State of Iowa vs. James Edward Rivers

IN THE SUPREME COURT OF IOWA
No. 263 / 97-1050
Filed December 23, 1998
STATE OF IOWA,
Appellee,
vs.
JAMES EDWARD RIVERS,
Appellant.
On review from the Iowa Court of Appeals.
Appeal from the Iowa District Court for Mahaska County, Richard J. Vogel, Judge.
Defendant appeals his convictions of second-degree theft, claiming insufficiency of the evidence.
DECISION OF COURT OF APPEALS AND JUDGMENT OF DISTRICT COURT AFFIRMED.
Linda Del Gallo, State Appellate Defender, and Tricia A. Johnston, Assistant State Appellate Defender,
for appellant.
Thomas J. Miller, Attorney General, Martha E. Boesen, Assistant Attorney General, and Charles A.
Stream, County Attorney, for appellee.
Considered by Harris, P.J., and Larson, Carter, Neuman, and Ternus, JJ.
TERNUS, Justice.
The defendant, James Rivers, claims that the evidence is insufficient to support his convictions of two
counts of second-degree theft and, therefore, the trial court erred in refusing to grant his motion for
judgment of acquittal. One conviction arose out of Rivers’ failure to pay a hotel bill. The other was based
on events occurring in connection with Rivers’ remodeling business when he failed to complete work for
customers who had already paid him. Although the latter conviction appears similar to the conviction this
court reversed in State v. Tovar, 580 N.W.2d 768 (Iowa 1998), based on insufficiency of the evidence, the
similarity is only superficial. We find the evidence here sufficient to support Rivers’ convictions on both
counts. Accordingly, we affirm.
I. Scope of Review.
In reviewing a denial of a motion for judgment of acquittal based on insufficiency of the evidence, we
consider the evidence in the light most favorable to the State. See State v. Walker, 574 N.W.2d 280, 284
(Iowa 1998). A finding of guilt is binding on the court “unless there is not substantial evidence in the
record to support it or such finding is clearly against the weight of the evidence.” State v. LaPointe, 418
N.W.2d 49, 51 (Iowa 1988). “Evidence is substantial if it could convince a rational fact finder that the
defendant is guilty beyond a reasonable doubt.” State v. Bayles, 551 N.W.2d 600, 608 (Iowa 1996). The
evidence “must do more than raise suspicion, speculation, or conjecture”; it must raise a fair inference of
guilt as to each essential element of the crime. LaPointe, 418 N.W.2d at 51.

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II. Background Facts and Proceedings.
Rivers was charged with second-degree arson in connection with a fire at his rental residence, see Iowa
Code §§ 712.1, .3 (1995), second-degree theft based on his failure to pay a hotel bill at the Red Carpet
Inn, see id. §§ 714.1(3), .2(2), and first-degree theft with respect to obtaining funds from customers
without completing the promised work, see id. §§ 714.1(3), .2(1). The evidence at trial, viewed in a light
most favorable to the State, revealed the following events giving rise to these charges.
Rivers was a self-employed home remodeling contractor. He ran his business out of his home in
Oskaloosa, Iowa. Between September 1995 and January 1996, Rivers contracted for at least six
remodeling jobs in the Oskaloosa area in which he took down payment money and never completed the
work. In many cases, Rivers would begin the job, reach a certain point (generally when he had done
about 50-60% of the work), request the balance or a portion of the contract payment, receive it and then,
prior to completion of the job, fail to return. On February 2, 1996, Rivers filed a chapter 13 bankruptcy
petition, his fourth bankruptcy petition in thirteen months.[1]
On the same day as the bankruptcy filing, Rivers’ rented home was severely damaged in a suspicious
fire. Rivers had rental insurance coverage and so, after the fire, an insurance adjuster contacted him at
the Traveler’s Budget Inn where he and his family were staying. The adjuster set up a $500 account at
Walmart so the Rivers family could purchase some necessities. In addition, Rivers was given a $5000
advance payment that the adjuster said was to be used for the family’s immediate expenses. (The policy
limit for additional living expenses was $5500.)
Within a few days of the advance payment, Rivers asked for additional money from the insurer. By this
time, however, the fire was being investigated as a potential arson. The adjuster refused to make a
second advance and told Rivers that no further advances would be made and any temporary living
expenses would have to be paid out of the initial $5000 advance. When the Budget Inn called the adjuster
concerning payment of Rivers’ bill, the adjuster informed the hotel that the insurer would not pay the bill,
that Rivers had been given a $5000 advance, and that the hotel would have to collect the bill from Rivers.
(There was testimony that it is customary in such situations for the insured to pay the hotel and be
reimbursed by the insurer.)
The Rivers family stayed at the Budget Inn from February 2 through February 14, 1996. Prior to leaving,
Rivers made one payment of $416 and requested that the balance of $257 be billed to the Red Cross of
Mahaska County. (The Red Cross did cover this expense.)
After the family left the Budget Inn, they moved into the Red Carpet Inn. Initially, because of the
circumstances of the fire, the hotel agreed to provide two large rooms to the Rivers family at a discounted
rate. Rivers’ wife gave the hotel a check for several nights rent. A few days later, however, Rivers showed
the hotel the insurance policy provision providing coverage for temporary living expenses; Rivers asked to
have his check returned and requested that the hotel bill the insurance company directly. Rivers and the
hotel also agreed that the insurer would be billed at the full rate, rather than the original discounted rate.
The Rivers family stayed at the Red Carpet Inn for seventeen days. They left without checking out,
without informing anyone where they were going, and without paying their bill. After several days, the
hotel decided the Rivers family was not returning; the hotel cleaned out their rooms, which still contained
clothes and a refrigerator full of food. The Red Carpet Inn submitted the bill for the Rivers’ stay to the
insurer, but the insurer refused to pay.
As noted earlier, Rivers was charged with second-degree arson, second-degree theft, and first-degree
theft. The jury acquitted Rivers of the arson charge, but found him guilty of two counts of second-degree
theft, one based on the Red Carpet Inn bill and one based on the unperformed remodeling jobs. Rivers
appealed, challenging the sufficiency of the evidence to support his convictions. The case was transferred

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to the Court of Appeals, where the convictions were affirmed. We granted Rivers’ petition for further
review.
III. Crime of Second-Degree Theft.
Rivers was convicted of theft by deception, a crime defined in Iowa Code section 714.1(3):
A person commits theft when the person does any of the following:
. . . .
3. Obtains the labor or services of another, or a transfer of possession, control, or
ownership of the property of another, or the beneficial use of property of another, by
deception.
The word “deception,” as used in section 714.1(3), has been statutorily defined. In this case, we are
concerned with only one alternative of the definition: “knowingly . . . [p]romising payment, the delivery of
goods, or other performance which the actor does not intend to perform or knows the actor will not be
able to perform.” Iowa Code § 702.9(5). Such intent or knowledge must exist at the time the defendant
makes the promise of payment, delivery, or performance. See State v. Hogrefe, 557 N.W.2d 871, 879
(Iowa 1996).
Rivers claims there was insufficient evidence that he did not intend to pay his hotel bill or perform the
promised work for his customers, or that he knew he would be unable to pay or perform. In examining the
evidence of intent in the record, we keep in mind some basic principles applicable to theft by deception.
The mere fact of nonpayment or a failure to perform will not support a finding of intent. See Iowa Code §
702.9(5) (“Failure to perform, standing alone, is not evidence that the actor did not intend to perform.”);
Hogrefe, 557 N.W.2d at 878. On the other hand, intent to deceive may be shown by circumstantial
evidence. See State v. Comes, 245 Iowa 485, 491, 62 N.W.2d 753, 756-57 (1954).
IV. Theft Conviction Based on Unpaid Hotel Bill.
Our review of the trial record reveals adequate evidence from which the jury could infer that Rivers did not
intend to pay for the hotel rooms. Although Rivers claims that he believed the insurance company would
pay his hotel bills based on his insurance coverage for additional living expenses, the adjuster testified
that he unequivocally told Rivers before Rivers registered at the Red Carpet Inn that Rivers had to pay
the hotel bill from the advance he had already been given. In fact, it was after the first hotel was informed
by the insurer that Rivers was personally responsible for the hotel expenses that Rivers moved his family
to a new, unsuspecting hotel. Once there, the family stayed for seventeen days and then left without
checking out. Moreover, their abandonment of the premises without removing all their clothes and food
left a false impression that they were coming back. From this conduct the jury could have inferred that
Rivers was attempting to delay any suspicion on the part of the hotel that they were skipping out on their
bill. Finally, Rivers left no forwarding address where the bill could be sent and he never filed a claim with
the insurance company for the Red Carpet Inn bill.
The inference of intent that can be drawn from these circumstances is validated by the theft-by-deception
statute which provides:
Where the compensation for goods and services is ordinarily paid immediately upon the
obtaining of such goods or the rendering of such services, the refusal to pay or leaving
the premises without payment or offer to pay or without having obtained from the owner
or operator the right to pay subsequent to leaving the premises gives rise to an inference
that the goods or services were obtained by deception.

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Iowa Code § 714.1(3). Not only did Rivers fail to pay the hotel bill upon leaving, as is customary, he did
not leave any forwarding address where the bill could be sent. The only evidence that he made any
arrangements for later payment is the fact that he had earlier given the hotel the name and address of his
insurance company. But the jury could have readily concluded that this information was given, not to
facilitate payment of the bill (since Rivers had been told by the insurance company that it would not pay
the bill), but rather was part of Rivers’ scheme to obtain rooms for his family without spending any of the
advance he had already received.
We conclude the evidence was sufficient to convince a rational trier of fact that Rivers rented the rooms
without any intent to pay for them. Therefore, the trial court correctly denied Rivers’ motion for judgment
of acquittal on this charge.
V. Theft Conviction Based on Business Transactions.
Rivers’ second theft conviction stems from six remodeling contracts he undertook in the Oskaloosa area
between September 1995 and January 1996. The evidence established that in each instance Rivers
received either substantial partial payment or complete payment for the job, that he completed a portion
of the work, or in one case, none at all, and that he then failed to finish the job. No refunds were made to
any of his customers. There was additional evidence that Rivers had engaged in a similar pattern of
conduct the previous year in Indianola.
Rivers argues that the State failed to prove that at the time of the down payments on the remodeling
contracts he had no intention of completing the contracts or knew that he was unable to complete them,
as required for proof of deception under section 702.9(5). We recently considered the applicability of
section 702.9(5) in similar circumstances in the Tovar case. 580 N.W.2d at 772. A brief discussion of that
case is helpful in analyzing the evidence in the case before us.
In Tovar, the defendant failed to perform two contracts for the installation of carpeting, after having
received partial payments from his customers. Id. at 769. We noted that the only factual finding made by
the trial court to support its finding of intent was that Tovar had lied to his customers as to why he wanted
the down payment checks made out to him individually rather than being payable to his business. Id. at
772. We concluded the State had proved nothing more than that Tovar had failed to perform, a fact
insufficient by itself to prove intent. Id.
The evidence of intent in the present case is far more substantial; the jury could have found from this
evidence a common scheme or plan by Rivers to defraud his customers. Once Rivers established the
initial contact with a customer, he used various ploys and reasons to persuade the customer to make
additional and premature payments: Rivers would offer to throw in additional work for free; he said he
had to have the money for payroll or his crew would not return; or he claimed he needed the money to
move his shop or to buys tools or materials. Typically, the customer would pay the balance and Rivers
and his crew would never return. Even when they did show up again, the work progressed slowly and
eventually, before anything was completed, stopped entirely.
Another ploy used by Rivers was to find other projects on the premises that needed to be done. He would
convince the customer that he could do the additional work; the original contract would be amended; and
he would be paid additional moneys. The evidence suggests that when Rivers had milked the customer
for as much as appeared possible, he never showed up again.
In addition, customers were often unable to contact Rivers. When they would reach him, he always had a
reason why he had not performed. On several occasions when he suspected that his customers were
unhappy with his progress and had complained to others about him, he threatened them with lawsuits.
Perhaps the most convincing evidence of Rivers’ intent was the evidence that he had followed a similar
pattern of conduct a year earlier in the Indianola area. See Baker v. State, 588 So. 2d 945, 947 (Ala.

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Crim. App. 1991) (holding evidence of other similar failures to perform support a finding that the
defendant never intended to perform in the case before the court). Rivers’ various bankruptcies also
support the inference of an intent to deceive, rather than evidencing poor business management. As
previously noted, Rivers had filed four petitions for bankruptcy within thirteen months. Although only one
petition was fully processed, creditors, including the victims in the Oskaloosa area, received notices of the
bankruptcy petitions and thus, as the trial court noted, would be disinclined to pursue Rivers for
restitution. The trial judge made the following apt observation at sentencing:
You are as surely a predator as a fox is when it comes to being able to talk people into
down payments and then being able to walk away from performing the work that you had
agreed to do. The scheme is obvious to me in the various bankruptcies and the notices
that were sent knowing that you couldn’t complete those bankruptcies but knowing that
that would get people off your back for work that you had promised and didn’t intend to
complete.
As the trial court recognized, the jury could have found that the facts and circumstances surrounding
these business transactions revealed a scheme to obtain money from unsuspecting individuals without
any intent to perform the promised work. It is this evidence of intent that distinguishes the case before us
from Tovar. We conclude, therefore, that the trial court correctly denied Rivers’ motion for judgment of
acquittal on this charge.
DECISION OF COURT OF APPEALS AND JUDGMENT OF DISTRICT COURT AFFIRMED.
NOTES:
[1] Rivers had previously filed chapter 13 petitions on January 13 and March 6, 1995. Both were
dismissed for noncompliance. Rivers later filed a chapter 7 petition and received a discharge of his debts
on September 15, 1995. The fourth petition filed on February 2, 1996, was initially filed under a social
security number that did not belong to Rivers. This filing was also subsequently dismissed for
noncompliance

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