State v. Puckett

• Decision Date: 28 August 1981
• Docket Number: No. 52507,52507
• Court: Kansas Court of Appeals
• Parties: , Blue Sky L. Rep. P 71,661 STATE of Kansas, Appellee, v. Floyd Calvin PUCKETT, Appellant.

Page 144

634 P.2d 144

6 Kan.App.2d 688, Blue Sky L. Rep. P 71,661

STATE of Kansas, Appellee, v. Floyd Calvin PUCKETT, Appellant.

No. 52507.

Court of Appeals of Kansas.

Aug. 28, 1981.

Review Granted Oct. 22, 1981.

Syllabus by the Court

1. A trial judge in passing upon a motion for judgment of acquittal must determine whether upon the evidence, giving full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact, a reasonable mind might fairly conclude guilt beyond a reasonable doubt. If the judge concludes guilt beyond a reasonable doubt is a fairly possible result, he must deny the motion and let the jury decide the matter. If he concludes that upon the evidence there must be such a doubt in a reasonable mind, he must grant the motion.

2. Cross-examination must be responsive to testimony given on direct and must be material and relevant.

3. Cross-examination of an expert should be permitted to the fullest extent so the jury may determine the probative value of his testimony.

4. Where general subject matter has been opened up on direct, cross-examination may go to any phase of the subject matter and is not restricted to identical details developed or specific facts gone into on the direct.

5. The extent of cross-examination lies within the sound discretion of the trial court.

6. Where a defendant's cross-examination of a witness has been limited, and it appears that full cross-examination might have more fully informed the jury and are unable to say that such cross-examination would not have changed the jury's decision, the restriction of cross-examination is error.

7. Good faith is a defense to a charge of unlawful acts committed in the sale of securities. Good faith reliance on the advice of counsel is a factor to be considered by the jury in determining whether there was an intent to defraud.

8. Where legal advice concerning the noncriminality of certain acts is given after a defendant has committed the acts, evidence of such legal advice is properly excluded.

9. No specific intent is necessary to constitute the offenses of sale of unregistered securities and sale by persons not registered as a broker/dealer except the intent to do the acts denounced by the statute. The term "willfully" under K.S.A. 1979 Supp. 17-1267 is construed to mean that the person acted intentionally in the sense that he was aware of what he was doing.

10. Generally, failure to brief an issue constitutes a waiver or abandonment of a claim of error with regard to that issue.

11. No party may assign as error the giving or failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection, unless the instruction is clearly erroneous.

12. An instruction is clearly erroneous when the reviewing court reaches a firm conviction that if the trial error had not occurred there was a real possibility the jury would have returned a different verdict.

13. Whenever an appellate court discovers an error in the jury instructions, which error is so extreme as to present a high likelihood that defendant's constitutional rights to a fair trial are involved, it has both the right and the duty to remand the case for new trial. This is so even if the matter was not objected to by defendant in the court below, nor presented in his brief on appeal, nor raised in oral argument before the appellate court. In the final analysis, it is up to the appellate court to feel assured that the defendant, particularly in a criminal case, has received a fair trial. Such rule should not come into play unless the appellate court is of the opinion that the jury might well have convicted the defendant of a crime which he may not have committed, and that such result might not have occurred had proper instructions been given.

Marjorie Wholey Haines, of Hylton & Fletcher, P.A., Wichita, for appellant.

R. Michael Jennings, Asst. Dist. Atty., Clark V. Owens, Dist. Atty., and Robert T. Stephan, Atty. Gen., for appellee.

Before SPENCER, P.J., and REES and MEYER, JJ.

MEYER, Judge:

Defendant Floyd Calvin Puckett was convicted of seven counts of selling unregistered securities (K.S.A. 17-1255 and 1979 Supp. 17-1267), seven counts of failure to register as a broker-dealer or agent (K.S.A. 1979 Supp. 17-1254 and 1979 Supp. 17-1267), and seven counts of unlawful acts in connection with the sale of a security (K.S.A. 1979 Supp. 17-1253 and 1979 Supp 17-1267) (referred to interchangeably as failure to disclose a material fact or the "fraud" counts). The securities involved are fractional interests in oil and gas leases. Defendant Puckett appeals from his conviction.

The circumstances which gave rise to the convictions began in July, 1977, when Robert R. Freeman, an attorney, and Toby Elster approached defendant regarding an oil lease, known as the Parker lease, which they had obtained in Red Willow County, Nebraska. After discussion among the three men, the details of an agreement regarding the transfer of the lease to defendant and to his corporation, Petroleum Producers, Inc., were finalized. The parties agreed that Freeman and Elster would retain a 25 percent carried interest (said 25 percent was later purchased by Arthur J. Gorski) in the oil produced in exchange for transferring the lease to defendant. Defendant also assigned to his wife a 25 percent carried interest. Defendant planned to drill two wells on the leased acreage by the beginning of 1978.

Defendant met with his salesmen in August, 1977, and acquainted them with the lease which they were to sell to potential investors. Between September, 1977, and January 10, 1978, eight investors were sold interests in the leases. None were told about the carried interests.

On October 27, 1978, defendant wrote a letter to three of the purchasers on his corporate stationery verbalizing what he had known all along:

"I told you during my presentation that the purchase price of the first two wells was double high, so to speak, due to the fact that in order for me to acquire the acreage I had to carry one-quarter of the working interest free on the drilling, equipping, and completion in addition to the normal quarter interest for the promoter-producer. In other words that party paid nothing, which made the purchase price very high, however, due to the location of the acreage involved and with the potential of getting producers rather than dry holes, I felt it was worth it."

Gary Burge, one of the salesmen, testified that one of the investors requested information about the drilling dates, which request he referred to defendant. Defendant told Burge to make a copy of a portion of a letter showing the drilling dates, but told him to cover up the portion of the letter regarding the acquisition of the Red Willow lease by giving a carried interest.

All of the investors testified that the existence of the carried interests was important knowledge to them because if they had known that there were carried interests they would not have invested. Frank Morgan, an expert witness for the State, testified that it is important to know about the existence of carried interests because "it would tell you what you might expect in the way of return, how long it would take you to get your return of your investment capital, not profit, just return of the investment capital....Would make a big difference." Morgan's testimony was also corroborated by Bruce Burditt, chief accountant in the office of the Kansas Securities Commissioner.

Defendant first contends that the trial court erred in failing to grant a motion to dismiss at the close of the State's evidence since there was no evidence to show materiality of the fact not disclosed.

The scope of review in a criminal case is found in State v. Peoples, 227 Kan. 127, 133, 605 P.2d 135 (1980):

"In a criminal action where the defendant contends the evidence at trial was insufficient to sustain a conviction, the standard of review on appeal is: Does the evidence when viewed in the light most favorable to the prosecution convince the appellate court that a rational factfinder could have found defendant guilty beyond a reasonable doubt? (Citations omitted.) In considering the sufficiency of evidence to sustain a conviction, this court looks only to the evidence in favor of the verdict, it does not weigh the evidence and if the essential elements of the charge are sustained by any competent evidence the conviction must stand. (Citation omitted.)"

K.S.A. 22-3419(1) states:

"The court on motion of a defendant or on its own motion shall order the entry of judgment of acquittal of one or more crimes charged in the complaint, indictment or information after the evidence on either side is closed if the evidence is insufficient to sustain a conviction of such crime or crimes. If a defendant's motion for judgment of acquittal at the close of the evidence offered by the prosecution is not granted, the defendant may offer evidence without having reserved the right."

In State v. Colbert, 221 Kan. 203, Syl. P 4, 557 P.2d 1235 (1976), it is stated:

"A trial judge in passing upon a motion for judgment of acquittal must determine whether upon the evidence, giving full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact, a reasonable mind might fairly conclude guilt beyond a reasonable doubt. If the judge concludes guilt beyond a reasonable doubt is a fairly possible result, he must deny the motion and let the jury decide the matter. If he concludes that upon the evidence there must be such a doubt in a reasonable mind, he must grant the motion."

See also State v. Tillery, 227 Kan. 342, 345, 606 P.2d 1031 (1980).

Our question, then, is whether there was evidence from which a juror might conclude beyond a reasonable doubt that the failure to disclose the...