State v. Kendall
| Decision Date | 04 October 2016 |
| Docket Number | Docket: Cum-15-304 |
| Citation | 2016 ME 147,148 A.3d 1230 |
| Parties | State of Maine v. John Kendall |
| Court | Maine Supreme Court |
Thomas F. Hallett, Esq. (orally), Hallett, Zerillo & Whipple P.A., Portland, for appellant John Kendall
Janet T. Mills, Attorney General, Gregg D. Bernstein, Asst. Atty. Gen. (orally), and Elizabeth Weyl, Stud. Atty., Office of the Attorney General, Augusta, for appellee State of Maine
[¶ 1] John Kendall appeals from a judgment of conviction for three counts of theft by misapplication of property (Class B), 17–A M.R.S. § 358(B)(4) (2015) ; one count of conspiracy to commit intentional evasion of tax (Class D), 17–A M.R.S. § 151(1)(D) (2015) and 36 M.R.S. § 184–A(2) (2015) ; and three counts of failure to collect, account for, or pay over withholding tax (Class D), 36 M.R.S. § 184 (2015), entered in the Unified Criminal Docket (Cumberland County, Warren, J. ) after a jury trial. Kendall contends that on the charges of theft by misapplication and failing to collect, account for, or pay over withholding taxes, the evidence is insufficient to support the convictions and the court instructed the jury incorrectly; and that the court abused its discretion by admitting evidence of country club memberships purchased by a company he owned and used exclusively by his wife and him.1 We affirm the judgment.
[¶ 2] When the evidence is viewed in the light most favorable to the State, the jury was entitled to find the following facts beyond a reasonable doubt. See State v. Dorweiler , 2016 ME 73, ¶ 2, 143 A.3d 114.
[¶ 3] Kendall was the president and owner of Chipco International, Inc., a poker chip manufacturing business, from 1987 to 2013. In those capacities, Kendall oversaw and was integrally involved in Chipco's business operations, including payroll; controlling and managing Chipco's finances, including the business's taxes; and communicating and negotiating with the Maine Revenue Services (MRS). Under Maine law, Chipco was required to withhold income tax from employee wages and, on a quarterly basis, pay over those withholdings to the State Tax Assessor. Kendall signed Chipco's employee withholding tax returns when they were filed with the State, and he directed another member of Chipco's management team to file the returns without submitting the required payment. On multiple occasions from 2007 to 2012, Chipco failed to pay the Assessor required withholding taxes totaling more than $150,000 as those payments became due.2
[¶ 4] During that period, Kendall directed Chipco employees to pay some of Chipco's business expenses with the employee tax withholdings. He also directed that Chipco money be used to pay for some of his personal expenses such as mortgage payments and legal fees arising from a personal bankruptcy proceeding. Further, at Kendall's direction, Chipco purchased corporate country club memberships used only by Kendall and his wife.
[¶ 5] In 2009, Kendall instructed members of Chipco's management team to apply for unemployment compensation benefits. Four of those employees—all of whom later pleaded guilty to charges of theft by deception and tax evasion—received unemployment benefits while continuing to work for Chipco. Kendall directed Chipco's finance manager to pay those employees “off the books,” meaning that Chipco did not identify them as employees and did not turn over withholding taxes for them to the State Tax Assessor, even though they continued to work for Chipco, which paid them the same net amount they earned previously. Kendall also attempted to evade the MRS's collection efforts by withdrawing funds immediately after they were deposited into Chipco's accounts, and by transferring Chipco funds into bank accounts owned by another Chipco employee, by his wife, and by other corporations.
[¶ 6] Because of Chipco's failure to pay over its employee withholding taxes, Kendall received many communications from the MRS. On behalf of Chipco, he was in regular contact with the MRS for roughly five years, never challenged the MRS's tax assessments, and entered into payment plans, which Chipco did not fulfill. As he directed the use of withholding funds for other business obligations and the use of corporate money for his own expenses, he advised the MRS that Chipco did not have enough money to pay the overdue withholding amounts but promised to satisfy the debt as soon as possible.
[¶ 7] In August 2013, Kendall was indicted for three counts of theft by misapplication of property (Class B), 17–A M.R.S. § 358(B)(4) (Counts 1-3); one count of conspiracy to commit intentional evasion of tax (Class D), 17–A M.R.S. § 151(1)(D) and 36 M.R.S. § 184–A(2) (Count 4); three counts of failure to collect, account for, or pay over withholding tax (Class D), 36 M.R.S. § 184 (Counts 5-7); and one count of making and subscribing a false statement in a Maine income tax return (Class D), 36 M.R.S. § 5333 (2015) (Count 8). He entered pleas of not guilty.
[¶ 8] The court held a seven-day jury trial in March 2015. In a motion in limine, Kendall requested that the court exclude evidence about the country club memberships that Chipco paid for and that he and his wife used exclusively, arguing that evidence of affluence was unfairly prejudicial. See M.R. Evid. 403. The court denied the motion and ruled that, subject to limitations, the State could present such evidence.
[¶ 9] The jury returned guilty verdicts on all counts. Having moved unsuccessfully at trial for a judgment of acquittal, Kendall filed a renewed, post-trial motion for a judgment of acquittal. The court denied the motion as to Counts 1-7, but granted it as to Count 8. The court then imposed the following concurrent sentences: on the three charges of theft by misapplication, forty-two months to the Department of Corrections, all but ten months suspended, three years of probation, and restitution of $51,663 payable to the MRS;3 on the charge of conspiracy to commit tax evasion, six months of incarceration; and on the three charges of failure to collect, truthfully account, and pay over tax, three months of incarceration. Kendall's appeal followed.
[¶ 10] Kendall challenges the convictions for theft by misapplication of property (Counts 1-3), asserting that 17–A M.R.S. § 358(1)(A) (2015) does not apply to the failure to pay over employee withholding taxes to the State Tax Assessor. Kendall next argues that he cannot properly be convicted for failing to collect, truthfully account for, and pay over withholding taxes pursuant to 36 M.R.S. § 184 because he was not subject to a statutory duty to do so.4 Finally, Kendall contends that the court erred by admitting certain “lifestyle” evidence over his objection. We consider these arguments in turn.
[¶ 11] Kendall contends that the crime of theft by misapplication does not encompass his alleged conduct because the withholding taxes were not payable to a “3rd person” as section 358(1)(A) provides, and therefore the convictions for Counts 1-3 are erroneous.
[¶ 12] Although Kendall frames this contention in several ways, including challenges to the court's “jurisdiction” and the adequacy of the indictment, it is essentially an argument that the evidence is insufficient to support the guilty verdicts on Counts 1-3. Kendall did not make this argument below,5 but we nonetheless consider his contention under the standard of review applicable to preserved error. See State v. Van Sickle , 434 A.2d 31, 34–35 (Me.1981). As we have explained, even where an accused fails to move for entry of judgment of acquittal based on insufficiency of the evidence, the trial court has an independent duty pursuant to M.R.U. Crim. P. 29(a) to assess the sufficiency of the evidence at the close of both the State's case-in-chief and the accused's case.6 Id. at 34. Therefore, the sufficiency of the evidence to support a guilty verdict is before the court, irrespective of whether the defendant articulates it. We thus address Kendall's argument rooted in the sufficiency of the evidence under the familiar standard of “whether a trier of fact rationally could find beyond a reasonable doubt every element of the offense charged.” Dorweiler , 2016 ME 73, ¶ 6, 143 A.3d 114 (quotation marks omitted).
[¶ 13] We reiterate, however, that the level of appellate scrutiny brought to bear on a sufficiency argument is not consequential: no matter what standard of review we apply, if the evidence is not sufficient to allow a fact-finder to rationally find the defendant's guilt beyond a reasonable doubt, then the resulting conviction cannot be deemed free of reversible error. Van Sickle , 434 A.2d at 34 n.4.7
[¶ 14] Kendall's argument requires us to construe section 358. “The interpretation of a statute is a legal issue we review de novo.” State v. Jones , 2012 ME 88, ¶ 6, 46 A.3d 1125. When interpreting a statute, “we seek to effectuate the intent of the Legislature, which is ordinarily gleaned from the plain language of the statute.” Id. (quotation marks omitted). “We will not look beyond the plain language of the statute if it is unambiguous.” State v. Knight , 2016 ME 123, ¶ 9, 145 A.3d 1046. We examine statutory language in the context of the entire statutory scheme, see Jones , 2012 ME 88, ¶ 6, 46 A.3d 1125, and seek to arrive at a construction that avoids absurd or illogical results, see State v. Burby , 2003 ME 95, ¶ 6, 828 A.2d 796.
To continue reading
Request your trial
-
State v. McLaughlin
...any amount of cocaine. 17–A M.R.S. § 1102(1)(F).[¶ 16] Thus, when examined "in the context of the entire statutory scheme," State v. Kendall , 2016 ME 147, ¶ 14, 148 A.3d 1230, the thirty-two gram weight threshold in section 1105–A(1)(D) applies to a specific form of "cocaine": a mixture or......
-
State v. Cannady
...a statute is "to effectuate the intent of the Legislature, which is ordinarily gleaned from the plain language of the statute." State v. Kendall , 2016 ME 147, ¶ 14, 148 A.3d 1230 (quotation marks omitted). "We examine [the] statutory language in the context of the entire statutory scheme."......
-
State v. Gagne
...exists a victim to be made whole. [¶19] "We examine [the restitution statutes] in the context of the entire statutory scheme." State v. Kendall , 2016 ME 147, ¶ 14, 148 A.3d 1230. Maine's restitution statutes are silent on the enforceability of an order of restitution owed to a corporate en......
-
State v. Cummings
...a lack of unanimity. [¶ 16] With respect to questions of law, including the construction of statutes, our review is de novo. See State v. Kendall , 2016 ME 147, ¶ 14, 148 A.3d 1230 ; State v. Kimball , 2016 ME 75, ¶ 10, 139 A.3d 914. "A person acts intentionally with respect to a result of ......