Opinion ID: 1984482
Heading Depth: 2
Heading Rank: 2

Heading: District court proceedings upon remand.

Text: Upon remand, the State sent a proposed order to the district court concerning appropriate relief and disposition of the case. The State also sent a copy of the proposed order to counsel for defendant McHose, requesting any response thereto as soon as possible and indicating that the State planned to submit the order to the court by June 3, 1997. McHose's counsel wrote to the State on June 6 expressing his disagreement with the terms of the proposed order and sent a copy of his letter to the court. Without holding a hearing, and before receiving McHose's comments, the district court signed and filed the State's proposed order on June 9, 1997, entering judgment against McHose and in favor of the State for $1,457,135 and making disposition of certain attached and escrowed property. The parties, however, did not receive a copy of the order until July 12, 1997. On August 12, 1997, McHose filed a combined motion to vacate or modify judgment and petition for relief pursuant to Iowa rule of civil procedure 252, requesting the court to vacate the June 9 order because the clerk of court failed to promptly notify the parties of that order. The State filed a resistance. After hearing, the district court entered an order on October 16, 1997, sustaining McHose's motion to vacate the June 9 order. The district court also concluded that based upon our decision in Diacide I, McHose had knowledge of the details of Diacide's note program on or about May 5, 1993. Thus, any investor monies he may have obtained after this date are tainted. The court further concluded, however, that it was not equitable to enter a judgment against McHose requiring him to repay amounts taken from investors prior to his involvement with Defendants Diacide and Starnes. The court therefore did not hold McHose jointly and severally liable for the full $1,457,135 amount lost by investors, but rather only entered judgment for disgorgement in the amount of $102,283 in favor of the State against McHose for investors' funds that McHose used to repay himself for his investment in Diacide. The district court also ordered that the frozen ESP bank account funds should be released to McHose. In addition, the court ordered that $19,141.33, which represents one-half of the proceeds from the sale of the Nevada property which was attached prior to judgment, should be returned by the State to Imogene McHose, wife of Sam McHose. The State appealed.