State v. Blunt , 2010 N.D. LEXIS 144 ( 2010 )

VANDE WALLE, Chief Justice,

concurring and dissenting.

[¶ 43] I concur in Parts I, II and III of the majority opinion. Because I do not agree that State v. Jelliff 251 N.W.2d 1 (N.D.1977), controls our decision and because I read the legislative history of N.D.C.C. ch. 12.1-23 differently than does the majority, I respectfully dissent to Parts IV and V of the majority opinion.

[¶ 44] The State contends, and the district court concluded, that the aggregation provision contained in the theft grading statute, N.D.C.C. § 12.1-23-05(6), applies and allows the State to charge multiple instances of misapplication of entrusted property as a single offense and aggregate the amounts to reach the grading thresholds specified in N.D.C.C. § 12.1-23-07(2). The statute relied upon by the State and the district court provides:

For purposes of grading, the amount involved in a theft under this chapter shall be the highest value by any reasonable standard, regardless of the actor’s knowledge of such value, of the property or services which were stolen by the actor, or which the actor believed that the actor was stealing, or which the actor could reasonably have anticipated to have been the property or services involved. Thefts committed pursuant to one scheme or course of conduct, whether from the same person or several persons, may be charged as one offense and the amounts proved to have been stolen may be aggregated in determining the grade of the offense.

N.D.C.C. § 12.1-23-05(6). The district court concluded that the language “under this chapter” in the first sentence of N.D.C.C. § 12.1-23-05(6) indicated the legislature intended the subsection to apply to all offenses in N.D.C.C. ch. 12.1-23, including misapplication of entrusted property.

[¶ 45] The rationale employed by the district court is incomplete and ignores other language in the statute. Section 12.1-23-05(6) does not say that it applies to all offenses under chapter 12.1-23; it expressly applies to “theft under this chapter” and only allows “amounts proved to have been stolen ” to be aggregated. N.D.C.C. § 12.1-23-05(6) (emphasis added). The legislature has defined “stolen” for purposes of N.D.C.C. ch. 12.1-23:

“Stolen” means property which has been the subject of theft or robbery or a vehicle which is received from a person who is then in violation of section 12.1-23-06.

N.D.C.C. § 12.1-23-10(11). Thus, the critical question is whether misapplication of entrusted property under N.D.C.C. § 12.1-23-07 constitutes “theft” as required by N.D.C.C. § 12.1-23-05(6).

[¶ 46] Chapter 12.1-23, N.D.C.C., was part of the criminal code originally adopted in 1973. See 1973 N.D. Sess. Laws ch. 116, § 22; State v. Ensz, 503 N.W.2d 236, 238 (N.D.1993). The consolidation of numerous theft offenses was described as “one of the most radical changes in current North Dakota law” in the proposed new criminal code. Minutes of Interim Comm, on Judiciary “B” 36 (June 20-21, 1972); see Ensz, at 238. The legislature took the unusual step of enacting an expression of legislative intent explaining its consolidation of previously recognized theft offenses into three specific code sections, N.D.C.C. §§ 12.1-23-02, -03, and - 04:

Conduct denominated theft in sections 12.1-23-02 to 12.1-23-04 constitutes a single offense designed to include the separate offenses heretofore known as larceny, stealing, purloining, embezzlement, obtaining money or property by false pretenses, extortion, blackmail, fraudulent conversion, receiving stolen property, misappropriation of public funds, swindling, and the like.

N.D.C.C. § 12.1-23-01(1); see Minutes of Interim Comm., supra, at 36 (Section 12.1-23-01(1) “provides that the theft offenses are to be construed as consolidating the numerous separate offenses previously known in the criminal law, i.e., this section provides a statement of ‘legislative intent’ ”). This statutory expression of legislative intent, coupled with the recognition in the minutes of the interim committee that N.D.C.C. §§ 12.1-23-02, -03, and -04 consolidated the theft offenses “previously known in the criminal law,” strongly suggests that the legislature intended those three code sections to encompass all theft offenses under the North Dakota Century Code and that misapplication of entrusted property under N.D.C.C. § 12.1-23-07 is not theft.

[¶ 47] A broader review of the legislative history and policy underpinnings of N.D.C.C. ch. 12.1-23 further supports this conclusion. Chapter 12.1-23, as originally enacted in 1973, was derived from the proposed Federal Criminal Code. When confronted with a question of statutory interpretation, we are thus guided by the drafters’ official comments to the proposed Federal Criminal Code and the relevant legislative history, including the Working Papers of the National Commission on Reform of Federal Criminal Laws (1970) (“Working Papers ”). State v. Stensaker, 2007 ND 6, ¶ 9, 725 N.W.2d 883; State v. Knowels, 2002 ND 62, ¶ 9, 643 N.W.2d 20. The official commentary to the proposed Federal Criminal Code and the Working Papers are persuasive in interpreting the intent of our criminal code when the North Dakota statute does not vary in substance from its federal counterpart. See State v. Beciraj, 2003 ND 173, ¶15, 671 N.W.2d 250; Knowels, at ¶ 9.

[¶ 48] The drafters of the proposed Federal Criminal Code unequivocally indicated that misapplication of entrusted property was not theft under the Code. Addressing the federal provision on misapplication of entrusted funds, the drafters explained:

Misapplication of Property. — The offense proposed in section 1737 involves one who deals with entrusted property in an unauthorized manner that exposes the property to a risk of loss. This offense is the second step in the three-tiered approach suggested by the theft materials for the problems posed by the mishandling of funds by public employees.

The first step involves the offense of theft, and in particular the definition of “deprive,” which provides that an employee “deprives” the government of property if he disposes of it in a manner such as to make its restoration, in fact, unlikely. This was supplemented by the provision that a failure to account upon demand amounts to a prima facie case of theft.

The second step — taken by proposed section 1737 — is to treat as a misdemeanor any disposition of entrusted property that is not authorized and that at the same time exposes the property to a risk of loss or detriment. The idea is thus that a theft is made out if the actor uses or disposes of entrusted property in a manner that involves a loss of his control over its use. The misdemeanor of misapplication is made out if his use or disposition of the property does not involve a loss of control, but on the other hand does involve exposure of the property to a risk of loss.

The third step, is to rely on various regulatory offenses involving breach of duty with regard to entrusted funds. Thus, for example, depositing money in an authorized depositary could subject the employee to serious sanctions of a civil nature, but would not become truly criminal unless the offenses of misapplication or theft could be made out. It is believed that this three-tiered approach, described more fully in the commentary to the theft proposal, more accurately poses the significant issues on which the degree of criminal liability should turn, while at the same time retaining the salutary deterrent effect of the present law.

II Working Papers, at 974 (citations and footnote omitted); see also Final Report of the National Commission on Reform of Federal Criminal Laws 205, Introductory Note to Theft and Related Offenses (1971) (“Final Report”); Final Report 212-13, Comment to § 1737; II Working Papers, at 920-21, 930-31. As noted by the drafters, “there are a number of existing Federal statutes that include ... forms of diversions or loss of property that cannot properly be denominated ‘theft’ ” including “statutes which speak of the ‘misapplication’ or ‘use’ of property.” II Working Papers, at 930. These comments clearly evince the drafters’ intent that theft and misapplication of entrusted property were entirely separate and distinct offenses, and I conclude that when our legislature enacted the theft and misapplication of entrusted property provisions of the proposed Federal Criminal Code in 1973 it acted with the same intent. See Stensaker, 2007 ND 6, ¶ 9, 725 N.W.2d 883; Beciraj, 2003 ND 173, ¶ 15, 671 N.W.2d 250; Knowels, 2002 ND 62, ¶ 9, 643 N.W.2d 20.

[¶ 49] The clear distinction between theft and misapplication of entrusted property embodied in the proposed Federal Criminal Code is particularly significant when considering application of the theft grading statute. In their Introductory Note to the Theft and Related Offenses section of the proposed Federal Criminal Code, the drafters expressly noted that the theft grading provision, § 1735, “deal[t] with theft only.” Final Report 205, Introductory Note to Theft and Related Offenses. Thus, the drafters clearly demonstrated their intent that the theft grading provision, including the aggregation provision, did not apply to misapplication of entrusted property.

[¶ 50] In the theft grading provision in the proposed Federal Criminal Code, the statute does not include the language “theft under this chapter,” but refers specifically to the theft provisions by section number:

Valuation. For purposes of grading, the amount involved in a theft under sections 1732 to 1734 shall be the highest value by any reasonable standard.... Thefts committed pursuant to one scheme or course of conduct, whether from the same person or several persons, may be charged as one offense and the amounts proved to have been stolen may be aggregated in determining the grade of the offense.

Final Report § 1735(7). Sections 1732 to 1734 of the proposed Federal Criminal Code were adopted as N.D.C.C. §§ 12.1— 23-02, -03, and -04. When the new criminal code was adopted in this state in 1973, the legislature substituted the phrase “theft under this chapter” in place of the specific federal sections listed in the first sentence of the federal provision. There is no indication in the state legislative history that this was intended as a substantive change, but appears merely to be an attempt to conform the statute to the structure and format of the North Dakota Century Code. Given the clear direction in the federal history that misapplication of entrusted property was not theft and that the theft grading provision applied to “theft only,” I do not believe the legislature intended the theft grading provision to apply to the misapplication of property statute when it enacted N.D.C.C. ch. 12.1— 23 in 1973.

[¶ 51] Furthermore, any question about the legislature’s intent is resolved when one considers the language of the misapplication of entrusted property statute as enacted in this state in 1973. As originally enacted, misapplication of entrusted property was always a class A misdemeanor — there was no grading of the offense based upon value of the property:

12.1-23-07. MISAPPLICATION OF ENTRUSTED PROPERTY.) A person is guilty of a class A misdemeanor if he disposes of, uses, or transfers any interest in, property which has been entrusted to him as a fiduciary, or in his capacity as a public servant or an officer, director, agent, employee of, or a person controlling a financial institution, in a manner that he knows is not authorized and that he knows to involve a risk of loss or detriment to the owner of the property or to the government or other person for whose benefit the property was entrusted.

1973 N.D. Sess. Laws ch. 116, § 22. Under this provision, any misapplication of entrusted property, whether ten dollars or ten thousand dollars, was a class A misdemeanor. Thus, the aggregation provision of the theft grading statute clearly had no application to misapplication of entrusted property because the value of the property was wholly irrelevant. Accordingly, when the legislature enacted the theft grading statute, including the language “theft under this chapter” in N.D.C.C. § 12.1-23-05(6), it could not have intended the aggregation provision would apply to misapplication of entrusted property under N.D.C.C. § 12.1-23-07.

[¶ 52] The legislature’s 1989 amendment of N.D.C.C. § 12.1-23-07, which added the grading thresholds for misapplication of entrusted property, does not indicate any intent to make the theft grading aggregation provision in N.D.C.C. § 12.1— 23-05(6) applicable to misapplication of entrusted property, and in fact demonstrates the opposite. The 1989 amendment of N.D.C.C. § 12.1-23-07 arose from an interim study on adult protective services by the Legislative Council. See Report of the North Dakota Legislative Council to the Fifty-first Legislative Assembly 160-61 (1989) (“Legislative Council Report”). In response to concerns that classification of the offense of misapplication of entrusted property as a class A misdemeanor did not provide a meaningful penalty in cases where entrusted property of substantial value belonging to a vulnerable adult was misapplied, the legislature deleted the language making misapplication of entrusted property a class A misdemeanor and enacted separate grading classifications for that offense. See 1989 N.D. Sess. Laws ch. 167, § 1; N.D.C.C. § 12.1-23-07. The legislature’s action, and the legislative history of the 1989 amendment, demonstrate the legislature did not intend the aggregation provision in N.D.C.C. § 12.1-23-05(6) to apply to misapplication of entrusted property.

[¶ 53] The legislative history indicates the legislature was well aware of the historical distinctions between theft and misapplication of entrusted property under the state and proposed federal codes. The history expressly notes the three-tiered approach embodied in the proposed Federal Criminal Code, including the clear distinction between theft and misapplication of entrusted property:

According to the final report of the National Commission on Reform of Federal Criminal Laws, from which the North Dakota Criminal Code was derived, the offense of misapplication of entrusted property is part of a three-step approach to the problems posed by the mishandling of property by persons in a fiduciary relationship. The first step in the approach taken in the proposed federal code and the North Dakota Criminal Code is to define “deprived,” a key element in the offense of theft but not an element of the offense of misapplication of entrusted property, to include only those misapplications of property in which restoration of the property is unlikely. The offense of misapplication of entrusted property constitutes the second step in this approach to mishandling of property by persons in a fiduciary relationship in that any disposition of entrusted property which is not authorized and which exposes the property to a risk of loss or detriment is treated as a misdemeanor. The third step in the approach provides that any other breach of duty with regard to entrusted property, regardless of risk of loss, be treated as a regulatory offense outside the Criminal Code.

Legislative Council Report, at 161.

[¶ 54] Perhaps the clearest indication of the legislature’s intent arises from the fact that it adopted a separate grading provision for misapplication of entrusted property expressly based upon the theft grading provision, but did not incorporate an aggregation provision similar to N.D.C.C. § 12.1-23-05(6). The grading threshold amounts in N.D.C.C. § 12.1-23-07(2) replicate the thresholds encompassed in N.D.C.C. § 12.1-23-05, and the legislative history of the 1989 amendment expressly notes that the property value thresholds set forth for the various levels of offenses “generally follow the classifications used for the grading of theft offenses under NDCC Section 12.1-23-05.” Legislative Council Report, at 161. Yet when the legislature expressly engrafted the same dollar value thresholds in subsections (1), (2), (3), and (4) of N.D.C.C. § 12.1-23-05 into a separate grading provision for misapplication of entrusted property in N.D.C.C. § 12.1-23-07(2), it did not include an aggregation provision similar to N.D.C.C. § 12.1-23-05(6). It is a fundamental rule of statutory construction that “[i]t must be presumed that the Legislature intended all that it said, and that it said all that it intended to say.” State v. Dennis, 2007 ND 87, ¶ 12, 733 N.W.2d 241 (quoting Little v. Tracy, 497 N.W.2d 700, 705 (N.D.1993)); see also Simon v. Simon, 2006 ND 29, ¶ 17, 709 N.W.2d 4; Public Serv. Comm’n v. Wimbledon Grain Co., 2003 ND 104, ¶ 28, 663 N.W.2d 186; State v. Myers, 73 N.D. 687, 710, 19 N.W.2d 17, 29 (1945) (“The Legislature must be presumed to have meant what it said, and all that it said, and nothing else.”). The legislature’s decision to adopt a separate grading provision in N.D.C.C. § 12.1-23-07(2) based upon N.D.C.C. § 12.1-23-05, without incorporating an aggregation provision, is a clear indication that the legislature did not intend to allow the amounts of multiple offenses to be aggregated to reach the grading thresholds in N.D.C.C. § 12.1-23-07(2).

[¶ 55] Nor do I believe this Court’s decision in State v. Jelliff is controlling. In Jelliff the issue before the Court was whether the alleged acts of misapplication of entrusted property which occurred before July 1, 1975, the effective date of N.D.C.C. § 12.1-23-07, was cause to dismiss the entire criminal complaint which contained allegations of misapplication both before and after July 1, 1975. The Court concluded, as I have concluded, that each misapplication of entrusted property can be considered a separate offense. The issue before the Court did not involve the grading of those separate offenses and the opinion of the Court contained no discussion of the legislative history of the relevant statutes which had been enacted and became effective during the time of the alleged violations.

[¶ 56] I recognize that my construction of the statute may appear somewhat unwieldy in a case such as this, where there are literally dozens of alleged instances of misapplication of entrusted property. Our prior caselaw makes it clear, however, that the State need not prove a series of transactions to establish the offense, and each individual misapplication of entrusted property constitutes a completed statutory offense. Jelliff, 251 N.W.2d at 7. While valid public policy reasons may exist for allowing aggregation of the value of multiple misapplications of entrusted property, such determinations of policy are for the legislature, not the courts. E.g., Doyle v. Sprynczynatyk, 2001 ND 8, ¶¶ 14, 17, 621 N.W.2d 353. The primary goal when construing a statute is to ascertain the intent of the legislature. E.g., Nelson v. Johnson, 2010 ND 23, ¶ 12, 778 N.W.2d 773; State v. Brown, 2009 ND 150, ¶ 15, 771 N.W.2d 267. It is for the legislature to amend a statute if the language of the statute does not accurately reflect the legislature’s intent; the duty of the judiciary is to simply enforce the law as it exists. Olson v. Workforce Safety & Ins., 2008 ND 59, ¶ 23, 747 N.W.2d 71.

[¶ 57] One final consideration factors into our interpretation of the statutes at issue in this case. This Court has repeatedly cautioned that criminal statutes are to be strictly construed in favor of the defendant and against the government. See, e.g., State v. Corman, 2009 ND 85, ¶ 15, 765 N.W.2d 530; State v. Geiser, 2009 ND 36, ¶ 16, 763 N.W.2d 469; Dennis, 2007 ND 87, ¶ 12, 733 N.W.2d 241. Interpreting the various provisions in N.D.C.C. ch. 12.1-23 in light of their legislative history, and construing them strictly in favor of the defendant and against the government, I conclude that the aggregation provision in the theft grading statute, N.D.C.C. § 12.1-23-05(6), does not apply to the offense of misapplication of entrusted property, and the amounts of multiple instances of misapplication of entrusted property may not be aggregated to reach the grading thresholds set out in N.D.C.C. § 12.1-23-07(2).

[¶ 58] Because I believe the district court erred in holding that N.D.C.C. § 12.1-23-05(6) applied and allowed the jury to aggregate the amounts of multiple instances of misapplication of entrusted property, it is necessary to consider the effect of this error upon the jury verdict and the appropriate remedy on appeal.

[¶ 59] The only allegation of misapplication of entrusted property in Count I that individually totaled more than $10,000 was the grant money allegation. As the majority notes, the district court instructed the jury it was not to consider evidence of the grant money in reaching its verdict. A jury is presumed to follow the instructions given by the court. E.g., State v. Stridiron, 2010 ND 19, ¶ 8, 777 N.W.2d 892; State v. Paul, 2009 ND 120, ¶ 27, 769 N.W.2d 416; State v. Kmckenberg, 2008 ND 212, ¶ 24, 758 N.W.2d 427.

[¶ 60] I therefore presume that the jury found Blunt had committed multiple instances of misapplication of entrusted property and aggregated the amounts to find him guilty of a class B felony under N.D.C.C. § 12.1-23-07(2)(a). The remaining allegations urged by the State in support of Count I were numerous instances of gift certificates pm-chased for WSI employees; food, beverages, flowers, balloons, decorations, costume rentals, ornaments, and employee gifts for WSI meetings; food and convention expenses for legislators; sick leave paid to a WSI executive; and failure to recoup relocation expenses owed by a WSI executive. The jury returned a general verdict finding Blunt guilty on Count I. Thus, the jury had to have found the seven elements of the statutory offense had been proven. See Blunt, 2008 ND 135, ¶ 7, 751 N.W.2d 692; Barendt, 2007 ND 164, ¶ 10, 740 N.W.2d 87. I have no way of discerning, however, which allegations the jury believed and how it arrived at an amount misapplied in excess of $10,000. In short, the jury found Blunt had on multiple occasions misapplied entrusted property, but I cannot point to any single item with a specific dollar amount that the jury relied upon.

[¶ 61] The grading provision in N.D.C.C. § 12.1-23-07(2) sets various thresholds based upon the value of the property misapplied: a class B felony if the value exceeds $10,000, a class C felony for $500 to $10,000, a class A misdemeanor for $250 to $500, and a class B misdemean- or “in all other cases.” Because the jury should not have been allowed to aggregate the amount of multiple offenses, and because I cannot discern with certainty that the jury found any single misapplication of property valued in excess of $250, I conclude the appropriate remedy on appeal is to consider this offense as falling within “all other cases” under N.D.C.C. § 12.1-23-07(2)(d) and to treat the jury’s verdict as a finding of guilt of a single instance of misapplication of entrusted property in an amount less than $250, a class B misdemeanor. I would therefore reverse the order deferring imposition of sentence based upon a class B felony and remand with directions that the jury verdict be treated as a finding of guilt of a class B misdemeanor.

[¶ 62] Gerald W. VandeWalle, C. J.