discussing the “general rule that broken promises are not actionable as fraud . . .
unless if when made the speaker had an existing intention not to perform” (citations omitted)).

33

the plaintiffs, in view of their own information and intelligence, had a right to rely on the
representations.” Id. (citing Lockard v. Carson, 287 N.W.2d 871, 878 (Iowa 1980)).
Taking the facts alleged in the light most favorable to the non-moving party,
Hirschbach has plausibly alleged that SmartTruck made material, false representations
that its products would improve the fuel efficiency of Hirschbach’s fleet by 10%.
Hirschbach has also plausibly alleged that it reasonably relied on the representations,
resulting in injury and damages. The alleged representations go to the very purpose of
the agreement between SmartTruck and Hirschbach.

Given the specificity of the

representations and the lengthy negotiations between the parties, it was not unreasonable
for Hirschbach to rely on the representations, at least prior to 2014.
A more difficult question is whether Hirschbach has plausibly pleaded the required
scienter element. Hirschbach has plead several explanations as to how SmartTruck knew
its representations were false when made.

I must consider whether any of these

explanations plausibly allege that SmartTruck had the required state of mind. Hirschbach
contends that Greenberg, Henderson, Wulff and Ingham each attempted to discredit test
results that contradicted SmartTruck’s own testing when confronted with those results in
2014. Doc. No. 14 at ¶¶ 30, 32, 111. For each of the above individuals, Hirschbach
also alleges that their “conduct” before and after the sale of SmartTruck’s products
revealed their “true intentions” to dupe Hirschbach. Id. at ¶¶ 64, 77, 94, 109. Similarly,
Hirschbach alleges that each individual’s “true and fraudulent intentions” were revealed
in various meetings with Hirschbach before and after the sale of SmartTruck’s products,
without stating how these intentions were revealed. Id. at ¶¶ 69, 86, 101, 112.
Finally, for each individual, Hirschbach alleges the following:
Greenberg knew of the falsity of the claims made as he claims SmartTruck
did its own testing, which purports results wildly different from reality. It
is reasonable to believe that Smart Truck’s own testing would have revealed
the lack of fuel efficiency from the aerodynamic component parts or that
34

Greenberg knew of the unreliability and variables in the testing that could
have produced false results.
Id. at ¶ 70.
Wulff was involved with and had direct knowledge of the testing that was
performed by Smart Truck in developing its claimed fuel cost savings.
Wulff knew that the testing done by SmartTruck was not accurate or in line
with the real performance of Smart Truck’s aerodynamic component parts.
Wulff was also aware of the conflicting test results from independent testing
facilities, and still continued to make the false claims regarding performance
and fuel cost savings. It is reasonable to believe that SmartTruck’s own
testing would have revealed the lack of fuel efficiency from the
aerodynamic component parts or that Wulff knew of the unreliability and
variables in the testing that could have produced false results.
Id. at ¶ 87.
Henderson was one of the key persons involved with developing Smart
Truck’s aerodynamic component parts and developing the testing,
Henderson knew that the advertised results of the testing were not in line
with the reality of the negligible fuel cost savings that would be achieved
from use of the SmartTruck aerodynamic component parts. It is reasonable
to believe that Smart Truck’s own testing would have revealed the lack of
fuel efficiency from the aerodynamic component parts or that Henderson
knew of the unreliability and variables in the testing that could have
produced false results.
Id. at ¶ 102.
Ingham knew of the falsity of the claims made as he claims Smart Truck
did its own testing, which purports results wildly different from reality. It
is reasonable to believe that Smart Truck’s own testing would have revealed
the lack of fuel efficiency from the aerodynamic component parts or that
Ingham knew of the unreliability and variables in the testing that could have
produced false results.
Id. at ¶ 113.

Hirschbach does not actually allege that SmartTruck’s testing was

unreliable. Nor does Hirschbach explain how it came to the conclusion that SmartTruck’s
testing would have revealed the “true” results of an approximate 1.5% increase in fuel
efficiency. Rather, in the face of conflicting tests, and without alleging that SmartTruck
35

knew of the conflicting tests prior to 2014, Hirschbach claims it is reasonable to infer
that SmartTruck knew its test results were wrong, or lied about the test results.
Fatal to this argument is the allegation that Pinchuk had a great deal of access to
SmartTruck’s testing system and was able to inspect the products before its purchase.
SmartTruck even did testing on Hirschbach’s own fleet of semi-trailers, at Hirschbach’s
facility. Doc. No. 14 at ¶¶ 15(n)-(o). Hirschbach makes no allegations that SmartTruck
lied about or concealed its testing procedures and Hirschbach had every opportunity to
inquire further or look for contradictory information before it made its purchase. The
unsupported allegation that SmartTruck should have known its tests results were false or
misleading does not establish that SmartTruck either knew or recklessly disregarded the
falsity of its tests. The further allegations that SmartTruck defended its testing and
discredited the contradictory tests just as easily support an inference that it believed its
testing methods were more accurate than those of its competitors.

The fact that

SmartTruck made a promise, and that promise did not come true, is insufficient to support
an inference of scienter. Brown, 987 F. Supp. at 1158. Hirschbach has failed to state
a claim of intentional misrepresentation under Iowa law. Count XIV will be dismissed.17

5.

Counts XV-XVII (Detrimental Reliance, Hirschbach v. SmartTruck;
Unjust Enrichment, Hirschbach v. SmartTruck; and Unjust Enrichment,
Pinchuk v. SmartTruck)

Hirschbach and Pinchuk assert three claims under a quasi-contract theory. In
Count XV, Hirschbach alleges that SmartTruck made clear promises regarding the fuel
costs savings Hirschbach would receive with the expectation that such promises would
induce action by Hirschbach to its detriment. Doc. No. 14 at ¶¶ 184-85. Hirschbach

17

Of course, if discovery discloses evidence bolstering a claim that SmartTruck made false
representations with the requisite scienter, Hirschbach may seek leave to amend the complaint
accordingly. At this stage of the case, however, the factual allegations set forth in the amended
complaint are insufficient.

36

contends it would be unjust to permit SmartTruck to avoid liability for these promises.
Id. at ¶ 187. In Count XVI, Hirschbach argues that SmartTruck has been unjustly
enriched by Hirschbach’s payment to SmartTruck, based on false representations. Id. at
¶¶ 189-95. Finally, in Count XVII Pinchuk alleges that his endorsement of SmartTruck
and other benefits bestowed upon SmartTruck on the basis of SmartTruck’s false
promises have unjustly enriched SmartTruck. Id. at ¶¶ 197-206.
SmartTruck responds that the various warranties and limitations in the Limited
Warranty Documents foreclose SmartTruck’s quasi-contract claims as a matter of law.
Doc. No. 20-1 at 20. Further, SmartTruck contends that it has “established that there is
in fact an enforceable contract between the parties,” such that Hirschbach “may no longer
recover under the theory of promissory estoppel.” Id. at 19 (quoting Farm & Ranch
Servs., Ltd. V. LT Farm & Ranch, LLC, 779 F. Supp. 2d 949, 966 (S.D. Iowa 2011);
Union Pac. R.R. Co. v. Cedar Rapids & Iowa City Ry. Co., 477 F. Supp. 2d 980, 100102 (N.D. Iowa 2007).

Hirschbach responds that its quasi-contract claims are not

foreclosed by its express contract claims, because “a party may state as many separate
claims or defenses as it has, regardless of consistency.” Doc. No. 23 at 25 (citing Fed.
R. Civ. P. Rule 8(d)(3)). Further, Hirschbach contends that Iowa law allows a party to
recover on a quasi-contract theory for contract terms not covered by an express contract
in certain situations. Id. (citing Legg v. W. Bank, 873 N.W.2d 763, 771 (Iowa 2016)).
Both parties are correct in their analysis of Iowa law. The theory of detrimental
reliance, or promissory estoppel, allows a party to be held liable for its promise in spite
of the lack of consideration typically found in a contract. See Schoff v. Combined Ins.
Co. of Am., 604 N.W.2d 43, 48 (Iowa 1999) (citing Samuel Williston, Williston on
Contracts § 8.4, at 41 (1992)). To prove detrimental reliance, Hirschbach must establish:
“(1) a clear and definite oral agreement; (2) proof that plaintiff acted to his detriment in
reliance thereon; and (3) a finding that the equities entitle the plaintiff to this relief.” Id.
37

(citing Johnson v. Pattison, 158 N.W.2d 790, 795 (Iowa 1971); Nat’l Bank v. Moeller,
434 N.W.2d 887, 889 (Iowa 1989).
Unjust enrichment is a related equitable remedy that serves to imply a contract
when one party has conferred a benefit on the other. See Iowa Waste Sys., Inc. v.
Buchanan Cnty., 617 N.W.2d 23, 29-30 (Iowa 2000).

The elements for unjust

enrichment are: “(1) an enrichment; (2) an impoverishment; (3) a connection between
the enrichment and impoverishment; (4) absence of a justification for the enrichment and
impoverishment; and (5) an absence of a remedy provided by law.” Irons v. Cmty. State
Bank, 461 N.W.2d 849, 855 (Iowa Ct. App. 1990).
Quasi-contract theories are foreclosed by an express, integrated contract except in
limited circumstances:
A person who pleads an express contract ordinarily cannot also recover
under an implied contract. Scott v. Grinnell Mut. Reins. Co., 653 N.W.2d
556, 561 (Iowa 2002). “An express contract and an implied contract cannot
coexist with respect to the same subject matter, and the former supersedes
the latter.” Chariton Feed & Grain v. Harder, 369 N.W.2d 777, 791 (Iowa
1985). “Although we have held there may be a contract implied in law on
a point not covered by an express contract, there can be no such implied
contract on a point fully covered by an express contract and in direct conflict
therewith.” Smith v. Stowell, 125 N.W.2d 795, 800 (Iowa 1964).
Legg, 873 N.W.2d at 771-72 (discussing plaintiffs’ claim for unjust enrichment where
there was an express contract). Thus, although Hirschbach and Pinchuk are allowed to
plead inconsistent theories of recovery at this stage of the case, Fed. R. Civ. P. 8(d)(3),
the claims for breach of express contract (Counts I-IV) and breach of quasi contract
(Counts XV-XVII) are not necessarily inconsistent. As noted above, it is impossible at
this stage of the case to conclude that an express, integrated contract was formed. Thus,
the quasi-contract claims are not foreclosed as a matter of law. Hirschbach and Pinchuk
have plausibly plead facts demonstrating that SmartTruck made promises intended to

38

induce reliance and that the promises were broken, resulting in an unjust benefit conferred
upon SmartTruck. Counts XV through XVII will not be dismissed.
6.

Count XXVI (Civil Conspiracy to Commit Fraud, Hirschbach v. All
Defendants)

In Count XXVI, Hirschbach alleges that all of the named defendants agreed to act
together to commit various torts against it. Doc. No. 14 at ¶¶ 268-274. I have already
found that the individual defendants must be dismissed from this action due to lack of
personal jurisdiction. However, I must address Hirschbach’s civil conspiracy claim
against SmartTruck.
Hirschbach fails to state a claim for civil conspiracy for two reasons. First, as
discussed above, a corporation cannot conspire with its own agents. Hirschbach has not
alleged that the corporation conspired with anyone other than Greenberg, Wulff,
Henderson and Ingham. Each is a corporate officer of SmartTruck and was acting as an
agent of SmartTruck during the relevant events. Second, a claim for civil conspiracy
cannot survive in the absence of an underlying tort claim. Wright v. Brooke Grp. Ltd.,
652 N.W.2d 159, 172 (Iowa 2002) (“Civil conspiracy is not in itself actionable; rather it
is the acts causing injury undertaken in furtherance of the conspiracy [that] give rise to
the action. . . .” (citations omitted, modification supplied)). Here, I have found that
Hirschbach has failed to state a plausible fraud claim. As such, any claim for civil
conspiracy to commit fraud necessarily fails. Count XXVI will be dismissed.
VI.

CONCLUSION

For the reasons discussed above, defendants’ motion to dismiss (Doc. No. 20) is
granted in part and denied in part. The motion is granted as to the following claims:
1.

As to Count II: granted. Hirschbach’s claim for breach of written contract
due to poor performance is struck pursuant to Fed. R. Civ. P. 12(f).
39

2.

As to Counts V, VI, VII, VIII, IX, X, XI and XII: granted. Hirschbach’s
claims for fraud and constructive fraud against the individual defendants are
dismissed for lack of personal jurisdiction pursuant to Fed. R. Civ. P.
12(b)(2).

3.

As to Counts XIII and XIV: granted. Hirschbach’s claims for negligent
misrepresentation and fraud against SmartTruck are dismissed for failure to
state a claim pursuant to Fed. R. Civ. P. 12(b)(6).

4.

As to Counts XVIII, XIX, XX, XXI, XXII, XXIII, XXIV and XXV:
granted. Pinchuk’s claims for fraud and constructive fraud against the
individual defendants are dismissed for lack of personal jurisdiction
pursuant to Fed. R. Civ. P. 12(b)(2).

5.

As to Count XXVI: granted.
a.

Hirschbach’s claim for civil conspiracy against the individual
defendants is dismissed for lack of personal jurisdiction, pursuant to
Fed. R. Civ. P. 12(b)(2).

b.

Hirschbach’s claim for civil conspiracy against SmartTruck is
dismissed for failure to state a claim, pursuant to Fed. R. Civ. P.
12(b)(6).

The motion is denied with respect to Counts I, III, IV, XV, XVI and XVII. This
case will proceed with regard to those six counts.
IT IS SO ORDERED.
DATED this 3rd day of January, 2018.

__________________________
Leonard T. Strand, Chief Judge
40