Clarifying “Prohibited Practices” Under Iowa’s Consumer Fraud Act: Intent, Reliance, and Written-Contract Controls

Introduction

The dispute in Bradshaw Renovations, LLC v. Barry Graham & Jacklynn Graham reached the Iowa Supreme Court after a jury found the contractor (Bradshaw Renovations) liable to homeowners (the Grahams) on theories of breach of contract, consumer fraud, unjust enrichment, and quantum meruit. At issue on further review was whether the evidence supported the consumer‐fraud verdict under Iowa’s Private Right of Action for Consumer Frauds Act, Iowa Code chapter 714H, and whether Bradshaw’s equitable claims could survive in the presence of an express written contract. The Court vacated the Court of Appeals decision affirming the consumer‐fraud award—holding the Grahams presented no “prohibited practice” under section 714H.3(1)—and remanded for judgment consistent with its analysis.

Summary of the Judgment

Chief Justice Christensen, writing for a unanimous Court, (1) reversed the jury’s consumer‐fraud award and related attorney-fee order, concluding the Grahams failed to prove any unfair practice, misrepresentation, or omission of material fact made with intent that they would rely on it; (2) affirmed the jury award on the Grahams’ breach‐of‐contract claim ($16,000) and the district court’s denial of Bradshaw’s post-trial motions; and (3) affirmed dismissal of Bradshaw’s unjust enrichment and quantum meruit claims, finding that an express written contract governed scope changes and precluded implied-contract remedies on the same subject matter.

Analysis

Precedents Cited

State v. Keding, 553 N.W.2d 305 (Iowa 1996): Established standards for directed verdict and judgment notwithstanding verdict (JNOV).
Carter v. Carter, 957 N.W.2d 623 (Iowa 2021): Defined “substantial evidence” standard under JNOV.
In re Estate of Johnston, 16 N.W.3d 700 (Iowa 2025): Reaffirmed trial court discretion in submitting issues to jury.
MidWestOne Bank v. Heartland Co-op, 941 N.W.2d 876 (Iowa 2020): Clarified unjust enrichment elements.
Kunde v. Estate of Bowman, 920 N.W.2d 803 (Iowa 2018): Explained that implied-contract remedies yield to express contracts on same subject matter.
Nepstad Custom Homes Co. v. Krull, 527 N.W.2d 402 (Iowa Ct. App. 1994): Distinguished—scope-of-work clearly defined and controlled by written agreement.

These authorities guided the Court’s review of evidentiary sufficiency (for consumer fraud) and the interplay between express and implied contracts (for unjust enrichment and quantum meruit).

Legal Reasoning

1. Consumer-Fraud Claim Under Iowa Code § 714H

Iowa’s Private Right of Action for Consumer Frauds Act allows a consumer to recover actual and treble damages only for an “ascertainable loss … as the result of a prohibited practice” in connection with a commercial transaction. A “prohibited practice” requires proof that a defendant knowingly or reasonably should have known of an unfair practice, deception, misrepresentation, concealment, suppression, or omission of a material fact, with the intent that the consumer rely on it. (§ 714H.3(1).)

The Court found no substantial evidence that Bradshaw misrepresented its labor rate, concealed a markup on materials, or billed for items not used with intent to induce the Grahams’ reliance at the time they entered the August 2019 contract. Key points:

The five-page itemized “current estimate” and payment schedule made no specific hourly labor rate or zero-markup promise.
Conversations about a $45/hour rate occurred only after the project’s completion, during billing disputes—too late to constitute inducement of the original contract.
Receipts grouping Bradshaw’s multiple projects did not establish fraudulent billing of materials specific to the Grahams’ job.

Because no “prohibited practice” was established, the verdict awarding $40,000 in consumer-fraud damages and attorney fees could not stand. The Court reversed that portion of the judgment and remanded with instructions to enter judgment for Bradshaw on the fraud count.

2. Unjust Enrichment and Quantum Meruit

Both doctrines rest on implied contractual obligations, but an express written contract governs here. The August 1, 2019 contract contained an explicit “changes” clause requiring written email approval for any scope modification. Bradshaw never followed that procedure; it instead relied on verbal or invoice-only change notifications. Under Kunde, an implied contract cannot coexist when an express contract covers the same subject matter. Consequently:

Bradshaw cannot recover on unjust enrichment or quantum meruit for work within the scope of the written contract.
District Court correctly dismissed these claims.

Impact

This decision has several key ramifications:

Heightened Proof for Consumer Fraud: Plaintiffs must pinpoint a misrepresentation or omission made with intent to induce reliance before or at contract formation—not merely sloppy post-hoc billing.
Contract Drafting and Change Orders: Contractors and consumers will emphasize clear written change-order procedures to avoid disputes over scope and pricing.
Limitation of Equitable Remedies: Express contract provisions that preclude or govern certain remedies will bar implied-contract theories covering identical subject matters.

Complex Concepts Simplified

Prohibited Practice (Iowa Code § 714H.3(1)): A deceptive act—misstatement or omission of material fact—done knowingly or negligently, with intent that the other party relies on it when making a purchase decision.
Ascertainable Loss: A quantifiable monetary harm caused by the prohibited practice (e.g., overpayment due to deception).
Directed Verdict vs. Judgment Notwithstanding Verdict (JNOV): A directed verdict is a pre-jury decision to entry judgment for one party if evidence is insufficient; a JNOV is post-verdict relief when the jury verdict lacks evidentiary support.
Unjust Enrichment: Equity principle allowing recovery when one party unfairly benefits at another’s expense absent a valid contract—but barred if an express contract covers the same ground.
Quantum Meruit: “As much as deserved”—an implied-in-fact contract remedy for services rendered, likewise displaced by a governing written agreement on the same issue.

Conclusion

The Iowa Supreme Court’s decision in Bradshaw Renovations v. Graham clarifies that not every billing dispute amounts to consumer fraud: plaintiffs must show a prohibited practice—intentional misrepresentation or omission—made to induce reliance. It also underscores that express written contracts, with robust change-order clauses, preclude parallel equitable claims for the same work. This ruling will guide contractors, homeowners, and lower courts in evaluating both consumer-fraud claims and the availability of equitable remedies alongside written agreements.