UPDATES & ANALYSIS

Suit regarding ownership of Terrace Hill contents remanded to trial court by Iowa Supreme Court

by Rox Laird | May 9, 2024

The Iowa Supreme Court sent a case back to Polk County District Court for further proceedings on a suit brought by the Terrace Hill Society Foundation against the Terrace Hill Commission regarding which party controls the collection of artifacts in the Terrace Hill governor’s mansion.

The Terrace Hill Society Foundation, a non-profit that has collected historic artifacts displayed in the Des Moines mansion, placed those items in the custody and control of the Terrace Hill Commission over the course of nearly fifty years. The Commission is a state agency charged under Iowa Code section 8A.326 with the preservation, maintenance, renovation, landscaping, and administration of Terrace Hill.

A dispute arose between the Foundation and the Commission as to which organization owned the items in the collection. The Foundation sued the Commission for a determination that it was the owner of the artifacts. The Polk County District Court denied the Commission’s motion to dismiss the case and granted the motion with respect to Terrace Hill Commission Chairperson Kristin Hurd. These rulings were appealed to the Supreme Court.

In its unanimous May 3 ruling written by Justice Christopher McDonald, the Supreme Court affirmed the trial court ruling. The Court disagreed with the Commission’s argument that the Foundation’s suit is barred by the legal doctrine of sovereign immunity, under which the Commission—as a state agency—cannot be sued unless it waives that immunity. In this case, the Court held, the Commission “impliedly or constructively” waived immunity by voluntarily entering into a legal relationship with the Foundation.

“At the hearing on the motion to dismiss,” Justice McDonald wrote, the Foundation’s counsel “specified that the voluntary legal relationship between [the Foundation] and the Commission was ‘clearly’ or ‘essentially’ a ‘common law bailment.’”

A bailment occurs, Justice McDonald explained, when personal property is delivered by one person to another with the understanding the property will be returned after the purpose for delivering the property has been accomplished.

While the Foundation did not use the term “bailment” when it filed its suit, the Court concluded that the Foundation’s amended petition “alleges sufficient facts to plead a voluntary bailment and thus a voluntary legal relationship that impliedly waived the State’s sovereign immunity.”

The Court also affirmed the trial’s court’s dismissal of Hurd on the ground that Hurd is not a proper party in the suit because she could not provide the relief sought by the Foundation. The trial court dismissed her from the case without prejudice, meaning the case could be refiled with her as a defendant.

Hurd argued the claims against her should have been dismissed with prejudice rather than without prejudice because the defect cited by the trial court cannot be overcome by the Foundation refiling the claim. The Court disagreed, saying that even true, Foundation could add the remaining commissioners to the suit and Hurd would still be a party to the action.

Tags: Iowa Supreme Court 2023-24