State v. JoyState v. Joy
At issuе is whether the evidence is sufficient to convict defendant contractor of embezzlement of funds paid by homeowners for remodeling and cabinet work.
Defendant was charged with six counts of theft, alternatively charged as theft by color or aid of deception and theft by exertion of unauthorized control over (embezzlement of) fimds paid him by homeowners for contracting work. He was convicted of five counts. The other count was later dismissed and is not at issue. The jury instructions did not require unanimity as to which means of committing theft the jury found, nor did the special verdict form direct the jury to indicate a means it unanimously found. The Court of Appeals held that the evidence was insufficient to establish that defendant appropriated the property of another and therefore his convictions on an embezzlement theory could not be upheld. The Court of Appeals then reasoned that because the jury could have reached its verdict on the invalid embezzlement theory, remand and a new trial were required on the theft by deception theory.
State v. Joy,
The facts underlying each of the five counts on which defendant was convicted Eire set out below.
Count 1. On October 2, 1986, Mr. and Mrs. Peterson and defendant entered into a written contract for kitchen cabinets to be built by defеndant. Exhibit 1. The contract provided that defendant would provide all labor and material. Defendant asked for, and the Petersons paid him, 75 percent of the contract price, $4,431 of the total $5,908, in advance. Mr. Peterson testified that defendant told him defendant needed the down payment to buy materials for the Peter-sons' kitchen cabinets. Defendant stated he asked for the down payment "[t]o buy materiEd Eind equipment." Verbatim Report of Proceedings (Oct. 24,1989), at 66. He also testified that he spent some of the money for special equipment to build their kitchen and "a portion of it was held back for them to be spent later on." Verbatim Report of Proceedings
Count 2. Mr. and Mrs. Goldman hired defendant to work on several jobs on their rental houses. They paid him for each job, generally after he completed the work. In late 1986 or January 1987, the Gоldmans and defendant orally agreed that defendant would replace some windows in one of the rental houses. The Goldmans gave defendant $590 in advance of the work for removal of the old windows and purchase and installation of the new windows. Defendant testified "I explained to [Mr. Goldman] I was going to be doing the kitchen and I would like him to prepay the amount of the windows so I could get them ordered . . .". Verbatim Report of Proceedings (Oct. 24, 1989), at 19. Defendant testified the Goldmans paid the money in advance because he had worked for them before and they trusted him. Defendant testified he ordered the windows and put them in storage (although at trial he could not recall where), and that when he went to get them they were broken. He did not do the work or refund the money. We affirm conviction on this count.
Count 3. In March 1987, Mr. and Mrs. Hills entered into a written contract with defendant for cabinets to be built in a new home the Hills were constructing. The contract provided that defеndant would provide all materials and labor. It called for the Hills to pay one-third of the $6,490 contract price down, one-third upon completion of the cabinet frames, and one-third upon completion of the work. Mrs. Hills testified that defendant said he would use the down payment to buy materials.
On June-9,1987, defendant asked for the second one-third of the contract amount, although he had not completed the cabinet bases. The Hills made this early payment reluctantly beсause, Mrs. Hills testified, defendant said he did not have money to finish purchasing materials to finish the job. She testified that defendant said he was going to use the money specifically to buy the materials for their house. Shortly after the second payment was made, defendant indi
Defendant worked a few more days, then asked for more money for materials. The Hills, who had already given defendant over $4,300, elected to purchase the remaining materials and provide them to defendant. Defendant never returned to work, refused to complete the job, and refused to return any money to the Hills. Defendant said he did not return the materials for a refund because "[i]t wasn't my money." Verbatim Report of Proceedings (Oct. 24,1989), at 98-99. We affirm conviction on this count.
Count 5. On May 26, 1989, Ms. Condo and defendant entered into a written contract for kitchen remodeling at a cost of $21,823.23. Exhibit 12. The contract provided that defendant would рrovide all materials and labor. One-third of the contract amount was to be paid down, another one-third upon commencement of the work, and the final one-third upon completion of the project. Defendant supplied Ms. Condo with a fist of materials needed. Ms. Condo paid $6,700 down. Defendant began work on June 7, 1989, and received a second payment of $6,700 on June 12. Defendant worked a few more days. Defendant did not complete the work (Ms. Condo hired another contractor), and did not return any of the $13,400. Defendant used $4,000 of the first $6,700 for his contractor registration and bond. We reverse conviction on this count.
Count 6. On June 24,1989, Mr. and Mrs. Love and defendant entered into a written contract for construction and installation of new cabinets at a cost of $2,906.26. Exhibit 34. The Loves paid $1,295 down. Mr. Love testified that he assumed the. down was to buy materials but that there was no "official explanation" about what the money was for. The Loves were thereafter unable to locate defendant, and discovered that his places of business were vacant. Defendant never did any work, nor did he refund any money. Defendant testified he purchased some materials for the job. He also testified that he used the money the Loves gave him to pay his employees on June 30, 1989 (although they did no work
The jury was instructed on both theft by deception and theft by exerting unauthorized сontrol over (embezzlement of) the funds defendant received from the owners. The instructions did not require unanimity as to which means the jury found. The jury returned a verdict convicting on all but count 4 for which no verdict was returned. The verdict form did not identify which alternative means of theft the jury found defendant committed as to any of the counts.
Defendant appealed, arguing that there was insufficient evidence to support his convictions on the embezzlement theory. The Court of Appeals аgreed with defendant and reversed and remanded for a new trial.
The Court of Appeals reasoned that one cannot steal his or her own property, that title to the funds passed to defendant when paid to him, and that defendant therefore could not be convicted of embezzling the funds. The Court of Appeals rejected what it characterized as the State's argument: that the advance payments were earmarked for the purchase of materials and wеre thus entrusted to defendant as an agent who did not own the money. The Court of Appeals said "the payments here were advance payments pursuant to a contract, within the contract price. Under the cases cited above, this precludes an entrustment or agency relationship."
State v. Joy,
The State maintains that the Court of Appeals erred in holding that the evidence was insufficient to support defendant's convictions for theft by embezzlement. In reviewing the sufficiency of the evidence, the question is whether, after viewing the evidence in the light most favorable to the State, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.
State v. Green,
(1) "Theft" means:
(a) To wrongfully obtain or exert unauthorized, control over the property or services of another or the value thereof, with intent to deprive him of such property or services; or
(b) By color or aid of deception to obtain control over the property or services of another or the value thereof, with intent to deprive him of such property or services . . ..
(Italics ours.) Defendant was charged under both the "exerts unauthorized control" and the "[b]y color or aid of deception" alternatives of the statute. The "exerts unauthorized control" alternative includes what was embezzlement under prior law.
State v. Dorman,
"[E]xerts unauthorized control" means in relevant part:
(b) Having any property or services in one's possession, custody or control as bailee, factor, pledgee, servant, attorney, agent, employee, trustee, executor, administrator, guardian, or officer of any person, estate, association, or corporation, or as a public officer, or person authorized by agreement or competent authority to take or hold such possession, custody, or control, to secrete, withhold, or appropriate the same to his or her own use or to the use of any person other than the true owner or person entitled thereto ....
(Italics ours.)
The State argues that the contracts defendant had with the owners are agreements within the meaning of
Defendant maintains in part, however, that with repeal of former
This argument is unpersuasive. The effect of former
Defendant also argues that the evidence is insufficient to support his convictions for theft by embezzlement.
Under the relevant statutes, theft requires that the relevant property or services be the "property of another".
"Owner" means a person, other than the actor, who has possession of or any other interest in the property or servicesinvolved, and without whose consent the actor has no authority to exert control over the property or services ....
We recently explained that the meaning of the "property of another" element of theft can be derived from this definition of "owner".
State v. Pike,
Here, the issue is whether the owners had an interest in the money paid so as to meet the definition of "property of another", and whether defendant appropriated that property to his own use, contrary to agreements authorizing defendant to hold possession of or control the money. If the particular agreement between the owner and defendant restricted the use of the funds to a specific purpose, the owner would have an interest in the money, i.e., the application of the money to the purpose for which it was entrusted to defendant. See generally W. LaFave & A. Scott, Criminal Law § 89, at 648 (1972) (embezzlement may occur where contractor appropriates money, paid in advance on a contract, which is earmarked to be used only for a construction purpose).
We conclude that as to three of the counts there is sufficient evidence of a limitation in the agreements between the owners and defendant that advance payments be used to purchase materials for the contract work. The owners in those cases had an interest in the money given to defendant to hold for the purchase of those materials, and when defendant used that money for other purposes, he appropriated the funds to his own use and committed theft by embezzlement.
As to count 1, the jury was entitled to infer such an agreement from Mr. Peterson's testimony that defendant told him defendant needed the 75 percent of the contract price as a down payment to buy materials for the Petersons' kitchen cabinets, from defendant's statement that he asked for the down payment "[t]o buy material and equipment", Verbatim Report of Proceedings (Oct. 24,1989), at 66, and from defend
As to count 3, the jury could find an agreement restricting the advance paymеnts to purchase of materials from the following evidence: Mrs. Hills testified that defendant said he would use the down payment to buy materials. Mrs. Hills also testified that when defendant asked for the second one-third of the contract amount, defendant said he did not have money to finish purchasing materials to finish the job. She further testified that defendant said he was going to use the money specifically to buy the materials for their house. The Hills then paid defendant the second one-third of the contract price. Defendant said he did not return the materials for a refund because "[i]t wasn't my money." Verbatim Report of Proceedings (Oct. 24, 1989), at 98-99.
There is ample evidence that defendant did not use all the funds for materials and that he appropriated money earmarked for materials to his own use.
As to the remaining two counts, however, we conclude that there is insufficient evidence to support a conviction of
We therefore reverse the Court of Appeals as to counts 1, 2, and 3 and affirm defendant's convictions on those counts. In so doing, we comment on the Court of Appeals' analysis. First, we disapprove that analysis to the extent it may be construed as saying that absent a trust or agency relatiоnship, a contractor cannot be guilty of embezzlement, and that a trust or agency relationship is precluded where the amounts are paid pursuant to a construction contract. The question is not one of agency or trust alone. The question is whether funds were received lawfully under agreements authorizing defendant to hold or control the advance payments in which the homeowners had an interest, but not authorizing defendant to exert control over the funds in a way inconsistent with the owners' permission to use the funds for materials. The key is whether there was a restriction or limitation in the agreements giving the owners an interest in having the funds applied to the purchase of materials. Such a restriction or limitation can clearly pertain to a construction contract payment within the contract price.
We recognize, however, that the Court of Appeals' opinion is not entirely clear, and perhaps is amenable to the intеrpretation that there was simply insufficient evidence of any limitation as to the use of the funds advanced.
Second, the Court of Appeals concluded that
State v. Carr,
In
Carr,
the owner of a piano store received money in advance on a contract for a piano, which the buyer understood was needed as a down payment on the piano from the seller to the wholesaler. The seller did not use the funds in that way, however, and was charged with embezzlement of the funds. The court specifically addressed the question whether the seller was an agent of the buyer, within the meaning of the theft statutes. The court concluded that the
The court in Carr addressed only the agency question, and never addressed the part of thе theft statute at issue here, i.e., whether the seller was authorized by an agreement to hold the funds of the buyer and then appropriated the funds to her own use. The "authorized by agreement" part of the statute was then in effect.
Defendant here was not charged with embezzlement of funds received as an agent, and Carr is not controlling authority.
Third, we address
State v. Oglesbee,
In
Oglesbee
the defendant was a general contractor who, under a home-building contract between the homeowners and their bank, received progress payments conditioned on the prompt payment by the contractor for labor and materials supplied by others. Defеndant owed money on an open account with a supplier, which had furnished materials and labor on the homeowners' house and on other jobs. Using money from draws from the homeowners' bank, defendant paid $4,000 to the supplier, which applied the money to defendant's most delinquent accounts first, as defendant knew it would. As a consequence, none of the homeowners' money was applied to
Defendant Oglesbee was charged with theft in the first degree and convicted. He appealed, arguing that the theft statutes did not apply, on the grounds that repeal in 1975 of former
Oglesbee is consistent with our analysis herein. The issue there was whether defendant took possession of the funds pursuant to agreement, and then unlawfully appropriated those funds to his own use rather than paying the supplier according to restrictions in the agreement.
As to the two counts on which we affirm the Court of Appeals' reversal of defendant's convictions for embezzlement, the remaining question is whether remand for retrial is appropriate. After the Court of Appeals held that there was insufficient evidence to sustain dеfendant's convictions on the embezzlement theory, the court determined that remand for
when one is charged with having committed a crime by more than one method and there is a deficiency of proof as to one or more methods but the jury is, nevertheless, instructed as to those methods, the verdict must be set aside unless the court can ascertain that it was founded upon one of the methods with regard to which substantial evidence has been introduced.
Joy,
at 42 (quoting
State v. Gillespie,
When the State petitioned for review, we directed the parties to brief
Griffin v. United
States,_U.S._,
However, at oral argument the State asked that we not address Griffin, explaining that applicability of the analysis there had not been raised as an issue in this case. In light of the issues raised by the parties, we have decided not to address Griffin in this case.
Therefore, we remand counts 5 and 6 for retrial on the theft by deception theory.
Carothers,
at 265;
see also State v. Green,
Affirmed in part, reversed in part, and remanded for retrial on counts 5 and 6.
Andersen, C.J., and Utter, Durham, Smith, Guy, Johnson, and Madsen, JJ., concur.