McCary v. Com.

• Decision Date: 30 December 2003
• Docket Number: Record No. 1666-02-3.
• Citation: 42 Va. App. 119,590 S.E.2d 110
• Parties: Stephen Michael McCARY v. COMMONWEALTH of Virginia.
• Court: Virginia Court of Appeals

590 S.E.2d 110

42 Va. App. 119

Stephen Michael McCARY v. COMMONWEALTH of Virginia.

Record No. 1666-02-3.

Court of Appeals of Virginia, Salem.

December 30, 2003.

A. Gene Hart, Jr., Harrisonburg, for appellant.

Amy L. Marshall, Assistant Attorney General (Jerry W. Kilgore, Attorney General, on brief), for appellee.

Present: ANNUNZIATA, CLEMENTS and KELSEY, JJ.

ANNUNZIATA, Judge.

Stephen Michael McCary was convicted after a bench trial of construction fraud and larceny in violation of Code § 18.2-200.1. He challenges the verdict on the following grounds: the evidence was insufficient to establish fraudulent intent; he was not the criminal agent because he was an employee of a corporation; and the notice letters sent to him by the homeowners were legally defective. For the reasons that follow, we affirm the decision of trial court.

I. Background

On appeal, we view the evidence, and all reasonable inferences arising from the evidence, in the light most favorable to the Commonwealth because it prevailed below. Commonwealth v. Grimstead, 12 Va.App. 1066, 1067, 407 S.E.2d 47, 48 (1991). So viewed, the evidence establishes that McCary was the registered agent of a Harrisonburg, Virginia-based modular home building corporation known as Sudden Housing II, LLC (the company), and its predecessor, Advanced System Builders, during the years 1999-2001. Although not the owner of the company, McCary held himself out to be the company's president and was a signatory on the company's bank account at Rockingham Heritage Bank. McCary also referred to himself as general manager of the company, as well as financial director of the company. Neither McCary nor the company had a Virginia Contractor's License.

A. Botkin Home

In the fall of 1999, Freddie and Linda Botkin entered a contract to build a modular home with Advance System Builders, which later became Sudden Housing II. McCary negotiated the contract and executed it. McCary told the Botkins that the house would be completed by Thanksgiving 1999. On September 15, 1999, the Botkins wrote a check to Advance System Builders in the amount of $1,000 as a deposit on the contract. The Botkins then obtained a construction loan through City Mortgage Group. Pursuant to the schedule submitted by McCary on October 22, 1999, the mortgage company remitted a check, payable to Sudden Housing II, in the amount of $13,557.10. McCary endorsed the check and deposited it into the company's bank account.

The home was not completed by Thanksgiving as promised. The modular home finally arrived on February 7, 2000. On that day, the Botkins' mortgage company made another draw on the construction loan and forwarded a check, made payable to Advanced System Builders, in the amount of $37,255.50. McCary endorsed the check and deposited it into the company's bank account.

The same day, the mortgage company remitted a check in the amount of $86,000 directly to All American Homes. The home was "set" on the foundation the following day, at which time McCary told the Botkins it would be completed by June of 2000. That very month, a check written by McCary to a contractor for work on the garage was returned for insufficient funds. On or about April 15, 2000, the Botkins received a letter from Sudden Housing II, signed by McCary as the general manager, informing them that their home had been "seriously underpriced" and stating that it had caused a "serious cash flow problem" for the company.

In the fall of 2000, Vernon Reynolds, a criminal investigator with the Department of Professional and Occupational Regulations, began an investigation and met with McCary to discuss the Botkins' home. McCary stated he was the general manager of the company, admitted the Botkins' home had not been completed, and assured Investigator Reynolds he would see that "things were taken care of."

Investigator Reynolds met with McCary on January 23, 2001, and McCary again told him that he would have someone on the site to finish the job within weeks. Investigator Reynolds told McCary that if he and the company obtained their licenses and finished the work, the investigation would end and no further proceedings would occur. The investigator had two or three more brief telephone conversations with McCary during which McCary continued to assure him that the house would be completed. The house was never completed.

On March 22, 2001, the Botkins sent, via certified mail, a notice pursuant to Code § 18.2-200.1 to McCary at Sudden Housing II. The notice demanded the return of all advanced funds. The letter came back unclaimed, however, and the Botkins neither received a response to their letter nor a refund of any money. The Botkins later learned that Sudden Housing II had filed for bankruptcy in the spring of 2001.

B. Sharp Home

On June 23, 2000, William and Linda Sharp gave a check in the amount of $1,000, payable to Sudden Housing II, to McCary as a deposit for a modular home plan. The Sharps then entered into a contract on August 11, 2000 to purchase the home. McCary signed the contract as president of Sudden Housing II. The following day the Sharps gave McCary a check, payable to Sudden Housing II, in the amount of $45,438 to pay for the foundation, garage and deck as provided for in the contract.

The foundation was never poured, and the garage and deck were never constructed; in fact, the Sharps never received the plans for the garage and deck. In late November 2000, the manufacturer delivered the Sharps' modular home, but it could not be "set" because the foundation had not been laid. Pursuant to McCary's request, however, the Sharps wrote a check for $110,000 upon the house's arrival.

The Sharps inquired as to when the foundation would be ready, and McCary repeatedly claimed that they were "working on it." The foundation was never poured, the deck and garage were never built, and the home was never completed.

The Sharps hired attorney William Beeton to represent them. On February 8, 2001, Beeton sent a letter, via certified mail, to McCary at Sudden Housing II, demanding he return the advanced funds. Neither Beeton nor the Sharps received a response from McCary despite the notice and numerous phone calls.

The Commonwealth charged McCary with two counts of violating Code § 18.2-200.1. He was found guilty after a bench trial. McCary appeals the convictions and presents four arguments before this Court: 1) the Commonwealth's evidence was insufficient to prove he obtained the advances with fraudulent intent; 2) McCary's status as an employee of Sudden Housing II shielded him from any criminal liability; 3) the Botkins sent him a defective notice letter because it contained an incorrect zip code; and 4) the notice letters from the Botkins and Sharps failed to conform to statutory requirements because they requested the return of all funds advanced.

Under familiar principles, when the sufficiency of the evidence is challenged on appeal, we "review the evidence in the light most favorable to the Commonwealth, granting to it all reasonable inferences fairly deducible therefrom." Ortega v. Commonwealth, 31 Va.App. 779, 786, 525 S.E.2d 623, 627 (2000). Also, "[t]he judgment of a trial court sitting without a jury is entitled to the same weight as a jury verdict, and will not be disturbed on appeal unless plainly wrong or without evidence to support it." Beck v. Commonwealth, 2 Va.App. 170, 172, 342 S.E.2d 642, 643 (1986).

For the reasons that follow, we affirm.

II. Fraudulent Intent

On appeal, McCary first contends that the Commonwealth failed to prove that he obtained advances from the Botkins and Sharps with the requisite fraudulent intent. We disagree.

Code § 18.2-200.1 provides as follows:

If any person obtain from another an advance of money, merchandise or other thing, of value, with fraudulent intent, upon a promise to perform construction, removal, repair or improvement of any building or structure permanently annexed to real property, or any other improvements to such real property, including horticulture, nursery or forest products, and fail or refuse to perform such promise, and also fail to substantially make good such advance, he shall be deemed guilty of the larceny of such money, merchandise or other thing if he fails to return such advance within fifteen days of a request to do so sent by certified mail, return receipt requested, to his last known address or to the address listed in the contract.

Thus, under the statute, the Commonwealth had to prove that McCary: (1) obtained an advance of money from another person, (2) with fraudulent intent at the time the advance was obtained, (3) made a promise to perform construction or improvement involving real property, (4) failed to perform the promise, and (5) failed to return the advance "within fifteen days of a request to do so by certified mail" to McCary's last known address or his address listed in the contract. Klink v. Commonwealth, 12 Va. App. 815, 818, 407 S.E.2d 5, 7 (1991). Fraudulent intent is examined at the time McCary procured the advance, not when the parties entered into the contract. Rader v. Commonwealth, 15 Va.App. 325, 329, 423 S.E.2d 207, 210 (1992) (construing Code § 18.2-200.1).

Whether McCary had a fraudulent intent at the time he obtained the advances depends upon the circumstances of the case. Norman v. Commonwealth, 2 Va.App. 518, 520, 346 S.E.2d 44, 45 (1986). "Intent may, and most often must, be proven by circumstantial evidence and the reasonable inferences to be drawn from facts that are within the province of the trier of fact." Ellis v. Commonwealth, 29 Va.App. 548, 555, 513 S.E.2d 453, 456 (1999). Circumstantial evidence may be more compelling and persuasive than direct evidence, and it is entitled to as much weight as direct evidence when convincing. Jett v. Commonwealth, 29 Va. App. 190, 194, 510 S.E.2d 747, 748-49 (1999). The Commonwealth must exclude reasonable hypotheses of innocence that flow from circumstantial...