STATE OF IOWA, Plaintiff-Appellee, vs. MITZI E. FENZLOFF, Defendant-Appellant.
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IN THE COURT OF APPEALS OF IOWA
No. 9-636 / 08-1738
Filed September 17, 2009
STATE OF IOWA,
Plaintiff-Appellee,
vs.
MITZI E. FENZLOFF,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Franklin County, John S. Mackey,
Judge.
Mitzi Fenzloff appeals from her convictions for fraudulent practices and
first-degree theft. AFFIRMED.
Mark C. Smith, State Appellate Defender, and Stephan J. Japuntich,
Assistant Appellate Defender, for appellant.
Thomas J. Miller, Attorney General, Martha E. Trout, Assistant Attorney
General, Brent Symens, County Attorney, and Denise Timmins and Chantelle
Smith, Special Prosecutors, for appellee.
Considered by Eisenhauer, P.J., Mansfield, J., and Zimmer, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2009).
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ZIMMER, S.J.
Mitzi Fenzloff appeals after being convicted of fraudulent practices and
first-degree theft following a bench trial. She contends there was insufficient
evidence to support her conviction for first-degree theft by misappropriation. She
also contends her counsel was ineffective.
We affirm her conviction and
preserve her claim of ineffective assistance for possible postconviction
proceedings.
I. Background Facts and Proceedings. Mitzi Fenzloff and her husband,
Albert Fenzloff, owned Sunnyside Memory Gardens, a perpetual care cemetery.
They applied for the permits necessary to sell pre-need funeral services and
merchandise but were denied due to Mitzi’s criminal history and concerns about
the insolvency of their business. Despite the fact that they did not have the
appropriate permits, the Fenzloffs sold pre-need funeral services and
merchandise from November 2003 through December 2004.
After receiving a complaint about Sunnyside Memory Gardens, the Iowa
Insurance Division’s Director of Regulated Industries conducted an investigation.
On March 20, 2006, the State charged Mitzi and Albert with ongoing criminal
conduct, fraudulent practice in the first degree, and theft in the first degree by
misappropriation.
The three-count trial information was later amended.
The
State dismissed the ongoing criminal conduct charge and reduced the firstdegree fraudulent practice charge to second-degree fraudulent practice. The
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first-degree theft charge was not affected by the amendment. The defendant
waived her right to a jury trial and opted for a trial on the minutes of testimony.1
Following a trial on the minutes, the district court found the defendant
guilty of second-degree fraudulent practices and first-degree theft. The court
sentenced her to a term of not more than five years for second-degree fraudulent
practices (Count I) and ten years for first-degree theft (Count II). The sentences
were ordered to run concurrently. In this appeal, Fenzloff contends the district
court erred in convicting her of first-degree theft.
II. Sufficiency of the Evidence. Fenzloff contends the evidence is not
sufficient to support her conviction for theft by misappropriation.
We review
challenges to the sufficiency of the evidence to support a conviction for errors at
law. State v. Dalton, 674 N.W.2d 111, 116 (Iowa 2004).
The district court's finding of guilt is binding upon us unless we find
there was not substantial evidence in the record to support such a
finding. In determining whether there was substantial evidence, we
review the record evidence in the light most favorable to the State.
Substantial evidence means such evidence as could convince a
rational trier of fact that the defendant is guilty beyond a reasonable
doubt.
Id. (quoting State v. Sutton, 636 N.W.2d 107, 110 (Iowa 2001)). We consider all
the record evidence, not just the evidence supporting guilt. Id.
The State alleged that the defendant misappropriated the funds she
collected from various customers for pre-need funeral services while operating
Sunnyside Memory Gardens. Under Iowa Code section 714.1 (2005), a person
commits theft by misappropriation if he or she
1
This appeal concerns only Mitzi Fenzloff.
“Fenzloff” refer to Mitzi Fenzloff.
All references to the “defendant” or to
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[m]isappropriates property which the person has in trust, or
property of another which the person has in the person's
possession or control, whether such possession or control is lawful
or unlawful, by using or disposing of it in a manner which is
inconsistent with or a denial of the trust or of the owner's rights in
such property, or conceals found property, or appropriates such
property to the person's own use, when the owner of such property
is known to the person.
The theft of property exceeding $10,000 is a class “C” felony. Iowa Code §
714.1(2).
Fenzloff argues the record fails to demonstrate that she used or disposed
of the property of another in a manner inconsistent with the owner’s rights. She
also argues there is no evidence any misappropriated money was in excess of
$10,000 in value as required in section 714.1(2).
In its ruling, the district court made the following findings:
The defendant sold pre-need funeral services to several citizens
not only without the required permits, but also without depositing
80% of the customer’s funds into trust accounts as required under
Iowa Code section 523A.201. The minutes of testimony further
disclose that all funds received by the defendant pursuant to the
pre-need funeral service contracts were either deposited in the
Sunnyside Gardens business account or defendant’s personal
account. The minutes, therefore, make clear by circumstantial
evidence that no funds required to be held in trust were placed in
any trusting alternative allowed under subchapter part IV of chapter
523A. The minutes of testimony further reflect that only $980.70 of
over $51,000 received by defendant were placed into trust and of
those funds, the pre-need contracts were entered into prior to
defendant taking over the operations of Sunnyside Memorial
Gardens. Due to its insolvency, Sunnyside Memorial Gardens was
eventually placed into full receivership with the State. The minutes
of testimony further reflect that the defendant was in dire financial
straits personally and professionally during the time she operated
the business. According to State’s Exhibit 3, $56,132.25 paid to
defendant and her husband pursuant to the pre-need funeral
services contracts were withdrawn by defendant and her husband
without holding the same in trust for the benefit of the contract
holder.
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Substantial evidence supports these findings.
The district court concluded Mitzi misappropriated over $10,000 in preneed funeral services funds she was entrusted with. Upon our review of the
record, we find no reason to disagree with this conclusion.
The minutes of
testimony show that more than $50,000 in the pre-need funeral service funds
Fenzloff collected were deposited into either her personal account or the
business account.
The funds deposited into the business account were
withdrawn immediately. None of the funds were placed in trust as required by
law, which was in derogation of the owners’ rights.2
We believe the evidence is sufficient to allow a rational trier of fact to
conclude beyond a reasonable doubt that Fenzloff misappropriated money paid
by citizens for pre-need funeral services in an amount in excess of $10,000.
When viewed in the light most favorable to the State, the record supports the
conclusion that Fenzloff converted the funds she received to her own use instead
of using them for their intended purpose. Fenzloff acted in a manner that was
plainly inconsistent with the owners’ rights in such property. Because substantial
evidence supports Fenzloff’s conviction for first-degree theft by misappropriation,
we reject her challenge to the sufficiency of the evidence.
III. Ineffective Assistance of Counsel.
Fenzloff next contends her
counsel was ineffective in failing to object to the admission of State’s Exhibit 3.
She argues the exhibit in question—a list of customers, the amount of money
they paid for the pre-need funeral services, and the amount of money she placed
2
Defendant and her husband had two trust accounts at a bank in Charles City. After
2003, no funds were deposited into either account except by the previous owner of
Sunnyside, and that amount totaled $980.70.
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in trust—was inadmissible because she was not given proper notice of the
exhibit.3 She also contends the exhibit was inadmissible hearsay.
We review this claim de novo. State v. Bearse, 748 N.W.2d 211, 214
(Iowa 2008). A successful ineffective-assistance-of-counsel claim requires proof
by a preponderance of the evidence that (1) counsel failed to perform an
essential duty and (2) prejudice resulted. Id. at 214-15. In analyzing the first
prong of the test, we presume counsel acted competently. Id. at 215. Counsel
cannot fail to perform an essential duty by merely failing to make a meritless
objection. Id. In regard to the second prong of the test, Fenzloff must show a
reasonable probability the result of the proceeding would have been different had
counsel objected. State v. Cromer, 765 N.W.2d 1, 11 (Iowa 2009).
Ordinarily, we preserve ineffective assistance of counsel claims for
postconviction proceedings to enable full development of the record and to afford
trial counsel an opportunity to respond to the claims that have been made.
Berryhill v. State, 603 N.W.2d 243, 245 (Iowa 1999). We may resolve the claim
of ineffective assistance of counsel on direct appeal if we find the record is
sufficient to do so. State v. Hildebrant, 405 N.W.2d 839, 840-41 (Iowa 1987).
Upon review of the record here, we conclude the defendant’s claim should be
preserved.
In this case, defense counsel may well have had tactical reasons for
electing not to object to Exhibit 3. For example, the record reveals that the
parties engaged in negotiations prior to trial resulting in the dismissal of one
3
Defense counsel became aware of Exhibit 3 on the morning of trial. He objected to
editorial comments contained in the title of the exhibit and in one of the columns. The
trial court redacted the comments and the exhibit was received without further objection.
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felony charge, the reduction of another, and a bench trial on the minutes of
testimony. It is possible that counsel chose not to object to Exhibit 3 in order
preserve an agreement which benefited his client. The State may not have been
obligated to fulfill this agreement if defense counsel objected to Exhibit 3 in its
entirety. See State v. Coil, 264 N.W.2d 293, 296 (Iowa 1978) (holding that
because counsel may “have had a good reason for each step he took or failed to
take,” the issue of ineffective counsel should be raised in an application for
postconviction relief where a hearing may be had and counsel given the
opportunity to respond to defendant’s charges). We preserve the defendant’s
claim for possible postconviction relief proceedings.
Because substantial evidence supports the district court’s findings, we
affirm the defendant’s conviction and sentence. We preserve Fenzloff’s claim of
ineffective assistance of counsel for possible postconviction relief proceedings.
AFFIRMED.
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