Tracy Barkalow v. Jeffrey Clark, Bryan Clark, Joseph Clark, and Outside Properties, LLC

── Tracy Barkalow v. Jeffrey Clark, Bryan Clark, Joseph Clark, and Outside Properties, LLC ── Court: Court of Appeals of Iowa Date: May 13, 2026 Category: General IN THE COURT OF APPEALS OF IOWA _______________ No. 25-1074 Filed May 13, 2026 _______________ Tracy Barkalow, Plaintiff–Appellant, v. Jeffrey Clark, Bryan Clark, Joseph Clark and Outside Properties, LLC, Defendants–Appellees. _______________ Appeal from the Iowa District Court for Johnson County, The Honorable John Telleen, Judge. _______________ AFFIRMED AND REMANDED _______________ William W. Graham (argued), Wesley T. Graham, and Tanner J. Berger of Duncan Green, P.C., Des Moines, attorneys for appellant. Kevin J. Caster (argued), Jackson C. Blais, Laurie L. Dawley, and Kate E. Thorne Jewell of Shuttleworth & Ingersoll, PLC, Cedar Rapids, attorneys for appellees. _______________ Heard at oral argument by Tabor, C.J., Sandy, J., and Doyle, S.J. Telleen, S.J., takes no part. Opinion by Tabor, C.J. 1 TABOR, Chief Judge. Tracy Barkalow and his brothers-in-law—Jeffrey, Bryan, and Joseph Clark—continue to tussle over their limited liability company, Outside Properties, LLC.1 In 2019, the district court ordered the company dissolved and the capital contributions of each member reclassified as debt. Barkalow v. Clark, 959 N.W.2d 410, 417 (Iowa 2021). The supreme court reversed those orders and remanded with instructions for the members to continue operating Outside Properties. Id. at 422–23. A year later, Barkalow petitioned for declaratory judgment, seeking to judicially dissolve the company. In November 2024, the four owners agreed to judicial dissolution of Outside Properties. The district court held a bench trial on stipulated facts and exhibits to determine how the company’s remaining assets should be distributed. The issue before us is whether Outside Properties’ surplus assets should be distributed per capital (based on the owners’ financial contributions to the company) or per capita (equally between the owners). The district court found the operating agreement called for per capital distributions. Barkalow contends the operating agreement was silent on the method of distribution, so the surplus should be divided in equal shares under the “default rule” in Iowa Code chapter 489 (2022). He argues the district court wrongly relied on documents outside the company’s operating agreement to reach its contrary conclusion. 1 In the district court, Joseph sided with Barkalow. But he did not file a notice of appeal, so the supreme court disallowed his joinder motion. We refer to the brothers individually as needed or all three collectively as the Clarks, as determined by context. 2  On our de novo review, we find the operating agreement for Outside Properties included not only the four-page document entitled Operating Agreement, but also the Management Certificates, the Certificate of Organization, and the Minutes of the Organizational Meeting—all signed in August 2009. Read together, those four documents adopt a per capital distribution plan for the operation of the company. And as the district court determined, that same plan applied to distribution of the company’s surplus at the time of dissolution. Thus, we affirm. I. Facts and Prior Proceedings Barkalow and the Clark brothers operated Outside Properties as a real estate investment for over fifteen years. It started when they bought property on Melrose Avenue in Iowa City, hoping to capitalize on the market for rentals close to Kinnick Stadium. See Barkalow