State v. Eaton

• Decision Date: 18 October 2004
• Docket Number: No. 03-388.,03-388.
• Citation: 323 Mont. 287,99 P.3d 661,2004 MT 283
• Parties: STATE of Montana, Plaintiff and Respondent, v. Myles S. EATON, Defendant and Appellant.
• Court: Montana Supreme Court

99 P.3d 661

2004 MT 283

323 Mont. 287

STATE of Montana, Plaintiff and Respondent, v. Myles S. EATON, Defendant and Appellant.

No. 03-388.

Supreme Court of Montana.

Submitted on Briefs April 28, 2004.

Decided October 18, 2004.

For Appellant: Christopher Williams, Bozeman, Montana.

For Respondent: Mike McGrath, Attorney General; John Paulson, Assistant Attorney General, Helena, Montana, Marty Lambert, County Attorney, Bozeman, Montana.

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Myles Eaton (Eaton) appeals from the sentence imposed by the Eighteenth Judicial District Court, Gallatin County, following his plea of guilty to felony theft, ordering him to pay full restitution as a condition of his suspended sentence, and to pay a portion of his net income, including any income from social security, toward his restitution obligation. We affirm in part and reverse in part and remand to the District Court.

¶ 2 We rephrase the issues on appeal as follows:

¶ 3 1. Did the District Court err in ordering Eaton to pay restitution as part of his suspended sentence?

¶ 4 2. Did the District Court err in ordering Eaton to pay restitution from his "net income," which includes his social security benefits?

FACTUAL AND PROCEDURAL BACKGROUND

¶ 5 On September 4, 1997, Eaton was appointed by District Court Judge Thomas Olson to act as a receiver in a lawsuit involving the Sunset Memorial Gardens of Bozeman (the Cemetery). As such, Eaton was charged with the fiduciary responsibility to act in the Cemetery's best interest. However, the District Court began to have suspicions regarding Eaton's actions as receiver in June 2001. On June 26, 2001, James Harris (Harris), Secretary for the Cemetery's Owners Committee, wrote a letter to the District Court complaining that Eaton refused to disclose information regarding the Cemetery's financial situation. Harris also expressed concerns that the Cemetery's bank had failed to pay checks written on the Cemetery's account. Then, on August 9, 2001, Tom Baker (Baker), Dennis Carlson (Carlson), and Harris, members of the Cemetery's Owners Committee, reiterated to the District Court their concerns regarding Eaton's handling of Cemetery's property. Further, on August 21, 2001, Carlson informed the Court that he had obtained documents showing questionable financial transactions on the Cemetery's account. In a letter to the Court, he stated that it appeared that Eaton had withdrawn approximately $1,300.00 dollars from the Cemetery's account, depositing these funds into an account for the Beth Shalom Greater Yellowstone Jewish Community (Temple), for which Eaton was Treasurer.

¶ 6 Prior to the Cemetery's Owners Committee expressing concerns about Eaton's management of Cemetery funds, the District Court, on July 30, 2001, had ordered Eaton to prepare an accounting in regard to the possible sale of the Cemetery, and set a hearing on the matter for September 10, 2001. At this point, Eaton's financial house of cards began to crumble. At the hearing, the District Court questioned Eaton regarding the concerns expressed by the Cemetery's Owners Committee. Eaton responded by stating any questionable transfer of monies from the Cemetery to the Temple were mere mistakes which he had fixed. However, on September 12, the District Court ordered the accounting firm of Veltkamp, Stannebein, and Bateson, P.C., to audit Eaton's receivership of the Cemetery. Joe Bateson (Bateson) of that firm examined bank statements, accounting records produced by Eaton, accounting records produced by Baker, various deeds and title reports, and copies of various receipts related to Cemetery operations. In addition, Bateson conducted personal interviews with Eaton, members of the Cemetery's Owners Committee and its bank, as well as the Riverside Country Club, to which Eaton belonged. In a report to the District Court, Bateson concluded that between September 1997 and September 2001, checks and other transfers were made from the Cemetery's account to Eaton, or on his behalf, in the amount of $24,498.00. These transactions included deposits into Eaton's personal bank account, payment of Eaton's personal bills, including his Riverside Country Club dues and charges, and deposits into Eaton's personal investment account with Charles Schwab.

¶ 7 Pending Bateson's report, the District Court conducted a status hearing on November 26, 2001, in which the court suspended Eaton as a receiver of the Cemetery's property. The District Court removed Eaton as receiver for the Cemetery on January 15, 2002, after the court received and reviewed Bateson's report.

¶ 8 Meanwhile, as the Cemetery's Owners Committee was growing suspicious of Eaton's actions, so were the officers of the Temple, where Eaton acted as Treasurer. On or about August 23, 2001, Jennifer Bordy (Bordy), Temple Director, and Bob Rasmus (Rasmus), Temple President, filed a complaint with the Bozeman Police Department alleging that Eaton had stolen from the Temple. Rasmus told Detective Gappmayer that he learned that checks written on the Temple's account had been dishonored for insufficient funds, that there was an unpaid account opened by Eaton on behalf of the Temple at Staples supply store, and that there were two bank accounts with Western Security Bank in the Temple's name, which the Temple officers (other than Eaton) never knew existed. Because of Rasmus's findings, the Temple retained Certified Public Accountant Randy Newberg (Newberg) to audit its accounts. Newberg discovered that without the Temple's approval, Eaton, on numerous occasions, had kept cash from Temple deposits, cashed and deposited Temple funds into his own personal account, and used Temple funds to pay personal bills, including credit cards, a car loan, telephone expenses, and Riverside Country Club dues and charges. Newberg noted that there were many unexplained ATM withdrawals and transfers between the Temple and Cemetery, with only one connection, that being Eaton.

¶ 9 On March 29, 2002, the Gallatin County Attorney charged Eaton with two counts of felony theft, common scheme, in violation of § 45-7-301, MCA; one count of perjury, in violation of § 45-7-201, MCA; and one count of tampering with or fabricating physical evidence, in violation of § 45-7-207, MCA. Count I, theft, alleged that from September 1997, through August 2001, Eaton stole money totaling $24,498.00 from the Cemetery. Count II, theft, alleged that from April 1997 through August 2001, Eaton stole money from the Temple totaling $84,556.64.

¶ 10 On December 3, 2002, Eaton pled guilty to two counts of felony theft, common scheme, in violation of § 45-6-301, MCA, pursuant to a plea agreement. The District Court dismissed the other charges. Following a sentencing hearing, the District Court sentenced Eaton to two consecutive ten-year terms, for a total of twenty years, with fifteen years suspended, at the Montana State Prison. Further, the District Court ordered Eaton to pay restitution and fees totaling $114,520.32. At the sentencing hearing, the District Court ordered Eaton to make payments equal to 20 percent of his net income per month, from any source, including money received from his social security benefits. Eaton did not object to the District Court's order entered on January 21, 2003. He appeals.

STANDARD OF REVIEW

¶ 11 We pause to clarify once again the appropriate standard of review for a challenge to a criminal sentence, an issue we addressed at length in State v. Montoya, 1999 MT 180, 295 Mont. 288, 983 P.2d 937. We review a District Court's criminal sentence for legality only. Montoya, ¶¶ 15-16; State v. Heath, 2004 MT 126, ¶ 13, 321 Mont. 280, ¶ 13, 90 P.3d 426, ¶ 13. Recently, our cases have cited to an abuse of discretion standard in reviewing criminal sentences in addition to the legality standard, see State v. Kime, 2002 MT 38, ¶ 6, 308 Mont. 341,

¶ 6, 43 P.3d 290, ¶ 6 (citing State v. Horton, 2001 MT 100, ¶ 17, 305 Mont. 242, ¶ 17, 25 P.3d 886, ¶ 17), despite our holding in Montoya to the contrary: "This Court reviews a criminal sentence only for legality (i.e., whether the sentence is within the parameters provided by statute). To the extent that ... other decisions of this Court suggest that we also review criminal sentences for an abuse of discretion, they are overruled." Montoya, ¶ 15. Thus, our review is confined to legality. Montoya, ¶ 15; Heath, ¶ 13.

DISCUSSION

¶ 12 Before addressing the issues Eaton raises on appeal, we first address the State's procedural argument that Eaton effectively waived his right to appeal the District Court's imposition of restitution by "acquiescing" in that condition. The State argues that, because of Eaton's failure to object at the sentencing hearing to the District Court's order requiring him to pay full restitution as a condition of his suspended sentence, he failed to preserve the issue for appeal. The State cites § 46-20-104, MCA, which provides that, generally, a criminal defendant must make a contemporaneous objection in order to preserve an issue on appeal. Further, the State argues that our holdings in both State v. McLeod, 2002 MT 348, 313 Mont. 358, 61 P.3d 126, and State v. Micklon, 2003 MT 45, 314 Mont. 291, 65 P.3d 559, require this conclusion. However, we disagree.

¶ 13 Unlike the defendants in McLeod and Micklon, Eaton did not "acquiesce" or "actively participate" in the imposition of the sentencing conditions which he now challenges on appeal. First, Eaton is not challenging inaccuracies contained in his presentence investigation report (PSI). See McLeod, ¶ 15 (defendant waived his right to challenge incorrect information contained in his PSI report where he had ample time to bring the inaccuracies to the district court's attention and failed to do so). Second, although Eaton offered an apology to the District Court at his sentencing hearing for his failure to make any restitution payments, made statements regarding his assets, including the...