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For intent to defraud case, no need to instruct jury on terms of contract authorizing defendant’s conduct

State v. Greg LaPean, 2012AP2309-CR, District 3, 9/26/13 (not recommended for publication); case activity

This case boils down to whether LaPean transferred encumbered farm equipment with intent to defraud his lender, Security State Bank, in violation of § 943.84(2)(a); Wis JI-Criminal 1470.  LaPean asserted the real controversy was not tried due to an incomplete instruction on intent, there was insufficient evidence to support the jury’s finding of intent, and trial counsel was ineffective for failing to request an appropriate instruction on intent and in failing to move to dismiss at the close of the State’s case. The parties briefed–at great length, mind you–the statutory meaning of intent and what actions the security agreement covering the farm equipment permitted and/or required LaPean to take.  So, one might expect the decision upholding the jury’s conviction to recite and analyze the definition of intent and applicable provisions of the security agreement.  It doesn’t.  In, essentially, a knock-out punch the court of appeals held:

¶18 . . . We read LaPean’s brief on appeal as arguing that because his obligations with respect to the proceeds from the sale of the collateral were integral to the issue of his intent, the jury “had no basis for judging whether [his] ‘conduct’ evidenced an intent to defraud or was entirely innocent” absent an instruction explaining those rights and obligations.  We disagree.

¶19      LaPean was free to argue at trial, and did in fact argue, that under the terms of the security agreement he was under no obligation to pay the proceeds from the sale of the missing secured equipment directly to the bank but could instead use the proceeds to pay other business expenses.  LaPean has not presented this court with a persuasive argument as to why the failure to provide the jury with an instruction that would emphasize LaPean’s defense theory to the jury resulted in the real issue—in this case LaPean’s intent—not being fully tried.  Slip op.

“Intent to defraud” required proof that LaPean transferred farm equipment with the purpose of causing Security pecuniary loss or was aware that his conduct was practically certain to cause that result.  So those pesky contract provisions about whether LaPean could legally sell or lease equipment without Security’s consent, or whether he was legally required to give proceeds from sales to Security, or whether he could legally use proceeds from sales to pay certain business expenses are kind of  important to the issue of intent.  The trial court didn’t give the jury any guidance on this issue.  Seems a bit like letting the State argue “the law is A,” while letting the defense argues “the law is Z”, and then telling the jury “you decide what the law is and then apply it to the facts you find.”

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