State v. Kay

Decision Date31 March 2015
Docket NumberNo. 20120299.,20120299.
Citation349 P.3d 690,2015 UT 43
PartiesSTATE of Utah, Appellant, v. Rockie J. KAY, Appellee.
CourtUtah Supreme Court

Sean D. Reyes, Att'y Gen., John J. Nielsen, Asst. Att'y Gen., Salt Lake City, for appellant.

Samuel A. Hood, Ogden, for appellee.

Justice PARRISH authored the opinion of the Court, in which Chief Justice DURRANT, Associate Chief Justice LEE, Justice DURHAM, and Judge ORME joined. Due to his retirement, Justice NEHRING did not participate herein; Court of Appeals Judge GREGORY K. ORME sat. Justice DENO G. HIMONAS became a member of the Court on February 13, 2015, after oral argument in this matter, and accordingly did not participate.

Justice PARRISH, opinion of the Court:

INTRODUCTION

¶ 1 The State appeals the district court's dismissal of two criminal cases filed beyond the statute of limitations. In two separate cases, the State charged Rockie Kay with multiple counts of communications fraud and one count of a pattern of unlawful activity, all second-degree felonies. The district court dismissed the first case, Kay I , on statute-of-limitations grounds after holding that communications fraud is not a continuing offense. The district court dismissed the second case, Kay II , as an improper prosecution of the “same substantive offenses as ... the previous case” for which the district court had already determined that the statute of limitations had run. We agree with the district court that communications fraud is not a continuing offense and that the State therefore commenced its prosecution against Mr. Kay after the statute of limitations had run. Accordingly, we affirm the dismissal of both cases.

BACKGROUND

¶ 2 In June 2006, Terry and Tonya Fowles entered into a construction contract with Mr. Kay to build and finance the construction of their home. They made an initial payment of $50,000 to Mr. Kay, and he obtained financing through a construction loan. During construction, Mr. Kay approached the Fowleses on three separate occasions and asked them for additional money so he could make payments on the construction loan. Mr. Kay told the Fowleses that paying him cash would save them interest on the loan. The Fowleses wrote three additional checks to Mr. Kay, one in July and two in November 2006. In total, the Fowleses paid Mr. Kay $135,000.

¶ 3 In April 2007, Mr. Kay finished building the home, and Mr. and Mrs. Fowles moved in. They attempted to contact Mr. Kay multiple times to settle payment on the construction loan and to close on additional financing for the home, but Mr. Kay avoided them. Once the Fowleses threatened to contact an attorney, Mr. Kay responded. He explained that he had delayed responding because he was embarrassed to inform them of cost overruns that would necessitate an additional payment of $30,000 before they could close on the home.

¶ 4 Unsatisfied with Mr. Kay's response, Mr. and Mrs. Fowles filed a civil suit against him in November 2007 and scheduled mediation in March 2008. A few weeks before the mediation, Mr. Kay sent the Fowleses two e-mails stating that he was “still working on getting closed,” and that meeting with a mediator was unnecessary. However, the parties did meet for the mediation, during which Mr. Kay admitted that, instead of expending the Fowleses' $135,000 to build the home, he had spent it on business-related expenses, including salaries and overhead costs. Mr. Kay sent the Fowleses three subsequent e-mails in May and June 2008 suggesting that he would eventually meet with them to close on their home. But he never did, and the construction lender foreclosed on the Fowleses' home in June 2008.

¶ 5 In July 2008, the Fowleses reported Mr. Kay's fraudulent actions to local police. However, the Box Elder County Attorney's Office declined to file charges against Mr. Kay at that time. The Attorney General's Office eventually brought charges against Mr. Kay in June 2011 (Kay I ), and again in February 2012 (Kay II ).

¶ 6 The information in Kay I alleged four counts of theft by deception on the basis of Mr. Kay's admission that he used the Fowleses' four checks to fund his own business rather than to build their home. The information included one count of a pattern of unlawful activity spanning from June 6, 2006, when Mr. Kay received the first check, to June 16, 2008, when the Fowleses' home was lost to foreclosure. The count of a pattern of unlawful activity was predicated on the four counts of theft by deception.

¶ 7 The State later amended the information to replace the four counts of theft by deception with four counts of communications fraud, one for each of the four checks that Mr. Kay had obtained from the Fowleses. The State also amended the charge of a pattern of unlawful activity to predicate it on communications fraud. The district court dismissed the State's charges, concluding that the communications fraud was committed in 2006 when Mr. Kay took the Fowleses' checks. Thus, the Kay I information, which was not filed until June 2011, was filed outside of the four-year statute of limitations. The legal predicate for this conclusion was the district court's holding that communications fraud is not a continuing offense that continued during the period in which Mr. Kay attempted to conceal his fraudulent activity. Because the communications fraud charges were time barred, the district court also dismissed the charge of a pattern of unlawful activity, which was predicated on the untimely communications fraud charges.

¶ 8 Two days later, on February 23, 2012, the State filed Kay II , charging Mr. Kay with five counts of communications fraud on the basis of five e-mails Mr. Kay had sent to the Fowleses in 2008. The information in Kay II again included one count of a pattern of unlawful activity that the State alleges began on June 6, 2006, when Mr. Kay took the Fowleses' first check, and ended on June 18, 2008, after they lost their home to foreclosure. The district court dismissed Kay II with prejudice, concluding that Kay II was an improper attempt “to prosecute Defendant for the same substantive offense as in [Kay I ].” The State timely appealed both cases. The court of appeals consolidated both cases and certified the appeal to us. We have jurisdiction pursuant to section 78A–3–102(3)(b) of the Utah Code.

STANDARD OF REVIEW

¶ 9 The issue of whether communications fraud is a continuing offenses is one of statutory construction. We give no deference to the district court's ruling on this issue and instead review it for correctness. State v. Lusk, 2001 UT 102, ¶¶ 10–11, 37 P.3d 1103.

ANALYSIS

¶ 10 The State appeals from the district court's dismissal of two separate cases against Mr. Kay. We address each case in turn.

I. THE DISTRICT COURT CORRECTLY DISMISSED KAY I

¶ 11 The State argues that the district court erred when it held that the charges against Mr. Kay were time barred. It contends that communications fraud is a continuing offense and that, by concealing his fraudulent scheme, Mr. Kay continued to commit communications fraud. The State argues this prevented the statute of limitations from beginning to run until March 2008 when Mr. Kay admitted his fraudulent conduct. Specifically, the State points to the fact that Mr. Kay continued with the construction of the Fowleses' home through 2007, thereby concealing his misappropriation of the funds. The State further alleges that Mr. Kay acted to conceal the fraud when he solicited an additional $30,000, purportedly to complete work on the home, in late 2007.1

A. Communications Fraud is Not a Continuing Offense

¶ 12 In cases involving a continuing offense, the statute of limitations does not begin to run so long as the offense continues. Here, and in a companion case issued today, State v. Taylor, 2015 UT 42, 349 P.3d 696, we address an issue of first impression: when does a criminal offense qualify as continuing, thereby delaying the commencement of the limitations period.

¶ 13 We begin with an overview of our statute-of-limitations law. Section 76–1–302(1)(a) of the Utah Code provides that a felony prosecution “shall be commenced within four years after it is committed.” A crime is committed when every element of the statutory definition is satisfied. See Russell Packard Dev., Inc. v. Carson, 2005 UT 14, ¶ 20, 108 P.3d 741 ([A] statute of limitations begins to run upon the happening of the last event necessary to complete the cause of action.” (internal quotation marks omitted)).

¶ 14 Many crimes are complete at the moment of a single, discrete act. For example, the crime of assault is complete when a perpetrator commits an act “with unlawful force or violence[ ] that causes bodily injury to another.” Utah Code § 76–5–102(1)(c). Other crimes, however, are continuing. When a crime is continuing, the statute of limitations does not begin to run until the criminal conduct ceases. A classic example of a continuing offense is possession. See State v. Lawrence, 312 N.W.2d 251, 253 (Minn.1981).

¶ 15 To determine whether an offense is continuing, we turn first to the operative statute,2 which in this case is the communications fraud statute. See Utah Code § 76–10–1801. As with any question of statutory interpretation, our primary goal is to effectuate the intent of the Legislature. State v. Watkins, 2013 UT 28, ¶ 18, 309 P.3d 209. The best evidence of the Legislature's intent is the statute's plain language. Marion Energy, Inc. v. KFJ Ranch P'ship, 2011 UT 50, ¶ 14, 267 P.3d 863. Further, we interpret[ ] statutes to give meaning to all parts, and avoid [ ] rendering portions of the statute superfluous.” Watkins, 2013 UT 28, ¶ 23, 309 P.3d 209 (alterations in original) (internal quotation marks omitted).

¶ 16 Utah's communications fraud statute makes it a crime to

devise[ ] any scheme or artifice to defraud another or to obtain from another money, property, or anything of value by means of false or fraudulent pretenses, representations, promises, or material omissions, and ...
...

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3 cases
  • State v. Tipton
    • United States
    • Iowa Supreme Court
    • June 23, 2017
    ...See Pendergast , 317 U.S. at 418, 63 S.Ct. at 271 ; United States v. Gonzale z , 495 F.3d 577, 580 (8th Cir. 2007) ; State v. Kay , 349 P.3d 690, 693–94 (Utah 2015). According to Tipton, subsequent acts after the offense charged may tend to prove the charge but cannot be used to extend the ......
  • State v. Taylor
    • United States
    • Utah Supreme Court
    • March 31, 2015
    ...issued today, we address the same question with respect to the communications fraud statute, Utah Code section 76–10–1801. State v. Kay, 2015 UT 43, 349 P.3d 690.2 Because this case comes to us on an interlocutory appeal, the facts have yet to be determined. On interlocutory review, we reco......
  • State v. Stewart
    • United States
    • Utah Supreme Court
    • June 12, 2018
    ...unlawful activity. After the court bound Stewart over for trial, we decided State v. Taylor , 2015 UT 42, 349 P.3d 696, and State v. Kay , 2015 UT 43, 349 P.3d 690. Those cases concluded that securities fraud and communications fraud are not continuing offenses.2 Taylor , 2015 UT 42, ¶ 24, ......

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