The University of Iowa, Board of Regents, State of Iowa v. Modern Piping, Inc.

The University of Iowa, the Iowa Board of Regents, and the State of Iowa (collectively, “the University”) contracted with appellee Modern Piping, Inc., to work on the new University of Iowa Children’s Hospital. When a dispute arose, the University successfully obtained a temporary injunction against defendant, the American Arbitration Association, from arbitrating the parties’ dispute. The district court later dissolved the injunction, and that ruling was affirmed. University of Iowa v. Am. Arb. Ass’n, No. 17-0949, 2019 WL 141003 (Iowa Ct. App. Jan. 9, 2019). The district court later granted Modern Piping’s motion to add a counterclaim for wrongful injunction, and sought compensatory and consequential damages, restitution, interest, attorneys’ fees and costs. A jury awarded Modern Piping nearly $12.7 million for unjust enrichment. The district court denied the University’s posttrial motions, and entered judgment in favor of Modern Piping in the amount of approximately $15.9 million, including interest, attorneys’ fees, and costs. The University argues the court erred because: (1) Modern Piping was not damaged by the temporary injunction; (2) Modern Piping was not entitled to seek unjust enrichment damages in the form of disgorgement of profits; (3) Modern Piping should not have been allowed to file a counterclaim after the appeal; (4) the wrongful injunction claim was barred by the Iowa Tort Claims Act as essentially a malicious prosecution or abuse of process claim, and the University was immune from such claims; and (5) Modern Piping was not entitled to prejudgment interests because it was not deprived of any property while the injunction was in effect.

Holding: Party which obtained a temporary injunction that was subsequently dissolved appeals judgment ordering payment of restitution for wrongful injunction. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.