Opinion
No. 5-520 / 04-1024
Filed November 9, 2005
Appeal from the Iowa District Court for Black Hawk County, Bruce B. Zager, Judge.
A defendant appeals from his convictions and sentences for two counts of fraudulent practice in the second degree in violation of Iowa Code sections 321.97, 714.8(10) and 714.10(1) (2003). REVERSED AND REMANDED.
Judith O'Donohoe of Elwood, O'Donohoe, Stochl, Braun Churbuck, Charles City, for appellant.
Thomas J. Miller, Attorney General, Bridget A. Chambers, Assistant Attorney General, Thomas J. Ferguson, County Attorney, and James Katcher, Assistant County Attorney, for appellee.
Heard by Huitink, P.J., Zimmer, J., and Brown, S.J.
Senior Judge assigned by order pursuant to Iowa Code section 602.9206 (2005).
Mervin Hague appeals from his convictions and sentences for two counts of fraudulent practice in the second degree in violation of Iowa Code sections 321.97, 714.8(10) and 714.10(1) (2003). Because we conclude the district court committed instructional error, we reverse Hague's convictions and remand for a new trial.
I. Background Facts and Proceedings.
Hague, a seventy-year-old businessman, was having financial difficulties. A friend referred him to an individual in Arizona, Bob Roberts, who had "information" about a means to "cancel" debts and release liens on automobiles. Hague contacted Roberts.
Roberts's scheme called for a debtor to write a series of letters to a lender, and if the lender did not respond in the manner demanded by the debtor, the debtor could declare the debt cancelled and file a Uniform Commercial Code (UCC) financing statement amendment with the secretary of state. In the amendment the debtor would personally declare the unpaid debt void, the lien cancelled, and the collateral released. The debtor would then take the file-stamped UCC financing statement amendment to the county treasurer and apply for a duplicate title which would not reflect the lien endorsed on the original certificate of title. Hague followed this practice in an attempt to eliminate personal debts secured by his 1997 Cadillac Deville and his 1990 Ford F-150 pickup truck.
Marshall Isley Bank (M I) held a recorded security interest in the Cadillac. Hague sent various letters to M I challenging the validity of M I's interest in the Cadillac and asserting that unless a proper response was made and proper proof received, a "default judgment" would be entered against M I. M I failed to respond to any of Hague's letters. Approximately three weeks after he sent his final letter to M I, Hague filed an UCC financing statement amendment signed by Hague as the "secured party," which stated M I's interest in the Cadillac had been released and "all other claims . . . extinguished." Attached was a release, signed by Hague, which asserted his obligation to M I had been fraudulently obtained and which purported to release M I's security interest in the Cadillac.
Hague then applied for a duplicate title from the Black Hawk County Treasurer. The portion of the application where the applicant must list any and all security interests in the vehicle was left blank, and Hague attached the file-stamped UCC financing statement amendment and supporting self-executed release as proof the security interest held by M I had been released. An employee of the treasurer's office noted the lien had been "cancelled" and issued a duplicate title which showed no security interest in the Cadillac. Shortly thereafter Hague sold the Cadillac to a friend.
Hague followed the same procedure regarding a security interest in the Ford, which was held by American General Finance (American). American responded to Hague's letters, asserting the promissory note made by Hague and his wife and secured by the Ford and another vehicle, was valid and fully enforceable. American also provided Hague with a copy of the promissory note. Apparently finding American's response to be inadequate, Hague filed a UCC financing statement amendment, supported by another self-executed release that asserted American's security interest in the vehicle had been released. Hague then applied for a duplicate title, again failing to list the existing security interest in the application, and again attaching the amendment and release as proof the lien had been released. As with the prior application, an employee of the treasurer's office indicated the lien had been "cancelled" and issued a duplicate title which showed no security interest in the vehicle.
The other vehicle, a 1998 Cadillac Deville sedan, is not at issue in this matter.
During a routine review, the operations manager of the Black Hawk County Treasurer's Office discovered the documents filed by Hague. The manager determined the duplicate titles should not have been issued and alerted the fraud investigation unit at the Iowa Department of Transportation (Department). The duplicate titles were cancelled, and the Department launched an investigation. Michael Athey, a Department investigator and peace officer, met with Hague at Hague's office. Officer Athey interviewed Hague for approximately thirty minutes, then placed him under arrest.
Hague was charged with two counts of second-degree fraudulent practice in violation of Iowa Code sections 321.97, 714.8(10), and 714.10(1). Hague filed a motion to suppress the statements he gave to Officer Athey, asserting the statements were obtained in violation of the standards set forth in Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966), and moreover, that the statements were not voluntary. The district court denied the motion.
The matter proceeded to trial. Following the close of evidence, Hague objected to several jury instructions. In relevant part, he asserted that the court's proposed instructions on general intent and the mistake-of-fact defense should not be given and that the instruction outlining the county treasurer's obligation to determine the genuineness, regularity, and legality of title and lien release applications should be expanded by adding a statement that "the defendant had a right to rely upon the fact that the treasurer would follow her duties." The court overruled Hague's objections and denied his request for the additional language. The matter was submitted to the jury, which found Hague guilty of both counts of fraudulent practice. The court imposed two concurrent indeterminate five-year terms of incarceration; suspended those terms; and imposed fines, surcharges, and costs.
Hague appeals. He contends the district court erred in overruling his motion to suppress. He contends the court further erred by overruling his objections to the general intent and mistake-of-fact instructions and in refusing to instruct the jury that he had a right to rely on the treasurer to determine the legality of his applications for duplicate titles. Finally, Hague asserts the evidence was insufficient to support the jury's verdicts.
II. Scope of Review.
We review this matter for the correction of errors at law. Iowa R. App. P. 6.4. However, to the extent Hague's claims involve alleged violations of constitutional rights, our review is de novo. State v. Washburne, 574 N.W.2d 261, 263 (Iowa 1997).
III. Motion to Suppress.
Hague made numerous statements to Officer Athey during the approximately thirty-minute interview. In response to Officer Athey's questioning, Hague confirmed he had made the applications for duplicate title, and Hague stated he had used UCC filing statements in the past to "make . . . lien[s] go away." Hague showed Officer Athey an example of this method, which he was currently using to release a lien upon or interest in an air conditioner. Hague further stated he sold the Cadillac and used the proceeds to pay bills rather than repay his approximately $9,000 debt to M I. He also admitted the lenders had not consented to the releases and the releases were not ordered by a judge.
Hague asserts these statements should have been suppressed by the district court. He renews his arguments that the statements were obtained in violation of Miranda v. Arizona and that the statements were not voluntary.
A. Custodial Interrogation.
A person questioned by the police after being "taken into custody or otherwise deprived of his freedom of action in any significant way" must first be warned that "he has a right to remain silent, that any statement he does make may be used as evidence against him, and that he has a right to the presence of an attorney, either retained or appointed." Miranda, 384 U.S. at 444, 86 S. Ct. at 1612, 16 L. Ed. 2d at 706-07. If no warnings are given, any evidence obtained as a result of a custodial interrogation is inadmissible unless the State can show the defendant knowingly waived those rights. Id. at 479, 86 S. Ct. at 1630, 16 L. Ed. 2d at 726. " Miranda warnings are not required unless there is both custody and interrogation." State v. Countryman, 572 N.W.2d 553, 557 (Iowa 1997) (citations omitted).
Here, there is no dispute Officer Athey conducted an interrogation of Hague without giving Hague Miranda warnings. The only question is whether Hague was in custody at the time of the interrogation. In assessing this question "we `make an independent evaluation of the totality of the circumstances as shown by the entire record' . . . [but] give deference to the district court's fact findings due to its opportunity to assess the credibility of witnesses." State v. Turner, 630 N.W.2d 601, 606 (Iowa 2001) (citation omitted).
Turning to the record, we note the relevant facts are largely undisputed. Officer Athey contacted M I and American. Each lender confirmed it had not released its lien and that Hague still had an outstanding obligation to the institution. Officer Athey attempted to locate Hague to ascertain if he was responsible for the applications for duplicate title. Officer Athey went to Hague's office. Hague was at lunch, and Officer Athey told Hague's secretary that he would return later. When Hague returned from lunch, the secretary told him a "large gentleman . . . wearing a gun" had asked to see him and "would be back later." When Officer Athey returned, the secretary told him he could go back to Hague's office unannounced and introduce himself.
Although Hague insisted the secretary did not send Officer Athey back to his office, he admitted he had no personal knowledge of the secretary's actions. Hague also admitted the secretary often sent visitors to his office unannounced.
Hague's door was open. Officer Athey stepped into the doorway, identified himself, and told Hague that he wanted to speak to him about some title applications that had been made at the county courthouse. Hague questioned Officer Athey's identity. Officer Athey showed Hague his credentials and displayed the badge clipped to his belt. When Office Athey showed Hague his badge, the officer's gun and handcuffs were also visible.
According to Officer Athey, Hague responded cordially, telling Officer Athey to come into his office and have a seat. Officer Athey stated he sat down and spoke with Hague. Officer Athey further stated Hague seemed forthright in answering questions and that he "wanted to get it resolved. He wanted to make amends for what he . . . did."
During the interview Hague was seated behind his desk, unrestrained. Officer Athey conducted the questioning in a professional and cordial manner, did not use force or threats, did not unholster or draw attention to his weapon, or act in a way that would place Hague in fear of physical harm. None of the officer's statements indicated Hague was not free to leave, terminate the interview, or refuse to answer questions. At some point during the conversation, Hague's colleague and co-defendant, William Nibbelink, entered the office through a second door located behind Hague, and left quickly.
After speaking with Hague for approximately thirty minutes, Officer Athey informed Hague he was under arrest and advised Hague of his Miranda rights. Hague made no further statements after his arrest. According to Officer Athey, Hague did not ask to speak to anyone prior to his arrest.
In his suppression hearing testimony, Hague disputed only a few aspects of Officer Athey's version of events. Hague asserted Officer Athey stood during the entire interview and that immediately before his arrest Officer Athey refused Hague's requests to speak with his wife and Nibbelink. Hague also emphasized that his office was only eleven feet by fourteen feet and indicated Officer Athey, who is six-feet-four-inches tall and weights 210 pounds, was intimidating by his mere presence. In addition, Hague asserted he believed he was going to be arrested and was not aware he had a right to refuse to answer questions, stop the interview, leave the office, or contact an attorney. He also stated, however, that he did not believe he was in custody prior to the time of his arrest.
Hague did not testify at trial.
Like the district court, we conclude that a custodial interrogation did not occur. A person is not in custody, for the purposes of Miranda, unless "there was a formal arrest or restraint on freedom of movement of the degree associated with a formal arrest." Countryman, 572 N.W.2d at 557-58 (citation omitted). The test is an objective one — "whether a reasonable person in the [defendant's] position would understand himself to be in custody." Id. at 558 (citation omitted). In assessing that reasonable understanding we consider four factors:
(1) the language used to summon the individual;
(2) the purpose, place, and manner of interrogation;
(3) the extent to which the defendant is confronted with evidence of [his] guilt; and
(4) whether the defendant is free to leave the place of questioning.
Id.
As the district court noted, although law enforcement initiated the interview, questioning took place in Hague's office during normal business hours. Although Officer Athey and Hague were alone in the office for most of the interview, Hague's secretary and colleague were close by. Officer Athey acted in a cordial, non-intimidating manner, and while the officer had a weapon, it was not used to obtain Hague's statements. Moreover, Hague's freedom of movement was in no way restricted. Nothing in Officer Athey's words or demeanor indicated Hague would be prevented from using the phone on his desk or exiting through either door to his office.
Hague points out the purpose of the interview was to establish his involvement in making the applications for duplicate title and Officer Athey admitted that prior to the interrogation there was "a high likelihood he was going to arrest" Hague. Hague also notes that he was "confronted" with evidence of his guilt, in that Officer Athey briefly showed him at least one of the applications and its supporting documents. While these facts provide at least some support for Hague's argument that he was in custody, when we review the totality of the circumstances, we conclude a reasonable person in Hague's position would not have understood that he was in custody at the time of the interrogation. Thus, the officer's failure to give Hague Miranda warnings prior to the interrogation does not preclude admission of the statements obtained during that interrogation.
B. Voluntariness of Statements.
Hague asserts that even if the statements were not presumptively coerced under Miranda, they were nevertheless involuntary, and thus inadmissible. See State v. Davis, 446 N.W.2d 785, 788 (Iowa 1989). In order to establish the voluntariness of Hague's statements, the State bore the burden of proving, based upon the totality of the circumstances, "that the statements were the product of an essentially free and unconstrained choice, made by [Hague] at a time when his will was not overborne nor his capacity for self-determination critically impaired." State v. Hodges, 326 N.W.2d 345, 347 (Iowa 1982) (citation omitted).
A number of factors bear on the issue of voluntariness, including
the defendant's age, experience, prior record, level of education and intelligence; the length of time defendant is detained and interrogated; whether physical punishment was used, including the deprivation of food or sleep; defendant's ability to understand the questions; the defendant's physical and emotional condition and his reaction to the interrogation; whether any deceit or improper promises were used in gaining the admissions; [and] any mental weakness the defendant may possess.
Id. at 348 (citations omitted).
In this case, nearly all the factors weigh in favor of concluding the statements were voluntarily made. Although Hague was seventy years old and had no prior experience with the criminal justice system, he holds a bachelor's degree and a master's degree. The interrogation lasted only thirty minutes, no physical force or punishment was used, and there is no evidence Officer Athey employed deceit or improper promises to gain Hague's statements. Rather, the exchange between Officer Athey and Hague was open and cordial, and Hague clearly understood the officer's inquiries. Under the totality of the circumstances, we conclude, as did the district court, that Hague's will was not overborne, nor was his capacity for self-determination critically impaired. Accordingly, we affirm the district court's denial of Hague's motion to suppress.
IV. Jury Instructions.
Hague forwards three claims of instructional error. He contends the court erred in submitting both Jury Instruction No. 14, general intent, and Jury Instruction No. 15, the mistake-of-fact defense, because the instructions were inappropriate, irrelevant, and led to jury confusion. He also contends the court erred in refusing his request to amend Jury Instruction No. 23, because he had a right to rely the treasurer's obligation to determine the legality of his title.
In reviewing Hague's claims, we look to see whether the instructions are correct statements of the law and are supported by substantial evidence. State v. Liggins, 557 N.W.2d 263, 267 (Iowa 1996). The court must give a requested instruction if it is a correct statement of the law, has application to the case, and is not stated elsewhere in the instructions. State v. Kellogg, 542 N.W.2d 514, 516 (Iowa 1996). If the court erred in giving or refusing to give an instruction, reversal is warranted only if the error is prejudicial. Id. A. Jury Instruction No. 14.
Jury Instruction No. 14 is a verbatim recitation of the uniform instruction on general criminal intent:
To commit a crime a person must intend to do an act which is against the law. While it is not necessary that a person knows the act is against the law, it is necessary that the person was aware he was doing the act and he did it voluntarily, not by mistake or accident. You may, but are not required to, conclude a person intends the natural results of his acts.
See also I Iowa Crim. Jury Instructions 200.1 (1988). It is, in and of itself, a correct statement of the law. See State v. Rinehart, 283 N.W.2d 319, 322 (Iowa 1979). The question on appeal is whether the instruction was appropriate within the context of this case.
We begin by noting that, during trial Hague, the State, and the district court all appeared to agree Hague was being charged with a specific intent crime, and a specific intent instruction was submitted to the jury without objection. However, fraudulent practices, as outlined in sections 321.97 and 714.8(1), is a general intent crime. Thus, it was in fact error to submit the specific intent instruction.
In relevant part, a person commits a fraudulent practice under §§ 321.97 and 714.8(1) when he (1) makes a false statement or conceals a material fact in an application for a certificate of title and (2) does so knowingly. When used in this context, "knowingly" requires only that the defendant be aware of the nature of his acts. See State v. James, 693 N.W.2d 353, 356 (Iowa 2005). Because § 321.97 "does not require an intent to do any further act or achieve some additional consequence other than the prohibited conduct . . . [i]t is a general intent crime. . . ." State v. Canas, 597 N.W.2d 488, 496 (Iowa 1999) (overruled on other grounds by State v. Turner, 630 N.W.2d 601, 606 n. 2 (Iowa 2001)). But cf. State v. Acevedo, ___ N.W.2d ___ (2005) (stating, in context of § 321.97, "that defendant's attempt to obtain a certificate of title by giving false identification was an attempt to secure a muniment of title to a motor vehicle that he could not have obtained by using his true name," and that "to deliberately make false statements . . . in order to gain some advantage is to act with fraudulent intent").
Nonetheless, because the specific intent instruction was submitted without objection, it became the law of the case and binding on this court upon review. State v. Taggart, 430 N.W.2d 423, 425 (Iowa 1988). Typically, we would proceed to analyze Hague's claim as if he had in fact been charged with a specific intent crime. Unfortunately, such a procedure is hampered by the instructions submitted to the jury in this matter.
Not only did the jury receive both a general and a specific intent instruction, they received no guidance as to how either intent instruction applied to Jury Instruction Nos. 18 and 19, which defined the elements of each count of fraudulent practice. Moreover, the elements outlined in Instruction Nos. 18 and 19 defined a general intent crime, and made no reference to specific intent. Accordingly, it is impossible to ascertain whether the jury reached its guilty verdicts based upon findings of specific intent or general intent.
Under the unique circumstances presented here, we agree with Hague that the district court erred in submitting the general intent instruction to the jury. This error is presumed prejudicial unless, from a review of the entire case, the contrary appears beyond a reasonable doubt. State v. Engle, 590 N.W.2d 549, 551 (Iowa Ct.App. 1998). We do not view the erroneous instruction in isolation, but look to the jury instructions as a whole. State v. Fintel, 689 N.W.2d 95, 104 (Iowa 2004). When the court's instructions confuse or mislead the jury, prejudice results. Anderson v. Webster City Cmty. Sch. Dist. 620 N.W.2d 263, 268 (Iowa 2000).
It is tempting to conclude the submission of the general as well the specific intent instruction did no more than hold the State to a higher standard of proof than it was obligated to meet under section 321.97 and that Hague was therefore not prejudiced by the instructional error. However, when the instructions are viewed as a whole, they offer little clear guidance on the issue of intent, and in fact are rather confusing. We cannot determine beyond a reasonable doubt that the jury was neither confused nor mislead as to the applicable standard of intent. Accordingly, we conclude Hague was prejudiced by the instructional error, and his convictions must be reversed.
In order to remand this matter for a new trial, the evidence admitted during Hague's trial must provide substantial support for his convictions. See State v. Dullard, 668 N.W.2d 585, 597 (Iowa 2003). As we more fully explain in the opinion's final section, we conclude that it does. We therefore address Hague's other claims of instructional error, as they may reoccur upon retrial.
B. Jury Instruction No. 15.
In Jury Instruction No. 15 the court outlined the mistake-of-fact defense:
The Defendant claims that at the time of the act or omission in question, he was ignorant of the fact the lien releases were invalid, or acting under a mistake of fact as to the validity of the lien releases. When an act is committed or omission is made because of ignorance or mistake of fact, the ignorance or mistake of fact must be because of a good faith reasonable belief by the Defendant, acting as a reasonably careful person under similar circumstances.
The Defendant must inquire or determine what is true when to do so would be reasonable under the circumstances.
The State has the burden of proving the Defendant was not acting under ignorance or mistake of fact as it applies to the question of the lien releases.
Despite Hague's assertions to the contrary, the instruction is a correct statement of the law. See State v. Freeman, 267 N.W.2d 69, 70 (Iowa 1978); I Iowa Crim. Jury Instructions 200.39 (1988). It is based upon Iowa Code section 701.6, which provides:
All persons are presumed to know the law. Evidence of an accused person's ignorance or mistake as to a matter of either fact or law shall be admissible in any case where it shall tend to prove the existence or nonexistence of some element of the crime with which the person is charged.
In deciding whether a mistake-of-fact instruction should be given, the court is not solely guided by whether the defendant requested the instruction. If mistake of fact is an issue raised during trial, and substantially supported by the evidence, the district court has a duty to fully and fairly instruct regarding the defense. See Iowa R. Crim. P. 2.19(5)( f); Liggins, 557 N.W.2d at 267.
Here, Hague injected the concept of mistake into the proceedings when he defended against the charges, in primary part, on the ground he believed his self-executed releases had in fact extinguished M I's and American's security interests. This alleged mistake was relevant to negating an element of the charged offense, as it had a direct bearing upon whether Hague knowingly made a false statement when representing that the existing security interests had in fact been released. Cf. State v. Metz, 636 N.W.2d 94, 99 (Iowa 2001) (finding no error in refusing mistake-of-fact instruction regarding identity of murder victim as identity of victim is not element of crime); Saadiq v. State, 387 N.W.2d 315, 324 (Iowa 1986) (finding no error in court's rejection of mistake instruction, in prosecution of general intent crime of felon in possession of firearm, where knowledge of felony status not element of crime).
Hague asserts that such a defense would be a mistake-of-law defense rather than a mistake-of-fact defense, as his mistake related to the legality of the release procedure rather than any operative fact. While in one sense Hague's alleged mistake is one of law, in another and very real sense, it is a mistake of fact. As one federal court has noted, where a claim involves the alleged ignorance of a legal condition that is an operative fact of the crime, "the mistake of the law is for practical purposes a mistake of fact. . . ." U.S. v. Fierros, 692 F.2d 1291, 1294 (9th Cir. 1982).
Upon retrial, if Hague again defends on the basis that he mistakenly believed the liens had been released, the district court may again instruct the jury as to a mistake defense. Whether the court styles the mistake as one of fact, of law, or both, will depend upon the nature of the defense presented by Hague.
C. Jury Instruction No. 23.
Jury Instruction No. 23 informed the jury that "Iowa Code section 321.13 and 321.24 state that the Black Hawk County Treasurer shall examine and determine the genuineness, regularity, and legality of every application for a title or a lien release." The district court denied Hague's request to amend the instruction by adding the following sentence: "[T]he defendant had a right to rely upon the fact that the treasurer would follow her duties." Hague asserts this was error. We cannot agree.
Hague's contention requires us to interpret sections 321.13 and 321.24. Our goal in interpreting the statutes is to ascertain the legislature's intent. Tow v. Truck Country of Iowa, Inc., 695 N.W.2d 36, 39 (Iowa 2005). We are primarily guided by the statutory language, but also consider the "subject matter, the object sought to be accomplished, the purpose to be served, underlying policies, remedies provided, and the consequences of the various interpretations." Cox v. State, 686 N.W.2d 209, 213 (Iowa 2004) (citation omitted). Moreover, "[w]e read the statute as a whole and give it its plain and obvious meaning, a sensible and logical construction, which does not create an impractical or absurd result." In re Detention of Swanson, 668 N.W.2d 570, 574-75 (Iowa 2003) (citations omitted).
We first note that nothing in either section 321.13 or section 321.24 expressly indicates a legislative intent that a criminal defendant may rely on the treasurer's assessment as an affirmative defense. Moreover, the statutory scheme of chapter 321 indicates the final determination of the legality or validity of an application for title lies with the Department, and not the county treasurer.
Section 321.2 specifically reserves to the Department the duty to administer and enforce the provisions of chapter 321. See Merchants Motor Freight v. State Highway Comm'n, 32 N.W.2d 773, 775, 239 Iowa 888, 891 (1948). As a local official charged with the chapters administration and enforcement, the county treasurer is governed by not only the code, but by departmental rules. See Iowa Code §§ 321.1(36), 321.5.
Section 321.20 requires that an application for a certificate of title should be made to the county treasurer or, in appropriate circumstances not at issue here, to the Department. Section 321.24(1) requires the county treasurer to issue a certificate of title "when satisfied as to the application's genuineness and regularity." However, section 321.13 vests in the Department the authority to grant or refuse applications, and to determine their legality:
The department shall examine and determine the genuineness, regularity, and legality of every application made to the department, and may investigate or require additional information. The department may reject any application if not satisfied of the genuineness, regularity, or legality of the application or the truth of any statement made within the application, or for any other reason, when authorized by law. The department may retain possession of any record or document until the investigation of the application is completed if it appears that the record or document is fictitious or unlawfully or erroneously issued and shall not return the record or document if it is determined to be fictitious or unlawfully or erroneously issued.
In addition, section 321.14 specifically allows the Department to seize any certificate of title "which has been unlawfully or erroneously issued."
The foregoing indicates a legislative intent that the Department, and not the county treasurer, be the final arbiter of the legality or validity of an application or issued certificate of title. The purpose of section 321.24 is to create a procedure for the issuance of registrations and certificates of title. We perceive no legislative intent to create an affirmative defense to fraudulent practices as defined by sections 321.97 and 714.8(10). Moreover, interpreting sections 321.13 and 321.24 as Hague suggests leads to absurd results. As aptly noted by the State, "Defendant's argument would create an absolute defense for anyone who succeeded, by hook or by crook, in persuading a clerk in a treasurer's office to accept a filing — no matter how clearly fraudulent the document."
Hague's requested language was not a correct statement of the law, and any request to include such language upon retrial should be rejected. In addition, for the benefit of retrial, we must note an error in Jury Instruction No. 23 as given. Instruction No. 23 stated the county treasurer was charged with determining the genuineness, regularity, and legality of applications. However, as previously noted, section 321.24 limits the treasurer's role to a determination of the genuineness and regularity of an application. Upon retrial, any requested instruction should comport with the governing code section.
V. Sufficiency of the Evidence.
As we noted above, to remand this matter for a new trial, Hague's convictions must be supported by substantial evidence. In concluding they are so supported, we address three specific challenges made by Hague. First, Hague contends there is no evidence he concealed any material fact in his applications for duplicate certificates of title, or that the UCC financing statement amendments contained any false statements. Second, he contends there is not substantial evidence he knew he was concealing a material fact or making a false statement. Third, he contends the record does not support convictions for fraudulent practices in the second degree, as there is not substantial evidence "the amount of money or value of property . . . involved exceeds one thousand dollars . . ." as required by section 714.10(1).
Jury Instruction Nos. 18 and 19 informed the jury they could convict Hague of fraudulent practices if he
1. . . . .
a. Knowingly conceal[ed] a material fact on the Application for New Title; and/or
b. Knowingly ma[d]e a false statement in the UCC Financing Statement Amendment.
2. He did the acts knowing them to be false.
Hague contends the question should be limited to whether there was concealment of fact in the application itself, because any statements within the amendments were not made "in" the application as required by Iowa Code § 321.97. He does not, however, assert a distinct claim of instructional error, as required by our rules of appellate procedure. See Iowa R. App. P. 6.14(1). We therefore proceed to consider whether there is substantial evidence of Hague's guilt under either prong of the court's instruction. See Hanson v. Harveys Casino Hotel, 652 N.W.2d 841, 842 (Iowa Ct.App. 2002) (noting we are not bound to consider a claim if a party fails to comply with our rules of appellate procedure).
In considering Hague's claims, we are bound by the jury's verdicts so long as the record contains substantial evidence of guilt. See State v. Button, 622 N.W.2d 480, 483 (Iowa 2001). Substantial evidence means evidence which is sufficient to convince a rational trier of fact, beyond a reasonable doubt, of the defendant's guilt. State v. Turner, 630 N.W.2d 601, 610 (Iowa 2001). In assessing whether the record contains substantial evidence of Hague's guilt, we note it is the jury's duty to sort out the credibility of witnesses and to assign the evidence presented whatever weight it deems proper. State v. Thornton, 498 N.W.2d 670, 673 (Iowa 1993). We view the totality of the record in the light most favorable to the State, drawing any and all legitimate inferences that can be reasonably deduced from the evidence. State v. Williams, 574 N.W.2d 293, 296 (Iowa 1998).
A. Falsity or Material Omission.
Turning to Hauge's first assertion, we note the form application for replacement of a certificate of title requires the applicant, consistent with section 321.20(4), to make "a complete statement of all security interests noted upon the [original] certificate of title." In his applications, Hague listed neither the security interest held by M I nor the security interest held by American. Each was listed on the respective original certificate of title, and the State presented evidence, including the testimony of representatives from M I and American as well as Hague's own statements to Officer Athey, from which a jury could conclude that both security interests existed at the time the applications were made. Obviously, the existence of a security interest is a material fact that must be disclosed in the application.
Hauge asserts he did not "conceal" the security interests, as he supplied documentation that revealed the existence of the interests, as well as the fact they had been released. Assuming without deciding that there is merit to this assertion, Hague nevertheless made a false statement in connection with the application. Contrary to the declarations in the financing statement amendments and self-executed releases, which Hague supplied as proof of his assertions that the liens had been extinguished, the liens had not been released.
Hague also contends he made no false statements because a cursory review of the amendments and releases revealed that he, rather than the secured party, was releasing the security interests. We find this to be a distinction without a difference. Hague affirmatively represented the liens had been released. Based upon the evidence introduced at trial, the jury could conclude beyond a reasonable doubt that these statements were false.
B. Knowing Action.
This leads us to the question of whether the record contained substantial evidence that Hague knowingly made a false statement or concealed the existence of unreleased liens. Hague points to evidence he introduced, largely through testimony of family and friends, that indicated he honestly believed he followed a procedure that allowed him to release the liens himself. However, the jury was also presented with evidence that could support a contrary conclusion. Hague was a knowledgeable businessman who was experiencing financial difficulties. He was admittedly aware that neither M I nor American had released its security interest and, in the case of American, knew the institution had affirmatively asserted the validity of its interest. He also waited to see if his first application would be successful before he made his second and indicated to Officer Athey that he "wanted to make amends for what he . . . did."
As we have previously noted, it is the for the jury to assess the credibility of witnesses and assign weight to the evidence as it deems fit. Thornton, 498 N.W.2d at 673. While the jury was free to accept Hague's evidence, it was also free to reject it, in whole or in part. State v. Garr, 461 N.W.2d 171, 174 (Iowa 1990). When we look to the totality of the record, deferring to the role of the jury and drawing any and all reasonable inferences, we conclude the evidence is sufficient to convince a rational trier of fact, beyond a reasonable doubt, that Hague knowingly made false statements or material concealments.
C. Evidence of Degree.
We therefore turn to Hague's final claim, that the record does not contain substantial evidence "the amount of money or value of property . . . involved exceeds one thousand dollars. . . ." Iowa Code § 714.10(1). His contention is twofold. First, he asserts there is insufficient evidence that either M I or American held enforceable lien obligations. Second, he asserts that even if American held an enforceable lien obligation, the "property involved," in this case the Ford F-150 pickup truck, had a value of less than $1,000. We conclude neither assertion has merit.
1. Valid and Enforceable Liens.
Testimony from Dan Trost, Assistant Vice President of the Special Collection Department of M I, and documentation introduced by Hague indicated that on November 24, 2000, Hague entered into an installment contract with Dan Deery Toyota for the purchase of the Cadillac and that Dan Deery Toyota then assigned Hague's loan obligation to M I. Trost further testified that at the time Hague obtained a duplicate certificate of title M I's interest secured an approximate $12,000 to $13,000 remaining obligation on the loan.
Melissa Norton, a financial representative with American, testified that in 2001 Hague and his wife made a promissory note to American and secured their loan with two vehicles, including the Ford F-150 pickup. Copies of the promissory note and related documents reflecting an original obligation of $19,234.09 were introduced into evidence by Hague. Although Norton could not specify the exact amount of American's security interest in the vehicle at the time Hague applied for and obtained the duplicate title, she testified it would have been "more than $1,000 at the time," and "at no point in time was the balance [on the note] ever less than $10,000."
Hague asserts the foregoing is insufficient to establish valid and enforceable liens and points to what he perceives as various flaws in the State's evidence. We have considered Hague's contentions and conclude that when we view the record in the light most favorable to the State and draw all legitimate inferences, the record contains substantial evidence that both M I and American held valid liens at the time Hague obtained duplicate titles and that each vehicle secured an obligation in excess of $1,000.
2. Value of Property Involved.
Hague contends that, even if American had an enforceable lien, the State failed to demonstrate the value of the property involved exceeded $1,000. He relies on the fact that when the Ford was repossessed and sold at auction it was purchased for only $650. In essence, Hague asserts the degree of the offense should be limited to the actual resale value of the vehicle.
We first note section 714.14 provides, for the purpose of the fraudulent practice statute, that "[t]he value of property . . . is its highest value by any reasonable standard at the time the fraudulent practice is committed[, which] . . . includes but is not limited to market value within the community, actual value, or replacement value." Thus, actual resale value is not the only means by which value may be measured. Moreover, we believe Hague reads section 714.10(1) too narrowly.
If the jury may take into account only the sale value of the vehicle, then its consideration is limited to the portion of the secured obligation of which American was actually deprived. However, our supreme court has specifically held that the amount of money or property "involved" is not limited to "amounts taken or obtained." State v. McSorley, 549 N.W.2d 807, 810 (Iowa 1996). The court has implicitly approved the dictionary definition of "involved": "[i]mplicated, affected or concerned in some degree." Id. at 809 (citation omitted).
We agree with the State that, here, the amount of money or property implicated, affected, or concerned may be appropriately measured by the amount of money secured by the interests in the vehicles. When we look to the record, we conclude the jury was presented with evidence from which a reasonable fact finder could determine, beyond a reasonable doubt, that for each charge this amount exceeded $1,000.
VI. Conclusion.
We have considered all of Hague's claims, whether or not specifically discussed. We conclude the district court did not err in denying Hague's motion to suppress. However, the court did commit prejudicial error when instructing the jury on the requisite level of intent for the crimes charged. Accordingly, Hague's convictions must be reversed. Because the record contains substantial evidence in support of Hague's convictions, we remand this matter for a new trial.