State v. Nistler

• Decision Date: 22 January 2015
• Docket Number: A147483.,092042AFE
• Citation: 342 P.3d 1035,268 Or.App. 470
• Parties: STATE of Oregon, Plaintiff–Respondent, v. James Charles NISTLER, Defendant–Appellant.
• Court: Oregon Court of Appeals

268 Or.App. 470

342 P.3d 1035

STATE of Oregon, Plaintiff–Respondent

v.James Charles NISTLER, Defendant–Appellant.

092042AFE

A147483.

Court of Appeals of Oregon.

Argued and Submitted July 31, 2013.

Decided Jan. 22, 2015.

Jedediah Peterson, Deputy Public Defender, argued the cause for appellant. With him on the briefs was Peter Gartlan, Chief Defender, Office of Public Defense Services.

Matthew J. Lysne, Assistant Attorney–in–Charge, argued the cause for respondent. With him on the brief was Ellen F. Rosenblum, Attorney General, and Anna M. Joyce, Solicitor General.

Before DUNCAN, Presiding Judge, and HASELTON, Chief Judge, and SCHUMAN, Senior Judge.^*

Opinion

HASELTON, C.J.

Defendant, who was convicted of racketeering, eight counts of securities fraud, and eight counts of aggravated first-degree theft, argues that the trial court erred in (1) denying his demurrer to five of the theft charges on statute of limitations grounds, (2) denying his motion for judgment of acquittal on all of the securities fraud charges, and (3) rejecting two distinct challenges to the testimony of a state's witness. As explained below, we conclude that the trial court erred in denying the demurrer as to the five theft charges.¹ However, with respect to the remaining assignments of error, we conclude that the trial court correctly denied defendant's motion for judgment of acquittal on the securities fraud charges, properly determined that the state's witness's testimony was admissible expert testimony under OEC 702, and did not otherwise commit reversible error with respect to the admission of that testimony. Accordingly, we reverse five of the theft convictions and otherwise affirm.

Consistent with the jury's verdict, the facts pertaining generally to defendant's convictions are as follows. In 2004, defendant's wife purchased undeveloped property in Jackson County for $220,000, after which defendant and his wife, along with Kellems, created Jackson County Development, LLC. In March 2006, defendant's wife sold the property to Jackson County Development, LLC, for $800,000, and in exchange received a promissory note for $765,000 secured by a trust deed on the property. The property, called Tennessee Acres, was subdivided into six lots, and the present charges relate to defendant's activities in procuring money from investors for development of houses on lots within Tennessee Acres.

Beginning approximately in early 2006 and through part of 2007, defendant ran an advertisement in a newspaper that stated: “ATTENTION INVESTORS [,] Earn 12–15% return. Secured by land. Call Jim Nistler, First Call Mortgage,” and defendant's telephone number. Investors—the victims in this case—responded to the ad or heard of defendant from others, and contacted defendant about investing. Defendant suggested to them that they invest in Tennessee Acres, explaining that houses would be built on the six lots, and that the investors would earn interest and be repaid in full within a specified period of time. Between approximately March 2006 and March 2007, the victims entered into agreements with defendant and received promissory notes from defendant, which were secured by trust deeds to various of the lots within Tennessee Acres. The victims were to receive prepaid interest and a full return of the amount invested after a given period. The victims understood that the money they provided to defendant would be used to build houses on the lots in Tennessee Acres. The victims received some of the prepaid interest they had been promised, and some received partial repayment, but were not repaid in full by defendant as promised.

Although some of the funds defendant received from the victims were used for development of Tennessee Acres, the funds were used in significant part to pay defendant's wife and other investors. The houses on the lots in Tennessee Acres were not completed as expected, and defendant was unable to repay the victims pursuant to the terms of the promissory notes. The victims recouped some, but not all, of their losses during foreclosure sales on the lots in Tennessee Acres.

In May 2009, defendant was indicted on the present charges. As discussed in more detail below—and as pertinent to defendant's assignment of error relating to the denial of his demurrer—the offenses were alleged to have occurred between March 2006 and April 2007. Defendant filed a demurrer, arguing, in pertinent part, that five of the theft charges were not alleged to have been committed within the statute of limitations. The trial court denied the demurrer.

Shortly before trial, in an omnibus hearing addressing various evidentiary issues, jury instructions, and exhibits, one of the prosecutors mentioned that the state intended to call Carolyn Smith as its first witness, and that she would offer expert testimony as to whether, inter alia, the disputed transactions involved securities. Defendant objected that such testimony would be improper, and the trial court ruled that Smith's opinion would be admissible under OEC 702. Thereafter, on the morning of the first day scheduled for trial, defense counsel raised another objection to Smith's testimony—viz., that the state had committed a discovery violation by failing to timely identify Smith as a trial witness. The trial court determined that there had been no discovery violation.

In the ensuing trial, Smith testified, describing the attributes of a “security” under Oregon's securities laws and offering an opinion that the disputed transactions did involve “securities.” Defendant subsequently unsuccessfully moved for a judgment of acquittal on all securities fraud charges, contending that the state had failed to prove that the predicate transactions involved “investment contracts” and, hence, “securities.” The jury found defendant guilty of racketeering, as well as eight counts each of securities fraud and aggravated first-degree theft.

On appeal, defendant makes four arguments. First, he asserts that the trial court erred in denying his demurrer to five of the theft charges, on the ground that the charges were brought after the three-year statute of limitations ran for those offenses. Second, he asserts that the trial court erred in denying his motion for judgment of acquittal on all of the securities fraud charges, arguing that the investments at issue in the present case did not involve “securities.” Third, he asserts that the trial court erred in determining that no discovery violation occurred with respect to the state's witness Carolyn Smith. Finally, he asserts that the trial court should have excluded Smith's testimony under OEC 702. As explained below, we conclude that defendant is correct about the statute of limitations, but that the trial court properly rejected his remaining arguments.

We turn first to the question whether the trial court erred in denying defendant's demurrer, predicated on ORS 135.630,² to five of the aggravated first-degree theft charges, on the ground that the charges were not brought within the statute of limitations. Under ORS 131.125(7),³ a prosecution for first-degree theft must, in most circumstances, be brought within three years of the commission of the offense. ORS 131.125(8)(a) provides that,

“[i]f the offense has as a material element either fraud or the breach of a fiduciary obligation, prosecution may be commenced within one year after discovery of the offense by an aggrieved party or by a person who has a legal duty to represent an aggrieved party and who is not a party to the offense, but in no case shall the period of limitation otherwise applicable be extended by more than three years.”

The charges in this case were brought on May 15, 2009. The five challenged aggravated first-degree theft charges alleged dates of commission that were not within three years of May 15, 2009. Those charges read:

“The defendants, James C. Nistler and Michelle M. Nistler, on or about [dates between March 24, 2006 and May 5, 2006], did unlawfully and knowingly commit theft of money, of the total value of $10,000 or more, the property of [named victims]. The state further alleges that the above described offense included a material element of fraud and that prosecution of the offense was commenced within one year after discovery of the offense by an aggrieved party, or a person who has a legal duty to represent an aggrieved party and is not a party to the offense, and further, that prosecution was commenced not more than six years after the offense was committed.”

In his demurrer to these charges, defendant asserted that the charges were untimely under the three-year statute of limitations. The state responded that the charges were timely under ORS 131.125(8), because each of the theft offenses, as alleged, had fraud as a material element. The state alternatively argued, citing State v. Knutson, 81 Or.App. 353, 725 P.2d 407 (1986), that the statute of limitation did not begin to run while the stolen property was “concealed.” The trial court denied defendant's demurrer.

On appeal, defendant asserts that aggravated first-degree theft does not have fraud as a material element. Defendant is correct. State v. Hunter, 257 Or.App. 764, 766, 308 P.3d 266, rev. den., 354 Or. 490, 317 P.3d 255 (2013) (extended statute of limitations period set forth in ORS 131.125(8) does not apply to aggravated first-degree theft because that offense does not contain an element of fraud or breach of a fiduciary obligation); State v. Ricker, 107 Or.App. 245, 246, 810 P.2d 1356 (1991) (same). Thus, the sole basis for satisfying the statute of limitations that is pleaded on the face of the indictment is legally inapposite.

The state now acknowledges that ORS 131.125(8) does not apply. Instead, it relies solely on the alternative rationale that it presented in the trial court—that the five charges at issue here involved “concealment,” and thus the charges were timely under this court's rationale in the Knutson case. The state's alternative reliance on Knutson...