State v. Cline
| Docket Number | 1 CA-CR 22-0230 |
| Decision Date | 29 June 2023 |
| Parties | STATE OF ARIZONA, Appellee, v. KRISTA MARIE CLINE, Appellant. |
| Court | Arizona Court of Appeals |
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Yavapai County No V1300CR201880022 The Honorable Michael R. Bluff, Judge
Arizona Attorney General's Office, Phoenix By Kevin M Morrow Counsel for Appellee
Krista Marie Cline, Goodyear Appellant
Presiding Judge Paul J. McMurdie delivered the Court's decision, in which Judge Michael J. Brown and Judge Michael S. Catlett joined.
¶1 Krista Marie Cline appeals from her convictions and sentences for theft and fraudulent schemes and artifices. We find no reversible error and affirm.
¶2 Cline managed the assets of several trusts, all signed and executed in Yavapai County. Between 2014 and 2017, Cline served as the trustee of the Nelson Trust.[2] During this time Cline failed to provide an annual accounting or distribute proceeds to the beneficiaries. Cline entered a 30-year "owner-carry" contract for the trust's residential property with "extremely unfavorable terms" and never distributed the proceeds to beneficiaries. Cline sold assets belonging to the trust's commercial property without depositing the proceeds in the trust account, informing beneficiaries, or making distributions. When Cline began her tenure with the Nelson Trust, the trust account had around $60,000 in assets. In the end, the trust account had less than $500 remaining.
¶3 In 2017, the probate court ordered Cline to provide an accounting for the Nelson Trust. When Cline eventually disclosed the accounting, it lacked a detailed itemization of expenses, fees, and service dates. Trust account records showed over $50,000 in transfers and withdrawals were made without documentation. Cline's banking records revealed that she transferred $35,065 from the trust to her fiduciary account, $22,950 to her checking account, $6,250 to another business account, and $600 to pay her credit card bill.
¶4 Between 2014 and 2018, Cline served as the trustee of the Porter Trust. Although the trust's executor had personally "taken care of most of his affairs," Cline removed $32,758 of the trust's $45,000 cash assets throughout her time as a trustee. Her banking records showed that she transferred $11,592 from the trust account to her fiduciary account, $14,700 to her checking account, $2,550 to another business account, and $3,916 to pay her credit card bill. Cline also sold vehicles belonging to the trust for about $6,600 without depositing the proceeds into the trust account.
¶5 For nine months in 2017, Cline served as the trustee of the Kennedy Special Needs Trust. When first executed, the trust had over $15,000 to help Kennedy live independently. Cline's banking records showed she transferred $5,103 from the trust account to her fiduciary account, $560 to her checking account, and $1,412 to pay her credit card accounts. At the end of her tenure as trustee, only around $3,000 remained.
¶6 With an investigation into Cline's trust management looming, she provided additional invoices to authorities. For the Nelson and Porter Trusts, the invoices did not list specific dates for services rendered, and the time spent on routine services appeared heavily inflated, consistently rounded up to "large even hours." Some invoices showed Cline billed for services she had not completed. For the Kennedy Trust, the formatting of the invoices differed from those of the other trusts, with dates specified next to the services rendered. The invoices, however, contained inflated hours for routine services, discrepancies in expenses, and creation dates after Cline stopped acting as trustee. When Cline eventually spoke with the lead detective, she could not recall making any "improper transfers" and denied transferring money to anything but her fiduciary account.
¶7 The State charged Cline with three counts of fraudulent schemes and artifices, Class 2 felonies (Counts 1, 3, and 5), two counts of theft, Class 2 felonies (Counts 2 and 4), and one count of theft, a Class 6 felony (Count 6). Counts 1 and 2 applied to offenses committed against the Nelson Trust, Counts 3 and 4 applied to crimes against the Porter Trust, and Counts 5 and 6 applied to crimes against the Kennedy Trust.
¶8 In an unrelated criminal case, Cline was tried and convicted for mismanaging another trust between January 2016 and March 2017. See State v. Cline (the 2017 case), 1 CA-CR 20-0257, 2021 WL 871756, at *1-2, ¶¶ 2-3, 9 (Ariz. App. Mar. 9, 2021) (mem. decision). In the 2017 case, the superior court sentenced Cline to multiple concurrent terms of imprisonment. Id. at *2, ¶ 9. We affirmed Cline's convictions but corrected an error in the sentencing minute entry. Id. at *6, ¶ ¶ 35-36.
¶9 As the trial approached in this case, Cline waived her right to counsel and elected to represent herself. In this capacity, Cline filed several pretrial motions, including a motion to dismiss for lack of subject matter jurisdiction. She argued that the criminal court lacked jurisdiction because trusts fall within the domain of the probate court. The superior court granted some of Cline's motions but denied the motion to dismiss.
¶10 In the six-day jury trial, the State presented testimony from (1) the lead detective about the relevant trusts; (2) beneficiaries, counsel for the successor trustee, and other interested parties associated with the Nelson Trust; (3) family members associated with the Porter Trust; (4) the successor trustee for the Kennedy Trust; (5) a fiduciary expert; and (6) a forensic accountant.
¶11 At the close of the State's case, Cline moved for a judgment of acquittal under Arizona Rule of Criminal Procedure ("Rule") 20(a)(1), arguing the evidence showed she acted within her lawful authority as trustee. The superior court denied the motion. Although Cline chose not to testify on her behalf, she called witnesses associated with the Kennedy Trust. Cline presented evidence of legitimate, documented purchases she made for Kennedy while acting as trustee.
¶12 In its closing argument, the State focused on the sparse, nonspecific, and hurried nature of the accounting Cline provided authorities. The State contended that compared to Cline's personal and business accounts, the jury could reasonably infer that she created the invoices "after the fact using bank records as a guide." In Cline's closing argument, she attacked the investigation, claiming authorities should have uncovered more details about her banking records, income, and online scheduling. Before its rebuttal argument, the State informed the court that it intended to comment on Cline's failure to provide any additional, possibly exculpating, documents. Cline did not object, and the court found it an appropriate rebuttal argument. The State then argued to the jury that authorities gave Cline a chance to provide additional documentation, but she chose not to do so.
¶13 The jury convicted Cline on Counts 1 through 4 but could not reach a unanimous verdict on Counts 5 and 6. The court granted the State's motion to dismiss Counts 5 and 6 with prejudice. The jury found one aggravating factor applied to Counts 1 and 3, and two aggravating factors involved Counts 2 and 4. After the jury rendered its verdict, Cline renewed her motion for judgment of acquittal under Rule 20(b)(1). She argued insufficient evidence supported her convictions, and she acted within her lawful authority in managing the trusts. The court denied the motion, finding sufficient evidence that Cline exceeded her role as a fiduciary in controlling and depriving the beneficiaries of the trust assets.
¶14 As sentencing approached, Cline submitted a sentencing memorandum and letters of support from friends and family. Cline asked for leniency and requested presentence incarceration credit for her time in custody in the 2017 case. She moved to preclude portions of the adult probation department's presentence report, arguing it included false and inaccurate statements. The court conducted a two-day presentence hearing, where Cline called the presentence report writer to testify about her findings and challenged the nature of the report. Cline's family and friends testified, further countering the recommendations made in the report. The court sustained Cline's objections to technical errors but declined to preclude the "investigative narrative."
¶15 At the sentencing, the State argued that the offenses in Cline's 2017 case constituted two prior felony convictions. The State also argued that consecutive sentences would be appropriate because Cline harmed multiple victims. Acknowledging the disposition in the 2017 case, Cline contended that the offenses, in that case, represented only one prior felony conviction and should run concurrently with her sentences in this case.
¶16 Noting that the 2017 case involved one victim, the superior court agreed with Cline and found the 2017 case constituted one prior felony conviction, or the equivalent of the first felony offense, under A.R.S. § 13-703(A).[3] The court balanced the aggravating and mitigating factors, including the jury's findings and Cline's family and community support. Based on these factors, the court sentenced Cline as a category one repetitive offender on Counts 1 and 2 imposing slightly mitigated terms of 4.5 years' imprisonment, and as a category two repetitive offender on Counts 3 and 4, imposing slightly mitigated terms of 7 years' imprisonment. See A.R.S. § 13-703(A), (H)-(I). The court ordered the sentences to be served concurrently to each other but consecutively to her sentences in the 2017 cas...
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