Lead Opinion
[¶ 1.] Wyatt Morse agreed to convert Janice Heffron’s second-floor room into a small bathroom. He said his plumbing work would be above and beyond code and that he could complete the project in five weeks for $5,000. After ten weeks, the project was not finished. Morse quit without explanation. He had been paid in excess of $6,000. Afterwards, Janice learned that some of the work he did was faulty. Morse was charged and convicted of theft by deception. On appeal, we reverse because there was insufficient evidence from which a jury could infer that Morse had the intent to defraud.
Background
[¶ 2.] Janice Heffron purchased a home in Deadwood, South Dakota. It was listed on the historical registry and was originally her grandfather’s. She planned on remodeling and restoring the structure. In the fall of 2005, Janice hired Ricardo Trevino to work on the exterior. Janice also wanted a room on the second floor converted into a small bathroom. Trevino indicated that he could likely complete the project for between $7,000 and $10,000, but he did not provide a formal bid.
[¶ 3.] Wyatt Morse was Janice’s neighbor and had come to her house while Trevino was working. Through discussions with Janice, Morse learned about her desire to have a second-floor bathroom. He proposed to convert the second-floor bedroom into a bathroom in five weeks for $5,000. According to Janice, Morse “stalked” her about doing the remodeling project, repeatedly stating he could do it “easy, quick, cheap.” Nonetheless, Janice told her mother, Maxine Heffron, who would finance the project, about Morse’s offer. Maxine and Janice then went to Morse’s home, where he showed them the bathroom he had restored. Janice and Maxine were impressed. Morse also told them that he had plumbing experience, that his work would be above and beyond code, and that the local inspector did not inspect his work because he was so good.
[¶ 4.] In December 2005, Janice, Maxine, and Morse made an oral agreement for him to complete the project in five weeks for $5,000, with payments in cash installments. Maxine wanted to pay using personal checks to assure a paper trail, but Morse convinced her to pay him with cash. According to Janice, he wanted to be paid in cash to avoid the IRS. They agreed that Morse would convert the room into a bathroom, install an antique claw-foot tub (one that he would provide personally), put wainscoting on the walls, install an old tin ceiling like the one in his bathroom, and install crown molding.
[¶ 5.] Morse began work in January 2006. His efforts continued until the second week of March. He repaired the kitchen ceiling and wall. He installed plumbing fixtures in the area he repaired. He removed the old water heater and installed a new one. He ran a freeze-proof spigot outside the house. He put in a bathroom vent with an antique vent cover. He custom built a bathroom cabinet at no extra cost to the Heffrons. He mounted wainscoting and crafted a surrounding shelf with rope lighting. He put in a faux tin ceiling, with crown molding and trim. He installed water pipes and a new drain stack.
[¶ 6.] The project took longer and cost more than originally agreed. Morse ran into difficulties when he attempted to install a tankless water heater that Maxine was aware took approximately two weeks effort. He was never able to install the tankless heater, and ended up installing a traditional tanked water heater. Morse
[¶ 7.] Maxine paid Morse somewhere between $6,000 and $6,500 cash. Her last payment was on February 28, 2006. Some of the cash, she said, was for “off contract” materials that were not part of the contract price. In March 2006, Morse fell and aggravated his already bad back. Before Janice and Maxine hired him, Morse had told them that he had a back condition. After his fall in March, he came to the job site less and less. Then, after the second week in March he stopped coming entirely. The Heffrons tried contacting him through phone calls, personal visits, and certified mail. He never responded.
[¶ 8.] After Morse abandoned the project, Janice contacted a licensed plumber, who examined Morse’s work and gave Janice an estimate on the cost of completing the project. The plumber pointed out several deficiencies in Morse’s work. In particular, Morse incorrectly installed the water heater, the pipes for the sink, lavatory, and bathtub. He used S-traps, illegal in South Dakota, and improperly vented the floor drains. Because he installed the water heater incorrectly, carbon monoxide was leaking into Janice’s home. In sum, Morse’s work on the bathroom, in the opinion of the licensed plumber, had no value to the home.
[¶ 9.] On October 12, 2006, Morse was indicted for grand theft by deception in violation of SDCL 22-30A-3(l) and SDCL 22-30A-3(3), or in the alternative, grand theft by obtaining property without paying. The alternative count was later dismissed. A Lawrence County jury returned a guilty verdict. Morse admitted to a Part II Information and was sentenced to five years in prison. He appeals asserting that the evidence was insufficient to sustain the verdict.
Standard of Review
[¶ 10.] Our de novo standard of review on a sufficiency claim is well established:
“[A]ll of the evidence is to be considered in the light most favorable to the prosecution.” Jackson v. Virginia,443 U.S. 307 , 319,99 S.Ct. 2781 , 2789,61 L.Ed.2d 560 (1979) (emphasis in original). There must be substantial evidence to support the conviction. Glasser v. United States,315 U.S. 60 , 80,62 S.Ct. 457 , 469,86 L.Ed. 680 (1942), superseded on other grounds, Bourjaily v. United States,483 U.S. 171 ,107 S.Ct. 2775 ,97 L.Ed.2d 144 (1987). The “inquiry does not require [an appellate] court to ‘ask itself whether it believes that the evidence at the trial established guilt beyond a reasonable doubt.’ ” Jackson,443 U.S. at 318-19 ,99 S.Ct. at 2789 ,61 L.Ed.2d 560 (emphasis in original) (quoting Woodby v. Immigration and Naturalization Serv.,385 U.S. 276 , 282,87 S.Ct. 483 , 486,17 L.Ed.2d 362 (1966)). “Instead, the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Id. Evidence is insufficient, and therefore not substantial, when no rational trier of fact could find guilt beyond a reasonable doubt. Id.
State v. Tofani,
Analysis and Decision
[¶ 11.] Morse argues that the State failed to prove he had the requisite intent to defraud the Heffrons. He does not dispute that the work he did on Janice’s home was faulty and resulted in the Heffrons having to pay considerably more
[¶ 12.] Theft by deception is a specific intent crime. State v. Heftel,
[¶ 13.] In State v. Fyffe, the Ohio Court of Appeals ruled there was insufficient evidence to convict the defendant for knowingly depriving the victim of property, i.e., money, by deception, despite the fact that the defendant took money and did not perform.
[¶ 14.] An Alabama court also reversed a defendant’s conviction of theft by deception. Smith v. State,
[¶ 15.] There are a number of cases involving construction contracts where courts have found the evidence sufficient to prove deceptive theft, or related criminal conduct. In those cases, however, there was either circumstantial or direct evidence to establish the requisite intent. For example, in Cash v. United States, an appeals court held that the jury could infer intent when at the time Cash obtained the money he had no intention to complete the work because he took the money and never performed.
[¶ 16.] Here, Morse was convicted of theft by deception, defined in SDCL 22-30A-3. It states in part:
[a]ny person who obtains property of another by deception is guilty of theft. A person deceives if, with intent to defraud, that person:
(1) Creates or reinforces a false impression, including false impressions as to law, value, intention, or other state of mind. However, as to a person’s intention to perform a promise, deception may not be inferred from the fact alone that that person did not subsequently perform the promise; ...
(3) Fails to correct a false impression which the deceiver previously created or reinforced, or which the deceiver knows to be influencing another to whom the deceiver stands in a fiduciary or confidential relationship; ...
The term, deceive, does not, however, include falsity as to matters having no pecuniary significance or puffing by*921 statements unlikely to deceive reasonable persons.
Id. (emphasis added). In Hurst, we noted that SDCL 22-30A-3 is similar to section 223.3 of the Model Penal code, requiring that the accused have a purpose to deceive.
[¶ 17.] Based on our review of the record, in a light most favorable to the verdict, Morse: (1) failed to complete the project in five weeks for $5,000 as promised; (2) performed work that was not “above and beyond code” as promised; (3) lied about obtaining a building permit; (4) lied about the reasons he could not get the tankless water heater installed and why the pipes were leaking; (5) returned the water heater and did not give the $186 refund to Maxine;
[¶ 18.] These facts do not prove the elements of theft by deception. There is no evidence that Morse had a purpose to deceive or intended to defraud the Heffrons when he agreed to remodel Janice’s bathroom. Although his work was not above and beyond code, the State never argued that Morse knew he would do faulty work.
[¶ 19.] Moreover, the State never argued or presented evidence that Morse
[¶ 20.] Morse did keep a $186 refund after returning the tankless water heater, which was rightly Maxine’s money, but this fact alone does not prove that Morse intended to defraud the Heffrons when he agreed to do the project. Morse also lied to Janice and Trevino in saying that he had obtained a building permit. Janice and Trevino testified, however, that the conversation took place in March, and because the last payment Morse received from Maxine was February 28, 2006, the false representation about the building permit could not have deceived the Hef-frons into parting with more money.
[¶ 21.] The facts of this case are analogous to Fyffe,
[¶ 22.] To sustain a conviction, each element of an offense must be supported by evidence. See State v. Plenty Horse,
[¶ 23.] Reversed.
Notes
. The State also asserts that because Morse was legally required to have a plumbing license and building permit, but had neither, "he deceived the Heffrons as to matters of law,” in violation of SDCL 22-30A-3(l). The State cannot make this claim on appeal. At trial, the State never argued that Morse deceived the Heffrons as to matters of law. Moreover, the jury was not instructed that it could consider whether Morse created a false impression as to law. Despite appellate counsel's belief that the facts support an additional theory of guilt, this Court has long held that it will not consider issues for the first time on appeal. See Schull Constr. Co. v. Koenig,
. Apparently relying on the State’s appellate brief, the dissent claims that Morse purchased products at Menards on Maxine’s credit card without her permission. Nothing in the record supports this. At trial, Janice was asked, "And how were these [materials] being purchased at Menards?” She responded, “Either my mother would write a check or use her credit card.” Maxine testified that she, Morse, and Janice "went out to Menards and we would make purchase of what he needed, and we used the credit card.” Maxine did testify about the $186 refund from returning the tankless water heater, but neither Maxine nor Janice claimed that Morse purchased materials with their credit cards without their permission.
. According to the State, Morse also created the false impression that he was a licensed plumber. The testimony does not support this claim. Janice testified that Morse only told her he was in the process of getting his license. Therefore, Janice was aware when she hired Morse that he was not a licensed plumber.
.The dissent contends that Morse made false statements on the value of his services, which “brought his statements within the scope of SDCL 22-30A-3.” See dissent, infra ¶ 35. Morse, however, was not charged with defrauding the Heffrons as to "value,” but rather as to "intention.” In State v. Quinn, we reversed a conviction for theft by deception when we concluded that the evidence did not support the conviction as charged.
Dissenting Opinion
(dissenting).
[¶ 30.] I respectfully dissent. Twelve jurors were charged with determining whether Morse was guilty of grand theft by deception in violation of SDCL 22-30A-3(1) and SDCL 22-30A-3(3). They concluded that this was not a mere civil dispute between an over-expectant home owner and an under-achieving contractor. They concluded it was a crime. In so doing, they found that Morse had the specific intent to defraud.
[¶ 31.] This Court does not retry cases de novo. Instead, we review the evidence in the light most favorable to the jury’s verdict. State v. Tofani,
This case turns on this factual determination. “Where conflicting evidence is present, as in this case, and the credibility of witnesses is in issue, then it is a question of fact for the jury. The jury is physically present at the trial and, therefore, in the best position to judge the demeanor and credibility of the witnesses.” State v. Shank,88 S.D. 645 ,226 N.W.2d 384 , 387 (1975).
State v. Hurst,
[¶ 32.] If Morse had just extolled the general virtues of his abilities as a plumber this could be excused as advertising or puffing. He, however, did far more. He made specific factual representations to induce the Heffrons to hire him. He told the Heffrons that his work would be above and beyond code. While there is a lot of gray in claiming to be a “good” plumber, or even some in repeatedly telling the victim the job will be “easy, quick, cheap,” the same cannot be said for a claim that the work will be above and beyond code. It is either above and beyond code or it is not. The accuracy of such a claim can be empirically determined by reference to the plumbing code. Here it is undisputed that Morse’s work did not meet code, and this Court concedes it “had no value to the home.”
[¶ 33.] To also “close the deal” Morse further assured the Heffrons that his work was so good that the local plumbing inspector did not inspect his work. Once again, this is not puffing. Whether the local plumbing inspector passed his work without inspection because of Morse’s self-proclaimed expertise is easily ascertainable. This was obviously another misstatement of fact Morse made in order to get the job. In his brief Morse does not even attempt to claim this statement was truthful.
[¶ 34.] Moreover, there was no negotiation between equals. Like many homeowners, Heffrons had minimal knowledge in the plumbing field. Specifically, the Heffrons did not feel they possessed sufficient knowledge about plumbing to question Morse’s self-professed plumbing skills.
[¶ 35.] The statements were made by Morse to “create ... a false impression ... including false impressions as to ... [the] value” of his services. SDCL 22-30A-3(1). Thus, he was not convicted for doing substandard work or not completing the job. Rather, his statements brought him within the scope of SDCL 22-30A-3. He created false impressions to get the job. The fact he received between $6,000 and $6,500 for his “services” makes it a matter of “pecuniary significance” required by SDCL 22-30A-3.
(1) Janice Heffron did not seek Morse out to do the job. He repeatedly hounded her about getting the job to the point she described it as “almost being stalked.”
(2) He demanded to be paid in cash to defraud the Internal Revenue Service;
(3) He refused to sign a written contract and only wanted an oral agreement;
(4) He lied about obtaining a building permit;
(5) He purchased items at Menards on the Heffrons’ credit card without their permission;
(6) He failed to produce receipts for his project purchases despite the repeated requests of the Heffrons to do so;
(7) He lied about the reasons he could not get the tankless water heater installed and why the pipes were leaking;
(8) He returned the water heater to Menards and did not give the $186 refund to the Heffrons;
(9)He quit working on the project prematurely and without notice or explanation; and,
(10)He never responded to the Hef-frons’ attempts to contact him after he failed to return to work.
[¶ 37.] We need not depart this jurisdiction as does the Court, for interpretative case law concerning the State’s burden of proof to establish a specific intent to defraud to secure a conviction under SDCL 22-30A-3. In State v. Klein,
[¶ 38.] The same defense Morse raises was rejected by this Court in Hurst,
[¶ 39.] In State v. Phair,
[¶ 40.] Most recently in State v. Swalve,
[¶ 41.] Thus, this Court should review the requirements of SDCL 22-30A-3(1) and 22-30A-3(3) by applying our own interpretative ease law. Moreover, such specific affirmative misrepresentations to obtain a financial benefit are conspicuously missing from the out-of-jurisdiction cases cited by this Court upon which it relies in reversing Morse’s criminal conviction.
[¶ 42.] When researching this Court’s opinions concerning the sufficiency of the evidence for convictions pursuant to SDCL 22-30A-3 there is a consistent deference to the determination of the jury because determinations of fraudulent intent are, by their nature, “factual,” Hurst,
[¶ 43.] This case also involves a factual and circumstantial determination. This
[¶ 44.] For these reasons, I respectfully dissent.
. In his brief Morse admits "[t]here is no dispute that some of the plumbing did not meet the rigors of the plumbing code.” Those "rigors” identified by State Plumbing Inspector Gerald Johnson included no plumbing certificate, improper bathroom venting, no water heater expansion tank, and, no relief valve on the water heater.
. Lest there be any confusion as to whether the Heffrons received anything of value for
. In State v. Fyffe,
. State v. Quinn,
. Nor were our decisions controversial. Klein, Hurst, Phair and Swalve are without dissent.
Concurrence Opinion
(concurring).
[¶ 27.] As the Court notes, the sole legal theory upon which this matter was submitted to the jury was that, at the time the contract was made, Morse made fraudulent representations to induce Heffrons to enter into the contract. On that issue, the record reflects that the trial did not involve disputes of credibility or conflicting evidence. Morse did not testify, and the parties simply argued whether Morse’s un-refuted representations and substandard work established fraudulent intent in making the contract. Thus, the issue was whether the essentially undisputed historical facts met the legal elements of fraud in the inducement under SDCL 22-30A-3(l) and 22-30A-3(3).
[¶ 28.] Although most of the trial involved circumstantial evidence — evidence upon which the dissent relies- — I am persuaded to join the opinion of the Court because virtually all of that evidence related to posi-inducement conduct and evidence of Morse’s substandard work that was actually performed. Furthermore, that evidence established nothing other than Morse’s incompetence, financial disputes, medical problems relating to his ability to finish the contract, and puffing. Similarly, the only direct evidence of pre-inducement representations, provided in Heffrons’ testimony, also reflected nothing more than puffing. At trial, Maxine Hef-iron described the nature of the deception as: “I had no indication, you know, that he wasn’t able to follow through.” (Emphasis added). Janice Heffron’s testimony was similar. After discussing Morse’s plumbing and other representations, she was asked what Morse’s statements meant to her. She responded that she “interpret[ed]” the statements to mean “that he would do a fabulous job.” When asked if there were any other representations that Morse made to induce her to enter into the contract, she indicated, “not that I can recollect.”
[¶ 29.] Upon a review of all trial testimony, I agree with the Court that even viewing the evidence most favorably to support the verdict, the evidence did not, as a matter of law, support a rational theory of fraud in the inducement of the contract. There were no material disputes of fact or issues of credibility. The evidence reflected nothing more than a civil dispute involving a contractor who was, for a variety of reasons, unable to competently perform. Morse’s motion for judgment of acquittal should have been granted.