State v. Rounds

• Decision Date: 15 April 2011
• Docket Number: No. 09–418.,09–418.
• Parties: STATE of Vermontv.David ROUNDS.
• Court: Vermont Supreme Court

22 A.3d 477

2011 VT 39

STATE of Vermont

v.David ROUNDS.

No. 09–418.

Supreme Court of Vermont.

April 15, 2011.

William H. Sorrell, Attorney General, and David Tartter, Assistant Attorney General, Montpelier, for Plaintiff–Appellee.Matthew F. Valerio, Defender General, Rebecca Turner, Appellate Defender, and Cabot Teachout, Legal Intern, Montpelier, for Defendant–Appellant.Present: REIBER, C.J., DOOLEY, JOHNSON, SKOGLUND and BURGESS, JJ.SKOGLUND, J.

¶ 1. Defendant, a home improvement contractor, appeals a jury verdict adjudging him guilty of home improvement fraud. He makes three claims of error on appeal: (1) the trial court erred in denying his motion for acquittal because the State failed to establish that he knowingly promised performance that he did not intend to complete, in whole or in part, at the time he entered into the contract, and the court's ruling to the contrary ignores his substantial performance under the contract; (2) the trial court gave a faulty permissive inference instruction that was not supported by the evidence, was contrary to the statutory language of 13 V.S.A. § 2029, violated Vermont Rule of Evidence 303, and impermissibly lowered the State's burden of proof; (3) the permissive inference in 13 V.S.A. § 2029 is unconstitutional on its face. We vacate his conviction for home improvement fraud and remand the case for a new trial because the State did not establish the predicate facts for instructing the jury on the permissive inference, and, as given, the instruction on the permissive inference failed to reflect the requirements of the statute.

¶ 2. The essential facts of the case are largely uncontested. Homeowners, a husband and wife, were residents of New York and purchased a second home in Andover, Vermont, in 2005. Desiring to renovate and expand the home, they hired defendant as their contractor. They had architectural plans drawn up and met with defendant several times in 2006 to discuss and review these plans. In November 2006, defendant and homeowners entered into a contract for construction of an additional 900 square feet, adding two bedrooms and one bathroom and enlarging the living space on the ground floor. Homeowners also wanted defendant to build a 450 square foot deck off the addition. Based on the plans, defendant quoted homeowners a price of $68,000 to $69,000 for labor and materials, which homeowners thought was “very good.” The parties understood at the time of the contract that work could not begin on the home until May 2007, as the road accessing the property was rough and impassable until spring. The final contract apparently never gave a firm completion date, nor did it lay out a payment schedule.¹ Upon execution of the contract, homeowners paid defendant $7000.

¶ 3. Before any work began at the site, homeowners met with defendant in April 2007 ² and informed him that they had found a less expensive source for building materials and would have most of them shipped to the site from New York. The materials cost would then be deducted from the original contract price. Because defendant would need additional supplies from a nearby source, homeowners set up an account for the project at a local lumber yard where defendant could purchase supplies, which would be charged to homeowners. At the April meeting, homeowners paid defendant an additional $5000 to get the job started. When husband visited the house in June and met with defendant, the materials had arrived and work had begun. According to husband, the footings were excavated and possibly poured, and demolition of the wall of the existing home had begun. During the June meeting, defendant brought up concerns about finding a mason to build the new chimney, which would need to be complete before the walls of the addition could be erected. Defendant eventually contracted with a mason in July, and homeowners wrote defendant a $10,000 check as a deposit for the mason's work.

¶ 4. By August, defendant had completed the foundation of the addition, demolished the rear wall of the house, and framed two walls for the first floor of the addition. At this point, homeowners had serious concerns about the progress of the work. Husband, who worked in real estate development—specifically custom-home construction—estimated that framing a project of this size should have taken two or three weeks at most. Apparently homeowners did not bring their concerns about the slow pace of work to defendant at this August meeting. Even so, defendant explained that the framing was slowed because the mason had not completed the chimney, which was necessary before defendant could tie the addition's roof to the existing roof. Homeowners noted that because the roof was not complete, rainwater had entered the finished basement of the existing house, damaging sheetrock and insulation. At this point, defendant asked homeowners for another progress payment, which they refused. They did give defendant a check for $2000 to purchase a set of French doors for the addition and to pay for waste disposal on the job site. Defendant cashed this check.

¶ 5. Homeowners met with defendant at the house in September and noted that the framing on the addition's second story was completed and the roof was underway—possibly even sheathed—but the house was still not weather tight. Homeowners provided defendant with a progress payment of $10,000 at this meeting. At the end of September, defendant requested an immediate payment of $6715 for materials to complete the roof and pay his roofing crew.

¶ 6. At a meeting in October, homeowners noted that the addition had some metal roofing in place but that the chimney was not yet built to the roof line, and the roof itself was not yet water tight. By the November visit, homeowners still did not believe the roof was weather tight. At this meeting, defendant asked for an immediate additional payment. Husband wrote a check to defendant for $7500 using a check from his credit card company. A few days later, defendant contacted homeowners to request a replacement check, explaining that his bank would take an additional ten days to cash the credit-card check. Homeowners understood that defendant would destroy the original check and sent him a replacement check drawn on their personal bank account. They later learned that defendant had cashed both checks. Also in November, homeowners received an invoice from the local Vermont lumberyard charging them almost $600 for a set of French doors defendant had purchased, presumably the same doors for which they had already paid defendant.

¶ 7. Homeowners called defendant to request a meeting at the site in December, but, for the first time in their relationship with defendant, they did not receive a return call. After several attempts to contact defendant about a meeting, husband visited the home and determined that little progress had been made since his November visit some three weeks earlier. Siding for the house, which had been delivered in July, was still lying on the ground, unused. Defendant had not installed insulation or sheetrock or any interior doors nor had he begun construction on the deck. Husband testified that the addition's roof was still not tied into the existing house and that some of the work defendant had completed was contrary to the plans the parties had agreed upon when signing the contact.

¶ 8. At this point, communication between the parties completely broke down. Homeowners tried several times to reach defendant to inquire about the lack of progress on the project to no avail. In January 2008 they informed defendant that they were cancelling the contract and his services would no longer be needed. They had paid over $100,000 for the project, roughly $70,000 directly to defendant. They ultimately paid over $30,000 to another contractor to make the addition weather tight, repair water damage done to the finished basement in the existing house, and correct alterations from the original plans. Also in January, homeowners received notice that defendant had sued them for breach of contract. Homeowners eventually countersued for breach and reported defendant's conduct to law enforcement.

¶ 9. Based on these facts, the State charged defendant with three criminal counts: Count One, home improvement fraud under 13 V.S.A. § 2029; Count Two, misdemeanor false pretenses, under 13 V.S.A. § 2002, based on the double payment for the $600 French doors; and Count Three, felony false pretenses, under the same statute, for cashing the two $7500 checks. At the trial, the State's main witness was husband, who had most of the dealings with defendant. Wife also testified. Defendant did not testify or present witnesses.

¶ 10. At the close of the State's case, defendant brought a motion for judgment of acquittal under Vermont Rule of Criminal Procedure 29. In relevant part, he argued that the State had failed to present evidence that at the time he had signed the contract with homeowners he had knowingly promised performance he knew would not be performed. He highlighted the absence of a clear timeline for performance in the contract and the fact that he completed a substantial amount of work. Though he admitted there was more work to be done when he left the project, he argued that this did not constitute evidence that he had intended not to finish the project at the time he had signed the contract nearly a year earlier. The trial court denied his motion. The court recognized that there would rarely be direct evidence of any person's intent “at the specific moment of entering into the contract”; for this reason, it noted that “circumstantial evidence is sufficient under our case law.” Relying on such evidence, the court held that the jury could find defendant's intent based upon the slow pace of progress, the significant payments homeowners made during the summer, which “didn't seem to increase the progress of the work,” and the fact that defendant had “walked...