Dean Thorson v. Thomas Hansen and Jeanett Hansen ( 2019 )

IN THE COURT OF APPEALS OF IOWA
No. 18-1306
Filed September 11, 2019
DEAN THORSON,
Plaintiff-Appellee,
vs.
THOMAS HANSEN and JEANETT HANSEN,
Defendant-Appellants.
________________________________________________________________
Appeal from the Iowa District Court for Winneshiek County, Linda M.
Fangman, Judge.
Defendants appeal an order and judgment against them. AFFIRMED.
Erik W. Fern of Berry Law Firm, Lincoln, Nebraska, and Andrew J. Casper
of Putnam & Thompson Law Office, P.L.L.C., Decorah, for appellants.
James A. Garrett of James Garrett Law Office, Waukon, for appellee.
Considered by Mullins, P.J., Bower, J., and Vogel, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2019).
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BOWER, Judge.
Thomas and Jeanett Hansen appeal a trial court order finding in favor of
Dean Thorson in a conversion and breach-of-contract action concerning a hay crop
and farm-rental agreement. The Hansens claim the trial court erred in denying
their motion for new trial because Thorson made knowing material
misrepresentations during trial that prejudiced the Hansens and by making a
mistake of fact and law as to the date of conversion. We find the court did not
abuse its discretion in denying the motion for new trial and did not make a mistake
of fact or law. We affirm.
I. Background Facts & Proceedings
The Hansens own a farm in northeast Iowa. Thorson has worked in various
capacities on the Hansens’ farm since the 1990s. Until 2009, Thorson primarily
cash rented the Hansens’ land. Beginning in 2009, Thorson leased agricultural
land from the Hansens under a variety of oral rental agreements. The fields leased
or otherwise farmed through the parties’ association were commonly known as the
North 40, South 31, East 40, and West 16. With respect to the acres farmed under
crop-share agreements, where the parties divided the crop after harvest instead of
Thorson paying rent, Thorson was obligated to apply fertilizer and nutrients to
maintain the soil for the future. The acres subject to custom farm agreements—
where the Hansens paid Thorson for his labor and retained the entire harvested
crop—obligated the Hansens to fertilize the land.
In 2009, the Hansens began converting their farm to produce organic crops.
Until 2011, the Hansens had a contract to grow organic peas for Sno Pac Foods
(Sno Pac). After a conflict between the Hansens and Sno Pac, Thorson included
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some of the Hansens’ land in his own contracts with Sno Pac. Thorson took over
the organic-certification work for the Hansens’ land.
In 2012, the parties had a crop-share agreement for hay grown in the East
40 field. After the second1 cutting and baling of hay, Thorson left the large round
bales of hay on the Hansens’ land. The Hansens moved all the bales from the
field to a shed, though the number of bales was in dispute. Thorson was told he
could get them when he wanted. In November, he asked for his half of the bales
from the second cutting; the Hansens advised Thorson they were keeping the
bales. Thorson asked again for the bales in late April 2013 to feed his cattle and
was again refused. Thorson did not purchase hay but instead resorted to foraging
his cattle on an already-planted field. In the summer of 2013, the Hansens and
Thorson had an argument about the 2012 hay with Thorson indicating he
considered it stolen. Although the parties discussed Thorson recouping the hay
from the 2013 or 2014 crops, Thorson did not get his hay.
For the 2015 growing season, the parties contracted for hay and an oat-hay
mixture to be grown and harvested on the North 40 and East 40 fields, with the
crops to be divided evenly. A crop-share arrangement for organic corn was agreed
to on the South 31. Finally, the Hansens hired Thorson to prep the West 16 to
grow organic peas for Sno Pac. The parties knew Sno Pac might not accept the
Hansens’ land in Thorson’s contract for 2015. Thorson testified they reached a
contingent agreement by which he could seed the field with grass and oats for
1
Thorson testified he had three cuttings of hay on the East 40 in 2012. He received his
half portion of the first and third cuttings. The first cutting has the biggest yield and highest
nutrition, but Thorson testified the second cutting is more digestible.
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pasturing because he had applied nutrients to the field; Jeanett testified no
agreement was reached because she had not decided what to do with the field if
no peas were planted.
In the spring of 2015, the relationship between Thorson and the Hansens
imploded. Sno Pac’s internal policies had changed for the 2015 planting, requiring
the company to contract directly with property owners. Sno Pac did not opt to
contract with the Hansens but maintained its contract with Thorson. Thorson knew
by March 11 when he signed his own contract with Sno Pac that Sno Pac would
not include the Hansens’ land, and he left the Hansens a voice mail informing them
their land was not included in his contract. In April, Thorson seeded the East 40
with oat hay. Around April 19, Thomas informed Thorson during a phone call that
they had found someone else to plant the West 16 and cut hay and spread manure
on the North 40. Thorson argued that was not the deal they had made and, after
Thomas said they were contracting with the other farmer, Thorson said “Fine, that’s
it then.” Thorson considered this telephone call to constitute the Hansens’
termination of their contracts as to all the fields.
A couple days after the phone call, Thorson sent a document to the
Hansens he considered to be a bill for what the Hansens owed him. The document
listed the inputs for fertilizer and seed applied to the Hansens’ fields and listed
seventy bales of hay valued at $300 per bale. The Hansens repeatedly called and
sent letters in May and June to Thorson asking if he was terminating their contracts
or if he intended to continue to work on their farm. Thorson did not answer the ten
phone calls or open the first three letters, only opening the final letter on June 13.
In the June 13 letter, the Hansens stated Thorson’s failure to answer previous
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inquiries as requested was deemed to be a termination of their contract and told
Thorson not to enter their property “at any time for any reason.”
In March 2016, Thorson filed suit against the Hansens, claiming conversion
for the 2012 hay and breach of contract relating to the leasing arrangement.
Thorson claimed damages for the value of the hay converted2 and the cost of the
fertilizer, nutrients, and seed the Hansens benefited from due to the lease
termination. Thorson requested a total recovery of $36,171.22. The Hansens
answered, denying the conversion claim and claiming Thorson unilaterally
terminated the rental agreement. The Hansens also counterclaimed, asserting
Thorson breached the contract to prepare land for organic certification, to plant
organic corn, and to plant and harvest hay. The Hansens claimed damages of
$26,350.00, plus damages for lost hay.
In May 2017, the Hansens filed a motion for partial summary judgment.
They admitted to owing Thorson forty bales of hay and proposed a rate of $127.80
per bale of hay as valued on the August 2012 hay market report.
On February 14 and March 23, 2018, the matter was tried to the court. The
court heard testimony from Thorson, both Hansens, a neighboring farmer who has
farmed the Hansens’ land since 2015, and the county sheriff. The court entered
judgment on April 19 in favor of Thorson, awarding him $30,518.40 for converted
hay and input costs. The court dismissed the Hansens’ counterclaims.
The Hansens filed a motion for new trial and a motion to amend and enlarge,
in part alleging Thorson knowingly offered false evidence at trial. The Hansens
2
In the petition, Thorson claimed seventy bales of hay converted at a value of $300 per
bale.
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supplemented the motions with information obtained after trial relating to yields
and the value of the hay. A hearing was held on the motions on June 27. The
court denied the motion for a new trial and issued an order with additional findings
on July 20. In both the original ruling and the amended order, the district court
specifically made credibility findings that Thorson was credible and the Hansens
were not.
The Hansens appeal, claiming the district court abused its discretion in
denying their motion for a new trial, determining the date of civil conversion, and
finding substantial evidence supported a damages award.
II. Standard of Review
If based on discretionary grounds, a district court’s denial of a new trial is
reviewed for abuse of discretion. WSH Props., L.L.C. v. Daniels, 761 N.W.2d 45,
49 (Iowa 2008). An abuse of discretion occurs “when the district court exercises
its discretion on grounds or for reasons clearly untenable or to an extent clearly
unreasonable.” Channon v. United Parcel Serv., Inc., 629 N.W.2d 835, 859 (Iowa
2001) (citation omitted). “A ground or reason is untenable when it is not supported
by substantial evidence or when it is based on an erroneous application of the law.”
In re Gianforte, 773 N.W.2d 540, 544 (Iowa 2009) (citation omitted). “The district
court’s findings of fact have the force of a special verdict and are binding on us if
supported by substantial evidence.” Chrysler Fin. Co. v. Bergstrom, 703 N.W.2d
415, 418 (Iowa 2005); see also Iowa R. App. P. 6.904(3)(a) (“Findings of fact in a
law action . . . are binding upon the appellate court if supported by substantial
evidence.”). “Evidence is substantial if a reasonable person would accept it as
adequate to reach a conclusion.” Chrysler Fin. Co., 703 N.W.2d at 418. Assessing
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the credibility of witnesses is the responsibility of the fact finder. Smidt v. Porter,
695 N.W.2d 9, 22 (Iowa 2005).
III. Analysis
First, the Hansens request a new trial alleging Thorson made “materially
false statements” and perjured himself to the court, arguing that in a credibility-
dependent case prejudice is clear. The court based its valuation of the converted
hay on the value of hay as proposed by Thorson; the Hansens argue the hay was
not certified organic in 2012 and Thorson knowingly misled the court. Second, the
Hansens claim the trial court committed an error of law and mistake of fact in its
determination of the date of civil conversion.
A. New trial. Iowa Rule of Civil Procedure 1.1004 delineates the
grounds upon which a court may grant a new trial. These grounds include
misconduct of the prevailing party, newly discovered evidence, and errors of law
during the proceedings or mistakes of fact by the court. Iowa R. Civ. P. 1.1004(2),
(7), (8). “Trial courts have broad but not unlimited discretion in ruling on motions
for new trials. We do not favor motions for new trial based on newly discovered
evidence. We will not disturb the trial court’s ruling unless the evidence clearly
shows the court has abused its discretion.” Benson v. Richardson, 537 N.W.2d
748, 762 (Iowa 1995) (citations omitted).
The Hansens allege Thorson made material false statements to the court
regarding organic certification and a shooting incident. Because the district court’s
opinion was largely based on credibility findings, the Hansens claim the false
statements were clearly prejudicial and a new trial is warranted.
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Certification. The Hansens challenge whether the converted hay was
certified as organic.3 This challenge has two implications: first, the value of the
converted hay; and second, Thorson’s reliability as a witness. The Hansens argue
if Thorson is not a reliable witness as to the organic certification, he cannot be
trusted as to his other testimony, warranting a new trial.
At trial, Thorson testified the hay was organic and the field had been
chemical free since July 2011. Thomas testified the hay was not certified organic
and there was no reason to do so as both parties used the hay to feed their own
cattle, which were not certified organic.
Thorson provided a field history at trial for each of the four fields Thorson
farmed for the Hansens. The history, filled out by Thorson to file with the organic
certifier, showed the East 40 was certified as organic in 2012. The Hansens were
provided with the field history at least one week prior to the first day of trial. The
Hansens did not object to admission of the exhibit at trial. Thorson testified as to
the field history on the first day of trial, February 13.
Despite the organic nature of the fields being an issue in the case and
relevant to their ongoing farming operation, the Hansens did not request the
records for their own fields from the organic certifier prior to trial. Neither did they
seek the records following Thorson’s testimony on February 13 to use as
impeachment at the second day of trial on March 23. Instead, they waited until
3
Any other organic certifications do not bear on the district court’s decision. Moreover, it
appears the Hansens left any organic certification work in Thorson’s hands rather than
seeking certification on their own for their land.
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after the court’s final judgment to request the information.4 The Hansens now seek
a new trial based on the statements they claim were knowingly false, with the intent
of impeaching Thorson with evidence they obtained after trial.
While our rules allow a new trial based on newly discovered material
evidence, it has to be evidence “which could not with reasonable diligence have
been discovered and produced at the trial.” Iowa R. Civ. P. 1.1004(7). Additionally,
the new evidence must be “material and not merely cumulative or impeaching” and
“probably change the result if a new trial is granted.” Benson v. Richardson, 537
N.W.2d 748, 762 (Iowa 1995). “Verdicts should not be set aside lightly and the
court, in granting a new trial, must be sure there exists sufficient cause to support
the exercise of such discretion.” Wilkes v. Iowa State Highway Comm’n, 186
N.W.2d 604, 607 (Iowa 1971). “Every litigant is entitled to a fair trial, but only one.”
Id.The Hansens had the opportunity to challenge Thorson’s claims during trial
and failed to do so. We find the district court did not abuse its discretion in denying
the Hansens’ motion for a new trial based on impeaching evidence that could have
been produced at trial with reasonable diligence.
Shooting allegations. The Hansens make additional allegations that
Thorson materially misrepresented a shooting report. We find the Hansens’
allegations misconstrue Thorson’s testimony, are not material to the issues on
appeal, and are without merit.
4
We do not agree with the district court’s statement calling the issue of whether the hay
was organic a “red herring.” The court awarded damages of $300 per bale, not $300 per
ton, placing a premium on the hay above the conventional hay price range.
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B. Date of conversion. The date the conversion occurred is relevant
to the valuation of the converted hay. Thorson claims the conversion occurred in
April 2013—the final time he attempted to get his share of the 2012 hay. The
Hansens argue the conversion occurred either in July 2012, when they moved the
hay, or November 2012, the first time Thorson requested the hay and was denied.
The petition stated, “The defendants intentionally misappropriated or took
dominion and control over the 70 large round bales of hay owned by plaintiff in the
fall of 2012.” In its amended order, the court specifically noted the date of
conversion was a finding of fact within the court’s discretion, and it found the
conversion occurred the third and final time Thorson requested his share of the
hay crop—April 2013.5
“The essential elements of conversion are: (1) ownership by the plaintiff or
other possessory right in the plaintiff greater than that of the defendant;
(2) exercise of dominion or control over chattels by defendant inconsistent with,
and in derogation of, plaintiff’s possessory rights thereto; and (3) damage to
plaintiff.” In re Estate of Bearbower, 426 N.W.2d 392, 394 n.1 (Iowa 1988).
Conversion occurs at the time the property is taken from the owner causing
damages. See Duncan v. Ford Motor Credit, No. 17-1122, 2018 WL 3060265, at
*2 (Iowa Ct. App. June 20, 2018). “The general rule is that the measure of
damages for conversion is the fair and reasonable market value of the property at
the time of the taking.” Murray v. Conrad, 346 N.W.2d 814, 821 (Iowa 1984).
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During a hearing on the Hansens’ motion to enlarge and amend, the court specifically
noted the Hansens had not provided information for the price of hay in the fall of 2012.
The court was constrained to the exhibits provided when making its decision and found
the April 2013 prices to be the most relevant pricing information presented.
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Thorson included the specific quantity of hay and his valuation per bale in
his petition filed in 2016. At the trial in 2018, the valuation information provided to
the court included prices for August 2012, April 2013, and August 2013. Neither
party submitted pricing information for November 2012. The court found the
August 2012 hay prices submitted by the Hansens were not persuasive, as the
Hansens had not yet refused to give Thorson his share of the hay. The trial court
found the conversion did not occur until the Hansens asserted their rights to the
hay above the rights of Thorson. The district court determined the taking occurred
on the final time Thorson requested the hay bales, April 2013.
The April 2013 pricing was during the period where Thorson incurred
damages from the Hansens’ conversion of his hay. Both parties testified about
Thorson’s acquisition of cattle in 2012, to which he planned to feed the converted
hay. The district court found it “unbelievable that [Thorson] would turn down hay
which was due to him on multiple occasions” at a time he had to forage his cattle
on a planted field because he did not have enough to feed them in the spring of
2013.
At the hearing on the motion to enlarge and amend, the court expressly
noted it had to rely on the evidence presented during the original trial for valuation,
regardless of whether the conversion occurred in November or in April. The court
found the April 2013 pricing to be the most relevant of the evidence before it. We
agree with the court and find under the circumstances of this case, the court did
not make a mistake of fact or law in determining the date of conversion.
AFFIRMED.