Joseph Foster v. the State of Texas

Opinion filed October 6, 2022
In The
Eleventh Court of Appeals
__________
No. 11-21-00175-CR
__________
JOSEPH FOSTER, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 441st District Court
Midland County, Texas
Trial Court Cause No. CR46899
MEMORANDUM OPINION
A jury found Appellant, Joseph Foster, guilty of two first-degree felony
offenses: securities fraud involving $100,000 or more,1 and theft of property valued
1
See Act of May 18, 2011, 82d Leg., R.S. ch. 523 (H.B. 2342), § 2, 2011 Tex. Gen. Laws 1298,
1299 (codified at TEX. REV. CIV. STAT. ANN. art. 581-29(C)(3), (C)(4)(c)) (repealed effective Jan. 1, 2022)
(current version at TEX. GOV’T CODE ANN. § 4007.203(a)(1)(C), (a)(2)(A), (b)(3) (West Supp. 2022)). The
Texas Legislature repealed the Securities Act and, without making substantive changes to the Act,
transferred its provisions to the Texas Government Code effective January 1, 2022. See Act of May 21,
2019, 86th Leg., R.S., ch. 491 (H.B. 4171), §§ 3.01, 4.01–.02, 2019 Tex. Gen. Laws 1239, 1317
(“Nonsubstantive Revision of The Securities Act, Including Conforming Amendments”) (codified at TEX.
GOV’T CODE ANN. §§ 4001.001–4008.105 (West Supp. 2022)).
at $200,000 or more,2 with both offenses alleged to have been committed in 2011.
Upon Appellant’s election, the trial court assessed Appellant’s punishment at
confinement for eleven years in the Institutional Division of the Texas Department
of Criminal Justice for each conviction, with the sentences to run concurrently.
Appellant raises two issues on appeal. First, Appellant contends that we
should reverse his convictions and enter acquittals because there was insufficient
evidence to establish that Midland County was the proper venue for prosecution.
Second, Appellant asserts that the trial court’s failure to include a jury instruction in
the court’s charge that relates to Appellant’s right to not testify (commonly referred
to as a “no-adverse-inference” instruction) constituted harmful and reversible error.
We affirm.
Background Facts
The State alleged in the indictment that Appellant engaged in securities fraud
by offering to sell and selling interests in the Quay 411 – Wallace Ranch Joint
Venture, a security, to several individuals while failing to disclose material facts to
such individuals.3 Specifically, the State alleged that Appellant failed to disclose
that invested funds were used for personal expenses and for purposes other than for
2
See Act of May 29, 2011, 82d Leg., R.S., ch. 1234 (S.B. 694), § 21, 2011 Tex. Gen. Laws 3302,
3310 (amended effective Sept. 1, 2015) (current version at TEX. PENAL CODE ANN. § 31.03(e)(7) (West
2019)).
3
As noted in Bridwell v. State:
[T]he Texas Securities Act prohibits the use of fraud or fraudulent practices in connection
with the sale or offer of securities. [The Act] defines fraud or fraudulent practice to include
“an intentional failure to disclose a material fact.” The purpose of the Texas Securities Act
is to require sellers of securities to be truthful and provide investors wi[th] all material
facts, allowing them to make informed decisions. An omitted fact is material if there is a
substantial likelihood that it would have assumed actual significance in the deliberations
of a reasonable investor, in that it would have been viewed by the reasonable investor as
significantly altering the total mix of available information used in deciding whether to
invest.
No. 05-07-00258-CR, 2008 WL 467271, at *5 (Tex. App.—Dallas Feb. 23, 2008, no pet.) (not designated
for publication) (citations omitted).
2
“drilling, testing and completion of an oil and/or gas well,” each constituting a
material fact. The State additionally alleged that Appellant failed to disclose to
investors that he had prior judgments, court-ordered prohibitions, and a cease-and-
desist order pertaining to his prior business dealings. The State alleged that
Appellant obtained an amount that was $100,000 or more while committing the
securities fraud. In Count II, the State alleged that Appellant committed theft by
deception by creating and confirming false impressions with the intent to deprive the
investors of currency in an aggregate amount of $200,000 or more.
At trial, several witnesses testified during the State’s case-in-chief. Four of
the investors testified at length regarding the money paid to Appellant for Appellant
to drill and attempt to obtain profits through the Quay 411 – Wallace Ranch Joint
Venture. The investors testified regarding Appellant’s failures to (1) disclose his
prior judgments 4; (2) disclose that Appellant spent investors’ funds on personal
expenses and other purposes unrelated to their investment; (3) communicate with or
respond to the investors’ individual e-mails, letters, and phone calls requesting
information; and (4) return the money invested after Appellant failed to obtain the
rights to lease the land subject to the Quay 411 – Wallace Ranch Joint Venture. Each
of the investors testified as to the amount paid to Appellant, which, in the aggregate,
totaled over $320,000.
Two witnesses from the Texas State Securities Board (Securities Board)
testified during the State’s case-in-chief. William Mitchell, a financial examiner and
investigator with the Securities Board, explained the deposits and deductions from
Appellant’s accounts. Mitchell detailed the investors’ deposits and Appellant’s
expenditures for personal use, including Appellant’s purchases of antiques and
4
The State offered, and the trial court admitted, the following prior judgments, court-ordered
prohibitions, and cease-and-desist orders against Appellant and his companies: a Minnesota cease-and-
desist order, a Wisconsin order, two Midland County judgments, and a default judgment from Tarrant
County.
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jewelry, and for payment to Appellant’s other business accounts unrelated to the
Quay 411 – Wallace Ranch Joint Venture. The State tendered Suzanne Steinmetz,
an enforcement attorney with the Securities Board, as a securities expert. She
testified that the Quay 411 – Wallace Ranch Joint Venture was, in fact, a security.
Steinmetz testified that Appellant’s prior judgments and expenditures on personal
items and unrelated ventures constituted “material facts” required to be disclosed by
Appellant to the investors.
Analysis
Venue
In Appellant’s first issue, he asserts that the State provided insufficient
evidence to prove that venue was proper in Midland County. He bases his challenge
on the evidence that Appellant conducted business with the alleged victims in
various locations but that none of the dealings occurred in Midland County.
Appellant asserts that the evidence shows that his interactions with the alleged
victims occurred in Germany and in California, as well as the following counties in
Texas: Hemphill, Harris, Collin, Tarrant, and Travis. In response, the State contends
that Appellant did not preserve this issue for review and, alternatively, that venue
was proper in Midland County because (1) “all of the funds raised by Appellant from
investors . . . were wired or deposited in [a bank] located in Midland County,” and
(2) Appellant had a prior judgment from Midland County, a “material fact” omitted
in connection with the securities fraud allegation in Count I, Paragraph Seven of the
indictment.
Venue is not an element of an offense, and the State’s failure to prove it does
not implicate sufficiency of the evidence and does not require acquittal under
Jackson v. Virginia.5 Schmutz v. State, 440 S.W.3d 29, 35 (Tex. Crim. App. 2014).
Instead, when a party raises a challenge to venue on appeal, the Texas Rules of
5
443 U.S. 307 (1979).
4
Appellate Procedure require appellate courts to presume that venue was proven
unless venue is “disputed in the trial court” or “the record affirmatively shows the
contrary.” TEX. R. APP. P. 44.2(c)(1); see Schmutz, 440 S.W.3d at 35. Venue need
only be proven by a preponderance of the evidence. TEX. CODE CRIM. PROC. ANN.
art. 13.17 (West 2015); Fairfield v. State, 610 S.W.2d 771, 779 (Tex. Crim App.
[Panel Op.] 1981).
Here, Appellant did not dispute venue in the trial court. Accordingly, we
presume that venue was proven in the trial court unless the record affirmatively
shows otherwise. See TEX. R. APP. P. 44.2(c)(1). Appellant essentially relies on the
general venue statute, Article 13.18 of the Texas Code of Criminal Procedure, to
assert that the State had to show that all or part of the offense was committed in
Midland County. See CRIM. PROC. art. 13.18; Murphy v. State, 112 S.W.3d 592, 604
(Tex. Crim. App. 2003). However, the legislature has enacted special venue
provisions for specific types of crimes or particular facts. Murphy, 112 S.W.3d at604 (citing Soliz v. State, 97 S.W.3d 137, 141 (Tex. Crim. App. 2003)). The special
venue statutes expand the number of counties in which an offense may be
prosecuted, and they “are a species of codified ‘substantial contacts’ jurisdiction”
for a variety of reasons, including the role that several different counties may have
in a particular crime. Soliz, 97 S.W.3d at 141.
In addition to asserting that the alleged conduct occurred in Texas counties
other than Midland County, Appellant contends that the evidence showed that it also
occurred in Germany and California. Article 13.01 provides as follows: “Offenses
committed wholly or in part outside this State, under circumstances that give this
State jurisdiction to prosecute the offender, may be prosecuted in any county in
which the offender is found or in any county in which an element of the offense
occurs.” CRIM. PROC. art. 13.01. The evidence at trial detailed that Appellant lived
in Midland County during the time that the alleged conduct occurred, that he
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deposited the money obtained from the alleged victims into a bank in Midland
County, and that he used the funds that he obtained in Midland County. With respect
to the theft charge, Article 13.08 provides that “[w]here property is stolen in one
county and removed to another county, the offender may be prosecuted either in the
county in which the property was stolen or in any other county through or into which
the property was removed.” CRIM. PROC. art. 13.08(a) (West Supp. 2021).
Accordingly, the State established by a preponderance of the evidence that venue
was proper in Midland County. We overrule Appellant’s first issue.
“No-Adverse-Inference” Jury Instruction
In Appellant’s second issue, he asserts that the trial court’s failure to include
a “no-adverse-inference” instruction in its charge to the jury harmed Appellant and
that the purported error “entitle[s] him to a new trial.” The State responds that trial
counsel did not request such an instruction and, alternatively, that Appellant did not
suffer egregious harm from the trial court’s failure to include the instruction.
Appellant concedes that trial counsel did not request the desired instruction but
asserts that Appellant relied on the trial court’s statement that it would include the
instruction in the court’s final charge “when [Appellant] made his decision not to
testify in his defense.”
Under Article 36.14, the trial court is required to give the jury a written charge
“setting forth the law applicable to the case.” CRIM. PROC. art. 36.14 (West
2007); Vega v. State, 394 S.W.3d 514, 518 (Tex. Crim. App. 2013). A review of
alleged jury-charge error involves a two-step analysis. Ngo v. State, 175 S.W.3d
738, 743–44 (Tex. Crim. App. 2005); Abdnor v. State, 871 S.W.2d 726, 731–32
(Tex. Crim. App. 1994). We must first determine whether the charge contained any
actual error. Ngo, 175 S.W.3d at 743–44; Abdnor, 871 S.W.2d at 731–32. If there
was actual error, we must next determine whether the error resulted in sufficient
harm to require reversal. Ngo, 175 S.W.3d at 743–44; Abdnor, 871 S.W.2d at 731–
6
32; see also Almanza v. State, 686 S.W.2d 157, 171 (Tex. Crim. App. 1985);
Villarreal v. State, 453 S.W.3d 429, 433 (Tex. Crim. App. 2015) (describing
Almanza harm analysis for jury charge error).
While a trial court “must instruct jurors that they may not draw any adverse
inference from a defendant’s failure to testify,” it must do so only upon a request
from trial counsel. See Beathard v. State, 767 S.W.2d 423, 432 (Tex. Crim. App.
1989) (citing Carter v. Kentucky, 450 U.S. 288, 305 (1981)); Michaelwicz v. State,
186 S.W.3d 601, 622–24 (Tex. App.—Austin 2006, pet. ref’d); see also Anderson v.
State, 504 S.W.2d 507, 511 (Tex. Crim. App. 1974) (trial court did not have duty to
give “no-adverse-inference” instruction where trial counsel did not object to the
charge or request such an instruction). In the absence of a request, the failure to
include a no-adverse-inference instruction is not jury charge error. Duke v. State,
365 S.W.3d 722, 727 (Tex. App.—Texarkana 2012, pet. ref’d); Michaelwicz, 186
S.W.3d at 623. A finding that the trial court did not commit error precludes any
harm analysis under Almanza. Tolbert v. State, 306 S.W.3d 776, 779 (Tex. Crim.
App. 2010) (citing Posey v. State, 966 S.W.2d 57, 61 (Tex. Crim. App. 1998)).
Appellant seeks to evade this rule by relying on the trial court’s statement to
him that a no-adverse-inference instruction would be included in the court’s charge
to the jury—a statement made by the trial court to Appellant when it warned him
about his decision to testify at trial. However, trial counsel made several objections
to the proposed jury charge. Counsel did not, however, object to the absence of a
“no adverse inference” instruction in the final charge. Courts have noted that as part
of sound trial strategy, trial counsel may choose not to request a jury instruction on
a defendant’s election not to testify. See Duke, 365 S.W.3d at 727; Michaelwicz,
186 S.W.3d at 624. Thus, trial counsel’s choice not to object to the absence of the
no-adverse-inference instruction may have constituted sound trial strategy. Because
trial counsel did not object to the absence of the complained-of instruction, and
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because the decision to not object may have been a matter of trial strategy, the court’s
charge to the jury was not error irrespective of the trial court’s earlier statements to
Appellant. We overrule Appellant’s second issue.
This Court’s Ruling
We affirm the judgments of the trial court.
JOHN M. BAILEY
CHIEF JUSTICE
October 6, 2022
Do not publish. See TEX. R. APP. P. 47.2(b).
Panel consists of: Bailey, C.J.,
Trotter, J., and Williams, J.
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