State v. Hogrefe, 95-1155

CourtUnited States State Supreme Court of Iowa
Citation557 N.W.2d 871
Docket NumberNo. 95-1155,95-1155
PartiesSTATE of Iowa, Appellee, v. Sherman Paul HOGREFE, Appellant.
Decision Date20 November 1996

Page 871

557 N.W.2d 871
STATE of Iowa, Appellee,
Sherman Paul HOGREFE, Appellant.
No. 95-1155.
Supreme Court of Iowa.
Nov. 20, 1996.
Rehearing Denied Dec. 17, 1996.

Page 872

Richard O. McConville of Coppola, Sandre & McConville, P.C., Des Moines, for appellant.

Thomas J. Miller, Attorney General, Martha E. Boesen, Assistant Attorney General, and Paul L. Martin, County Attorney, for appellee.

Considered by HARRIS, P.J., and CARTER, LAVORATO, SNELL, and TERNUS, JJ.

LAVORATO, Justice.

Sherman Paul Hogrefe appeals from conviction and sentence for theft by deception. See Iowa Code §§ 714.1(3), 714.2(1), and 714.3 (1993). He raises several issues. Because one issue is dispositive of the case, we address it only. That issue is whether there was sufficient evidence to submit the marshalling instruction on theft by deception. Because we conclude there was not sufficient evidence to submit the instruction, we reverse and remand for a new trial.

I. Background Facts and Proceedings.

Hogrefe is a 1986 graduate of South Dakota State where he majored in agribusiness. Following graduation, Hogrefe worked for several years as a sales representative for American Cyanamid selling chemicals. During this time, Hogrefe came into contact with Richard Houge, Jim Dunbar, and Kim Pleggenkuhle. At the times material to this case, Houge and Dunbar were employees of North Iowa Cooperative Elevator (NICE). Houge was the general manager of the elevator, and Dunbar was its chemical and agronomy manager. Pleggenkuhle was the owner and manager

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of Midwest Soya International, Inc. (Midwest), a grain elevator in Clear Lake.

Hogrefe left American Cyanamid in January 1991. He started farming about 1600 to 1800 acres. He also owned two small businesses--a commodities trading office and a land development company.

In September 1991 Hogrefe approached Pleggenkuhle about a "no lose" business proposition. Hogrefe convinced Pleggenkuhle to have Midwest advance Hogrefe $425,000 for the purchase and resale of Pursuit, a herbicide manufactured by American Cyanamid. For this advance, Midwest was to profit $40,000 by December 1, 1991, the beginning of Midwest's new fiscal year. Because of Hogrefe's past sales experience with American Cyanamid, Pleggenkuhle believed Hogrefe would be able to sell the herbicide.

Midwest had an ongoing business relationship with Pattison Grain, a grain elevator in Fayette. Pleggenkuhle approached Pattison Grain about advancing $250,000 toward the $425,000. Pleggenkuhle convinced Pattison Grain to make the advance because both considered Hogrefe--a farmer--a potential customer.

On September 25 Hogrefe and his wife executed a promissory note to Midwest for $425,000 together with a security interest on Hogrefe's crops and a mortgage on his house. Hogrefe received the $425,000 from Midwest through payments on September 25 and 26. Pleggenkule insisted that the deal be completed by December 1 because Midwest would close its books by that date and the company needed money to purchase grain for the next year.

December 1 came and went, but Midwest saw no money, herbicide, or profits. About this time, Pleggenkuhle began pressing Hogrefe for the money. Hogrefe testified he had purchased and resold chemicals with the $425,000 but could not remember what had happened to the sales proceeds.

Instead of using the proceeds from the proposed sale of chemicals purchased with Midwest's money, Hogrefe arranged for payment by other means. These other means are the subject of this appeal.

Around mid-December Hogrefe approached Dunbar about purchasing Pursuit, but that sale fell through. Instead, Hogrefe ended up agreeing to buy 500 gallons of Pursuit from NICE. Dunbar determined the sales price, and Hogrefe wrote four checks to NICE for $262,220. These checks were meant as payment for the 500 gallons of Pursuit. All four checks were dated December 22, 1991. Hogrefe and Dunbar understood that the checks were to be cashed at different times.

NICE presented the four checks for payment at some point. The checks, however, were returned for insufficient funds. The record contains no mention of when or where the checks were presented.

On December 24--two days after Hogrefe wrote the four checks to NICE as payment for the 500 gallons of Pursuit--Houge wrote Hogrefe a check from the NICE account for $230,000. On that same day, Hogrefe signed over this check to Midwest as part payment on the $425,000 advance.

At this point, NICE had yet to order the 500 gallons of Pursuit.

Houge testified that he specifically ordered Dunbar not to order the Pursuit until Hogrefe repaid the $230,000. Dunbar apparently ordered the 500 gallons of Pursuit on December 30. At trial, Dunbar claimed that Houge had authorized the order.

On December 26 Houge called Hogrefe into NICE's Portland facility. Hogrefe came as requested and wrote three checks to NICE for $231,500. Two checks were dated December 28 and one was dated December 29. Houge was to hold all three checks until Hogrefe approved their deposit.

Various explanations were given at trial for the $230,000 check Houge gave Hogrefe. Hogrefe testified the $230,000 was an "advance" on a contract for the sale of 35,000 bushels of Hogrefe's grain to NICE. This transaction was evidenced by a written contract Hogrefe prepared at the December 24 meeting between Houge and himself. Hogrefe did not sign the contract, Houge testified, because it was for a large quantity and delivery was to occur the next month. Houge testified the contract "wasn't something

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that the producer was going to forget." Houge further testified that when he turned over the $230,000 check to Hogrefe, he was unaware Midwest had a lien on Hogrefe's grain.

Later in his testimony, Hogrefe gave a second explanation for the $230,000 check: the check was meant as prepayment for the Pursuit that Hogrefe was to deliver to NICE. NICE's bookkeeper testified by deposition that (1) Houge told a secretary that the $230,000 was an advance purchase of Pursuit, and (2) the check was entered into NICE's ledger as prepayment for chemicals.

The bookkeeper testified to a third explanation. Houge told her the $230,000 check was written to Hogrefe "because Sherm needed some money that day."

Hogrefe gave a fourth explanation: the $230,000 check was a gift. Hogrefe denied anything more than that he and Houge discussed a grain sale and that Houge made an offer. At one point, however, Hogrefe did refer to the money as "borrowed."

Hogrefe denied having an obligation to repay the $230,000 until he wrote the three checks for $231,500 to NICE on December 26. He characterizes these checks as a favor in appreciation of a previous gift. He denied he gave the checks in payment of an obligation.

Houge, on the other hand, testified Hogrefe's three checks for $231,500 to NICE were to correct his "mistake" for giving Hogrefe the $230,000 check. Houge explained the additional $1500 as "interest" on the $230,000.

As mentioned, Dunbar ordered the 500 gallons of Pursuit on December 30. American Cyanamid through its distributor United Purchasers Association (UPA)--a chemical distributor operating out of Minnesota--shipped the 500 gallons of Pursuit to NICE on December 31. The Pursuit arrived on January 2, 1992, at NICE's Plymouth facility. Hogrefe picked up the Pursuit that day.

The Plymouth facility is not the normal winter delivery site for freezable chemicals such as Pursuit. Houge was at the Portland facility when the Pursuit arrived. Dunbar was at the Plymouth facility that day to receive the Pursuit. No one prepared a warehouse receipt until several days later and after NICE's bookkeeper became aware of Hogrefe's January 2 pickup.

On January 2--the same day he picked up the 500 gallons of Pursuit--Hogrefe delivered the Pursuit to Pattison Grain. This delivery apparently satisfied any outstanding obligation Hogrefe had on the $425,000 advance from Midwest and Pattison Grain to Hogrefe.

On January 6 American Cyanamid billed NICE for the 500 gallons of Pursuit at a price of $275,000. Hogrefe told Houge to cash the three checks totaling $231,500 as payment for the 500 gallons of Pursuit. Houge added UPA as payee on the three checks from Hogrefe totaling $231,500, endorsed the checks as payment for the 500 gallons of Pursuit, and told UPA to deposit them. On January 8 the checks were returned for insufficient funds.

About mid-January after the three checks were returned for insufficient funds, Hogrefe promised Houge that he would bring to NICE 1000 gallons of Pursuit in "exchange for the money and Pursuit he had obtained from NICE."

On Friday, January 24, Dunbar drove Hogrefe to a truck rental agency so Hogrefe could rent a truck to deliver the 1000 gallons of Pursuit to NICE. On the way, Hogrefe called an insurance agent with questions about insuring the truck and Pursuit for $600,000. The agent told Hogrefe she would call him back with some answers. Later the agent tried unsuccessfully to reach Hogrefe and give him answers to the questions he posed.

After picking up the truck, Dunbar and Hogrefe drove to NICE's Portland facility. When they arrived, Hogrefe told Dunbar he was not feeling well and would pick up the truck after a doctor's appointment he had scheduled. Hogrefe never returned to pick up the truck. Instead he found someone to take the truck from the locked Portland facility (Dunbar had given Hogrefe the keys to the facility) so that the truck and its supposed cargo appeared to have been stolen. In truth, Hogrefe had never purchased any

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Pursuit to replace the money and Pursuit he had obtained.

The next evening--Saturday--Hogrefe called Dunbar and told him the 1000 gallons of Pursuit was at NICE's Portland facility. On Monday morning, January 27, Dunbar picked Hogrefe up at the latter's home so they could unload the Pursuit. When they got to NICE's Portland facility, the pair discovered that the truck and chemicals...

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