Hale v State
| Decision Date | 07 December 2000 |
| Docket Number | 99-985 |
| Citation | 31 S.W.3d 850 |
| Parties | DAVID HALE, APPELLANT, V. STATE OF ARKANSAS, APPELLEE, CR99-985 7 December 2000 APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, NO. CR96-3118, HON. DAVID BOGARD, JUDGE, AFFIRMED. Annabelle Clinton Imber, Justice. The appellant, David L. Hale, brings this appeal from his conviction by a jury in Pulaski County Circuit Court for making a false or misleading statement to the Arkansas Insurance Department in violation of Ark. Code Ann. § 23-60-109 (Repl. 1994). The jury sentenced Mr. Hale on that conviction to twenty-one days imprisonment in the Arkansas Department of Correction. Previously, in an interlocutory appeal by Mr. Hale, we affirmed the circuit court's denial of his motions to dismiss the State's charges against him. Hale v. State, 336 Ark. 345, 985 S.W.2d 303 (1999) (Hale I). In the present appeal, Mr. Hale raises five points on appeal: (1) there wasinsufficient evidence to support his conviction for violating Ark. Code Ann. § 23-60-109; (2) the trial court erred in not granting his motion to dismiss, when the prosecutor willfully used immunized testimony against him in violation of Kastigar v. United States, 406 U.S. 441 (1972); (3) the trial court erred in allowing the State to introduce video-deposition testimony in violation of his Sixth Amendment right of confrontation, Ark. R. Evid. 804, and Ark. Code Ann. § 16-44-202 (Repl. 1999); (4) the trial court erred in refusing to compel a witness to testify in his behalf after the witness had been granted immunity from prosecution by the State; and (5) the trial court erred in denying his cumulative-error objection and in exhibiting a hostile attitude toward Mr. Hale and his counsel in violation of his Sixth and Fourteenth Amendment rights to a fair trial and due process of law. We find merit in none of the points raised, and we affirm. At the trial of this case, the State claimed that in July of 1993 Mr. Hale entered into a complex scheme whereby he caused the president of National Savings Life Ins |
| Court | Arkansas Supreme Court |
7 December 2000
APPEAL FROM THE PULASKI COUNTY CIRCUIT COURT, NO. CR96-3118, HON. DAVID BOGARD, JUDGE, AFFIRMED.
The appellant, David L. Hale, brings this appeal from his conviction by a jury in Pulaski County Circuit Court for making a false or misleading statement to the Arkansas Insurance Department in violation of Ark. Code Ann. § 23-60-109 (Repl. 1994). The jury sentenced Mr. Hale on that conviction to twenty-one days imprisonment in the Arkansas Department of Correction. Previously, in an interlocutory appeal by Mr. Hale, we affirmed the circuit court's denial of his motions to dismiss the State's charges against him. Hale v. State, 336 Ark. 345, 985 S.W.2d 303 (1999) (Hale I). In the present appeal, Mr. Hale raises five points on appeal: (1) there wasinsufficient evidence to support his conviction for violating Ark. Code Ann. § 23-60-109; (2) the trial court erred in not granting his motion to dismiss, when the prosecutor willfully used immunized testimony against him in violation of Kastigar v. United States, 406 U.S. 441 (1972); (3) the trial court erred in allowing the State to introduce video-deposition testimony in violation of his Sixth Amendment right of confrontation, Ark. R. Evid. 804, and Ark. Code Ann. § 16-44-202 (Repl. 1999); (4) the trial court erred in refusing to compel a witness to testify in his behalf after the witness had been granted immunity from prosecution by the State; and (5) the trial court erred in denying his cumulative-error objection and in exhibiting a hostile attitude toward Mr. Hale and his counsel in violation of his Sixth and Fourteenth Amendment rights to a fair trial and due process of law. We find merit in none of the points raised, and we affirm.
At the trial of this case, the State claimed that in July of 1993 Mr. Hale entered into a complex scheme whereby he caused the president of National Savings Life Insurance Company (NSLIC) to make a false or misleading statement to the Arkansas Insurance Department in violation of Ark. CodeAnn. § 23-60-109. NSLIC was wholly owned by a holding company, National Savings Corporation (NSC), and Mr. Hale owned 100% of the stock in NSC. Mr. Hale also owned a company called Emanon Marketing Inc. (Emanon), which was the general agency for his insurance business. Joseph Niemann had been hired by Mr. Hale in January 1992 to serve as president for both NSLIC and Emanon.
By letter dated March 17, 1993, the Commissioner of the Arkansas Insurance Department, Lee Douglass, in accordance with Ark. Code Ann. § 23-69-138, notified NSLIC and its president, Mr. Niemann, that NSLIC had a capital deficiency in the amount of $38,757. The letter further advised Mr. Niemann that if the deficiency was not corrected within thirty days after receipt of the letter, Commissioner Douglass had authority, pursuant to Ark. Code Ann. § 23-69-138, to suspend NSLIC from soliciting or writing any new coverages in Arkansas until the deficiency was corrected, to deem NSLIC to be insolvent, and to institute delinquency proceedings against NSLIC.
Upon receipt of the March 17, 1993 letter, Mr. Niemann testified that he "took the letter to David Hale and we discussed it." He further stated that "we asked our attorney to meet with the Insurance Commissioner to see if he would grant us an extension to solve the deficiency, which he did."
Mr. Niemann also confirmed that the Insurance Commissioner granted a ninety-day extension of time to cure the deficiency and that Mr. Hale knew about the extension.
Likewise, Mr. Hale testified that "we" decided to get an extension, so they called their attorney, Allan Horne, to handle the matter. Although Mr. Niemann and Mr. Hale both denied that Mr. Hale attended a meeting with the Insurance Commissioner regarding the extension, Commissioner Douglass testified that he met with Mr. Hale and Mr. Horne regarding the extension, and Mr. Hale "sat in my office and told me that he would cure the impairment with a cash infusion and that he was trying to position the company where he could sell it." Thus, Mr. Hale began the process of attempting to cure NSLIC's capital impairment within the extended ninety-day period.
Mr. Hale entered into a series of transactions with George Michael Rutherford of Houston, Texas in 1993. The exact nature of these transactions was in dispute. Mr. Rutherford, along with his wife, Lisa Forbes, and Rebecca Winemiller, controlled an Arkansas company called FSA Financial Systems, Inc. (FSA). Mr. Rutherford testified that in May or June of 1993, he and Mr. Hale began discussions about FSA investing in a company called Med-A-Corp by means of a stock-swap or a preferential buy-out. According to Mr. Rutherford, they eventually agreed to do a stock swap between FSA and Med-A-Corp. He then stated that Mr. Hale "requested to borrow a couple of hundred thousand dollars to complete the deal with Med-A-Corp." Mr. Rutherford noted that he did not have $200,000, but he had just put $150,000 into a company called Ink Jet. Therefore, he agreed to loan Mr. Hale $150,000 from Ink Jet.
Mr. Hale gave a different version of his dealings with Mr. Rutherford. He testified that in 1993 Mr. Rutherford and Ms. Winemiller asked him to invest in FSA through his small business investment company, Capital Management Services, Inc. (CMSI). Although Mr. Hale told them that he could not invest any cash, he offered to let them look at CMSI's investment portfolio. As a result of that offer, they became interested in Med-A-Corp because the inactive company still held patents for "certain kinds of medical computer software." Pursuant to those discussions, Mr. Hale stated that FSA purchased 420 shares of Med-A-Corp from CMSI on March 14, 1993, and paid for those shares by transferring 420 shares of FSA stock to CMSI. Mr. Hale testified that Mr. Rutherford again approached him in May of 1993 about investing in his insurance agency, Emanon. Mr. Hale stated:
So he asked me if he bought a $150,000 in Emanon, the agency, could the agency buy $150,000 in his company -- could -- he said, you know, I said, "You can buy $150,000 worth of stock in the insurance company, and the insurance company can buy $150,000 of your stock." ... And it proceeded on to there, and then he kind of -- he made the decision about, oh, first of June, mid-June, and that's when we got Joe Niemann involved, and the stock purchase [agreement] was signed on June the 27th.
In support of Mr. Hale's testimony, the defense introduced into evidence a June 27, 1993 stock purchase agreement signed by Mr. Niemann as president of NSLIC and Lisa Forbes as president of FSA. According to that agreement, FSA agreed to sell and NSLIC agreed to buy 150 shares of $1000 par value preferred stock in FSA.
Shortly thereafter, on July 1 or 2, 1993, Mr. Rutherford directed an employee of Ink Jet to give Mr. Hale a check for $150,000 when he was ready for the money. In the meantime, Mr. Rutherford went to Texas. The State's exhibits, as confirmed by the testimony of Mr. Rutherford, Mr. Hale, and Mr. Niemann, show a series of transactions beginning on Thursday, July 1, 1993, as follows:
July 1, 1993
$150,000 cashier's check from First Commercial Bank made payable to Ink Jet
Deposit slip for $150,000 into an Ink Jet bank account
$150,000 check from Ink Jet to Emanon Marketing, Inc., signed by Thomas Quinlan of Ink Jet
Deposit slip for $150,000 into account at Pulaski Bank (Mr. Hale testified that Mr. Niemann deposited the check into the account of Emanon)
$150,000 check from Emanon to NSC, signed by Joe Niemann
Deposit slip for $150,000 into account of NSC
$150,000 check from NSC to NSLIC, signed by David Hale
Deposit slip for $150,000 into account of NSLIC
Mr. Niemann testified that Mr. Hale showed him the check from Ink Jet to Emanon on July 2, 1993, and told him that it should go to NSLIC as a capital contribution. When asked "[w]hat did [Mr. Hale] tell you to do with it[,]" Mr. Niemann stated: "Well, it was obvious it was meant to go to Emanon Marketing to be eventually contributed to National Savings Life Insurance Company." He further confirmed that he deposited the check into Emanon's account "so I could write [NSC] a check so they would in turn contribute the capital to [NSLIC]." He also testified that Mr. Hale told him about his plans for NSLIC to use the money to buy preferred stock in FSA. When Mr. Niemann expressed concern about FSA stock not being an admissible asset, Mr. Hale stated:
Following NSLIC's receipt of the $150,000 from NSC, Mr. Niemann, as president of NSLIC, signed and sent a letter to the Arkansas Insurance Department on July 6, 1993. That letter stated, in relevant part, as follows:
Under date of March 17, 1993 we were advised that National Savings Life Insurance Company in accordance with Ark. Code. Annotated 23-69-138(a) had a capital impairment in the amount of $38, 575. Subsequently, you allowed a 90 day extension for the Company to correct this deficiency.
Enclosed you will find a receipted deposit slip in the amount of $150,000 to the savings account of the Company. This is a capital contribution from our parent, National Savings Corporation.
Should you desire any additional information concerning this matter please so advise.
Attached to the letter was a copy of the July 2, 1993 deposit ticket showing that $150,000 was deposited into NSLIC's account. Mr. Niemann testified that he wrote the July 6 letter to the Insurance Commissioner because the $150,000 capital contribution to NSLIC cured the earlier deficiency. With regard to Mr. Hale's involvement in writing the letter, he stated:
I don't exactly recall whether I said, "We need to write the letter," to David Hale, or whether David Hale said to me, "We need to write the...
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