DocketNumber: CR1200951; A156452
Citation Numbers: 277 Or. App. 516, 371 P.3d 1256
Judges: Dehoog, Sercombe, Tookey
Filed Date: 4/13/2016
Status: Precedential
Modified Date: 9/9/2022
A jury convicted defendant on multiple counts of theft, aggravated theft, and forgery, all arising from defendant’s employment as the alleged victim’s bookkeeper. Defendant’s theory at trial was that she and her husband had been partners in the alleged victim’s automobile dealership and, therefore, were entitled to that company’s assets. To counter that theory, the state introduced the out-of-court statements of defendant’s husband, in which, the state argued, he effectively denied the existence of any such partnership or any claim of right that defendant might have had. Defendant’s fourth assignment of error on appeal contends that those statements, when introduced via a tape recording, were inadmissible hearsay. The state responds that the husband’s statements were statements against his pecuniary or proprietary interest and, therefore, admissible. We agree with defendant that the statements were hearsay, to which no exception applied, and that the trial court’s erroneous admission of that evidence was prejudicial error. Accordingly, we reverse and remand. Because we reverse and remand on those grounds, we do not reach defendant’s other assignments of error.
The following historical and procedural facts are undisputed. Defendant and her husband, Kevin Smith, owned “Kevz Karzz,” an automobile wholesale business. In 2008, that business began to suffer as a result of the economic downturn, so defendant and Smith went into business selling used cars with the alleged victim, Rick Jones, the owner of Rick Jones Motor Company, Inc. Jones hired Smith as a salesman and hired defendant to work part time as the company’s business manager. For a time, Jones paid defendant as an employee, but, around 2009, defendant stopped receiving regular paychecks because the company was losing money. Nonetheless, she continued to work as the company’s bookkeeper to help the business stay afloat.
At some point, defendant began writing checks to herself on the corporate account. She deleted those checks from the corresponding “QuickBooks” accounting logs and otherwise altered the company’s business records. When defendant’s actions aroused the suspicion of another employee,
As a result of the foregoing conduct, the state charged defendant with two counts of theft in the first degree, ORS 164.055, five counts of aggravated theft in the first degree, ORS 164.057,
Defendant and the state introduced competing testimony regarding the nature of the business entity. Jones testified that he had considered both Smith and defendant to be his employees; he had not considered either one to be a partner in the business. Jones acknowledged that he and Smith had split the profits from selling vehicles and that he had referred to Smith as his “partner.” However, that was, in his words, simply because he had not wanted Smith to feel like an “underling.” Notably, the defense called several witnesses to impeach Jones’s testimony.
For her part, defendant testified that she and her husband had had a number of businesses together and that she had always considered herself to be a partner in those businesses. Smith, on the other hand, asserted his spousal testimonial privilege and did not testify. Defendant also called two witnesses—one of the drafters of Oregon’s partnership statutes and a small-business lawyer—to explain how partnerships are formed. Both witnesses testified that partnerships can form by operation of law, i.e., without formal agreement, and that various factors may result in the creation of a partnership, whether or not the persons involved intend to form a partnership.
Significantly, most of the statements that Smith and Jones made during the call had no bearing on whether or not there had been a partnership.
The state presented evidence of Jones’s phone call to Smith in two forms. First, the state elicited testimony regarding Smith’s part of the call during the state’s redirect examination of the investigating detective, Eggleston. Over defendant’s hearsay objection, the trial court allowed Eggleston to recount Smith’s statements that defendant had placed the money she had taken “right into her account, $116,000”; that defendant “did not put any money in Kevz Karzz, none at all”; that Smith “did not know that she had
Second, the state introduced the recorded phone call itself, which it played for the jury. In anticipation of defendant’s hearsay objections, the state argued that the contents of the recorded phone call were admissible under various hearsay exceptions. As relevant here, the state’s primary argument was that Smith’s recorded statements were admissible under the hearsay exception for statements against pecuniary or proprietary interest, OEC 804(3)(c). Notably, the state indicated that its primary purpose in offering Smith’s statements was to undermine defendant’s theory that Jones or anyone else had authorized her use of the company’s money.
The trial court agreed with the state that Smith’s recorded statements were admissible under the hearsay exception for statements against a declarant’s pecuniary or proprietary interest. As the court characterized them, “the statements that he made [were] so far at odds with his rights as a partner” that they were contrary to his pecuniary and proprietary interests in the alleged partnership. Accordingly, the court admitted those statements. Moreover,
At the close of evidence, several days later, the trial court limited the jury’s use of the phone call evidence. The court instructed the jury, “As to the tape-recorded conversation between Rick Jones and Kevin Smith, you may consider it only to assess whether Mr. Smith’s conduct or his statements were consistent or inconsistent with a partnership relationship between Mr. Jones, Mr. Smith, and the defendant.”
With that background in mind, we focus our analysis on the trial court’s admission of the evidence about the recorded phone call as a statement against Smith’s proprietary or pecuniary interest. Defendant does argue on appeal—as before the trial court—that all of Eggleston’s testimony regarding Smith’s statements was inadmissible hearsay. However, with respect to the first four of those statements, defendant does not challenge the actual basis on which the court admitted them—that defendant had opened the door to that testimony. Accordingly, defendant’s arguments do not present any reason for us to disturb the court’s ruling regarding the testimony about those four statements.
We note that, on appeal, the parties apparently agree that the recorded statements were hearsay. We agree with that premise. “‘Hearsay’ is a statement, other than
Here, the state offered Smith’s recorded statements for their truth. The trial court instructed the jury to consider the recorded statements for their bearing, if any, on whether, in fact, a partnership had been formed. Those out-of-court statements could support the state’s position—that there had been no partnership—only if they were true; that use of the statements rendered them hearsay. For example, the state offered Smith’s statement, “I didn’t even know she was on your account.” The state’s apparent purpose for offering that statement—and the one on which the trial court ultimately relied—was that it supported the inference that Smith believed the corporate account belonged to Jones, alone, and not in partnership with defendant and Smith. In turn, that belief arguably supported the state’s desired conclusion that defendant, in fact, held no partnership interest in any assets of Rick Jones Motor Company, Inc. While the state’s ultimate purpose in offering Smith’s statement (“I didn’t even know she was on your account”) was to prove a different fact (that there had been no partnership), Smith’s statement would be probative of that ultimate fact only if his statement were true. That rendered Smith’s out-of-court statement hearsay.
We apply a “two-part standard of review to a trial court’s evidentiary ruling that a statement fits within an
As noted, the trial court admitted Smith’s recorded statement under the hearsay exception for statements against the declarant’s pecuniary or proprietary interest, OEC 804(3)(c). To be admissible, such a statement, “at the time of its making,” must have been “so far contrary to the declarant’s pecuniary or proprietary interest * * * that a reasonable person in the declarant’s position would not have made the statement unless the person believed it to be true.” OEC 804(3)(c).
The state argues that the contents of the phone call were admissible because Smith “failed to claim any
Before a hearsay statement may qualify as a statement against interest, there must “be some evidence, or at least an inference which could be drawn from that evidence, which indicates that the declarant realized that the statements were against his pecuniary interest at the time they were made.” Reynoldson v. Jackson, 275 Or 641, 645, 552 P2d 236 (1976). That factual predicate is essential, because a statement against interest loses its reliability if the declar-ant did not appreciate the statement’s potential detrimental impact. Kirkpatrick, Oregon Evidence § 804.04[3][a], 914.
Reynoldson illustrates that principle. In Reynoldson, the Supreme Court considered the admissibility of a pedestrian’s out-of-court statement that he and the plaintiff, who was his sister, had been crossing a street outside of an intersection when the defendant’s car struck his sister. 275 Or at 643. That statement tended to prove that the defendant driver had had the right of way. Id. at 643-44. The defendant argued that the statement was an admissible statement against the pedestrian’s pecuniary interest, because it jeopardized his own ability to claim damages for the accident. Id. at 644-45. The court disagreed, reasoning that “[t]here was absolutely no evidence” that the pedestrian had recognized that the statements were against his pecuniary interest at the time he made them. Id. at 645. The pedestrian had not been injured himself in the accident, so “any pecuniary interest he might have had as a result of the accident would be speculative and remote.” Id. In addition, the pedestrian was 89 years old, “slightly confused,” and, evidently, a layperson. Id. at 644. Thus, the court concluded that it was “doubtful that he would have further realized that he was impairing [any pecuniary] interest by placing the site of the accident where he presumably did.” Id. at 645.
Further, as defendant pointed out at trial, most, if not all, of Smith’s statements actually protected his pecuniary and other interests at the time that he made them. For example, in response to Jones’s insinuation that some of the forged checks had been written to Smith, Smith said, “I hardly made any money [last year]. I worked my butt off.” The state offered that statement to support the inference that Smith had been an employee rather than a partner. However, the statement itself advanced rather than impaired Smith’s interests—if true, the statement showed that Smith had not been complicit in defendant’s alleged crimes. Likewise, the statement that Smith “didn’t even know she was on [the] account” exculpated rather than implicated Smith. And, to the extent that the evidence did tend to show that Smith himself was not a partner, that inference stood to benefit him as well. In other words, by disclaiming a partnership, Smith distanced himself from any financial implications, should defendant ultimately be found liable.
The fact that Smith stood more to gain than to lose from his statements prevents us from concluding that the statements were, in fact, statements against his pecuniary
In summary, to the extent that the state argues that Smith’s statements were against his interest as a potential partner in Jones’s business, we do not agree. The only evidence at trial on that point indicated that Smith believed he did not have a partnership interest. Thus, any supposed interest that he may have been motivated to protect was “speculative and remote” and, therefore, could not warrant admission of his statements over defendant’s hearsay objection. See Reynoldson, 275 Or at 645. As a result, the trial court erred in admitting the phone call evidence’ under the hearsay exception for statements against pecuniary or proprietary interest, OEC 804(3)(c).
Finally, we conclude that the trial court committed reversible error by admitting the phone call evidence. Evi-dentiary error is harmless if there is “little likelihood that the particular error affected the verdict.” State v. Davis, 336 Or 19, 32, 77 P3d 1111 (2003); see also OEC 103(1) (“Evidential error is not presumed to be prejudicial.”).
Here, the state offered—and the trial court admitted— the phone call evidence for the specific purpose of undermining defendant’s claim that she had a partnership interest in the alleged victim’s business, a claim that formed the centerpiece of her defense to the theft charges. The state bore the burden of disproving that defense beyond a reasonable doubt. ORS 161.055(1); State v. Pranger, 110 Or App 237, 239-40, 822 P2d 714 (1991), rev den, 313 Or 75 (1992) (once defendant raises defense of honest claim of right, state bears
Furthermore, we are not persuaded that the trial court’s erroneous admission of the recording was not prejudicial in light of the admission of Eggleston’s testimony regarding a few of its statements. The tape recording relayed all of Smith’s firsthand statements rather than Eggleston’s secondhand description of some of them. And, as noted, the 12-minute tape recording contained numerous allegations by Smith and Jones directly accusing defendant of theft and forgery. Thus, the tape recording was “qualitatively different” from Eggleston’s testimony and not “merely cumulative.” See Davis, 336 Or at 34 (looking to those factors to determine whether evidentiary error was harmless). As a result, we cannot say that there is little likelihood that the error affected the verdict. Admitting the evidence was reversible error.
Reversed and remanded.
“A person commits theft when, with intent to deprive another of property or to appropriate property to the person or to a third person, the person *** [t]akes, appropriates, obtains or withholds such property from an owner thereof!.]” ORS 164.015(1). Theft in the first degree requires proof that the property stolen was worth at least $1,000, ORS 164.055(1)(a), while aggravated theft in the first degree requires proof that the property was worth at least $10,000, ORS 164.057(1).
As relevant here, a person commits forgery in the first degree “if, with intent to injure or defraud, the person *** [fjalsely makes *** a written instrument,” ORS 165.007(1)(a), and “the written instrument is or purports to be ⅜#* [a] check for $1,000 or more,” ORS 165.013(1)(a)(D). A person “[f]alsely makes * * * a written instrument” if the person makes “a complete written instrument in its entirety, *** which purports to be an authentic creation of its ostensible maker, but which is not, either because the ostensible maker is fictitious or because, if real, the ostensible maker did not authorize the making ⅜ * * thereof.” ORS 165.002(4).
It is a defense to theft “that the defendant acted under an honest claim of right, in that *⅜⅜ [t]he defendant reasonably believed that the defendant was entitled to the property involved or had a right to acquire or dispose of it as the defendant did.” ORS 164.035(1). In addition, “[i]t is a defense that the property involved was that of the defendant’s spouse.” ORS 164.035(4).
In addition to intent, factors that may indicate that a partnership has been created include such things as shared profits, joint participation in the control of the business, shared liability for the business’s losses and debts, and the contribution of money or property to the business. ORS 67.055(1), (4). The state did not object to defendant’s reliance on partnership principles to justify her conduct, and we express no opinion on whether a partnership existed under the circumstances described or whether the potential existence of a partnership would have licensed that conduct.
Arguably, none of the statements that either Smith or Jones made was an obvious reference to the existence of a partnership. However, the state, defendant, and the trial court all characterized much of the recorded conversation that way, apparently based upon the inferences that the state argued arose from that evidence. For purposes of our analysis, we accept that characterization for at least some of the statements.
The trial court admitted the final statement over defendant’s hearsay objection, on the theory that the statement was a “verbal act.” See Hickey v. Settlemier, 318 Or 196, 204, 864 P2d 372 (1993) (“Some statements are themselves significant legal facts, that is, the substantive law attaches certain consequences to utterances so that the mere making of the statement becomes an issue in the case.”).
As for the fifth such statement, which the trial court admitted over defendant’s hearsay objection on the grounds that it was a “verbal act,” the trial court’s ruling does not affect our analysis. Therefore, we do not decide whether that ruling was in error.
In more concrete terms, Smith’s statement that he “didn’t even know she was on [Jones’s] account” would help prove that there had been no partnership only if Smith’s statement were true, i.e., if he really had not known that defendant was on the account. Accordingly, we must evaluate that statement for its hearsay implications. See State v. Reid, 107 Or App 352, 356, 811 P2d 1380 (1991) (out-of-court statement introduced to impeach a witness was hearsay when the impeachment value of the statement depended on its truth).
The rule also requires that the declarant be “unavailable” as a witness. OEC 804(3). The parties do not dispute that Smith made himself “unavailable” by asserting his spousal testimonial privilege. See OEC 804(1)(a) (declarant is unavailable if he or she is exempt from testifying “on the ground of privilege”); OEC 505(3) (spousal testimonial privilege).