Iowa Supreme Court Rules that Punitive Damage Claims Cannot Stand Alone

On April 19, 2024, the Iowa Supreme Court affirmed the dismissal of plaintiffs’ claims for punitive damages against the administrators of the drainage districts and the engineering firm providing services to the drainage districts. The members of the Kossuth County Board of Supervisors administered the three drainage districts at issue in this case. The plaintiffs abandoned their breach of duty claims on appeal and argued they were entitled to pursue a stand-alone punitive damages claim. The court decisively ruled that punitive damages are not a freestanding cause of action and affirmed the dismissal. 

Facts

Plaintiffs were two LLCs and one individual, Joseph Goche, (collectively, Goche) who own land in three different drainage districts in Kossuth County. The county Board of Supervisors administers all three drainage districts. At district court, Goche alleged that the board intentionally administered the drainage districts with the goal of injuring them financially. Goche brought claims of breach of fiduciary duty and sought punitive damages against the board and engineering firm.

The board and engineering firm argued they did not owe a fiduciary duty to individual landowners like Goche and filed a motion to dismiss the claims. The district court agreed, and dismissed the case. Goche appealed. Goche did not appeal the district court’s decision to dismiss the breach of duty claims. Instead, in their appeal Goche argued they were still entitled to punitive damages, even if there was no duty owed to them or breach of fiduciary duty.

Opinion

The court found ample support in Iowa caselaw that punitive damages do not constitute a distinct cause of action. Instead, punitive damages are “incidental to the main cause of action.” Therefore, a “petition must identify an underlying cause of action for which punitive damages are available.”

In support of their argument that a claim for punitive damages could be freestanding, Goche used Iowa Code § 468.526A which states that a drainage district trustee is not personally liable for punitive damages “unless actual malice or willful, wanton, and reckless misconduct is proven.” Goche alleged the supervisors acted maliciously and therefore §468.526A entitled them to bring a claim for punitive damages. The court found that §468.526A did not apply to this case because the drainage district is not administered by trustees, and this section only applies to drainage districts administered by an elected board of trustees. 

Goche also relied on Iowa Code §670.12. This section immunizes the officers and employees of a county to the same extent as the county, except the statute allows officers and employees of the county to be held liable for punitive damages when they have acted maliciously or with “willful, wanton and reckless misconduct.” The court found the section applied to the board members, but it “does not create a stand-alone claim for punitive damages untethered from any recognized cause of action.”