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IN THE SUPREME COURT OF IOWA
No. 35 / 05-0375 Filed November 9, 2007 CHARMAINE HUNTER, Appellant, vs. CITY OF DES MOINES MUNICIPAL HOUSING AUTHORITY, RUSSELL UNDERWOOD, THERESA TAYLOR and TANGELA WEISS, Appellees. On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Polk County, Douglas E. Staskal, Judge.

Tenant and landlord seek further review in an action involving a claim and counterclaim for breach of a lease. DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT JUDGMENT AFFIRMED.

Robert A. Wright, Jr. of Wright & Wright, Des Moines, for appellant.

Michael F. Kelley, Des Moines, for appellees.

2 CADY, Justice. This appeal is a culmination of a long and complex dispute between a landlord and a tenant. It began as an eviction action and

eventually returned to district court as a claim and counterclaim for damages and other relief. The district court granted judgment for the landlord. The tenant appealed, and we transferred the case to the court of appeals. The court of appeals reversed the decision of the district

court and remanded the case for a determination of damages and entry of judgment for the tenant. On our review, we vacate the decision of the court of appeals and affirm the decision of the district court. I. Background Facts and Proceedings. Charmaine Hunter leased a house in Des Moines from the Des Moines Municipal Housing Agency (DMMHA). The DMMHA is a state agency that works in conjunction with the federal government to provide low-income housing for qualifying tenants. The term of the lease was for thirty days, beginning on November 1, 1988. The lease, however, Among other

automatically renewed for successive one-month terms.

terms, the lease required Hunter to accurately report her income and family composition each year and did not allow any unauthorized person to live in the dwelling unit. The DMMHA used this information to

determine the amount of Hunter's rent and her continued eligibility for assisted housing, as well as to ensure the size of the dwelling was appropriate for the number of residents. Based on the information

Hunter submitted, monthly rent was set at $12. Hunter was permitted under the rental agreement to terminate the lease with fifteen days' notice. The DMMHA, however, was only

permitted to terminate or refuse to renew the lease if the tenant committed a serious or repeated violation of material terms of the lease.

3 Such a violation specifically included willful misstatement or

concealment of information, as well as a failure to furnish accurate income and family composition information. The DMMHA was required to give thirty days' written notice of termination of the lease when based on grounds other than nonpayment of rent. The lease provided for a

grievance procedure to address disputes between the parties, including disputes over termination of the lease. Hunter resided in the dwelling for the next twelve years. She

consistently reported only a modest amount of income to the DMMHA, largely in the form of public assistance and social security. She did not report any unauthorized persons living in the dwelling. In 2001, DMMHA discovered an individual named Leo Clark had been living in the dwelling occupied by Hunter for numerous years. Clark was not approved to reside in the house. Moreover, Clark and

Hunter had received substantial gambling winnings from Prairie Meadows Racetrack and Casino as regular patrons at the casino. None of this information was disclosed to DMMHA. 1 Armed with this undisclosed information, the DMMHA served Hunter on April 27, 2001, with a "notice of lease termination" pursuant to Iowa Code section 562A.34(3). The notice requested Hunter to vacate the premises on or before May 31, 2001, based on numerous lease violations, including her alleged failure to accurately report income and permitting an unauthorized person to live with her.
1996, Hunter filed a civil rights action against a Des Moines police officer. A trial was held in 2001. Clark testified in deposition and at trial that he had been living with Hunter since 1996. Hunter also testified at trial that Clark lived at her house. Additionally, significant gambling winnings were disclosed. For example, records at Prairie Meadows Racetrack and Casino for 1999 indicated Clark and Hunter recorded winnings of over $75,000 each. While both individuals had significant losses as well, their winnings apparently exceeded their wagers by several thousands of dollars.
1In

4 Hunter pursued her rights under the lease to contest the termination by requesting a grievance hearing. On May 24, 2001, a

hearing officer upheld the decision by the DMMHA to terminate the lease. The hearing officer found Clark was living in the dwelling in violation of the lease, and both Clark and Hunter failed to report income to DMMHA in violation of the lease. Hunter refused to vacate the premises and sought judicial review of the decision of the hearing officer in federal district court. During this time the DMMHA served Hunter with a three-day notice to quit and initiated a forcible entry and detainer action in state small claims court. This proceeding was stayed pending the judicial review proceeding in federal court. On July 23, 2001, the federal district court upheld the decision of the hearing officer. Hunter did not appeal this decision. On August 7, 2001, the small claims court granted judgment for the DMMHA in the forcible entry and detainer action. Hunter appealed the small claims

decision to district court. On October 2, 2001, the district court reversed the small claims decision and dismissed the forcible entry and detainer petition. It held the action was required to be dismissed for lack of

jurisdiction because the DMMHA had failed to follow the procedures in Iowa Code section 562A.27(1), which the district court found required the DMMHA to provide Hunter with a notice to cure the alleged violations. 2

Hunter originally did not appeal the federal district court decision against her, after the state district court ruled a notice to cure was required, Hunter made several motions in federal court requesting relief from the federal district court's decision against her. These attempts, and their appeals, ultimately proved unsuccessful. See Hunter v. Underwood, 362 F.3d 468 (8th Cir. 2004).

2Although

5 The DMMHA then served Hunter with a "notice of

termination of month-to-month tenancy and nonrenewal of lease term" on January 16, 2002, pursuant to Iowa Code section 562A.34(2). The notice informed Hunter the lease would terminate on February 28, 2002, based on the prior grounds of failing to accurately report her income and permitting Clark to live in the house. It did not include a notice to cure under section 562A.27(1), and Hunter again contested the termination through a grievance hearing. The grievance hearing officer upheld the DMMHA's decision to terminate the lease and found the DMMHA did not have to provide Hunter with a notice to cure because Hunter's breaches were not amenable to cure. Hunter again refused to vacate the house, and the DMHHA served Hunter with a three-day notice to quit and brought another forcible entry and detainer action against her. The district court, however, granted

Hunter's motion to dismiss the action based on the DMMHA's failure to give Hunter a notice to cure. Hunter then filed an action against the DMMHA, and others, for breach of contract and abuse of process. Hunter sought damages,

injunctive relief, and attorney fees based on the conduct of DMMHA in terminating the lease and bringing the forcible entry and detainer action without first providing a notice to cure. DMMHA filed a counterclaim

against Hunter for breach of contract. It sought to recover the amount of rent Hunter would have been required to pay over the years if she had disclosed the information as required under the lease. Hunter and the DMMHA both moved for summary judgment. The claim for summary judgment by Hunter was largely predicated on her position that the DMMHA was required to provide her with a notice to cure before terminating her lease and utilizing the court system to

6 remove her from the premises. She asserted the district court rulings in the FED actions established her claim that notice to cure was required as a matter of law, and the parties were precluded from relitigating the notice-to-cure issue under the doctrine of res judiciata. The DMMHA

claimed it was not required to provide the notice, and the two prior administrative grievance proceedings between the parties conclusively established Hunter failed to disclose the required information, resulting in its damages of $20,294. Hunter submitted an affidavit in which she denied any gambling income and indicated that Clark was only in her house as a paid caretaker. The district court granted summary judgment for the DMMHA and dismissed Hunter's claims as a matter of law. It determined Hunter

could not recover on her claim for breach of contract without first establishing she had performed all the terms under the lease. The

district court determined Hunter could not meet this predicate to recovery because the prior grievance proceedings between the parties conclusively established she failed to disclose required information. Accordingly, the district court found the doctrine of issue preclusion prohibited relitigation of the issue. Additionally, the district court found DMMHA was not required to give Hunter a notice to cure under the statute. 3 This conclusion also supported the determination by the

district court rejected Hunter's claim that the prior FED decisions by the district court (holding the law required the DMMHA to give a notice to cure) were binding on the parties in this action under the doctrine of res judicata. The district court held it was free to revisit rulings by another district court judge. However, the district court did apply the doctrine of issue preclusion to preclude relitigation of the factual findings made in the administrative proceedings that Hunter failed to disclose the required information. The DMMHA never argued issue preclusion also applied to preclude relitigation of the decision in the second administrative hearing that notice to cure was not required to be given. Additionally, the DMMHA never raised any such issue on appeal.

3The

7 district court that Hunter could not establish her abuse-of-process

claim as a matter of law. The district court additionally found Hunter failed to produce any evidence of an improper purpose by the DMMHA in pursuing the forcible entry and detainer action. After the district court ruled on Hunter's claims, the parties entered into a stipulation regarding the DMMHA's breach-of-contract claim. Among other things, the stipulation stated the DMMHA had

calculated Hunter owed them over $20,000 in past rent. Relying on its previous findings during summary judgment and on the stipulated facts, the district court entered judgment for the DMMHA on its counterclaim, awarding the DMMHA $20,294 in damages. Hunter appealed the decision of the district court, and we transferred the case to the court of appeals. The court of appeals

reversed the district court decision and remanded the case for a determination of damages for Hunter. Although it agreed with the

district court that there was no evidence of an improper purpose to support the claim for abuse of process, it determined Hunter was entitled to a judgment as a matter of law in the breach-of-contract claim based upon its holding that the findings made in the prior grievance decisions involving the parties could not be used in this action to establish that Hunter failed to perform her obligations under the lease. Consequently, the court of appeals found the evidence set forth in Hunter's affidavit was sufficient to support her breach-of-contract claim. The court of appeals held the findings from the grievance proceedings that the DMMHA relied upon to support its claim had no preclusive effect because of the absence of a notice to cure. It also found that federal law prohibited any

preclusive effect of the grievance hearings, and that the administrative proceedings could not otherwise support a claim of issue preclusion.

8 Additionally, the court of appeals found the doctrine of issue

preclusion precluded the district court in this action from deciding that the notice to cure was not required to be given by the DMMHA, after two previous district court decisions determined the notice was required to be given. Both parties sought further review. II. Issues and Standard of Review. The questions now on further review were initially brought before the district court on the parties' motions for summary judgment. We

review rulings on motions for summary judgment for the correction of errors at law. See Clinkscales v. Nelson Sec., Inc., 697 N.W.2d 836, 840

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