State v. Mercer

• Decision Date: 29 December 2004
• Docket Number: Certiorari Denied, No. 29,034,Docket No. 23,390.
• Citation: 2005 NMCA 023,106 P.3d 1283
• Parties: STATE OF NEW MEXICO, Plaintiff-Appellee, v. ELLEN MERCER, Defendant-Appellant.
• Court: Court of Appeals of New Mexico

2005 NMCA 023

106 P.3d 1283

STATE OF NEW MEXICO, Plaintiff-Appellee, v. ELLEN MERCER, Defendant-Appellant.

Docket No. 23,390.

Court of Appeals of New Mexico.

Filing Date: December 29, 2004.

Certiorari Denied, No. 29,034, February 14, 2005.

Patricia A. Madrid, Attorney General, Ann M. Harvey Assistant Attorney General, for Appellee.

Brian A. Pori, Inocente, P.C., Peter Schoenburg, Rothstein, Donatelli, Hughes, Dahlstrom, Schoenburg & Frye, LLP, for Appellant.

OPINION

WECHSLER, Chief Judge.

{1} Defendant Ellen Mercer appeals her convictions for two counts of fraud and four counts of embezzlement. She argues that: (1) the district court erred in refusing to allow her to introduce the testimony of a satisfied business customer; (2) the district court improperly limited the scope of Defendant's cross-examination of the State's witness, Danny Gamboa, and improperly excluded extrinsic evidence relevant to Gamboa's motive and bias; (3) the district court erred in allowing an amendment to the grand jury indictment to add new charges; (4) the evidence was insufficient to support her convictions; (5) she was erroneously subjected to double jeopardy when convicted and sentenced for both fraud and embezzlement; and (6) cumulative error warrants reversal.

{2} We reverse and remand for a new trial to allow Defendant to introduce the testimony of at least one satisfied customer. We address Defendant's remaining issues only to the extent they either have the potential of affording Defendant greater relief on appeal or they are likely to recur on retrial.

Background

{3} Defendant was the owner and operator of Kitchen `N Bath Design in Las Cruces, New Mexico. As the owner and operator, Defendant primarily engaged in the design and construction of kitchen and bathroom countertops and cabinets. After receiving advance payments and failing to perform on her contractual obligations, Defendant was indicted on four counts of fraud, or, in the alternative, four counts of embezzlement, for activities arising out of the operation of her business. She was indicted on two counts of fraud over $20,000, or, in the alternative, embezzlement, with respect to transactions involving Danny and Paula Gamboa (the Gamboas) and Scott and Terry Adams (the Adamses). She was also charged with two counts of fraud over $2500, or, in the alternative, embezzlement, with respect to transactions involving the Gamboas and David Loyd and Kimela Miller-Loyd (the Miller-Loyds). After a jury trial, Defendant was convicted on all four counts of embezzlement and two counts of fraud.

Testimony Regarding a Contemporaneous Legitimate Business Transaction

{4} At trial, the State introduced testimony from Kimela Miller-Loyd, the Gamboas, and the Adamses that Defendant had defrauded them by collecting fees from them for goods and services that were never delivered. Defendant sought to introduce testimony from a satisfied customer as evidence of lawful business dealings. The State objected claiming that this testimony was irrelevant. Defendant responded that the testimony was directly relevant to her claim that she never intended to defraud anyone in her business dealings. To refute the State's evidence of Defendant's fraudulent intent, she sought to prove that she ran a legitimate, ongoing business, which regularly and successfully performed on projects similar to those at issue in the criminal proceedings. The State then argued that, if Defendant was allowed to introduce testimony of satisfied customers, the State would seek to bring in other dissatisfied customers. The State also argued that Defendant was improperly trying to introduce extrinsic evidence of Defendant's character.

{5} The district court excluded the evidence on the grounds that it was improper extrinsic evidence of character. See Rule 11-404 NMRA. The court observed that, under State v. McCallum, 87 N.M. 459, 461, 535 P.2d 1085, 1087 (Ct. App. 1975), the State would be entitled to bring in dissatisfied customers to show that Defendant continued to undertake projects which she could not complete. However, the court found that McCallum did not authorize Defendant to introduce the testimony of satisfied customers because that testimony would be improper extrinsic evidence of character or reputation.

{6} We analyze this decision of the district court concerning the admission or exclusion of evidence for abuse of discretion and will not disturb the exercise of that discretion absent a clear abuse. State v. Stanley, 2001-NMSC-037, ¶ 5, 131 N.M. 368, 37 P.3d 85. "An abuse of discretion occurs when the ruling is clearly against the logic and effect of the facts and circumstances of the case. We cannot say the [district] court abused its discretion by its ruling unless we can characterize it as clearly untenable or not justified by reason." State v. Woodward, 121 N.M. 1, 4, 908 P.2d 231, 234 (1995) (internal quotation marks and citation omitted).

{7} Under Rule 11-404, evidence of other acts may be admissible to prove motive, intent, and absence of mistake. In McCallum, 87 N.M. at 461, 535 P.2d at 1087, this Court held that, in a prosecution for fraud against a building contractor, the state could introduce evidence of other instances of uncharged misconduct involving similar failures to complete construction projects. We held that such evidence is admissible on the issue of the defendant's motive or intent to defraud and noted that, in the absence of such evidence, the jury could conclude that "defendant is simply a poor businessman" or mistakenly believed he could complete the contract. Id.; see State v. Schifani, 92 N.M. 127, 129, 584 P.2d 174, 176 (Ct. App. 1978) (holding that, in a prosecution for fraud and embezzlement, the testimony of witnesses who had dealings with the defendant similar in nature to the victims' dealings with the defendant was admissible as relevant to the issue of the defendant's fraudulent intent).

{8} We are unaware of any New Mexico cases addressing whether Rule 11-404 bars a defendant from offering evidence of prior lawful business dealings to attempt to rebut the state's evidence of fraudulent intent. However, we are persuaded by out-of-state authority addressing this issue that Defendant may introduce such evidence of lawful business dealings to rebut the prosecution's evidence of fraudulent intent under Rule 11-401 NMRA (defining "relevant evidence" as "evidence having any tendency to make the existence of" any consequential fact more or less probable) and Rule 11-402 NMRA (providing that relevant evidence is generally admissible). See, e.g., United States v. Thomas, 32 F.3d 418, 421 (9th Cir. 1994) (observing that defendants are entitled "to present, within reason, the strongest case they are able to marshal in their defense" which includes testimony of previous lawful behavior to negate fraudulent intent); United States v. Shavin, 287 F.2d 647, 654 (7th Cir. 1961) (same); Bogren v. State, 611 So. 2d 547, 550-51 (Fla. Dist. Ct. App. 1992) (holding that testimony of satisfied travel agency customers was relevant to the issue of the defendant's intent in accepting advance payments for travel when the travel agency was on the brink of collapse); State v. Marinos, 345 N.E.2d 76, 79 (Ohio Ct. App. 1975) (holding that it was prejudicial error to exclude the testimony of satisfied customers during the three-month period when the defendant allegedly engaged in fraud because the excluded testimony would rebut evidence introduced by the state on the question of fraudulent intent).

{9} The State argues that, even if the district court erred in excluding the testimony under Rule 11-404, the testimony was also properly excluded under the balancing requirements of Rule 11-403 NMRA, as cumulative and a waste of time. See Rule 11-403 (providing that relevant evidence "may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues or misleading the jury, or by considerations of undue delay, waste of time or needless presentation of cumulative evidence"); State v. Nguyen, 1997-NMCA-037, ¶ 7, 123 N.M. 290, 939 P.2d 1098 (observing that, even if evidence is admissible under Rule 11-404(B), the court must weigh the probative value of the evidence against its prejudicial effect pursuant to Rule 11-403 before deciding to admit the evidence). We do not agree.

{10} First, we disagree that the testimony of a satisfied customer is cumulative to Defendant's other evidence consisting of her own testimony and that of her accountant. See State v. Balderama, 2004-NMSC-008, ¶ 36, 135 N.M. 329, 88 P.3d 845 (holding that the court erred in excluding testimony as a "waste of time" when the testimony was relevant to the essential element of deliberate intent, and it was not cumulative); Chacon v. State, 88 N.M. 198, 200, 539 P.2d 218, 220 (Ct. App. 1975) (holding that evidence which came from two witnesses who were not connected to the defendant or his family was not cumulative even if the testimony appeared to be identical to that offered by the defendant); Thomas, 32 F.3d at 421 (holding that the customers benefitted by the defendant's actions were entitled to testify and that such testimony was not cumulative "of the abstract expert testimony proffered by the defendant's accountant").

{11} Second, we disagree that the district court, in the exercise of its discretion, could exclude the testimony in order to prevent a "parade of witnesses who had bad and good experiences with defendant." Indeed, the district court may exercise its discretion by limiting the number of satisfied and dissatisfied customers and excluding the testimony of any remaining customers as cumulative. However, the district court's authority to limit the number of witnesses does not alter our holding that the court abused its discretion in this case by refusing to allow Defendant to present the testimony of at least one satisfied customer. We recognize that in...