State v. Ferrari

• Decision Date: 02 April 1981
• Docket Number: No. 58603,58603
• Citation: 398 So.2d 804
• Parties: STATE of Florida, Appellant, v. Franco FERRARI and Charles Tarantino, Appellees.
• Court: Florida Supreme Court

Page 804

398 So.2d 804

STATE of Florida, Appellant, v. Franco FERRARI and Charles Tarantino, Appellees.

No. 58603.

Supreme Court of Florida.

April 2, 1981.

Rehearing Denied June 19, 1981.

Jim Smith, Atty. Gen., and Phillip D. Havens, Asst. Atty. Gen., Daytona Beach, for appellant.

Robert J. Buonauro, Orlando, and James Weart, Sanford, for Franco Ferrari and Charles Tarantino, appellees.

ADKINS, Justice.

This case comes to the Court on direct appeal from the Circuit Court of the Ninth Judicial Circuit in and for Orange County. We have jurisdiction since the court below held section 713.34(3), Florida Statutes (1979), unconstitutional. Art. V, § 3(b)(1), Fla.Const.

On March 29, 1978, F & C Builders, a partnership formed by appellees, contracted with Dr. R. W. Geldner to make improvements to his residence at a cost of $38,280. An advance payment of $14,000 was made when the contract was signed. Thereafter appellee Tarantino was arrested on a fugitive warrant issued by the State of Tennessee charging misapplication of contract funds. Tarantino at that point requested that appellee Ferrari agree to advance him $10,000 from F & C Builders to settle the Tennessee claims and avoid prosecution in that state. Ferrari agreed.

Appellees received a second draw on Dr. Geldner's construction contract on May 15, 1978. The next day Geldner's check for $11,982 was deposited in F & C's bank account, bringing the balance of that account to $12,446.92. On the same day, $10,000 was withdrawn from the F & C account for disbursement in settlement of the Tennessee claims.

F & C Builders was incorporated on July 6, 1978. Subsequently Ferrari attempted to withdraw from the corporation and took a truck, a trailer, and a riding lawn mower in consideration of his capital investment. Appellees never completed the work on Geldner's home, and materialmen and subcontractors went unpaid.

On July 21, 1979, appellees were charged by information with second-degree grand theft in violation of sections 812.014 and 713.34(3), Florida Statutes (1979). Appellees moved to dismiss, alleging that section 713.34(3) was unconstitutionally void for vagueness and that the presumption of prima facie evidence of intent to defraud, which the statute permits to be drawn from misdirection of contract advances, violated appellees' Sixth Amendment rights to a fair and impartial trial.

The trial court granted the motion to dismiss, holding that section 713.34(3) was impermissibly vague, overbroad and indefinite, and violative of the due process and equal protection clauses of the United States and Florida Constitutions. It was further held that the presumption of prima facie evidence of intent to defraud was irrational and arbitrary and therefore unconstitutional. This appeal followed.

The issue to be decided is whether the court below erred in holding section 713.34(3) unconstitutional. Section 713.34(3), Florida Statutes (1979), provides:

Any person, firm, corporation or agent, officer or employee thereof who, with intent to defraud, shall use the proceeds of any payment made to him on account of improving certain real property, for any other purpose than to pay for labor or services performed on or materials furnished for this specific improvement, while any amount for which he may be or become liable for such labor, services, or materials remains unpaid shall be guilty of embezzlement and shall be prosecuted and, upon conviction, punished in accordance with the provisions of the laws of this state; provided, however, that failure to pay for such labor, services or materials furnished for this specific improvement after receipt of such proceeds shall constitute prima facie evidence of intent to defraud.

The aim of the statute is to attach criminal liability for embezzlement to the actions of a contractor who misappropriates construction funds. There are three elements of the offense of embezzlement as described by section 713.34(3). First, there must be a misdirection of funds which have been entrusted to the holder for the purpose of improving real property. Second, the misdirection of funds must take place while a bill for labor, materials or services incurred in improving the property is due (or may become due) but remains unpaid. Third, the misdirection of funds must be undertaken with the intent to defraud. There is a statutory presumption of prima facie evidence of intent to defraud if bills from suppliers or subcontractors are not paid.

First we must address the trial court's holding that the presumption employed by the statute is invalid. It is well settled that only permissive presumptions may be utilized in criminal cases. That is, presumptions "which (allow) the jury to find the presumed fact once the basic fact is proven but (do) not require such a finding by the jury." Fitzgerald v. State, 339 So.2d 209, 211 (Fla.1976) (emphasis added). The plain language of section 713.34(3) indicates that its presumption does not bind the jury to find that the presumed fact necessarily follows the proven fact, therefore the presumption is permissive in nature. In fact, the presumption in the instant case is strikingly similar to the presumption of prima facie evidence of intent under section 814.06, Florida Statutes (1973), which we upheld in Fitzgerald.

This Court has recognized two other constitutional restrictions upon presumptions:

Criminal acts declaring one fact prima facie evidence or presumption of another are frequent. Their purpose is not to relieve the State of the burden of proof, but to allow the establishment of a prima facie case. Constitutional guarantees are not violated as long as there is a rational connection between the fact proven and the ultimate fact presumed and reasonable opportunity is afforded to rebut the presumption.

State v. Kahler, 232 So.2d 166, 168 (Fla.1970) (citations omitted).

The presumption in section 713.34(3) clearly affords a reasonable opportunity for rebuttal. Since the presumption is one of prima facie evidence only, the state is not totally relieved of the burden of proof. Any time after this prima facie evidence of intent is established the defendant may come forward with evidence to negate criminal intent, thereby destroying the presumption and shifting the burden back to the state to prove intent beyond a reasonable doubt. See, e. g., Mann v. State, 209 So.2d 472 (Fla. 1st DCA 1968).

There is a rational relationship between the proven fact that material and labor costs remain unpaid after an advance of contract funds, and the presumed fact that the contractor intends to defraud. Those contractors who intend to defraud their clients must to some degree incur material and labor debts in order to keep up a minimal level of activity on the job and extract subsequent contract draws. Clearly, such an embezzlement scheme would be fruitless if the contractor in fact paid all costs incurred on the job out of the funds received. Considering these factors, the legislature could have determined that the failure to pay suppliers and materialmen constitutes sufficient indication of intent to defraud that it should be prima facie evidence of such intent. It follows that the requisite relationship between the proven and presumed facts exists here. Accordingly, we conclude that the presumption of section 713.34(3) passes constitutional muster.

The trial court also found section 713.34(3) to be vague and overbroad. These are two substantially different defects.

A vague statute is one which is constitutionally infirm because its language is so unclear or ambiguous that persons of reasonable intelligence must guess at what conduct is proscribed. Our reading of section 713.34(3) reveals no unclear language. The appellees assert that problems exist with regard to determining when a material bill is owing. They direct our attention to language in the Mann decision, supra, stating that the statute is vague and indefinite in that respect.

We will not determine the constitutionality of the Statute in question because it was not properly raised in the lower court, but we can, and we think properly so, say and determine that said statute is so...