ESTATE OF TOMMY RAY LYON, by and through RONDA LYON, Personal Representative, and RONDA LYON, Individually, Plaintiffs-Appellants, vs. RODNEY HEEMSTRA, Defendant-Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 9-105 / 08-0934
Filed June 17, 2009
ESTATE OF TOMMY RAY LYON, by
and through RONDA LYON, Personal
Representative, and RONDA LYON, Individually,
Plaintiffs-Appellants,
vs.
RODNEY HEEMSTRA,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Warren County, Michael Huppert,
Judge.
The plaintiffs appeal the district court’s order regarding cash bail.
AFFIRMED.
Ron D. Danks and Phillip H. Myers of Myers, Myers, Danks & Smith,
Pleasantville, and Donald Beattie of Beattie Law Firm, P.C., Des Moines, for
appellants.
Joel Baxter of Beverly Wild Law Office, P.C., Guthrie Center, Joel Yunek
of Yunek Law Firm, P.L.C., Mason City, David Richter, Council Bluffs, and
Joseph Hrvol of Joseph Hrvol, P.C., Council Bluffs, for appellee.
2
Stanley Thompson and Deborah M. Tharnish of Davis, Brown, Koehn,
Shors & Roberts, P.C., Des Moines, and Jeffrey Bump of Bump & Bump, Panora,
for intervenor-appellee, Guthrie County State Bank.
Stephen Hardy and Allison J. Doherty of Grefe & Sidney, P.L.C., Des
Moines, for intervenor-appellee, Cool Acres, L.L.C.
Bruce Green of Willson & Pechacek, P.L.C., Council Bluffs, for
intervenors, Diane and Kelly Clevenger.
Ernest Kersten of Law Offices of Schnurr, Fitzgerald & Kersten, Fort
Dodge, for intervenors Marilyn and Neal Heemstra.
Thomas J. Miller, Attorney General and Martha Boesen, Assistant
Attorney General, for intervenor, State of Iowa.
Bryan Tingle, Warren County Attorney, for intervenor, Warren County,
Iowa.
Heard by Sackett, C.J., and Vogel and Miller, JJ.
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VOGEL, J.
I. Background Facts and Proceedings
On January 13, 2003, Rodney Heemstra shot and killed Tommy Lyon.
Subsequently, Heemstra was charged with first-degree murder in violation of
Iowa Code sections 707.1 and 707.2 (2003), which a jury convicted him of in
October 2003.
Lyon’s widow, Ronda Lyon, and the Estate of Lyon (collectively the
Estate) filed a wrongful death suit. On December 29, 2003, the district court
entered partial summary judgment in favor of the Estate on the issue of liability
as a result of Heemstra’s first-degree murder conviction. A trial was held on
damages.
On February 3, 2006, the Estate secured a judgment against
Heemstra for $8,913,431.44.
Heemstra appealed his first-degree murder conviction.
On August 25,
2006, our supreme court reversed Heemstra’s first-degree murder conviction and
remanded for a new trial. State v. Heemstra, 721 N.W.2d 549, 558 (Iowa 2006).
On October 31, 2006, while awaiting retrial, Heemstra was released from jail
after Joel Baxter, who was Heemstra’s court-appointed attorney at the time,
posted a $1,000,000 cash bail. The checks he posted the bail with were drawn
on the trust account of the Beverly Wild Law Firm, P.C. with funds secured from
Guthrie County State Bank.
On April 30, 2007, following a second trial, a jury convicted Heemstra of
voluntary manslaughter in violation of Iowa Code section 707.4. On May 11,
2007, the district court sentenced Heemstra to ten years in prison and ordered
Heemstra to pay a fine, surcharge, and court costs. Additionally, Heemstra was
4
ordered to pay restitution, which included restitution in the amount of $150,000 to
the Estate pursuant to Iowa Code section 910.3B.
As for the cash bail, the
district court ordered that it not be immediately released.1
Prior to sentencing, the Estate had initiated proceedings to garnish the
cash bail based upon the February 3, 2006 judgment. Motions to intervene and
to quash the garnishment were filed by Guthrie County State Bank, Cool Acres,
L.L.C., Diane and Kelly Clevenger, and Marilyn J. and Wendel Neil Heemstra,
individually and as trustees of the Heemstra Revocable Trust (collectively
intervenors).2
On July 10, 2007, the district court granted the motions to
intervene and denied the motions to quash the garnishment finding that Guthrie
County State Bank had not proven ownership of the cash bail. On July 11, 2007,
an order condemning funds for the cash bail was entered. On July 18, 2007, the
district court entered an order directing the bail proceeds to be distributed in the
following order of priority: (1) court costs in the criminal and civil proceedings; (2)
payment of the $150,000 of restitution to the Estate as provided in the sentencing
order; (3) the civil judgment.
On October 18, 2007, the supreme court vacated the December 29, 2003
partial motion for summary judgment which had been based upon Heemstra’s
first-degree murder conviction and consequently, vacated the February 3, 2006
1
In the sentencing order, the district court ordered if the court in the civil matter
determines the cash bail was posted by Heemstra, then all costs, restitution, fines, and
surcharges shall be paid prior to disbursing any remaining amount. If the civil court
determines the cash bail was posted by a party other than the defendant, then the civil
court’s order shall take precedent and the bond shall be released.
2
Diane and Kelly Clevenger are Rodney Heemstra’s sister and brother-in-law, who are
also owners of Cool Acres. Marilyn and Wendel Heemstra are Rodney Heemstra’s
parents. The State also filed a motion to intervene, but later abandoned its application.
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civil judgment entered against Heemstra. The wrongful death suit was remanded
to the district court for a new trial.
On December 6, 2007, the supreme court ruled on motions to set aside
the district court’s July 10, 11, and 18, 2007 orders. It noted that the garnishment
orders were based on the wrongful-death judgment, which subsequently had
been vacated by the court’s October 18, 2007 order. Thus, the supreme court
set aside the July 10, 11, and 18, 2007 orders. The matter was remanded to the
district court to hold a hearing and enter appropriate orders with respect to: (1)
the recovery of any condemned funds that were previously disbursed; and (2) the
disposition of the remaining funds.
On April 28, 2008, following a hearing, the district court found that the
cash bail was not owned by Heemstra.
Rather, the various intervenors had
entered into a loan agreement, which was secured by mortgages on various
parcels of land, with Guthrie County State Bank. As a result of this transaction,
Guthrie County State Bank advanced $1,000,000, which was then deposited in
the trust account of Wild Law Office. The $1,000,000 cash bail was posted with
checks drawn from the trust account of the Wild Law Office. Further, there was
“no evidence to suggest that the defendant ever owned or held any interest in the
funds posted for bail,” except for the involvement of the Wild Law Firm that was
currently representing the defendant and an erroneous indication in the clerk’s
records indicating that the defendant was the owner of the funds. Thus, the
district court ordered that the funds be returned to the Wild Law Firm’s trust
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account and cited Iowa Code section 811.8(2) (providing for the return of funds
posted for bail “to the person who deposited the same”). The Estate appeals.3
II. Analysis
The Estate asserts that the district court erred in determining that the cash
bail was not subject to garnishment for court-ordered restitution.4 Our review is
for correction of errors at law. Iowa R. App. P. 6.4. The district court’s findings of
fact are binding if supported by substantial evidence. Iowa R. App. P. 6.14(6)(a).
First, the Estate asserts that court costs and fines, including restitution
ordered pursuant to Iowa Code section 910.3B, may be deducted from cash bail
regardless of the source of the cash bail because one of the purposes of bail is to
ensure court costs and fines are satisfied. See State v. Izzolena, 609 N.W.2d
541, 549 (Iowa 2000) (stating that restitution ordered pursuant to 910.3B is a fine
for constitutional purposes). However, the primary purpose of bail is to assure
the defendant’s appearance in court.
State v. Briggs, 666 N.W.2d 573, 582
(Iowa 2003). Prior to 1978, the Iowa Code expressly provided that cash bail was
subject to deduction for court costs and fines assessed against the defendant.
3
The district court initially ordered that the funds remaining after court costs were paid
were to be paid to the Estate. Subsequently, the judgment based upon the wrongful
death suit was vacated and remanded for a new trial, which was pending at the time this
appeal was filed. Thus, the only funds at issue on appeal are the $150,000 in restitution
ordered pursuant to Iowa Code section 910.3B.
4
The Estate also asserts that this court should not give the customary deference to the
evidentiary evaluation of Judge Huppert as he was “thrust into very complex litigation”
and “only provided two of the six volumes of materials in this case.” However, Judge
Huppert noted that he had reviewed the transcript from the June 15, 2007 hearing, which
resulted in the July 10, 2007 order. As the issue on appeal is much narrower than
Plaintiffs assert, and Judge Huppert was provided the essential record to make his
findings of fact and conclusions of law, we find this argument is without merit.
Furthermore, the Estate does not assert how this claim is preserved and we doubt that it
is as the Estate failed to file a motion to amend or enlarge pursuant to Iowa Rule of Civil
Procedure 1.904. See Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002) (stating we
will not address an issue raised for the first time on appeal).
7
Iowa Code § 765.4 (1975); State v. Schultz, 245 N.W.2d 316, 318 (Iowa 1976)
(holding that cash bail deposited by a third party was subject to the statutory
deduction for court costs and fines); see 8 C.J.S. Bail § 146, at 192 (2008) (“The
authority of a court to apply cash bail to the payment of court costs or a fine
imposed on the accused depends wholly on statute, since the court has no
inherent power to do so.”). Our supreme court further explained that based upon
the statutory authority, court costs and fines could be deducted regardless of
whether the cash bail was posted by the defendant or a third party. Schultz, 245
N.W.2d at 318; see also State v. Friend, 212 Iowa 136, 139, 236 N.W. 20, 22
(1931) (stating that cash bail is deemed to belong to the defendant so far as the
rights of the State are affected and when the demands of the State have been
met then the rights of third parties become material); State v. Hart, 209 Iowa 119,
122-23, 227 N.W. 650, 651-52 (1929) (holding that cash bail deposited by a third
party shall be available to pay any fine or cost assessed against the defendant).
However, cash bail deposited by a third party did not become property of the
defendant and once court costs and fines were deducted, the remaining funds
could not be subject to garnishment by the defendant’s judgment creditors. See
Simmons v. Beeson, 201 Iowa 144, 146, 206 N.W. 667, 668 (1926) (“It is well
settled that money may be furnished by a third person and deposited in lieu of
bail to secure the release of one held in custody, and that, as between the
depositor and the defendant or his creditors, the ordinary rules of property
obtain.”); Wright & Taylor v. Dougherty, 138 Iowa 195, 198, 115 N.W. 908, 90809 (1908) (holding that cash bail deposited by a third party was not subject to
garnishment by a creditor of the defendant).
8
Effective January 1, 1978, Iowa Code chapter 765 was repealed and
replaced with Iowa Code chapter 811, which does not authorize the deduction of
court costs and fines from cash bail. See 1979 Op. Iowa Att’y Gen. 121 (“[C]ourt
costs and fines cannot be deducted from a cash bond posted by a defendant or
third party, irrespective of whether the costs were incurred at trial or upon
appeal.”); see also Iowa Code ch. 811 (2005) (omitting a provision authorizing
court costs and fines to be deducted from cash bail).
As such, there is no
statutory authority for court costs and fines to be deducted from cash bail
deposited by a third party. Rather, Iowa Code section 811.8(2) explicitly provides
that cash bail shall be returned to the person who posted it. Although the Estate
cites to two other states in support of their argument, statutory authority in those
states expressly provides for the deduction of court costs and fines from cash
bail, as our state did prior to 1978. See Fla. Stat. § 903.286 (2009) (providing
that fines, fees, costs, and restitution shall be deducted from cash bail prior to
refunding the surplus to the person posting the cash deposit); Idaho Code § 192908 (2009) (same). Therefore, we conclude that court costs and fines may not
be deducted from cash bail posted by a third party.
Next, the Estate asserts that even if Iowa Code section 811.8(2) requires
cash bail to be returned to the owner, the evidence demonstrated that the cash
bail belonged to Heemstra and was subject to garnishment. The Estate does not
challenge the district court’s finding that the intervenors entered into a loan
agreement with Guthrie County State Bank, which then advanced the funds to
the Beverly Wild Law Firm, for the express purpose of posting the cash bail.
Rather, the Estate argues that prior to the first criminal trial, Heemstra attempted
9
to divest himself of assets and his family members helped him to do so.
It
appears the Estate is essentially seeking restitution, based upon the allegation of
Heemstra’s fraudulent divestment of funds. However, we are not sitting in equity
to give the Estate restitution for the past transactions between Heemstra and his
family members. The narrow issue on this appeal is who deposited the cash bail.
The record clearly supports the district court’s finding that the funds were paid
from the Beverly Wild Law Firm’s trust account, as escrow agent for the Guthrie
County State Bank. Therefore, we affirm.
AFFIRMED.
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