State Of N.D. v. Hammer

Decision Date17 August 2010
Docket NumberNo. 20100025.,20100025.
Citation2010 ND 152,787 N.W.2d 716
PartiesSTATE of North Dakota, Plaintiff and Appelleev.Jay Larry HAMMER, Defendant and Appellant.
CourtNorth Dakota Supreme Court

COPYRIGHT MATERIAL OMITTED

Reid A. Brady (argued) and Cherie L. Clark (on brief), Assistant State's Attorneys, Fargo, ND, for plaintiff and appellee.

Jonathan T. Garaas (argued), Fargo, ND, for defendant and appellant.

Petra H. Mandigo Hulm (on brief), Special Assistant Attorney General, Bismarck, ND, for amicus curiae State of North Dakota.

KAPSNER, Justice.

[¶ 1] Jay Larry Hammer appeals after entering conditional guilty pleas to two counts of workers' compensation fraud. We hold the district court did not err by denying Hammer's motion to suppress bank records obtained through administrative subpoenas duces tecum, denying Hammer's motions to dismiss on double jeopardy grounds, or permitting the State to file an amended information. We decline to address Hammer's argument concerning the district court's rejection of his proposed jury instructions. We affirm the district court orders.

I.

[¶ 2] In April 2005, Hammer sustained a work-related injury, and Workforce Safety & Insurance (“WSI”) accepted his claim for disability benefits. In 2007, WSI began investigating whether Hammer had willfully made material false statements to the agency by failing to fully report work activities and income on injured worker status reports. As part of its investigation, WSI issued administrative subpoenas duces tecum to two banks seeking copies of Hammer's bank statements and deposit slips. WSI did not provide notice of the subpoenas to Hammer, nor did the banks contact him before providing the requested information to WSI. Following its investigation, WSI initiated administrative proceedings to terminate Hammer's disability and medical benefits. An administrative law judge found Hammer willfully failed to report income and work activities to WSI, which caused WSI to overpay $24,132.85 to Hammer. Therefore, the administrative law judge terminated Hammer's disability and medical benefits and ordered he pay restitution for the overpayment.

[¶ 3] In February 2009, the State filed criminal charges against Hammer. The information charged Hammer with one count of “Failing to Report Wages” under N.D.C.C. §§ 65-05-08(3), 65-05-33(2), and 12.1-32-01(4) and one count of “Filing a False Claim or False Statement” under N.D.C.C. §§ 65-05-33(1), 65-05-33(2), and 12.1-32-01(4). The first count alleged Hammer willfully “failed to report to WSI earnings from a mobile home repair business and from selling scrap metal,” while the second count alleged Hammer “received income from a mobile home repair business and selling scrap metal and willfully failed to report the income to WSI.” At his initial appearance, Hammer claimed the criminal charges should be dismissed because the information was defective and the charges violated his constitutional right against double jeopardy. The district court noted Hammer's arguments and scheduled a preliminary hearing for April 2009.

[¶ 4] At the preliminary hearing, WSI attorney Robin Forward testified he issued administrative subpoenas duces tecum seeking Hammer's bank records to two banks on two different occasions. At the time he issued the subpoenas, Forward stated WSI had not initiated administrative proceedings against Hammer, but was merely performing an investigation. During the preliminary hearing, Hammer again argued the criminal charges violated his constitutional right against double jeopardy because he was already penalized by the WSI order terminating his disability and medical benefits. The district court found probable cause supported the information and set a trial schedule.

[¶ 5] Prior to trial, Hammer filed several motions. Hammer filed a motion to suppress bank records obtained by WSI through administrative subpoenas duces tecum. Hammer argued the district court should suppress the bank records because WSI violated his constitutional right against unreasonable search and seizure, as well as state law, in obtaining them. Hammer also moved the district court to exclude from evidence the WSI order terminating his benefits, as well as the exhibits attached to the order, because the order and exhibits were the fruit of WSI's illegal search. Hammer moved to suppress evidence of his wife's wages and income, arguing such evidence was irrelevant to the charges against him. Finally, Hammer moved to dismiss the criminal charges. Hammer reasserted his argument that the charges violated his constitutional right against double jeopardy, but he also claimed the district court should dismiss the charges because he does not have to report income he receives from his wife's business to WSI.

[¶ 6] The district court denied all of Hammer's motions. The district court denied the motion to suppress because it concluded Hammer did not have a reasonable expectation of privacy in his bank records, and the constitutional right against unreasonable search and seizure did not apply. The district court also held WSI complied with state law in obtaining the bank records. The district court denied Hammer's motion to dismiss, stating double jeopardy does not prohibit criminal charges following a WSI order terminating benefits. The district court did not address Hammer's arguments about the relevance of wages and income from a business owned by his wife.

[¶ 7] In October 2009, the State moved to file an amended information. The amended information charged Hammer with one count of “Filing a False Claim or False Statement” in violation of N.D.C.C. § 65-05-33 and one count of “Filing a False Claim or False Statement” in violation of N.D.C.C. §§ 65-05-33 and 65-05-08. The first count alleged Hammer “willfully failed to notify [WSI] of the receipt of income from work while having a claim for workers compensation disability benefits....” The second count alleged Hammer “willfully failed to notify [WSI] that he is or had been working while having a claim for workers compensation disability benefits....” The amended information also expanded the time period in which Hammer was claimed to have committed the offenses. Hammer objected to the State amending the information, arguing the amendment substantively changed the charges and violated his right to due process. The district court granted the State's motion to amend over Hammer's objection, postponed the trial, and scheduled a preliminary hearing on the amended charges.

[¶ 8] The district court held the second preliminary hearing in November 2009. A WSI claims adjuster testified about WSI's acceptance of Hammer's claim for disability benefits, as well as WSI's awareness of Hammer's prior work selling scrap metal. The district court found probable cause supported the charges as amended and took notice of Hammer's previous arguments regarding double jeopardy and the bank searches. In December 2009, Hammer filed proposed jury instructions with the district court, as well as a motion in limine asking the court to prohibit the State from introducing into evidence the injured worker status reports he submitted to WSI. The district court rejected Hammer's proposed jury instructions and denied his motion in limine. Hammer then entered guilty pleas conditioned upon his appeal to this Court.

II.

[¶ 9] Hammer argues the district court erred by denying his motion to suppress the bank records because WSI violated his constitutional right against unreasonable search and seizure when it obtained the records through administrative subpoenas duces tecum. Hammer also claims the district court should have suppressed the records because WSI violated state law regarding the production of bank records and investigations by administrative agencies.

A.

[¶ 10] Hammer argues the district court erred by denying his motion to suppress because WSI violated his constitutional right against unreasonable search and seizure. Hammer claims WSI should not have been able to obtain his bank records through administrative subpoenas duces tecum, but rather should have been required to obtain search warrants issued by a neutral and detached magistrate.

[¶ 11] The Fourth Amendment of the United States Constitution provides: “The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated; and no warrants shall issue but upon probable cause....” See also N.D. Const. art. I, § 8 (providing for a right against unreasonable search and seizure). [I]f an individual has a reasonable expectation of privacy in the area searched or the materials seized, then a search and seizure within the protection of the Fourth Amendment has been conducted.” Lubenow v. N.D. State Highway Comm'r, 438 N.W.2d 528, 531 (N.D.1989) (citing Terry v. Ohio, 392 U.S. 1, 9, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968); State v. Johnson, 301 N.W.2d 625, 627 (N.D.1981)). If a search or seizure is within the protection of the Fourth Amendment, the government must generally obtain a warrant. State v. Gregg, 2000 ND 154, ¶ 23, 615 N.W.2d 515 (citing State v. Blumler, 458 N.W.2d 300, 302 (N.D.1990)).

[¶ 12] In Dorgan v. Union State Bank, 267 N.W.2d 777, 779 (N.D.1978) (citing United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976)), this Court held “there is no legitimate expectation of privacy in the information kept in bank records,” and the Fourth Amendment did not provide protection against the government obtaining a customer's bank records through a subpoena duces tecum. As the U.S. Supreme Court stated in Miller, at 440-43, 96 S.Ct. 1619, records in the custody of a bank “are the business records of the bank,” and a bank customer “takes the risk, in revealing his affairs to another, that the information will be conveyed by that person to the Government.” 1 However, since this Court's decision in Dorgan, the state legislature adopted N.D.C.C. ch. 6-08.1, which regulates the manner in...

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