Dean Thorson v. Thomas Hansen and Jeanett Hansen

• Court: Court of Appeals of Iowa
• Decided: September 11, 2019
• Docket: 18-1306
• Status: Published

Opinion

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). 2

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 3

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. 4

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 5

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. 6

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 7

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. 8

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. 9

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. 10

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).

5 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. 11

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.