State v. Pratt

• Citation: 813 N.W.2d 868
• Decision Date: 23 May 2012
• Docket Number: No. A09–2323.,A09–2323.
• Parties: STATE of Minnesota, Respondent, v. Marlon Terrell PRATT, Appellant.
• Court: Supreme Court of Minnesota (US)

813 N.W.2d 868

STATE of Minnesota, Respondent,

v.Marlon Terrell PRATT, Appellant.

No. A09–2323.

Supreme Court of Minnesota.

May 23, 2012.

Syllabus by the Court

1. The evidence was sufficient to support appellant's theft-by-swindle convictions.

2. A retired judge retained by a prosecuting authority to be an expert witness in an unrelated civil case is disqualified under the Code of Judicial Conduct from presiding over a criminal trial prosecuted by that same prosecuting authority. Under the unique facts of this case, reversal is warranted.

Lori Swanson, Attorney General, St. Paul, Minnesota; and Michael O. Freeman, Hennepin County Attorney, Michael Richardson, Assistant County Attorney, Minneapolis, MN, for respondent.

David W. Merchant, Chief Appellate Public Defender, Jessica Merz Godes, Assistant Public Defender, St. Paul, MN, for appellant.

OPINION

PAGE, Justice.

Appellant Marlon Terrell Pratt was charged by complaint with 17 counts of theft by swindle, pursuant to Minn.Stat. § 609.52, subd. 2(4) (2010), and two counts of racketeering, pursuant to Minn.Stat. § 609.903, subd. 1 (2010). He was charged both as a principal and as an accomplice. Following a jury trial, Pratt was convicted of all 19 counts. On appeal, the court of appeals affirmed in part, reversed in part, and remanded for resentencing. This appeal followed. On behalf of Pratt, appellate counsel raises six issues. In his pro se supplemental brief, Pratt raises a number of other issues. Because we conclude Pratt is entitled to a new trial, we only need to address two of the issues presented: (1) whether there was sufficient evidence to support Pratt's theft-by-swindle convictions; and (2) whether the judge who presided over Pratt's trial was disqualified from doing so.

I.

The facts underlying the criminal charges in the complaint arise from Pratt's employment as a loan officer with Universal Mortgage, Inc.¹ The complaint alleges that in that role, Pratt was involved in a mortgage loan fraud scheme. As a loan officer, Pratt assisted buyers in preparing purchase agreements and loan applications, which were ultimately submitted to lenders. With respect to the 17 properties involved in the complaint, Pratt prepared purchase agreements and loan applications that contained false and/or misleading information. Among other things, the purchase agreements and loan applications included inflated purchase prices for the properties involved, indicated that the properties would be owner occupied when in fact they would not be so occupied, contained falsehoods about the buyers' assets, contained falsehoods about whether down payments were borrowed, and failed to disclose that Pratt or his construction company would receive a check for a portion of the proceeds from the mortgage loans when the property transactions closed. Testimony at trial indicated that payments to the construction company were made ostensibly for construction work performed on the properties, but there was no evidence that any such work had been done. The complaint further alleges that, in reliance on these false and misleading purchase agreements and loan applications, the mortgage lenders involved were swindled out of loan funds. Under Minn.Stat. § 609.52, subd. 2(4), a person is guilty of theft by swindle if the person, “whether by artifice, trick, device, or any other means, obtains property or services from another person.”

At trial, the State presented evidence describing how a typical home purchase takes place. When a homeowner agrees to sell her home to a buyer, the agreement is memorialized in a purchase agreement. The purchase agreement identifies the seller, buyer, property, and purchase price—the amount of money the buyer promises to pay the seller for the purchase of the home. If the buyer needs a loan to finance the purchase, the buyer completes a loan application and submits the purchase agreement and loan application to a bank or other lender. The loan application defines the relationship between the buyer/borrower and the lender. Among other things, it contains the loan amount the buyer requests, the purchase price, information about the buyer's ability to repay the loan (e.g., assets and income), and a statement of whether the buyer intends to occupy the property. Although there was no direct evidence from any of the lenders involved here establishing that they relied on any information contained in the purchase agreements or loan applications submitted by or on behalf of Pratt, there was uncontroverted evidence introduced at trial establishing that it is standard practice for lenders to rely on the purchase price, the buyer's income, whether the buyer intends to occupy the property, and whether any portion of the down payment is borrowed in making a loan. Based on that information, the lender determines whether the buyer will be able to repay the loan and thus whether to make the loan.

When a lender agrees to make a loan, the closing on the property—which is often facilitated by a title company—takes place. If a title company facilitates the closing, the title company is responsible at closing for having the buyer sign the required financing documents and then disbursing all of the funds after receiving funds from the lender. In exchange for issuing the loan, the lender receives a promissory note (indicating the buyer's promise to repay the loan) and a mortgage (enabling the lender to initiate a foreclosure if the buyer fails to repay the loan).

On April 10, 2009, retired Judge Steven Lange was assigned to preside over Pratt's trial. He presided over multiple pretrial proceedings between April 10 and June 3, the date the trial began. On July 2, 2009, while the trial was still ongoing, the State disclosed for the first time that Judge Lange had been retained by the Hennepin County Attorney's Office (HCAO) in December 2008 to be an expert witness in an unrelated federal civil case.² According to Judge Lange, his involvement with the federal case began in December 2008 when he was contacted by the HCAO about the federal case. He subsequently attended a 90–minute meeting on December 23, 2008, during which he signed a confidentiality agreement, reviewed the case, and indicated what his opinion would be if he testified. On December 28, Judge Lange confirmed that he would accept the assignment to serve as an expert witness. Later, in February 2009, the HCAO provided Judge Lange with documents related to the federal case for his review. The record indicates that Judge Lange never reviewed those documents. According to Judge Lange, he had only one other contact with the HCAO about the federal case before he was assigned to preside at Pratt's trial, but he “was not asked to do anything, nor did [he] do anything” as a result of that contact. In the end, Judge Lange received no compensation related to the federal case and Judge Lange contends that he informed the HCAO on June 30 that he was no longer available to be an expert witness in the federal case. On July 7, 2009, Judge Lange returned the unreviewed February 2009 documents to the HCAO.

The State disclosed the relationship between Judge Lange and the HCAO to Pratt at the end of the day on Friday, July 2. The trial reconvened on July 6, following the holiday weekend, and jury deliberations began on July 7. On July 8, the jury found Pratt guilty of all 17 counts of theft by swindle and both counts of racketeering.

On July 9, 2009, Pratt filed a motion to disqualify Judge Lange.³ Judge Lange heard arguments on the motion on July 20, 2009, and ultimately denied the motion. Pratt requested an evidentiary hearing on his motion before the chief judge of the Fourth Judicial District. No evidentiary hearing was held and the chief judge issued an order denying Pratt's motion to disqualify Judge Lange. Pratt filed a petition for a writ of prohibition in the court of appeals to prevent Judge Lange from presiding further in the case, which the court of appeals denied. In re Pratt, No. A09–1685, Order (Minn.App. filed Sept. 24, 2009). Pratt was sentenced on September 24, 2009. Judge Lange imposed concurrent sentences of 39 months for each theft-by-swindle conviction; he also imposed concurrent sentences of 120 months for each racketeering conviction—an upward departure—based on the findings of a Blakely jury. We subsequently granted Pratt's petition for review of the court of appeals' denial of Pratt's petition for a writ of prohibition, but later vacated our order and dismissed Pratt's petition without prejudice. In re Pratt, No. A09–1685, Order (Minn. filed Feb. 4, 2010).

Pratt also appealed his convictions and sentences to the court of appeals, which affirmed in part, reversed in part, and remanded. The court reversed the trial court on two issues involving Pratt's sentences, but otherwise affirmed Pratt's convictions. With respect to Pratt's claim that he is entitled to a new trial because Judge Lange was disqualified from presiding over his trial, a two-member majority of the court of appeals panel concluded that Judge Lange was disqualified from presiding at Pratt's trial. With a different combination of the panel's members making up the majority, the court nonetheless affirmed Pratt's convictions, holding that Judge Lange's disqualification did not require reversal because Pratt had not shown prejudice. We conclude that Judge Lange was disqualified under Rule 2.11(A) of the Code of Judicial Conduct, that Pratt is entitled to a new trial, and therefore we reverse.

II.

We first address Pratt's argument that the evidence was insufficient to find him guilty of theft by swindle. The elements of theft by swindle are: (i) the owner of the property gave up possession of the property due to the swindle; (ii) the defendant intended to obtain for himself or someone else possession of the property; and (iii) the defendant's act was a swindle. Minn.Stat. § 609.52, subd. 2(4); 10 Minn. Dist. Judges Ass'n, Minnesota Practice—Jury...