State v. Wolford Corp.

• Decision Date: 03 December 2004
• Docket Number: No. 03-1726.,03-1726.
• Citation: 689 N.W.2d 471
• Parties: STATE of Iowa, Appellee, v. The WOLFORD CORPORATION, Appellant.
• Court: Iowa Supreme Court

689 N.W.2d 471

STATE of Iowa, Appellee, v. The WOLFORD CORPORATION, Appellant.

No. 03-1726.

Supreme Court of Iowa.

December 3, 2004.

John P. Roehrick of Roehrick, Krull & Blumberg, Des Moines, for appellant.

Thomas J. Miller, Attorney General, Sharon K. Hall, Assistant Attorney General, John P. Sarcone, County Attorney, and Lawrence E. James, Assistant County Attorney, for appellee.

WIGGINS, Justice.

The district court affirmed the associate district court's criminal conviction of The Wolford Corporation (Wolford) for failing to timely file two real estate contracts in violation of Iowa Code section 558.46(1) (2001). Because we agree with the district court that a violation of section 558.46(1) is a public offense punishable through criminal prosecution, and the execution of a second contract covering the same real estate transaction as the original contract did not extinguish Wolford's obligation to record the original contract, we affirm the judgment of the district court.

I. Background Facts and Procedure.

On April 26, 2001, Doreen Johnson entered into a real estate contract with Rachel N. Nelson as Trustee for the Medinoski Trust (Trust) for the purchase of a home located in Des Moines. On June 27, 2002, Johnson signed another contract concerning the same property with the Trust, which included the same terms and conditions as the original contract but with a lower interest rate. Under the terms of both contracts, the Trust had the obligation to file a "memorandum of interest" with the county recorder evidencing Johnson's interest in the property. The Trust did not file the original contract or a memorandum of the original contract with the recorder's office for recording. The Trust filed the second contract on January 29, 2003, for recording.

On February 24, 2003, the State issued a citation against the Trust¹ for failing to timely record the June real estate contract within 180 days from the date the parties signed the second contract as mandated by Iowa Code section 558.46(1) and (2). Because the Trust recorded the second contract 216 days after the date of signing, the county attorney charged the Trust with thirty-six simple misdemeanor counts, one count for each day the Trust did not file the contract for recording after the expiration of the 180-day grace period. The State later filed an amended complaint asserting an additional 246 simple misdemeanor counts based on the Trust's and Wolford's failure to record the original contract. The 246 counts represented each day the Trust and Wolford failed to file the original contract with the recorder calculated from the expiration of the 180-day grace period to the date the parties executed the second contract. In total, the State charged the Trust and Wolford with 282 simple misdemeanor counts. Without objection, the court later substituted Wolford as the proper defendant on all counts.

Wolford entered a plea of not guilty and argued a violation of section 558.46 is subject to a civil penalty rather than a criminal fine, and the second contract had extinguished any recording violations under the original contract. The associate district court concluded Wolford's failure to timely record the real estate contracts was punishable as a criminal misdemeanor. The court, however, found Wolford guilty of just one count of failure to record a real estate contract pursuant to section 558.46. The court fined Wolford $5 per day for each of the 282 days that the contracts went unrecorded, plus a thirty percent surcharge. The district court affirmed the decision of the associate district court. Wolford filed a petition for discretionary appeal, which this court granted.

II. Issues.

This discretionary appeal involves two issues: (1) whether a violation of Iowa Code section 558.46 constitutes a public offense punishable through criminal prosecution, and (2) whether execution of the second contract extinguished Wolford's statutory obligation to record the original contract.

III. Scope of Review.

Our review is for correction of errors at law because Wolford's contentions raise a question of statutory interpretation. State v. Kress, 636 N.W.2d 12, 17 (Iowa 2001); State v. Ceron, 573 N.W.2d 587, 589 (Iowa 1997).

IV. Is the Violation of Iowa Code Section 558.46 a Public Offense Punishable Through Criminal Prosecution?

There are no common-law crimes in this state. State v. Campbell, 217 Iowa 848, 853, 251 N.W. 717, 719 (1933). The legislature defines criminal acts by statute. State v. Di Paglia, 247 Iowa 79, 84, 71 N.W.2d 601, 604 (1955). It is not essential for a criminal statute to include language that the violation of the statute constitutes a misdemeanor or felony. Bopp v. Clark, 165 Iowa 697, 701, 147 N.W. 172, 174 (1914). The legislature has criminalized affirmative acts. See, e.g., Iowa Code § 707.1 (criminalizing murder as killing another with malice aforethought); id. § 714.1(1) (criminalizing theft as taking possession of another's property with the intent to deprive the other thereof); id. § 716.1 (criminalizing criminal mischief as intentionally damaging property by one who has no right to do so). The legislature has also criminalized omissions. See, e.g., id. § 422.25(5) (criminalizing the failure to file a tax return as a fraudulent practice); id. § 692A.7 (criminalizing the failure to register as a sex offender). The penalty for a criminal act may be incarceration. See, e.g., id. § 902.1 (stating the penalty for a class "A" felony is life in prison). The penalty may only be a fine. See, e.g., id. § 805.8 (listing scheduled fines for motor vehicle violations). In some instances, the penalty may include both incarceration and a fine. See, e.g., id. § 902.9(4) (stating the penalty for a class "C" felony includes confinement and a fine). The fine may be in a fixed amount for the specified violation. See, e.g., id. § 805.8(2)(a) (requiring a twenty dollar fine for certain parking violations). For other violations, the fine may be a per diem amount for each day the violation persists. See, e.g., id. § 455B.146A (stating knowingly violating a provision of division II of chapter 455B is an aggravated misdemeanor punishable by a fine of not more than ten thousand dollars for each day of violation). In other words, the legislature can draft a criminal statute in any form. It need not use any special language to criminalize an act. It may criminalize commissions or omissions and provide for a variety of penalties for a violation of a criminal statute.

To decide whether a violation of Iowa Code section 558.46 is a public offense punishable through a criminal prosecution, we must determine the legislative intent when the legislature adopted it. See Clinton Cmty. Sch. Dist. v. Anderson, 322 N.W.2d 73, 75-76 (Iowa 1982). "We determine legislative intent from the words chosen by the legislature, not what it should or might have said." Auen v. Alcoholic Beverages Div., 679 N.W.2d 586, 590 (Iowa 2004).

Iowa Code section 558.46 provides in relevant part:

1. Every real estate installment sales contract transferring an interest in residential property shall be recorded by the contract seller with the county recorder in the county in which the real estate is situated not later than one hundred eighty days from the date the contract was signed by the contract seller and contract purchaser.

2. Failure to record a real estate contract required to be recorded by this section by the contract seller within the specified time limit is punishable by a fine not to exceed one hundred dollars per day for each day of violation. The county recorder shall record a real estate contract presented for recording even though not presented within one hundred eighty days of the signing of the contract. The county recorder shall forward to the county attorney a copy of each real estate contract recorded more than one hundred eighty days from the date the contract was signed by the contract seller and contract purchaser. The county attorney shall initiate action in the district court to enforce the provisions of this section. Fines collected pursuant to this subsection shall be deposited in the general fund of the county.

Iowa Code § 558.46(1), (2) (2003) (emphasis added).

By the legislature's use of the language "punishable by a fine" in section 558.46(2), we believe the legislature intended a violation of section 558.46(1) to be a criminal act. In the absence of a legislative definition, we give words their plain and ordinary meaning. Lauridsen v. City of Okoboji Bd. of Adjustment, 554 N.W.2d 541, 544 (Iowa 1996). The dictionary defines a "fine" as "2a: a sum formerly paid as compensation or for exemption from punishment but now imposed as punishment for a crime — distinguished from forfeiture and penalty." Webster's Third New International Dictionary 852 (unabr. ed. 2002). Ordinary legal phraseology considers a "fine" as

pecuniary punishment which may be legally imposed or assessed only by a lawful tribunal in a case wherein it has jurisdiction, properly invoked, of the offense charged and of the person of the accused. It is the sentence pronounced by the court for the violation of a criminal law, the amount of which may be fixed by law or left in the discretion of the court.

Marquart v. Maucker, 215 N.W.2d 278, 282 (Iowa 1974). Finally, the legislature defines a "public offense" as "that which is prohibited by statute and is punishable by fine or imprisonment." Iowa Code § 701.2 (emphasis added). These definitions indicate the legislature intended to make a violation of section 558.46 a public offense punishable through criminal prosecution when it used the phrase "punishable by a fine."

Additionally, the legislature expresses its intent by omission. N. Iowa Steel Co. v. Staley, 253 Iowa 355, 357, 112 N.W.2d 364, 365 (1961). The Code is replete with statutes specifically labeling the violation of a statute as a "civil fine" or "civil penalty." See, e.g., Iowa Code § 9H.4(1...