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Joseph Lyons

A civil case begins when someone files a petition with the court. The person filing the petition is either called a Petitioner or a Plaintiff. The petition will contain the essential claims and facts of the case, putting the other party or parties, called Respondents or Defendants, on notice of the lawsuit. For simplicity, we will refer to them as Plaintiffs and Defendants. The plaintiff will serve the defendant with a copy of the petition.  

The defendant will then have to file an Answer, saying whether they agree with the petition. The answer may also include claims against the plaintiff by the defendant, which are called counterclaims. The defendant will raise the counterclaims in its answer. The plaintiff will then file their answer to the counterclaims.  

What are compulsory counterclaims?

Compulsory counterclaims are counterclaims that must be raised in the defendant’s answer. A defendant must bring a compulsory counterclaim against the plaintiff if the counterclaim involves the same events or transactions the plaintiff is suing about and is related to those events or transactions. Suppose the defendant does not raise the compulsory counterclaim. In that case, it will never be allowed to sue the plaintiff over that issue.  

This rule exists to decrease the number of cases filed with the court. It often takes time and effort on behalf of the courts and parties to hear all the evidence and facts of a particular case. The court needs to determine what really happened from the facts and evidence and then make decisions based on everything heard. If a jury is involved, the process could take even longer, several months or even years. If the court has one set of facts before it, the court will instead deal with all possible legal issues involving those facts at one time. Therefore, a rule says if defendants don’t bring a counterclaim arising out of the same events or transactions as the plaintiff’s lawsuit, it will prevent them from bringing those claims in the future.  

For instance, if Plaintiffs file a petition against a bank to try and declare a mortgage invalid, the bank has a compulsory counterclaim to foreclose the mortgage on the land in question. (Schafer v. Putnam, 841 N.W.2d 68 (Iowa, 2013).  

When what are the elements of a compulsory counterclaim?

Iowa courts say a counterclaim is compulsory when:  

  1. The claim has matured, meaning the claim exists at the time of the plaintiff’s petition, and the defendant could obtain a legal remedy (usually money damages);  
  1. There isn’t another open case involving this claim;  
  1. The defendant has a claim against the plaintiff, or if more than one plaintiff, against one of the Plaintiffs;  
  1. The claim does not require parties over which the court cannot acquire jurisdiction (meaning the case would need to involve a party the court doesn’t have control over). An example would be a party in another state who didn’t have anything to do with the event or transaction which occurred.  

One must meet all of the above for the claim to be compulsory. The compulsory counterclaim rule may come up in cases involving the same two parties. If one party can prove all the above existed at the time of the first case, they can ask the court to dismiss the new case.  

Are there compulsory counterclaims in small claims court?

Small claims court is a notable exception to the general rule. The compulsory counterclaim rule does not apply to small claims court actions. In a small claims court case, the defendant will most likely be allowed to bring a future claim against the plaintiff, which may typically be a compulsory counterclaim.  

What are permissive counterclaims?

Permissive counterclaims are other claims a Defendant has against a Plaintiff, which did not arise from the same events or transactions as the plaintiff’s petition. A permissive counterclaim needs to exist when the plaintiff files the petition. The defendant would probably have to file a separate action if the claim didn’t exist when the petition was filed.  

Can counterclaims be used to decrease damage?

Often counterclaims will be used to decrease the number of damages awarded to the plaintiff. The defendant will say that the amount of damages should be less due to a claim the defendant has against the plaintiff. For instance, if the plaintiff sues the defendant for $10,000, and the defendant brings a counterclaim against the plaintiff for $6,000, the defendant can argue that it should only pay $4,000. The defendant could also counterclaim for a higher amount than the plaintiff asked.  


This article provided an overview, not intended to be an exhaustive review, of Iowa counterclaim laws. If you have questions regarding your rights in Iowa, don’t hesitate to get in touch with one of our experienced Illinois business lawyers at 630-324-6666.

Disclaimer: The information provided on this blog is intended for general informational purposes only and should not be construed as legal advice on any subject matter. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship. Each individual's legal needs are unique, and these materials may not be applicable to your legal situation. Always seek the advice of a competent attorney with any questions you may have regarding a legal issue. Do not disregard professional legal advice or delay in seeking it because of something you have read on this blog.

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