# Al Poller and Deb Poller v. Okoboji Classic Cars, LLC

> Supreme Court of Iowa · June 4, 2021

URL: https://www.frixlaw.com/law-library/cases/5118699

## Case

- **Court:** Supreme Court of Iowa
- **Decided:** June 4, 2021
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/5118699

## How later opinions describe it (automated extraction)

- holding the violation of the Equal Credit Opportunity Act was an affirmative defense in an action to collect on debt
- discussing application of estoppel to prevent unjust results in auto repair context
- rejecting “roadworthiness” limitation and noting that “[c]ourts have consistently rejected creative attempts to narrow the scope of the [statute] by technical definitions and artificial distinctions”

## Opinion text

IN THE SUPREME COURT OF IOWA
No. 19–0875

Submitted March 23, 2021—Filed June 4, 2021
Amended August 16, 2021

AL POLLER and DEB POLLER,

Appellants,

vs.

OKOBOJI CLASSIC CARS, LLC,

Appellee.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Dickinson County, Don E.

Courtney, Judge.

Automobile owners seek further review of court of appeals decision

affirming the district court decision that found the owners failed to make

a valid claim under Iowa’s Motor Vehicle Service Trade Practices Act and
were not entitled to relief against their car restoration service for breach of

contract and, instead, awarded the automobile restoration service

damages in a counterclaim against the owners for breach of contract.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT

JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND

REMANDED WITH INSTRUCTIONS.

Appel, J., delivered the opinion of the court, in which all justices

joined.
2

Matthew G. Sease (argued) and Kylie E. Crawford (until withdrawal)

of Sease & Wadding, Des Moines, for appellants.

Jordan M. Talsma (argued) and John R. Walker Jr. (until

withdrawal) of Beecher, Field, Walker, Morris, Hoffman & Johnson, P.C.,

Waterloo, for appellee.
3

APPEL, Justice.

In this case, the owners of a 1931 Chevy claim that a company in

the business of restoration of antique vehicles violated various provisions

of the Motor Vehicle Service Trade Practices Act (MVSTPA), Iowa Code

chapter 537B, and breached its contract with the owner. The company

denied the claims, asserted affirmative defenses, and filed a counterclaim

alleging breach of contract arising from the failure of its customer to pay

an outstanding balance for restoration work on the vehicle.

After a two-day trial, the district court concluded that there were no

violations of the MVSTPA and that the plaintiffs were not entitled to relief

on their contract claim. The district court further held that the company

was entitled to a verdict on its counterclaim and awarded damages of

$67,396.15.

Plaintiff appealed. The court of appeals affirmed. According to the

court of appeals, the plaintiff failed to prove “ascertainable” damages

under the Iowa Consumer Fraud Act, which provides the remedies for

violations of the MVSTPA. The court of appeals further upheld the district

court’s verdict on the breach of contract counterclaim.

We granted further review. For the reasons expressed below, we
affirm in part and reverse in part, and we remand the case to the district

court for the entry of judgment consistent with our opinion.

I. Background Facts and Procedural History.

A. Introduction. Al and Deb Poller are residents of New Jersey

who own a 1931 Chevy. Okoboji Classic Cars, LLC (OCC) is a company

located in Spencer, Iowa, that is in the business of restoring antique cars.

After some preliminary communications, the Pollers shipped their

disassembled 1931 Chevy from New Jersey to OCC for restoration in
4

November of 2013. In late December, the Pollers visited OCC in Iowa and

made a $10,000 down payment on costs of the restoration project.

OCC commenced work on the vehicle in late 2013. Although the

Pollers were told by OCC staff that they would receive monthly invoices,

no invoices were sent to them during the first seven months of the project.

In August of 2014, when OCC asked for additional payment for their work,

the Pollers requested the unsent invoices. OCC promptly sent six invoices

to the Pollers, which showed that after a credit for the $10,000 down

payment, the Pollers owed OCC a balance of $39,560.27.

In the ensuing months, invoices accumulated as work continued on

the restoration of the Pollers’ vehicle. The Pollers paid an additional

$35,000 to OCC in three separate payments after August of 2014 but did

not satisfy the entire amount ultimately invoiced by OCC. According to

OCC, the total cost of the restoration of the ’31 Chevy came to

$112,396.15. The balance OCC claimed the Pollers owed was $67,396.15.

In December 2014, Al Poller and his son arrived at OCC to see the

car. OCC, however, refused to permit them to view the vehicle until bills

were paid. OCC placed the car in storage and refused to allow the Pollers

to inspect it, apparently asserting an artisan’s lien under Iowa Code
section 577.1.

Ultimately, OCC permitted an expert to view the vehicle for appraisal

purposes. The expert concluded that the quality of the restoration work

on the vehicle was excellent and that the cost to restore a vehicle to the

quality observed would be in excess of $100,000. Yet, the expert opined

that the current fair market value of the restored vehicle itself was

$37,900.

B. Overview of Petition and Counterclaim. The Pollers filed a

petition with three counts relevant to this appeal. In count I, the Pollers
5

sought a declaratory judgment regarding the nature of the contractual

relationship of the parties. According to the Pollers, the parties “agreed (at

least implicitly), that the costs of restoration would not greatly exceed the

overall value of the final finished product.” The Pollers sought a

declaration that with their total remittance of $45,000, they had “paid the

proper amount for the restoration of the ’31 Chevy.”

In count II of the amended petition, the Pollers alleged breach of

contract and breach of the duty of good faith and fair dealing. They alleged

that there existed a valid and enforceable contract between the Pollers and

OCC and that the Pollers had met the necessary terms of the contract by

“paying a reasonable and fair amount for the work performed on the ’31

Chevy.” The Pollers claimed OCC breached the contract by making

demands for payment outside the scope of any contractual agreement and

by failing to return the vehicle to the Pollers after receiving payment for

services.

In count IV of their amended petition, the Pollers alleged violations

of the MVSTPA. The Pollers claimed that OCC violated section 3 of the

MVSTPA by failing to disclose that the Pollers had a right to an estimate,

failing to provide an estimate, and failing to have proper forms
documenting the transaction. See Iowa Code § 537B.3. In the alternative,

the Pollers pled that if the ballpark figure was, in fact, an estimate, OCC

violated section 6 of the MVSTPA by not obtaining oral or written

authorization from the consumer when the costs of the repairs or service

amounted to more than ten percent above the original estimate. See id.

§ 537B.6(3).

Further, the Pollers charged that OCC violated section 6 of the

MVSTPA in other ways. They claimed that OCC improperly charged them

for disassembly and reassembly or partially completed work without
6

obtaining authorization in advance. See id. § 537B.6(5). The Pollers

alleged that they incurred charges that they had not authorized, including

storage fees for their vehicle. See id. § 537B.6(6). Further, the Pollers

asserted that OCC “materially and intentionally understate[d] or

misstate[d] the estimated cost of the repairs or service.” See id.

§ 537B.6(12).

Because of the above violations, the Pollers sought damages,

including damages for loss of use of the ’31 Chevy and money previously

paid. The Pollers also sought injunctive relief seeking to enjoin OCC in

order to protect the public from further violations. See id. § 714H.5(1).

The Pollers further sought an award of attorney fees under Iowa Code

section 714H.5(2). Finally, the Pollers sought statutory damages up to

three times the actual damages because the actions of OCC were alleged

to be in willful and wanton disregard for the rights of consumers. See id.

§ 714H.5(4).

OCC generally denied many of the Pollers’ allegations in their claims.

Notably, however, OCC admitted that in approximately November of 2013,

the parties entered into an oral contract in which OCC was to restore the

Pollers’ ’31 Chevy. OCC further pled affirmative defenses of estoppel,
waiver, laches, and acquiescence.

In addition, OCC brought a counterclaim for breach of contract. In

the counterclaim, OCC alleged that an oral contract between the parties

was reached. Under the oral agreement, OCC made it clear that the

charges were on a time and materials basis, with labor being charged at

the rate of $65 per hour. OCC alleged that the Pollers were provided with

periodic billings and encouraged OCC to continue work on the vehicle.

OCC asserted that it continued work until the car was completed without

any indication from the Pollers that they should cease working on the
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vehicle. OCC asserted that the Pollers were in breach of contract for failure

to make payments for work on the completed car and sought damages plus

interest. Further, OCC asked the court to permit it to maintain possessory

control of the vehicle pursuant to its lien until the judgment of the court,

including interest and costs, was satisfied.

In response to OCC’s counterclaim, the Pollers admitted that OCC

refused to provide an estimate but otherwise denied the allegations. As

affirmative defenses, the Pollers claim that OCC breached the contract by

failing to deliver the vehicle in a timely manner and demanding an amount

beyond that agreed to by the parties. The Pollers further asserted that

there was no mutual assent to the terms of the contract. The Pollers also

claimed that OCC breached the contract first, thus excusing performance.

Finally, the Pollers charged that any alleged contract is illegal under the

MVSTPA and is therefore void. Finally, in light of the statutory violations,

the Pollers claimed that OCC was precluded from receiving any payment

from them.

C. Trial Before the District Court. The district court held a two-

day trial in January 2018. Witnesses at trial included Deb Poller, Al Poller,

a former OCC employee Robert Kirschbaum, and current OCC employees
Denny Linn, April Torrence, and Ken Potter. Exhibits were admitted into

evidence that included OCC invoices and backup documents, a number of

email communications between the Pollers and OCC, photographs of the

car during the work in progress and upon completion, and the report of

the expert on the value of the restored vehicle and the work done by OCC.

Many of the facts were undisputed and well documented in the

record. But there were two key factual disputes at trial.

First, the Pollers claimed that early in December 2013, an employee

of OCC provided them with what the Pollers claim either was a nonbinding
8

ballpark statement or, in the alternative, an initial estimate of $45,000 for

the restoration project. The OCC employees who testified at trial denied

that such a representation was made.

Second, OCC offered testimony that all of the work on the vehicle

was approved by the Pollers. OCC notes that it maintained close contact

with the Pollers as the project progressed, and when the invoices were sent

to the Pollers in August of 2014 and in later months, the Pollers did not

voice any objection to the invoices. The Pollers testified that they never

authorized any expenditures above $45,000 nor did they authorize certain

categories of expenses reflected in the invoices.

D. Overview of Findings of Fact and Conclusions of Law by the

District Court.

1. Findings of fact. The district court found the facts as follows. Al

and Deb Poller are residents of New Jersey. The Pollers have owned a 1931

Chevrolet four-door Sedan since the late 1990s. The Pollers began

restoring their Chevy in the 1990s but put it on hold to raise their family.

In July 2013, Deb Poller, while visiting her family near Spencer,

Iowa, visited the OCC museum. OCC’s museum also contained a body

shop where OCC employed restoration specialists to restore vehicles for
the museum as well as work on automobile restoration projects for private

owners. Visiting the museum prompted Deb to inquire into completing

the restoration project on her Chevy. Deb discussed the potential

restoration of her Chevy with OCC’s officer manager, April Torrence. After

Deb asked about the potential cost of the project, April told Deb that OCC

has a policy to not provide estimates of quotes for restoration projects

because of the variability and unknown conditions related to each

individual project.
9

By November 2013, the Pollers decided that they wanted OCC to

restore their Chevy. Deb sent April an email stating that the Pollers would

ship their Chevy to OCC to be restored but conditioned the project on OCC

providing a quote. OCC’s shop manager, Denny Linn, responded to Deb’s

email saying that OCC does not provide estimates for the total cost of

restoration projects and that he could not give Deb an estimate on her car

specifically because he did not know the condition of the Chevy. In his

reply, Denny told Deb that OCC would work on the Chevy based on “time

and materials,” meaning that OCC would do restoration work for $65 per

hour plus the materials for the project. Denny’s reply to Deb consisted of

the following:

Thank you for sending the pictures of the 31 Chevy, I
just saw them today for the first time. It looks like a pretty
nice car. Is it complete? It is very hard for us to give you a
quote or estimate. In fact we don’t give estimates. Our
experience has been that you can never see what problems
may arise as we work on the car. What I can tell you is that
we charge $65.00 an hour for work done in the shop. We do
the mechanical work, the body work and the upholstery work
for $65.00 an hour plus materials. We would restore or alter
the car, what-ever your interests maybe, while keeping you
involved in the decision making along the way. Right now we
are booked up over a year in advance. In our shop we have
area experts in the mechanics, body, and upholstery fields
and with your input into what you want, I am sure that we
could build you a very nice car.

Soon after receiving the email, Deb shipped the Chevy to OCC, and

all of the parts, consisting of four boxes, a motor, and a chassis, arrived

on November 26. At the time of arrival, an OCC employee unpacked all of

the boxes and determined that the Chevy appeared to be in excellent

condition and contained all of the major parts. The exception to the

excellent condition was surface rust and a dent near the roof that likely

occurred during transport.
10

Denny sent an email to Deb notifying her that the shipment arrived

and that they took pictures of all of the parts. The email stated, “You have

a really nice car here. It looks like it made the trip pretty well” aside from

the rust and small dents. He also indicated that OCC was one and a half

to two years away from restoring the Chevy because of the number of

projects ahead of the Pollers’ Chevy. Deb replied saying “NO WAY!!! Talk

to April, I have been on the schedule since summer.” Denny responded

that OCC had a number of cars they committed to restore ahead of the

Pollers’ Chevy but that OCC would do some preliminary work and get to

the more major work as soon as possible. Denny indicated that if the

Pollers were not satisfied with that arrangement, they should let OCC

know so OCC could discontinue work on the Chevy. Denny also said that

OCC would be in touch so that OCC and the Pollers could discuss more

detailed plans about the project.

Deb responded by email that she would be visiting Okoboji around

Christmas and that they could discuss specifics at that time. The Pollers

visited OCC on December 27. The Pollers wanted the restoration work

completed by August 15, 2014, to participate in a car cruise event. Denny

took notes during the meeting, and the notes indicated that the Chevy
would be restored to its original condition, with a modified paint job, and

installation of a stereo.

Deb discussed putting a $10,000 down payment on the project, and

despite April saying OCC had never taken a down payment, OCC accepted

the money. April also told Deb that OCC would be providing monthly

invoices, which was a new policy of OCC’s, beginning in 2014. Al also said

that during the meeting, an OCC employee said the restoration would

probably cost between $35,000 and $40,000, with an additional $5,000 to

$10,000 cost depending on choices the Pollers made.
11

Over the next several months, OCC worked on various parts of the

Chevy. OCC communicated with the Pollers regarding updates on the

work as well as asking the Pollers for their input on various decisions.

There were over forty email exchanges between OCC and the Pollers. The

first emails consisted of updates on engine parts and issues that third-

party contractors discovered with the engine. Denny discussed the

problems and the price to fix the problems, and the Pollers approved of the

costs as long as the repairs were what the third-party recommended.

Subsequent emails discussed the top speed of the engine and how

the engine could be “geared up” to be more comfortably driven on the

highway or in the alternative to replacing the gears, the use of larger tires.

Deb said that they did not want the larger tires because they would be

using the Chevy as a parade car.

A set of emails by Denny in May first indicated that there was a lot

of work left to do on the Chevy. Additional emails discussed the color to

be painted. Denny also discussed upgrading the electrical system so that

more safety features could be added to the Chevy, including a second tail

light, turn signals, and four-way flashers, and that the upgraded system

would allow for electric wipers, a stereo system, and a cigarette lighter.
Deb replied that they would like the upgraded electrical system and

wanted a specific metallic purple color for the Chevy.

In June, Denny told the Pollers that the fuel tank needed to be

replaced due to rusting. He provided two options, one for $1000 and

another for $1155. Deb replied that they would like the $1155 option.

Denny replied that they were putting many hours into the project and

sending out lots of parts for rebuilding. In another email, Denny discussed

parts needed for the rear gearing, including a ring and pinion set which

would cost $1320, and updated Deb that chromed items were sent to be
12

rechromed and would be back in five weeks. Deb replied, “[W]hy were the

chrome items not sent out until now? Also regarding the gear out, we

discussed this almost 2 months ago and gave our approval. How is this

car ever going to be completed by Aug 15th?” Denny’s reply consisted of

a continued discussion of the color, ring and pinion gears, and rear

luggage rack. He also said, “[W]e may not have the car ready for the mid-

August pick up.”

In July, Denny sent emails regarding the radiator, stating that for

the radiator to look like original, it would cost around $3000 but a modern

style radiator would be $1050 and said that it may take some time before

the radiator is completed. Deb responded:

We are very concerned about the time frame on our car.
You have had the car since Nov. 2013 with the agreement that
it would be done this summer. We met with you over
Christmas, went over details, set a date for Aug 16, now within
the last 2 weeks we are looking for gears on rear end, sending
out chrome and now addressing radiator, all issues according
to you will take a while some time, at least 5–6 weeks on just
the chrome. We have asked before, why wasn’t this done
before now? What has been done since Dec. 2013?

Denny did not address Deb’s questions, instead continuing to discuss the

paint and radiator.
In July, Deb was in Iowa and checked in on the progress at OCC.

Deb met with an upholstery person to discuss details. After the visit,

Denny sent Deb an email with pictures of the new radiator and asked the

Pollers for an additional payment. In response, Al replied saying that they

never received any monthly invoices from OCC and asked OCC to send the

invoices.

On August 6, OCC sent six invoices that demonstrated OCC had

used the $10,000 initial down payment and that the Pollers owed an

additional $39,560.27. The Pollers asked for an itemization of work. While
13

the itemization was being sent, the Pollers were sent an additional invoice

showing another $25,000 of work since August 6.

Denny sent more progress pictures at the end of August and also

stated that they were putting in many hours and paying for a lot of parts

for the Chevy. He again asked for a check from the Pollers. The Pollers

made a payment of $15,000 on September 11. Denny asked for additional

payment on October 7 if they wanted OCC to continue work on the Chevy

and told the Pollers that if they wanted OCC to discontinue work, they

would move the Chevy to a secured warehouse. He indicated that the

Pollers had paid $25,000 up to that point but that OCC had $21,219.19

of parts for the Chevy in OCC’s warehouse. He also said OCC would send

the itemization that the Pollers requested.

The Pollers had sent a check to OCC on October 6 for $10,000. On

October 31, Denny sent an email informing the Pollers of various work

being performed and wondered whether the Pollers had sent an additional

check. The Pollers sent a check for $10,000 on November 13. The Pollers

made no further payments. On November 14, the outstanding balance

was $50,694.93, and after completion of the project on December 31, the

balance was $66,705.70.
In January 2015, the Pollers hired an automobile appraiser to

appraise the Chevy. OCC initially refused to allow the appraiser access to

the Chevy but eventually the appraiser was given access. The appraiser

determined that the car was in excellent condition and said that the type

of restoration he saw would cost in excess of $100,000. The Chevy is still

in OCC’s possession and OCC continues to send the Pollers invoices.

2. Conclusions of law. The district court first addressed the Pollers’

claims under the MVSTPA. The district court held that “Deb’s action of

shipping the ’31 Chevy was an acceptance of OCC’s offer, authorizing OCC
14

to restore her ’31 Chevy based upon their $65.00 per hour time plus the

cost of materials.” The district court stated that Iowa Code section

537B.3(2)(b) gives a supplier “the choice to write the written estimate on

the authorization form, or state an hourly labor charge.” Since OCC

provided an hourly rate, the district court determined that OCC complied

with the provision. The district court further determined that because Deb

shipped the parts, rather than requesting repairs in writing or orally, the

disclosure requirements of subsections 1 and 3 of Iowa Code section

537B.3 and were not triggered.

The district court also concluded that OCC did not engage in other

deceptive activity under section 537B.6. The district court rejected the

claim that OCC violated the MVSTPA by not obtaining authorization when

the amounts exceeded the initial estimate by ten percent. See Iowa Code

§ 537B.6(3). The district court concluded that there was no estimate;

therefore, no violation of the ten percent rule.

The district court did not directly address other potential violations

of the MVSTPA regarding unauthorized work. But the court noted that all

modifications were authorized by the Pollers through email and that

detailed invoices demonstrating that the charges OCC imposed were all
directly related to restoration. As a result, the district court ruled that the

plaintiffs failed to prove any violations of the MVSTPA.

On the breach of contract claims, the district court determined that

the Pollers breached the contract. The district court found the Al Poller’s

testimony that he received an oral estimate of $45,000 was against the

weight of the evidence. So, any claim that costs above the “agreed upon

amount” lacked mutual assent was without merit.

The district court also determined that the Pollers’ claim that OCC

charged a thirty percent markup on parts in violation of the agreed-upon
15

contract was without merit. The district court found that OCC sold parts

below fair market value, even after the thirty percent markup.

Finally, the district court determined that OCC’s failure to send

monthly invoices at the beginning of the project was not a material breach.

The district court found that the Pollers did not dispute any of the invoices

or request work be cancelled. OCC continued with the project and

continued to request payments from the Pollers.

The district court found that OCC provided general billing

statements and detailed itemization of the bill. The district court found

“[t]he evidence is clear, and without dispute, that every stage of the

restoration process was a work in progress that involved the Plaintiffs in

the decision matrix that led to the ultimate cost of the time and materials

billed.” The district court said that if the plaintiffs believed they were only

required to pay $45,000, then “they had a duty to terminate their

relationship and not authorize further expense.” The district court noted

that the Pollers did not mitigate their damages despite having the

opportunity to have OCC set aside the Chevy. The district court concluded

that the Pollers materially breached the contract by only paying $45,000

when the total cost of the project amounted to $112,396.15. Thus, the
Pollers were in breach for failure to pay the unpaid balance of $67,396.15.

The district court entered a judgment in favor of OCC in that amount.

E. Decision of the Court of Appeals. The court of appeals, in a

per curiam opinion, affirmed the district court ruling. The court of appeals

assumed, without deciding, that the MVSTPA applied to the transaction.

In discussing the Pollers’ claim that OCC violated the MVSTPA, the court

of appeals majority emphasized the findings of fact of the district court

that all the work performed by OCC was authorized. Because the work

was “authorized,” the court of appeals majority held that that the Pollers
16

could not prove “actual damages” under Iowa Code section 714H.5. In

support of its holding, the court of appeals majority cited a footnote in

Kaskin v. John Lynch Chevrolet-Pontiac Sales, Inc. stating that “a customer

finding a violation of the written estimate requirement has not suffered a

pecuniary loss if the customer admits to authorizing to the repairs.” 767

N.W.2d 394, 402 n.6. (Wis. Ct. App. 2009).

The court of appeals majority also held that the Pollers did not

establish that OCC committed a willful or wanton breach of Iowa Code

chapter 537B that would entitle them to exemplary damages. The court

of appeals majority reasoned that the district court finding in favor of OCC

on its breach of contract counterclaim made it clear that the standard for

exemplary damages was not met. In support of its holding, the court of

appeals majority cited Scibek v. Longette, 770 A.2d 1242 (N.J. Super. Ct.

App. Div. 2001). In Scibek, the court found that there was no

“ascertainable loss” arising from the failure of a repair shop “to provide a

written estimate and obtain a written authorization.” Id. at 1249–51.

The court of appeals majority next turned to OCC’s breach of

contract claim. The court of appeals majority recognized the argument

advanced by the Pollers that it would be illogical and against public policy
to permit collection of monies earned in violation of a consumer protection

statute. But, the court of appeals majority noted that Iowa Code section

714H.5 limits damages to “ ‘actual damages’ incurred ‘as the result of a

prohibited practice.’ ” Based on its conclusion that the Pollers are not

entitled to damages based upon alleged violations of the MVSTPA, the

court of appeals majority concluded that OCC “is not foreclosed from

recovering damages on its breach-of-contract counterclaim based on its

violation of chapter 537B.”
17

The court of appeals majority finally considered whether OCC

breached the parties’ agreement by failing to provide timely billing. The

court of appeals majority noted that the district court found that OCC did

not provide timely billing, but the court put the onus on the Pollers for

failing to insist on adherence to timely billing while OCC continued to work

on the car. As a result, the court of appeals majority found that the Pollers

acquiesced in the delayed billing.

A special concurrence determined that the antique auto restoration

business of OCC was subject to the terms of the MVSTPA. See Schuster v.

Dragone Classic Motor Cars, Inc., 98 F. Supp. 2d 441, 448 (S.D.N.Y. 2000);

Montgomery v. Nostalgia Lane, Inc., 891 N.E.2d 994, 999, 1001 (Ill. App.

Ct. 2008). Further, the special concurrence reasoned that a dissembled

vehicle was within the scope of the statute. In re Baily, 326 B.R. 750, 757

(Bankr. S.D. Iowa 2004). Further, the special concurrence concluded that

the OCC violated the MVSTPA by failing to provide the Pollers an estimate

as required by subsections 2(b) and 3 of Iowa Code section 537B.3.

The special concurrence also considered the impact of the Pollers

sending the car to OCC for repairs without having obtained an estimate.

According to the special concurrence, the conduct of the Pollers does not
provide a waiver, noting, in part, that under Iowa Code section 537B.6(2),

a supplier cannot condition services on waiver. Further, the special

concurrence found that while the Pollers could have taken action to

mitigate their expenses, mitigation has no bearing on whether OCC

violated chapter 537B.

Yet, like the majority, the special concurrence determined that the

Pollers did not prove actual damages from the violation of the MVSTPA.

The special concurrence further agreed with the majority’s disposition of

OCC’s breach of contract claim.
18

II. Standard of Review.

“In a law action tried to the court, our review is for the correction of

errors at law, and the district court’s findings of fact are binding on us if

they are supported by substantial evidence.” Wolf v. Wolf, 690 N.W.2d 887,

892 (Iowa 2005).

III. Overview of the Iowa Motor Vehicle Service Trade Practices
Act and Private Right of Action Under the Iowa Consumer Fraud Act.

We begin with a brief overview of the relevant statutory provisions

in this case. Iowa Code chapter 537B is entitled the “Motor Vehicle Service
Trade Practices Act.” Iowa Code § 537B.1. The MVSTPA covers

transactions between consumers and suppliers “for, repairs or service

upon a motor vehicle used primarily for farm or personal use.” Id.

§ 537B.2(1). After providing a series of definitions in Iowa Code section

537B.2, the MVSTPA contains provisions related to estimates and

documentation required before services are provided, provisions related to

various trade practices, aftermarket parts, and deceptive acts or practices.

Id. §§ 537B.3, .4, .6.

Importantly, a violation of the MVSTPA is an unfair practice under

the Iowa Consumer Fraud Act. Id. § 714.16(2)(k); State ex rel. Miller v.
Vertrue, Inc., 834 N.W.2d 12, 31 n.8 (Iowa 2013). Under the Iowa

Consumer Fraud Act, a private party may seek “actual damages.” Iowa

Code § 714H.5(1). Actual damages are “all compensatory damages

proximately caused by the prohibited practice or act that are reasonably

ascertainable in amount.” Id. § 714H.2(1). In addition, section 714H.5(4)

provides exemplary damages for “willful and wanton disregard for the

rights or safety of another.” Finally, attorney fees are recoverable where

statutory violations are proven and actual damages are awarded. Id.

§ 714H.5(2). As a consumer protection statute, the terms of the MVSTPA
19

should be interpreted liberally in favor of the consumer. State ex rel. Miller

v. Cutty’s Des Moines Camping Club, Inc., 694 N.W.2d 518, 528 (Iowa

2005); State ex rel. Turner v. Koscot Intrerplanetary, Inc., 191 N.W.2d 624,

630 (Iowa 1971); Levin v. Lewis, 431 A.2d 157, 161 (N.J. Super. Ct. App.

Div. 1981).

IV. Coverage Under the MVSTPA.

A. Positions of the Parties.

1. The Pollers. The Pollers assert that the restoration services

provided by OCC were within the scope of the MVSTPA. The Pollers claim

that they are “consumers” and OCC is a “supplier” under the Act. Under

the Act, a consumer is defined as “a person contracting for, or intending

to contract for, repairs or service upon a motor vehicle used primarily for

farm or personal use.” Iowa Code § 537B.2(1). A motor vehicle under Iowa

Code section 537B.2(2) is “a motor vehicle as defined in section 321.1

which is subject to registration.” In turn, Iowa Code section 321.1(42)(a)

defines motor vehicle as “a vehicle which is self-propelled and not operated

upon rails.” A “supplier” is “a person offering to contract for repairs or

service upon a motor vehicle.” Id. § 537B.2(3).

At the outset, the Pollers address a generalized concern that the
MVSTPA was not intended to cover transactions for the restoration of

antique cars. They note that such restoration work has been held to be

within the scope of similar statutes in a number of jurisdictions. Schuster,

98 F. Supp. 2d at 448–49; Schreiber v. Kelsey, 133 Cal. Rptr. 508, 510

(App. Dep’t Super. Ct. 1976); Morris v. Gregory, 661 A.2d 712, 716 (Md.

1995); Levin, 431 A.2d at 160; Jagodzinski v. Jessup, 572 N.W.2d 515,

517 (Wis. Ct. App. 1997); Webb v. Ray, 688 P.2d 534, 537 (Wash. Ct. App.

1984).
20

In order to be a “consumer” under the MVSTPA, the repair work

must be done on a “motor vehicle” within the terms of the statutory

provisions. Although their ’31 Chevy was disassembled when sent to OCC,

the Pollers assert that does not matter. The Pollers claim that when

delivered to OCC, the ’31 Chevy was complete with all major necessary

components provided.

In support of their position, the Pollers cite In re Baily, 326 B.R. 750.

In In re Baily, the court held that “the ordinary and common meaning of

the term ‘motor vehicle’ includes an inoperable vehicle that can be made

operable by reassembling one [or] more of its parts or by repairing one or

more of its parts.” Id. at 757–58.

The Pollers recognize that in order to be a “motor vehicle,” the vehicle

must be “subject to registration.” The Pollers assert that upon completion

of the work, the vehicle will be subject to registration under the laws of

New Jersey. They claim as a matter of statutory interpretation that the

word “is” includes the future because under Iowa Code section 4.1(33),

“[w]ords in the present tense include the future.” Therefore, according to

the Pollers, the fact that the vehicle upon completion of the restoration

would be subject to registration is sufficient to bring the restoration work
within the scope of the MVSTPA.

2. OCC. OCC denies MVSTPA coverage. OCC makes the general

claim that restoration of antique cars is simply not the type of activity that

the legislature intended to regulate under the MVSTPA. They cite two

cases from Massachusetts for the proposition that the repair work on

classic cars “customarily require[s] several months, if not years, to

complete and routinely cost twenty to thirty thousand dollars.” Devito Auto

Restoration v. Card, No. 9657, 2000 WL 1426124, *3 (Mass. Dist. Ct.
21

Sept. 15, 2000); see also Gulbankian v. Harabedian, No. 01WAD014, 2002

WL 480952, *3 (Mass. Dist. Ct. Mar. 25, 2002).

OCC notes that the cases cited by the Pollers for the general

proposition that classic auto restoration is subject to similar acts are not

persuasive because of differences in statutory language. OCC claims that

the Iowa statute was designed to protect consumers who use their vehicles

for daily transportation, not for owners of antique cars. In support of its

argument, OCC cites an affidavit from a distinguished former state

legislator who declared that chapter 537B was not intended to apply to

restoration of dismantled vehicles incapable of operating on the roadway

“because there are too many unknowns in the car restoration industry and

restoring vehicles is not an exact science.” Because OCC had a policy of

not providing estimates, OCC argues that the Pollers cannot use the

MVSTPA as a sword against them for authorized work.

OCC then turns to the question of whether the Pollers ’31 Chevy is

a “motor vehicle.” OCC directs our attention to Nelson v. Merchants

Bonding Co., 425 N.W.2d 433 (Iowa Ct. App. 1988). In Nelson, the court

of appeals held that a collection of automotive parts did not constitute a

“motor vehicle” under Iowa Code section 321.1. Id. at 436. OCC urges us
to follow a similar approach here.

OCC also addressed the case In re Baily cited by the plaintiffs.

According to OCC, while OCC recognizes that the court in In re Baily, 326

B.R. at 757, stated that the term ‘motor vehicle’ includes “an inoperable

vehicle that can be made operable by reassembling one [or] more of its

parts or by repairing one or more of its parts,” OCC argues, however, that

the case does not mean that a “completely assembled, inoperable vehicle”

which can only be made operable by replacing and rebuilding numerous

essential parts, is included within the term.
22

Finally, according to OCC, the disassembled vehicle was not “subject

to registration” within the meaning of Iowa Code section 321.18. OCC

argues that the Pollers have never held a certificate of title to the ’31 Chevy

and have never registered the vehicle. But, according to OCC, the reading

of the statute is unreasonable or absurd because the ’31 Chevy would have

been subject to registration for the thirteen years it was held in storage.

Instead, OCC points to Iowa Code section 321.18 to assist in the

interpretation of the term “subject to regulation” in the MVSTPA. Under

this provision, “[e]very motor vehicle, trailer, and semitrailer when driven

or moved upon a highway shall be subject to the registration provisions of

this chapter.” Id. § 321.18. OCC claims that motor vehicles are subject

to registration only when “driven or moved” on the highway, and not one

minute before.

B. Discussion.

1. Restoration of antique cars. We begin our discussion of the

applicability of the MVSTPA by considering whether restoration of antique

cars is within the scope of the statute. We recognize that there is some

authority from Massachusetts standing for the proposition that antique

restoration is not subject to a similar statute because of its unique
characteristics. In Devito Auto Restoration, the court held that a business

that restores antique cars is not a repair shop because the work

“customarily require[s] several months, if not years, to complete and

routinely cost twenty to thirty thousand dollars.” Devito Auto Restoration,

2000 WL 1426124 at *3; see also Gulbankian, 2002 WL 480952 at *3.

And, we recognize that OCC offered an affidavit from a prominent state

legislator stating that the legislature did not intend to include antique

restoration such as that engaged in by OCC within the scope of the statute.
23

Yet, the overwhelming majority of authority in other states points in

the opposite direction. See Schuster, 98 F. Supp. 2d at 448–49 (holding

that restoration is subject to Connecticut’s consumer fraud act); Schreiber,

133 Cal. Rptr. at 510 (“Restoration is not a stated exception to the

statute.”); Morris, 661 A.2d at 716 (Md. 1995) (“[W]e see no reason to draw

a distinction . . . between repair and restoration.”); Levin, 431 A.2d at 160;

Jagodzinski, 572 N.W.2d at 517 (“[T]here is nothing within the code to

suggest that the repairs were meant to be excluded simply because they

amounted to a ‘restoration.’ ”); Webb, 688 P.2d at 537.

We conclude that the restoration of antique automobiles is within

the scope of the MVSTPA if the relevant statutory criteria are met. There

is nothing in the statute that suggests that the age of the motor vehicle is

relevant to coverage, nor is there an exception for restoration of “classic”

or “antique” motor vehicles. Schreiber, 133 Cal. Rptr. at 510; Morris, 661

A.2d at 716; Jagodzinski, 572 N.W.2d at 517–18. Instead, the legislation

broadly applies to “a motor vehicle used primarily for farm or personal

use.” Iowa Code § 537B.2(1). While OCC has offered an affidavit from a

legislator to the contrary, we have held that statements by individual

legislators in litigation are inadmissible on the question of legislative
intent. Roades v. State, 880 N.W.2d 431, 447 (Iowa 2016). We do not

depart from that precedent today. We hold that if there is to be a carve

out from the statute for the restoration of antique automobiles, it is up to

the legislature to provide one.

2. Definition of “motor vehicle.” We now turn to the question of

whether the ’31 Chevy was a “motor vehicle” under the statute. We

conclude that the fact that the vehicle was disassembled and inoperable

at the time of delivery is of no moment. Autos that need repair are often
24

inoperable, of course, and the separation of an auto into component parts

does not change the nature of the repair activity.

The question was considered in an insurance context in Robertson

v. Nationwide Mutual Insurance, 569 A.2d 565 (Conn. App. Ct. 1990).

There, a disassembled antique car that was not currently operable was

stored in the insured’s garage. Id. at 565. The policy in that case had an

exclusion for “motorized land vehicles . . . designed for travel on public

roads as subject to motor vehicle registration.” Id. at 566 (omission in

original). The court found that the vehicle qualified as a motor vehicle as

it “was designed for highway travel” and “would be subject to vehicle

registration when that use was made.” Id.

Of course, a mere miscellaneous assembly of parts is not a “motor

vehicle.” Nelson, 425 N.W.2d at 436. In Nelson, many essential parts were

missing, such as the engine, radiators, and wheels. Id. But here, OCC’s

manager testified that the car was “a really nice car” and a former employee

characterized the vehicle as “very complete.” Unlike in Nelson, the former

employee testified that “the major components were there, the motor,

transmission, frame, running gear, wheels.” The testimony of Al Poller

that the vehicle was “[a]lmost drivable” was unrebutted.
Based on the facts developed at trial, we conclude that the approach

of the bankruptcy court in In re Baily applies here. In In re Baily, the

bankruptcy court found that the term “motor vehicle” includes an

inoperable vehicle that can be made operable through repair. 326 B.R. at

757–58; see also Sprenger v. Trout, 866 A.2d 1035, 1046 (N.J. Super. Ct.

App. Div. 2005) (rejecting “roadworthiness” limitation and noting that

“[c]ourts have consistently rejected creative attempts to narrow the scope

of the [statute] by technical definitions and artificial distinctions”). We

think the teaching of In re Baily, rather than Nelson, controls here.
25

3. “Subject to registration.” The final question is whether the ’31

Chevy meets the “is subject to registration” requirement. We think it does.

We regard the “is subject to registration” requirement as designed to

separate automobiles from other motor vehicles such as ATVs, golf carts,

and riding lawn mowers. See N. Sec. Ins. v. Rossitto, 762 A.2d 861, 863

(Vt. 2000) (stating that ATVs used on easements are not subject to

registration under Vermont statute); Progressive N. Ins. v. Pippin, 725

F. App’x 717, 720 (10th Cir. 2018) (stating that a golf cart is not a motor

vehicle under Oklahoma statute); Farm Bureau Mut. Ins. v. Kurtenbach

ex rel. Kurtenbach, 961 P.2d 53, 58–59 (Kan. 1998) (holding that a “street

legal” motorcycle was the type of motor vehicle subject to registration

despite its part-time use as an agriculture implement); Argonaut Ins. v.

Colonial Ins., 138 Cal. Rptr. 855, 857 (Ct. App. 1977) (stating that a

backhoe loader is not type of equipment subject to registration).

In other words, we find the statute is categorical, namely, that the

phrase “motor vehicles subject to registration” is designed to ensure that

vehicles that are commonly known as automobiles and cars that travel on

the state’s roads are within the scope of the act. Kimball v. New England

Guar. Ins., 642 A.2d 1347, 1348–49 (Me. 1994) (holding that for the
purposes of what type of vehicle is subject to registration, what matters is

whether the type of vehicle is subject to registration, not whether the owner

actually intends to register the vehicle).

As a result, the restoration of a disassembled vehicle for the purpose

of providing an operable motor vehicle falls within the scope of the

MVSTPA. In this case, there was undisputed testimony that the

completely restored automobile would be subject to registration in New

Jersey, the residence of the Pollers. We conclude that the “subject to
26

registration” requirement does not take the restoration project in this case

outside the scope of the MVSTPA.

V. Alleged Violations Under the MVSTPA.

A. Overview. Having determined that the MVSTPA covers the

transaction between the Pollers and OCC, we now turn to whether the

Pollers established any violations. The burden of proof is on the plaintiff

to prove each element of a statutory violation.

B. Violation of Iowa Code Section 537B.3 (Required

Disclosures).

1. The Pollers. The Pollers claim that OCC violated the

requirements of Iowa Code section 537B.3. This section of the statute

mandates that suppliers notify a consumer of several rights. Specifically,

the statute requires the supplier must maintain authorization forms which

contain “a conspicuous disclosure in substantially the following language”:

ESTIMATE

You have the right to a written or oral estimate if the
expected cost of repairs or service will be more than fifty
dollars. Your bill will not be higher than the estimate by more
than ten percent unless you approve a higher amount before
repairs are finished. Initial your choice:

................................ Written estimate.

................................ Oral estimate.

................................ No estimate.

................................ Call me if repairs and service will be more
than $................................

Iowa Code § 537B.3(1).

In addition, the MVSTPA requires the form to provide the date, the

supplier’s name, the customer’s name and phone number, and the

reasonably anticipated completion date. Id. § 537B.3(2)(a).
27

The MVSPTA contains provisions about the manner of execution of

the authorization forms. Under Iowa Code section 537B.3(2)(b), if the

consumer requests a written estimate, the supplier may use the written

authorization form or another form. If, however, “the nature of repairs or

service is unknown at the time that the estimate is given, the supplier may

state an hourly labor charge for the work.” Id.

According to the Pollers, OCC failed to comply with Iowa Code

section 537B.3 in several ways. Prior to shipping the car, Deb asked for

an estimate. In response, OCC did not provide an estimate but instead

declared that they “work for $65 an hour plus materials.” But the statute,

according to the Pollers, requires that the customer be notified of their

right to seek an estimate. Id. § 537B.3(3).

In addition, the Pollers assert that under the statute, a supplier is

required to provide to the consumer an estimated completion date. Id.

§ 537B.3(2)(a)(4). The Pollers assert that completion date was a significant

factor to them and that they were never provided an estimated finish date

as required by the statute.

Further, under Iowa Code section 537B.3(1), the Pollers claim they

were entitled to be informed of their right to impose a budget cap on project
expenses without express authorization. The Pollers claim that they were

interested in disciplining the cost of the project as reflected in the requests

for invoices as the project advanced. They claim OCC violated the statute

by not expressly offering them the option of capping expenses without

further authorization.

2. Position of OCC. OCC asserts that the language required by

section 537B.3(1) is only required “[i]f a consumer authorizes, in writing,

repairs or service upon a motor vehicle prior to the commencement of the

repairs or service.” Here, OCC points out, the Pollers did not authorize the
28

restoration service in writing but instead authorized the restoration service

by conduct.

Further, OCC asserts that the statute does not require an estimate

in all instances. They note that under Iowa Code section 537B.3(2)(b), “[i]f

the nature of repairs or service is unknown at the time that the estimate

is given, the supplier may state an hourly labor charge for the work.” OCC

cites the plaintiff’s case of Levin v. Lewis in support of its claim. In Levin,

the court specifically noted that the supplier did not tell the consumer that

he worked only on a time and materials basis. 431 A.2d at 157–58.

3. Discussion. We first consider the assertion of OCC that because

the request was not in writing, OCC was not required to provide an

estimate form. Iowa Code section 537B.3 establishes a two-tiered

framework for documentation. If a customer authorizes repairs in writing,

the supplier is required to use a form in substantial compliance with Iowa

Code section 537B.3(1).

But, if the customer authorizes repairs orally, the supplier is

required to inform the customer of “the right to receive a written or oral

estimate.” Id. § 537B.3(3). Then, the supplier is required to “note the

consumer’s response on the form described in subsections 1 and 2.” Id.
“If the consumer requests an estimate, the supplier shall provide the

estimate to the consumer prior to” the commencement of any work. Id.

Here, the Pollers do not claim there was a written acceptance under

Iowa Code section 537B.3(1) but instead seek to bring the case within the

“oral acceptance” provision by asserting that where there is no written

authorization, the provisions related to oral acceptance should apply. Id.

§ 537B.3(3).

We think the Pollers provide the best approach to the statute. The

statute divides authorizations into two categories: written and oral. They
29

are designed to create a binary world of authorization and not to permit

an exception for a third category of authorization, namely, authorization

by conduct.1 Further, we note that OCC in its pleadings admitted the

existence of an oral contract between the parties for the restoration of the

vehicle.

In any event, we think that subsection 3 has been violated under

either interpretation. If the requirements of subsections 1 and 2 related

to written authorizations apply to oral authorizations as well, it is clear

that the Pollers were not presented with two material disclosures. First,

they were entitled to have the opportunity to cap costs without further

authorization. Second, they were entitled to an estimated completion date.

It is undisputed that these requirements were not met by OCC.

And, even if we interpret subsection 3 as having its own distinct

requirements for oral authorizations, OCC still has not complied with the

statute. Based on the district court’s finding of fact, we conclude that the

Pollers were not given an estimate for the work. In fact, the opposite

1There is a question of whether there is a substantive difference in the terms of

subsections 1 and 3 under Iowa Code section 537B.3. For example, under subsection 3,
if the consumer requests an estimate, “the supplier shall provide the estimate to the
consumer prior to commencing the repairs or service.” Iowa Code § 537B.3(3). There is
no express provision in subsection 3 for an hourly rate and cost of materials type
response. Id. And, while subsection 3 provides that a supplier shall note the response
of the consumer on a form described in subsections 1 and 2 of the statute, the “response”
seems to refer to the prior sentence in the subsection, which requires only that the
supplier notify a consumer of the right to an estimate. Id. Thus, subsection 3 does not
expressly require that a supplier give the consumer the option of “Call me if repairs and
service will be more than $.........................” Compare id. § 537B.3(3), with id.
§ 537B.3(1). Nor does subsection 3 expressly require that the consumer be provided with
“[t]he reasonably anticipated completion date.” Compare id. § 537B.3(3), with id.
§ 537B.3(2)(a)(4). Yet, the requirement that the consumer’s response be recorded on a
form similar to that used for written authorizations may imply that these are additional
requirements. While OCC does contend that authorizations by conduct are excluded
from the statute, it does not argue that the authorization here is oral in nature and that
the substantive disclosure rights under the statute differ between oral and written
contracts. For the purpose of this case, we assume that the disclosure requirements for
oral and written authorizations are the same.
30

occurred. But, if an estimate is requested, as it was here, subsection 3

imposes on the supplier an unqualified obligation to “provide the estimate

to the consumer prior to commencing the repairs or service.” Iowa Code

§ 537B.3(3). In this case, Deb Poller clearly requested an estimate, but

OCC did not provide it.

We do not regard the failure to comply with the disclosure

requirements of subsection 3 as an inconsequential violation. As noted in

Sprenger v. Trout, “The significance of the automotive repair regulations is

to prevent a situation where the consumer is presented with a final bill

that far exceeds the anticipated cost of repairs.” 866 A.2d at 1042. That

is exactly what occurred here. A violation of the provision related to

estimates “goes to the very essence of what the regulations are designed to

accomplish.” Id. Or, as stated by another court, failure to comply with

the statute “created the climate for the dispute that ultimately developed.”

Scibek, 770 A.2d at 1249. Indeed, in this case, if OCC had complied with

the requirements of subsection 3, the parties would likely have mutually

come to grips with the overall cost issues prior to the provision of over

$100,000 in restoration services.

For the above reasons, we find that OCC violated Iowa Code section
537B.3 under all interpretive alternatives. We recognize that in light of

the nature of its business, OCC may find it difficult to provide prerepair

estimates. But OCC has a path to statutory compliance that

accommodates practicalities by insisting that all authorizations for

restoration be made in writing. Under the statute, when repair

authorizations are made in writing, OCC may decline to provide an

estimate, but it must specifically provide in writing an opportunity for the

customer to set a limit on expenditures that may be incurred without prior
31

approval and provide the information provided in subsection 2, including

an estimated completion date. See Iowa Code § 537B.3(1), (2).

C. Violation of Iowa Code Section 537B.6(3) (Cost Exceeding

Estimates).

1. Positions of the parties. The Pollers claim that OCC violated Iowa

Code section 537B.3 by not informing them of their right to an estimate

and not providing an estimate when requested by Deb. In the alternative

to their claim that they were not provided with an estimate as required by

chapter 537B.3, they claim they were provided with an estimate of $45,000

but that OCC exceeded the estimate by more than ten percent without

obtaining further authorization from them. Such conduct would amount

to an unfair practice under Iowa Code section 537B.6(3). OCC responds

that the district court determined that OCC did not, as a matter of fact,

provide a $45,000 cost estimate and that this factual determination is fatal

to the Pollers’ claim here.

2. Discussion. We see no reason to disturb the district court’s

factual finding that the Pollers were not given an estimate. The district

court found that the Pollers claim was against the weight of the evidence.

Such findings are left undisturbed if there is substantial evidence, as there
is here, to support it. Grinnell Mut. Reins. v. Voeltz, 431 N.W.2d 783, 785

(Iowa 1988). If there was no estimate, the Pollers were not improperly

charged for repairs that exceeded the estimate by ten percent. As a result,

we find no violation of Iowa Code section 537B.6(3).

D. Violation of Iowa Code Section 537B.6(5) (Disassembly and

Reassembly).

1. Position of the Pollers. Iowa Code section 537B.6(5) provides that

a supplier shall not fail to disclose to the customer “prior to the

commencement of any repairs or service” charges for “disassembly,
32

reassembly, partially completed work, or any other work not directly

related to the actual performance of the repairs or service.” On appeal, the

Pollers present to us a matrix of charges from invoices with descriptions

of work that they claim are within the scope of subsection 5. The total

amount of charges that the Pollers claim required advance authorization

is $6516.25.

2. Position of OCC. OCC responds by noting that the district court

found that “each and every task” performed by OCC was authorized. If

this factual finding is correct, OCC argues, then there is no basis for the

Pollers’ claim under Iowa Code section 537B.6(5).

3. Discussion. Based on the record at trial, we conclude that OCC

did not get preapproval for charges for “disassembly, reassembly, . . . or

any other work not directly related to the actual performance of the

repairs.” Id. Further, there is no question that the record shows that there

was considerable correspondence between the Pollers and OCC about the

restoration, including specific approval of engine parts, gas tanks, the

radiator, and paint. But the question here is a narrow one: Did OCC get

permission in advance for reassembly, disassembly, and other work not

related to the restoration of the car? The answer to this narrow question
is no and, as a result, a violation of the statute occurred.

E. Violation of Iowa Code Section 537B.6(6) (Unauthorized

Repairs).

1. Position of the Pollers. Iowa Code section 537B.6(6) provides that

it is a deceptive act or practice for a supplier to “[c]harge for any repair or

service which has not been authorized by the consumer.” The Pollers

claim that OCC engaged in unauthorized repairs by marking up the cost

of materials they obtained for the restoration project by thirty percent

before billing the Pollers. They further claim that OCC charged for shop
33

supplies and disposal of hazardous material. The Pollers also claim that

OCC performed a “show quality” restoration and that such services

involved extra work and charges. Finally, the Pollers assert that they never

agreed to storage charges assessed by OCC after the billing dispute arose.

2. Position of OCC. OCC generally asserts that the record shows the

Pollers approved “numerous modifications and change orders to the

original scope defined in December [of] 2013.” Therefore, OCC generally

claims that all of the charges on its invoices were “authorized.”

On the specific claim that the thirty percent markup of materials

violated the MVSTPA, OCC notes that it told the Pollers that it would

charge “$65.00 per hour plus materials” for the restoration work. This

statement, according to OCC, did not bind it to charge for materials at

wholesale cost. Further, OCC points out, both Linn and Torrence testified

that such markups were customary in the automobile industry for sellers

who purchase parts at wholesale. OCC also notes that it did not hide the

practice of marking up supplies and parts. Specifically, in an email sent

to the Pollers on August 1, 2014, OCC noted it had found a new core and

rebuilt radiator for “$2080 and we will not be marking it up for you.”

On the issue of “show quality,” OCC notes that Denny Linn testified
that show quality is the only kind of service performed by OCC. Further,

OCC points to an August 21, 2014 email from Linn to the Pollers noting

that the “[f]ront fenders have been color sanded and buffed. Again, it takes

a lot of time, but show quality when finished.” Further, OCC notes that

whenever OCC presented the Pollers with a choice between a cheaper or

higher quality item, the Pollers always chose the more expensive item. In

any event, OCC argues that Iowa Code section 537B.6(6) requires only that

“repairs or service” be authorized and that whether or not a restoration is

“show quality” is simply not relevant.
34

3. Discussion. We begin with consideration of the lawfulness of the

thirty percent markup by OCC. Here, OCC made it clear to the Pollers

that it would be billing them based on labor charges and “materials.”

There is nothing in the record to suggest that OCC said anything about

the method that OCC would use to price the materials. An automobile

repair service is ordinarily in the business of selling parts to consumers,

as well as providing services. The notion that a supplier would markup

materials provided to the consumer is not a surprising notion and appears

to be a standard practice in the automobile restoration industry. If the

Pollers were concerned about the pricing of materials, they could have

simply asked how charges for materials would be calculated. Under the

facts and circumstances presented here, we decline to find a violation of

Iowa Code section 537B.6(6) based on the thirty percent markup.2

On the question of charges for shop supplies and disposal of

hazardous materials, we also do not find a violation of the statute. The

Pollers failed to show at trial that the shop supplies and disposal of

hazardous waste charges were not tied to the actual performance of

repairs. As a result, since the general restoration was authorized and the

Pollers have not shown that the charges for shop supplies and disposition
of hazardous materials was not directly related to the authorized

restoration project, we decline to find a deceptive act or practice under the

MVSTPA.

The Pollers finally claim that they did not realize that the services

would produce a “show quality” vehicle. We think that the Pollers’ claim

fails on the record presented. The evidence shows that OCC only

2Our ruling here demonstrates the importance of the requirements of Iowa Code
section 537B.3 at the beginning of the transaction which help ensure that the consumer
and the supplier understand the nature of the costs and the limits of the transaction.
35

performed “show quality” restorations and the Pollers, who were in the

shop itself in December 2013, had an opportunity to view the work being

performed there. The expenses that the Pollers point to as being

unauthorized show quality relate largely to the painting of the vehicle. But

when Linn in the August 21, 2014 email relating to the painting of a fender

specifically mentioned “show quality,” there was no objection from the

Pollers. We decline to find a deceptive practice related to the restoration

of the car based on “show quality” under the record developed in this case.

Finally, there is the issue of storage costs. These arise not from the

restoration project itself but arise out of an artisan lien apparently

asserted by OCC under Iowa Code section 577.1. We do not regard these

charges as arising from the restoration itself but rather from a subsequent

payment dispute. We do not find a violation of the MVSTPA as the charge

is not related to the repair or restoration but to the subsequent legal battle

between OCC and the Pollers over the payment of bills. In any event, the

Pollers have not been damaged, as they have not paid the storage charges.

As will be seen below, because we conclude that the Pollers do not owe any

further amounts to OCC, OCC is not entitled to its lien and is not entitled

to receive storage charges arising from it.
F. Violation of Iowa Code Section 537B.6(12) (Materially and

Intentionally Mislead as to the Cost of Repairs). Iowa Code section

537B.6(12) prohibits a supplier from “[m]aterially and intentionally

understat[ing] or misstat[ing] the estimated cost of the repairs.” Because

the district court’s finding that OCC did not provide the Pollers with a

$45,000 estimate is supported by substantial evidence, we decline on

appeal to find a violation of this provision of the MVSTPA.

G. Summary. We find that OCC violated Iowa Code section 537B.3

by failing to inform the Pollers of the right to an estimate and section
36

537B.6 by failing to obtain preapproval of charges related to disassembly

and reassembly. We reject the balance of the Pollers’ MVSTPA claims.

VI. Impact of MVSTPA Violations on Enforceability of OCC’s
Breach of Contract Counterclaim.

A. Overview. We now turn to the question of whether the MVSTPA

violations affect the enforceability of OCC’s contract with the Pollers. The

district court found a contract existed based on the terms of the

November 6, 2013 email stating that charges for the project would be $65

an hour plus materials. The Pollers raise a number of issues related to
formation of the alleged contract.3 In addition, the Pollers claim that

because the contract was formed in violation of the provisions of the

MVSTPA, OCC may not enforce the illegal contract. Because it is

dispositive, we focus on the enforceability of the contract in light of the

violations of the MVSTPA.

B. Positions of the Parties.

1. Position of the Pollers. The Pollers claim that OCC cannot

succeed on a breach of contract claim because “[i]t is illogical and against

clear public policy to allow OCC to collect for monies it attempted to earn

in violation of a consumer protection statute.” The Pollers note that under
Iowa law, contracts made in contravention of a statute are void and

unenforceable. Bank of the W. v. Kline, 782 N.W.2d 453, 462–63 (Iowa

3The Pollers claim that OCC breached the contract with the Pollers when it failed
to provide monthly invoices. Further, the Pollers claim there was no meeting of the minds
regarding the work to be done as the Pollers did not agree to “show quality” of the
restoration effort and to other aspects of OCC’s billings. Finally, the Pollers claim OCC
represented that the cost of completion should be no more than $45,000 and, in any
event, they certainly were not notified that their bill would be in excess of $100,000.
Based on our review of the record, and our deference to the findings and credibility
determinations of the district court, we conclude that the Pollers at trial failed to show
that the monthly invoices were part of a bargained-for contract, that the parties failed to
agree on the issue of “show quality,” and that OCC promised that the cost of the project
would not exceed $45,000. As a result, the Pollers’ breach of contract claim fails.
37

2010) (holding that violations of Equal Credit Opportunity Act render void

any obligations made in contravention of the act); Milholin v. Vorhies, 320

N.W.2d 552, 554 (Iowa 1982) (en banc) (holding that a violation of rules of

the Iowa Real Estate Commission render oral listing agreement invalid).

The Pollers draw support from the Florida case Osteen v. Morris, 481

So. 2d 1287, 1290 (Fla. Dist. Ct. App. 1986). In Osteen, the court

considered a violation of the right to an estimate under a statute similar

to Iowa’s MVSTPA. Id. at 1288. The Osteen court concluded that the

purpose of the statute was “to protect consumers against

misunderstandings arising from oral estimates of motor vehicle repairs

and the legal disputes and litigation that result from the ‘fait accompli’

nature of claims for repair work already done.” Id. at 1290. The Pollers

also cite a Wisconsin court of appeals case holding that when a repair shop

takes money from a consumer after violating the law, in that case repairing

without authorization from the consumer, then the repair shop is not

entitled to payment for the repairs. Kaskin, 767 N.W.2d at 403.

2. Position of OCC. OCC argues that even if it violated chapter

537B, there was still a valid underlying contract. OCC contends that an

agreement to perform services on a time and materials basis is a valid
agreement. Welter v. Heer, 181 N.W.2d 134, 136 (Iowa 1970). OCC argues

that it provided quality restoration work under the contract and that

expert testimony from the Pollers’ own witness indicated that the final

product was in excellent condition and the restoration work would have

cost in excess of $100,000. OCC also argues that unlike some state

legislatures, Iowa has not created a “strict liability” statute within Iowa

Code chapter 537B that would prohibit charges for services rendered in

violation of chapter 537B. OCC argues that the legislative intent,
38

evidenced by not creating a strict liability rule, indicates that the Pollers’

public policy argument is not valid.

OCC notes that one of the Pollers’ main arguments under chapter

537B is that they were not provided with an estimate, which would have

given them an option to put a cap on the project’s expenses. But, OCC

argues that the Pollers had the chance to opt out of the contract after the

$45,000 expended that they alleged was their cap because in August 2014,

the Pollers received invoices totaling $49,560.27 and at the time of

receiving the invoices, also received an email from Denny offering the

Pollers to set aside their Chevy in a warehouse if the Pollers were not happy

with the arrangement.

3. Discussion. There are a number of cases from other jurisdictions

that provide that where a supplier does not provide a written estimate, the

underlying contract is not enforceable. Many of the cases, however,

involve statutes that directly answer the difficult question of what to do

when a supplier provides quality work but did not provide an estimate

required by law.

For instance in Webb v. Ray, a state of Washington appellate court

considered a case where the statute provided that “[t]he repairman may
not charge for work done or parts supplied which are not a part of the

written price estimate.” 688 P.2d at 536. The Webb court concluded that

because there was no written estimate, the repairer was not entitled to

enforce the underlying contract. Id. at 537. Similarly, in I-5 Truck Sales

& Serv. Co. v. Underwood, the court held that where no written estimate

was given, the contract could not be enforced. 645 P.2d 716, 720 (Wash.

Ct. App. 1982).

A California appellate court took a similar path in Schreiber v.

Kelsey, 133 Cal. Rptr. 508. In Schreiber, the statute provided that “The
39

automotive repair dealer shall give to the customer a written estimated

price for labor and parts necessary for a specific job and shall not charge

for work done or parts supplied in excess of the estimated price.” Id. at

509 (quoting Cal. Bus. & Prof. Code § 9884.9 (1973)). The Schreiber court

concluded that the “section bars recovery . . . done in the absence of a

written estimated price for labor and parts.” Id. Further, the court in

Schreiber held that subsequent oral authorizations were not enforceable

in light of the lack of the written estimate required by statute. Id. The

Schreiber court noted that if subsequent oral authorization were

permitted, the statute could be easily avoided in every case. Id.

A third case of interest is Brooks v. R.A. Clark’s Garage, Inc., 378

A.2d 1144 (N.H. 1977). In Brooks, the statute declared:

Every repairman who agrees to perform any repair on a
customer’s motor vehicle shall give to such customer a written
estimated price for labor and parts necessary for such repair.
No work shall be done and no charges shall accrue before
authorization to proceed is obtained from the customer.

Id. at 771 (omission in original) (quoting N.H. Rev. Stat. Ann. § 269:8

(Supp. 1975)). The Brooks court held that where a repairer entered into

an illegal contract by not providing a written estimate, the party could not
recover on principles of contract or quasi-contract. Id. at 771–72.

The Iowa version of the MVSPTA does not provide express

instruction of whether a contract entered in violation of section 3 may be

enforced. To that extent, our situation is somewhat different from the

situations in Webb, I-5 Truck Sales, Schreiber, and Brooks. But there is

authority for the proposition that express statutory language of the

unenforceability of an illegally formed contract is not required.

In Huffmaster v. Robinson, the court considered a case where a

written estimate of price was not provided. 534 A.2d 435, 437 (N.J. Super.
40

Ct. Law Div. 1986). Although the New Jersey statute was silent on the

effect of the omission on the underlying contract, the New Jersey court

concluded that the act “must be read as depriving a technically violating

repairman of any enforcement capacity.” Id. at 439. Otherwise, declared

the New Jersey court, “the act would make no sense.” Id.

The same type of reasoning was employed in Osteen v. Morris, 481

So. 2d 1287. In Osteen, a customer orally authorized a repair but the

statute required a written estimate or a written notice of the right to a

written repair estimate. Id. at 1288. The Osteen court held the contract

was not enforceable. Id. at 1290. According to the Osteen court, “if the

customer is held legally liable when the shop has disregarded the

provisions of the statute, the shop could effectively disregard the intention

of the legislature as evidenced by the provisions of this act.” Id. at 1289.

The result in the above cases has not been without controversy. For

instance, in the state of Washington, the legislature amended the statute

after the Webb and I-5 Interstate cases to permit the supplier to recover

the reasonable value for work performed and parts supplied. Clark v.

Luepke, 809 P.2d 752, 754–55 (Wash. Ct. App. 1991). In another case, a

Maryland appellate court held that a failure to give notice of customer
rights did not excuse the customer from paying for services rendered which

were necessary and furnished at a reasonable cost. Rogers Refrigeration

Co. v. Pulliam’s Garage, Inc., 505 A.2d 878, 884 (Md. Ct. Spec. App. 1986).

The precise question here on the breach of contract claim, then, is

not whether the Pollers suffered an ascertainable loss under the MVSTPA,

but is whether a contract which is illegally formed may be enforced by

OCC. While the court of appeals conflated these two issues, they are

separate and distinct.
41

On the separate and distinct issue of whether OCC may enforce the

illegally formed contract in violation of Iowa Code section 537B.3, we think

the better view is that the illegal contract cannot be enforced. Otherwise,

as suggested by Huffmaster and Osteen, the salutary terms of the statute

would not be enforceable and could easily be evaded. The salutary

purpose of the statute, namely, to clearly establish and document likely

expenses in the auto repair business, would be severely undermined by a

contrary rule. Our approach in this case is consistent with other

commercial cases where we have held that illegal contracts are not

enforceable. See, e.g., Kline, 782 N.W.2d at 461 (holding the violation of

the Equal Credit Opportunity Act was an affirmative defense in an action

to collect on debt).

We recognize that our conclusion may yield a degree of unfairness

to OCC. By all accounts, the work performed on the Pollers’ vehicle was

excellent. But as noted by the Osteen court, “We do not suggest that the

result in this case is fair to the shop. We only agree with the trial court

that this result appears to be mandated in this case by the statute.” 481

So. 2d at 1290.

We too agree that in order to give section 3 teeth, a contract formed
in violation of the provision is not enforceable. As a result, the district

court erred in awarding OCC damages based on its breach of contract

claim in this case.

VII. Remedies Available in Light of Rulings on MVSTPA and
Breach of Contract Claims.

A. Overview. In light of our ruling on the contract issue, we now

consider whether the Pollers are entitled to damages under the MVSTPA.

The MVSTPA does not have a section on remedies. Instead, violations of

the MVSTPA are unfair practices under the Iowa Consumer Fraud Act.
42

See Iowa Code § 714.16(2)(k). Thus, in order to recover damages for

violations of the MVSTPA, a plaintiff must meet the requirements of the

Iowa Consumer Fraud Act for damages.

Under the Iowa Consumer Fraud Act, “ ‘[a]ctual damages’ means all

compensatory damages proximately caused by the prohibited practice or

act that are reasonably ascertainable in amount.” Id. § 714H.2(1) (second

emphasis added). A consumer who suffers actual damages may bring a

claim under Iowa Code section 714H.5(1). Even if the Pollers have proven

violations of the MVSTPA, the question arises whether the Pollers have

made the required damage showing in this case, particularly in light of our

holding that OCC may not enforce the contract to collect the balance it

claims the Pollers owe.

B. Damages: The Issue of Ascertainable Loss. The Pollers claim

that they have established the requirements for a private cause of action

under Iowa Code section 714H.5. The Pollers argue that they have

demonstrated an ascertainable loss in both money and property because

of OCC’s violations of Iowa Code chapter 537B.

On the question of ascertainable loss, the Pollers cite the

Washington cases. In these cases, the Washington courts held that
contracts formed in violation of MVSTPA-type statutes are unenforceable.

I-5 Truck Sales & Serv. Co., 645 P.2d at 720; Webb, 688 P.2d at 537.

Because the Pollers have paid $45,000 under a contract that is invalid,

the Pollers are seeking a full refund of the amounts they have paid as part

of the restoration effort. In the alternative, the Pollers seek a credit against

the balance owed by the Pollers to OCC for unauthorized charges.4

4OCC does not directly address the damage issue in its appellate brief.
43

We briefly addressed the term “ascertainable loss” in McKee v. Isle

of Capri Casinos, Inc., 864 N.W.2d 518, 532 (Iowa 2015). In McKee, we

considered a case where a patron of a casino believed she had won in

excess of what the rules of the game, which provided contractual rights,

allowed for. Id. at 520. The claim was based on an alleged breach of

contract. Id. at 526–32. We determined that the consumer fraud claim

failed because “[i]f McKee had no contractual right to the bonus, and we

have already determined she did not, then she could not have suffered an

ascertainable loss of money or property when she was denied that bonus.”

Id. at 532.

Several other jurisdictions provide additional guidance for

understanding the term “ascertainable loss” in the context of violation of

a consumer protection statute. The Supreme Court of Connecticut has

determined that something is ascertainable when it is “capable of being

discovered, observed or established” and that loss is “synonymous with

deprivation, detriment and injury.” Hinchliffe v. Am. Motors Corp., 440

A.2d 810, 814 (Conn. 1981). Therefore, the court determined that

“[w]henever a consumer has received something other than what he

bargained for, he has suffered a loss of money or property. That loss is
ascertainable if it is measurable even though the precise amount of the

loss is not known.” Id. The Supreme Court of Tennessee has determined

that an “ascertainable loss” must be “measurable,” Discover Bank v.

Morgan, 363 S.W.3d 479, 496 (Tenn. 2012), and “have tangible economic

value.” Akers v. Prime Succession of Tenn., Inc., 387 S.W.3d 495, 509–10

(Tenn. 2012). Another court has stated that “ascertainable loss” is getting

something less than you bargained for and encompasses more than

economic harm. Simonsen v. Sandy River Auto, LLC, 413 P.3d 982, 985

(Or. Ct. App. 2018).
44

The Pollers claim that OCC’s violations of section 3 of the MVSTPA

meant the Pollers did not receive a document indicating the reasonably

anticipated completion date or allow them to set a budgetary cap on the

project under subsections 1 and 2 or, in the alternative, they did not

receive a written estimate, under subsection 3. We have also found that

certain charges for assembly and disassembly were subject to prior

approval, which did not occur, in violation of section 6 of the statute.

While OCC has undoubtedly failed to comply with the provisions of

the MVSTPA, the Pollers have not demonstrated a reasonably

ascertainable loss caused by OCC’s failings, particularly in light of our

holding that OCC cannot seek to enforce the contract to collect the balance

of the amount it claims the Pollers owe them. The Pollers have paid OCC

a total of $45,000. The testimony makes it clear that the Pollers in fact

expected to pay up to $45,000 for the restoration services. In light of our

holding on the lack of enforceability of the underlying contract, there is no

showing that they would have paid less than this amount had OCC

complied with all of the provisions of the MVSTPA.

We also conclude that the Pollers have no ascertainable loss for the

violation of Iowa Code section 537B.6(5). While OCC did not obtain
preapproval for covered charges, the Pollers made no persuasive showing

that they would not have approved the charges in advance if given the

opportunity to do so.

We now address the question of whether the Pollers are entitled to a

refund of the $45,000 paid to OCC. Although we have found the contract

illegal and unenforceable, we do not find that the Pollers are entitled to a

return of their payments to OCC. Such payments were voluntarily made

and show acquiescence in the underlying violations at least to the extent

of payments made. Further, the course of conduct in paying three
45

additional payments after they received the invoices on August 6 and

thereafter were clearly relied upon by OCC when it continued to work on

the car. Under the circumstances, permitting the Pollers to, in effect,

disown the payments would be inequitable. See Scibek, 770 A.2d at 1250

(discussing application of estoppel to prevent unjust results in auto repair

context). Further, while we have concluded that the MVSTPA may be a

shield to protect a customer from enforcement of an illegal contract, we

are not prepared under the circumstances here to permit the Pollers to use

the MVSTPA as a sword when they have no ascertainable loss. Id. at 1249.

OCC has retained possession of the Pollers’ auto. There might be

some economic value in being deprived of the use of the auto. The Pollers,

however, made no showing of such damage at trial. Further, on appeal,

the Pollers do not argue damages based on the retention of the car. Under

the circumstances, we see no basis for an award of damages based on the

lost possession of the vehicle.

While we decline to award damages to the Pollers for the car, we do

conclude they are entitled to full possession and ownership of the vehicle.

While OCC held possession of the car by claiming a lien for unpaid

charges, we have determined that the charges cannot be enforced. As a
result, there is no basis for the lien. Therefore, the Pollers are entitled to

their vehicle.

C. Exemplary Damages. The Pollers seek exemplary damages

under Iowa Code section 714H.5(4). They claim that OCC has been in

business for many years and has a policy of not providing estimates to

consumers seeking work performed. Such conduct, according to the

Pollers, demonstrates “willful and wanton disregard for the rights or safety

of another.” OCC did not directly address the issue in its appellate brief.
46

We have found that there is no ascertainable loss arising from the

violations of the MVSTPA in this case. As a result, there are no exemplary

damages. In any event, the questions of coverage decided in this case are

questions of first impression in Iowa. We cannot conclude that the actions

of OCC amount to willful and wanton disregard of the rights of their

customers sufficient to support an award of exemplary damages.

D. Injunctive Relief. Under Iowa Code section 714H.5(1), a party

may seek equitable relief as the court deems necessary to protect the

public from further violations, including temporary and permanent

injunctive relief. We see no basis for injunctive relief in this case. The

restoration project is now complete. We have decided issues of first

impression in this case. There is no basis to believe that OCC will continue

the practices that we have found unlawful in this case.

E. Entitlement to Attorney Fees. Under Iowa Code section

714H.5(2), attorney fees may be awarded if a person has violated the

chapter and the consumer “is awarded actual damages.” Here, although

we have found a violation of the Iowa Code chapter 537B, we have awarded

no damages. As a result, the Pollers are not entitled to attorney fees in

this action.
VIII. Conclusion.

For the forgoing reasons, we determine that OCC violated several

provisions of Iowa Code chapter 537B. As a result, OCC may not seek to

enforce the terms of a contract that was formed in violation of Iowa law.

The Pollers, however, did not establish actual damages arising from the

alleged violations and, as a result, are not entitled to affirmative relief.

Therefore, the decision of the district court is affirmed in part and

reversed in part. To the extent the district court held that the Pollers are

not entitled to recover under their claims, the result is affirmed. The
47

judgment in favor of OCC on the counterclaim is reversed. As a result of

our holdings, OCC has no basis for a possessory lien on the vehicle and

the Pollers are entitled to possession of it. The matter is remanded to the

district court with instructions to enter judgment dismissing OCC’s breach

of contract claim and to enter any such other orders as necessary to

implement the holdings in this opinion.

DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT

JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND

REMANDED WITH INSTRUCTIONS.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/5118699. Public record. Not legal advice.