People v. Lewis

• Decision Date: 14 March 1985
• Docket Number: No. 80CA0271,80CA0271
• Citation: 710 P.2d 1110
• Court: Colorado Court of Appeals
• Parties: The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Billy R. LEWIS and Allied Research & Marketing, Inc., d/b/a Allied Research, Inc., a corporation, Defendants-Appellants. . II

Page 1110

710 P.2d 1110

The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Billy R. LEWIS and Allied Research & Marketing, Inc., d/b/a Allied Research, Inc., a corporation, Defendants-Appellants.

No. 80CA0271.

Colorado Court of Appeals Div. II.

March 14, 1985.

Rehearing Denied April 25, 1985.

Certiorari Denied Dec. 2, 1985.

Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Dolores S. Atencio, Asst. Atty. Gen., Denver, for plaintiff-appellee.

Mary G. Allen, Boulder, for defendants-appellants.

SMITH, Judge.

Defendants, Billy R. Lewis and Allied Research & Marketing, Inc., a corporation, (Allied) appeal from the judgments of conviction entered pursuant to jury verdicts finding Lewis guilty of one count of theft over $10,000, eight counts of theft over $200 but less than $10,000, and one count of conspiracy to commit theft over $10,000, and finding Allied guilty of the theft counts. We affirm.

Billy R. Lewis was owner and president of defendant Allied. Allied was ostensibly in the business of assisting inventors in the development and marketing of their ideas.

The prosecution presented evidence that for a fee of $1500 to $2450, Allied promised to prepare a "product portfolio" for the purpose of communicating the inventor's idea to potential manufacturers. It promised that such a product portfolio would contain a patent search, drawings of the product, a product description, a production cost analysis, an advertising media study, a marketing study, a product distribution study, and an estimated pricing analysis. But, the prosecution's evidence showed that in each instance the portfolios produced contained substantially identical information that was very general in nature.

Former employees of Allied testified that the bulk of all information contained in each portfolio was reproduced unchanged from Allied's word processor. Another former employee testified that the patent information was often inaccurate and erroneous. Former Allied employees also testified that Allied routinely misrepresented its expertise, past success, and business contacts in order to induce inventors to pay Allied to prepare the portfolios presenting their ideas.

The jury heard testimony from the 16 victims involved in this case. These victims testified that they had relied upon Allied's representation that Allied's evaluation committee determined that the inventor's idea was good enough to justify the expense of having a product portfolio prepared. The victims testified that if an inventor balked at paying the fee, he was told that if he hurried, Allied could get his idea included in an upcoming trade show that would be attended by manufacturers.

A former Allied employee testified that no evaluation committee in fact existed and that every idea that did not involve food, chemicals, or perpetual motion machines was evaluated as a "good idea" as long as it appeared that the client could afford the cost of preparing a product portfolio. There was also testimony that no Allied personnel attended trade shows.

The evidence disclosed that Lewis was in the Allied office on a regular basis and that he hired and paid all personnel, approved of the portfolio contents and their method of compilation, and was generally in charge of and supervised all of Allied's activities.

I.

Defendants first contend that the trial court erred in denying their motion to suppress evidence obtained pursuant to a search warrant. We disagree.

In a four-page affidavit for a search warrant, the affiants, investigators for the Metropolitan District Attorneys Consumer Office, set forth in detail the results of interviews conducted with former customers and employees of Allied. The information set forth in the affidavit portrayed Allied as perpetrating a continuous scheme of deception upon its customers. The affidavit alleged that Allied's employees commonly made representations about services they could render that they had no capability of performing. The affidavit also alleged that Allied used "Mag Card" forms to mass produce client product portfolios. Allied then allegedly perpetuated this fraud by means of a tickler system that sent bogus progress reports to the clients.

Based on this affidavit, a warrant was issued, and pursuant to this warrant, virtually all Allied's client files, business records, bookkeeping records, and office equipment were seized.

A.

Defendants first argue that because the affidavit fails to mention the date of the offenses or exactly what the victims paid to defendants, it fails to establish probable cause to search.

In a related case involving Lewis' brother, this court found that the identical affidavit involved herein was sufficient to establish probable cause. People v. Lewis, 671 P.2d 985 (Colo.App.1983). We accept the reasoning and follow the ruling in that case.

B.

Defendants next argue that the scope of the search should have been limited to evidence related directly to the victims listed in the affidavit, and that the warrant issued improperly authorized a general search. We disagree.

"[T]he quantity of items listed in a search warrant or the quantity of items seized during the execution of a warrant does not necessarily have any bearing on the validity of the search itself. This is particularly true where a business record system is allegedly being used in the commission of a crime." People v. Tucci, 179 Colo. 373, 500 P.2d 815 (1972). A warrant will only be characterized as authorizing an impermissible general search if the facts surrounding the search indicate it was an exploratory search for evidence not specifically related to the search warrant. See People v. Tucci, supra, quoting with approval United States v. Russo, 250 F.Supp. 55 (E.D.Pa.1966). When the crime allegedly committed encompasses the entire business operation of the place searched, it is permissible to seize all files of the business. See United States v. Hershenow, 680 F.2d 847 (1st Cir.1982); United States v. Brien, 617 F.2d 299 (1st Cir.1980), cert. denied, 446 U.S. 919, 100 S.Ct. 1854, 64 L.Ed.2d 273.

Here, it can be inferred from the affidavit that the sole purpose of Allied's entire business operation was to defraud and deceive its customers. It is also apparent from the affidavit that its entire business record system was instrumental in committing the crime charged. Although virtually all records and equipment of Allied were sought, the facts surrounding the warrant indicate that all evidence sought was specifically related to proof of the crime alleged to have been committed in the affidavit. Hence, we hold that the trial court did not err in denying the defendant's motion to suppress the evidence obtained pursuant to the search warrant.

II.

Defendant Lewis next contends the trial court erred in giving an instruction explaining the application of the "exercise control" element of theft. We disagree.

The instruction complained of reads as follows:

"It is not necessary that a person maintain absolute control of the thing of value for his own personal use in order for him to be criminally liable. It is sufficient that the intended use of the money be inconsistent with the owners' use or benefit."

In separate instructions, all elements of theft were stated, with the instruction that they had to be proved beyond a reasonable doubt, a general reasonable doubt instruction was given, and an instruction on causative force was given.

Lewis argues that the quoted instruction was misleading in that it allowed the jury to find him guilty based on corporate conduct without requiring it to find that he was the causative force behind the conduct. He also contends the instruction relieved the prosecution of its burden of proving each element of the offense beyond a reasonable doubt.

The instruction complained of is a correct statement of the law. It defines one of the elements of theft in the context of the prosecution of an individual for corporate conduct. See People v. Treat, 193 Colo. 570, 568 P.2d 473 (1977). In determining the propriety of any one instruction, the instructions must be considered as a whole, and if the instructions as a whole properly instruct a jury, then there is no error. Chambers v. People, 682 P.2d 1173 (Colo.1984).

Here, the jury was instructed that Lewis could only be found liable for corporate conduct if such conduct was knowingly performed or caused by him. Considering the jury instructions as a whole, we conclude the jury was properly instructed, and the trial court did not err in giving this instruction.

III.

Defendants next contend that the trial court erred in denying their motion for mistrial based upon prosecutorial misconduct.

During an evidentiary argument before the jury, the prosecutor stated that he wanted to cross-examine defendant Lewis' brother concerning certain matters. At the time, the prosecutor was fully aware that Lewis' brother was unavailable as a witness because he had also been indicted and was awaiting trial on the same type of offenses charged against Lewis. The jury was ordered to disregard the prosecutor's comments. In response to defendant's motion for mistrial based on the prosecutor's remark, the trial court denied the motion, ruling that the remark, though unfortunate, was not so prejudicial as to require a mistrial.

The grant or denial of a motion for mistrial is within the sound discretion of the trial court and will not be disturbed on appeal absent a gross abuse of discretion prejudicing the defendants. Massey v. People, 649 P.2d 1070 (Colo.1982).

Here, the trial court immediately instructed the jury to...