State v. Smith

• Decision Date: 24 July 1995
• Docket Number: No. 94-654-C,94-654-C
• Citation: 662 A.2d 1171
• Parties: STATE v. Matthew J. SMITH. A.
• Court: Rhode Island Supreme Court

Page 1171

662 A.2d 1171

STATE v. Matthew J. SMITH.

No. 94-654-C.A.

Supreme Court of Rhode Island.

July 24, 1995.

Jeffrey B. Pine, Atty. Gen., Thomas Dickinson, Aaron L. Weisman, Asst. Attys. Gen., Providence, for plaintiff.

John D. Lynch, Robert H. Friel, Lynch, Costello & Friel, Providence, for defendant.

OPINION

SHEA, Justice.

This matter is before the court on two separate appeals. The defendant, Matthew J. Smith, appeals from Superior Court judgments of conviction of filing a false document in violation of G.L.1956 (1981 Reenactment) § 11-18-1, and conspiracy in filing a false document in violation of G.L.1956 (1981 Reenactment) § 11-1-6. The state appeals the trial justice's pretrial dismissal of a criminal-conversion charge against the defendant. For the following reasons we deny and dismiss both appeals.

The facts and procedural history pertinent to this appeal are as follows. On December 14, 1993, Matthew J. Smith, former court administrator and clerk of the Rhode Island Supreme Court, was indicted by a statewide grand jury on one count of wrongful conversion by a public employee in violation of G.L.1956 (1981 Reenactment) § 11-41-27, as amended by P.L.1991, ch. 153, § 1, two counts of filing a false document in violation of § 11-18-1, one count of obtaining money under false pretenses in violation of § 11-41-4 and § 11-41-5, as amended by P.L.1991, ch. 38, § 1, and two counts of conspiracy in violation of § 11-1-6.

The defendant subsequently filed a motion to dismiss the felony charge of wrongful conversion. From July 5 through July 8, 1994, a pretrial hearing was held in Superior Court. The focus of the hearing concerned count 2 of the indictment that charged defendant with wrongfully converting the labor or services of a court employee to his own private use.

The trial justice granted defendant's motion to dismiss count 2 of the indictment on two grounds. First, she found prosecutorial error in the grand jury proceedings. She also found that the facts as alleged by the state did not constitute criminal conversion as encompassed in § 11-41-27. The state appealed the pretrial dismissal to this court pursuant to G.L.1956 (1985 Reenactment) § 9-24-32.

The case went to trial on the remaining charges. After both parties had rested the trial justice granted defendant's Super R.Crim.P.Rule 29 motion for judgment of acquittal of the false-pretenses count, one of the conspiracy counts, and one of the filing-false-documents counts. On the two remaining counts submitted to the jury, the misdemeanor charges of filing a false document and conspiracy in filing the document, defendant was found guilty. The defendant filed a motion for a new trial that was denied. The trial justice imposed a $500 fine on each count, and defendant appealed the judgments of conviction to this court.

I State's Appeal of Pretrial Dismissal of Count 2

The factual background leading to defendant's being indicted on charges of criminal conversion of the services of a state employee are as follows. During grand jury proceedings on October 26, 1993, a Supreme Court employee testified that in addition to her duties as a court employee, she was employed part time for Lincoln Center Partnership (Lincoln Center), a corporate entity whose stock was owned by defendant, the former chief justice, and others. The court employee testified that in the early part of 1993 she had fallen behind in her work for Lincoln Center. She requested that defendant give her a day off from her court duties so that she might catch up on her work. She testified that she was given administrative leave and paid by the state for the work that she did for Lincoln Center.

The first issue presented is whether the trial justice erred by dismissing count 2 of the indictment on the basis of her conclusion that the prosecutor had erred in certain aspects of his legal instructions to the grand jury. In particular, the prosecutor had instructed the grand jury on the crime of conversion, advising the jurors as follows:

"The State is asking you to consider under the same theory, that is, the expenditures of money and the wrongful conversion of money through what has been described to you as the Rhode Island Supreme Court Special Account, Matthew Smith should be charged with wrongful conversion by a public employee in an amount over one hundred dollars."

The defendant contends that the prosecutor's instructions to the grand jury deprived him of his right to an independent and informed grand jury and left grave doubt about whether the proceedings were fundamentally fair. The defendant's contention is based upon the fact that the trial justice found neither evidence that the funds had come from the special account nor any instruction by the prosecutor that the conversion alleged was conversion of the value of an employee's services. Therefore, defendant asserts, the trial justice was correct in dismissing count 2 of the indictment on the ground that materially erroneous and misleading legal instructions were given to the grand jury.

Dismissal of an indictment based upon prosecutorial misconduct before the grand jury is a drastic remedy reserved for very limited and extreme circumstances. See, e.g., State v. Mollicone, 654 A.2d 311, 326 (R.I.1995); State v. Mainelli, 543 A.2d 1311, 1313 (R.I.1988); State v. Wilshire, 509 A.2d 444, 448 (R.I.1986). "[A]n indictment returned by a legally constituted grand jury calls for a trial on the merits." Mainelli, 543 A.2d at 1313 (citing Costello v. United States, 350 U.S. 359, 363, 76 S.Ct. 406, 408-09, 100 L.Ed. 397, 402-03 (1956)).

The prosecution's instruction to the grand jury was clearly incorrect because there was unequivocal evidence that the money for the court employee's services came from state funds, not the Supreme Court special account. In particular, the assistant administrator for human resources of the Rhode Island Supreme Court testified that the source of the employee's pay for work done for Lincoln Center was state funds, not the Supreme Court special account. The state submits that dismissal of the indictment is especially inappropriate here, where the alleged prosecutorial error is utterly irrelevant to the grand jury's consideration of the evidence. We agree.

It will be recalled that during the time of this grand jury proceeding there was a media frenzy surrounding the Rhode Island Supreme Court and the existence and use of a so-called Supreme Court secret account. The saturation of the media regarding the "secret" account may have caused the deputy attorney general who was presenting the case to the grand jury to misspeak as he did. Notwithstanding this error in the grand jury presentation, the questioning during the grand jury proceedings identified the true origin of the moneys paid to the state employee for nonstate work.

We have stated that absent "flagrant and overbearing" misconduct by a prosecutor, the proper remedy for alleged grand jury error is a trial on the merits. State v. Chiellini, 557 A.2d 1195, 1199 (R.I.1989). Therefore, we agree with the state that the trial justice's dismissal of count 2 of the indictment on the ground of prosecutorial misconduct was not justified.

The trial justice also found, however, that § 11-41-27 did not apply to a supervisory state employee who wrongfully compensates a subordinate from state funds for the performance of personal services for the supervisor's outside interests. The trial justice reasoned that the services of a state employee are intangible interests not covered by the conversion statute.

Section 11-41-27 reads as follows:

"Wrongful conversion by officer or state or municipal employee.--Whoever, being an officer or employee of the State of Rhode Island, or any department or agency or instrumentality or political subdivision thereof or any city or town, embezzles or wrongfully converts to his or her own use or benefit, or to the use or benefit of any other, any money or property which comes into his or her possession or control in the execution of such office or employment, shall be fined not more than fifty thousand dollars ($50,000) or three (3) times the value of the money or property thus embezzled or converted, whichever is greater, or imprisoned not more than twenty (20) years, or both; except that if the sum or value of the property embezzled is less than one hundred dollars ($100) he or she shall be fined not more than one thousand dollars ($1,000) or imprisoned not more than one year, or both." (Emphasis added.)

The state asserts that the trial justice's narrow reading of the statute in question is inconsistent both with the statute's plain meaning and with the broad interpretation of property adopted by this court and other courts. The state contends that intangible interests, such as the value of a subordinate employee's services, are nevertheless property and are entitled to protection as such. The state cites Colonial Laundries, Inc. v. Henry, 48 R.I. 332, 138 A. 47 (1927), a civil case, to show that this court has recognized that customer lists are entitled to protection as the property of its true owner. The state strenuously argues that an interest, to be regarded as property, "need not be one that was considered property at common law and, of course, need not be tangible." G.S. Rasmussen & Associates, Inc. v. Kalitta Flying Service, Inc., 958 F.2d 896, 902 (9th Cir.1992) (citing City of Oakland v. Oakland Raiders, 32 Cal.3d 60, 183 Cal.Rptr. 673, 646 P.2d 835 (1982)). In addition the state cites United States Supreme Court precedent for the proposition that property "extends beyond land and tangible goods and includes the products of an individual's 'labor and invention.' " See Ruckelshaus v. Monsanto, 467 U.S. 986, 1003, 104 S.Ct. 2862, 2873, 81 L.Ed.2d 815, 832 (1984).

We acknowledge that the definition of "property" has expanded to include various forms of intangibles. However, under the rules of statutory...