Opinion
Argued April 9, 1991.
Filed September 20, 1991. Petition for Allowance of Appeal Denied January 30, 1992.
Appeal from the Court of Common Pleas, Criminal Division, Lycoming County, No. 88-11, 170, Clinton W. Smith, J.
Douglas N. Engelman, Williamsport, for appellant.
Robert W. Ferrell, Asst. Dist. Atty., Williamsport, for Com.
Before ROWLEY, President Judge, and CAVANAUGH, CIRILLO, OLSZEWSKI, MONTEMURO, BECK, TAMILIA, POPOVICH and HUDOCK, JJ.
Before us is an appeal from the judgment of sentence entered following a plea of guilty by appellant R. David English. Pursuant to a plea agreement, the charge of theft by deception was withdrawn and appellant was sentenced for theft by failure to make required disposition of funds. Appellant argues that his plea was not voluntary and knowing in that he was not aware of the elements of the offense to which he pleaded guilty. We find his guilty plea to be knowing and voluntary and we affirm.
Appellant was sentenced to a term of five to twenty-three months incarceration for his role in soliciting funds for a local business directory. "Information Please" was a corporation made up of appellant and his family. The corporation solicited advertisements for a local, Williamsport area, business directory to be published in January 1987. There were three payment plans utilized by Information Please. The first utilized an escrow account. Advertisers would deposit monies into the escrow account under agreement that they would be returned if the directory was not published by March 15, 1987. The second plan required a lump sum payment for which the customer received a ten per cent discount. The third plan required one third the price at the time the contract was signed, one third at the time proofs were presented, and one third upon publication. More than $56,000 was deposited in the corporate operating account of which, over $42,000 was paid to appellant and his family in salaries. As of March 14, 1987 the directory was not published and the bank informed appellant that it was returning the escrow monies pursuant to the agreement. At that time appellant consulted an attorney about filing for bankruptcy.
Appellant contends that the lower court erred in denying his motion to withdraw his guilty plea. The burden placed on a defendant in such a motion increases significantly after sentencing.
In order to permit the withdrawal of a guilty plea after sentence has been entered, there must be a showing of prejudice that results in a manifest injustice to the defendant. Commonwealth v. West, 336 Pa. Super. 180, 485 A.2d 490 (1984), Commonwealth v. Middleton, 504 Pa. 352, 473 A.2d 1358 (1984). A defendant who attempts to withdraw a guilty plea after sentencing must carry the substantial burden of showing manifest injustice which is imposed in recognition that a plea withdrawal can be used as a sentence testing device. Commonwealth v. Shaffer, 498 Pa. 342, 446 A.2d 591 (1982).
Commonwealth v. Vance, 376 Pa. Super. 493, 499, 546 A.2d 632, 635 (1988). A demonstration of manifest injustice requires a showing that the plea was involuntary or was entered without knowledge of the charge. Commonwealth v. Warren, 307 Pa. Super. 221, 453 A.2d 5 (1982). When determining whether such a showing has been made, this court must look to the totality of the circumstances attendant on the entry of the plea. Commonwealth v. Shaffer, Supra.
The elements that make up the offense of theft by failure to make required disposition of funds are set out in 18 Pa.C.S.A. § 3927 :
A person who obtains property upon agreement, or subject to a known legal obligation, to make specified payments or other disposition, whether from such property or its proceeds or from his own property to be reserved in equivalent amount, is guilty of theft if he intentionally deals with the property obtained as his own and fails to make the required disposition.
Appellant argues that he has established manifest injustice because he was not properly informed of the elements of the offense with which he was charged particularly the second element. We disagree. The record establishes that appellant knew the elements of the offense when he entered his guilty plea. During the colloquy the court stated that at trial the Commonwealth would have to prove "that you obtained this money upon agreement or subject to a known legal obligation to make specific payments or to make a specific disposition of it. . . ." This is a correct statement of the second element as defined in 18 Pa.C.S.A. § 3927.
Appellant argues that since he was unaware of a legal obligation to make certain disbursements, mens rea is lacking. This is not the law. The statute requires the appellant to have received the money under agreement or subject to a known legal obligation. In Commonwealth v. Crafton, 240 Pa. Super. 12, 367 A.2d 1092 (1976), a travel agent took funds as payment for a chartered trip, commingled those funds with working funds, and failed to maintain enough to pay the carrier airline for the trip. With respect to the second element of the offense this court stated:
The testimony at trial showed that the participants in the trip did not expect appellant to provide services herself, but, rather, expected her to make arrangements with others although they did not know whom. Appellant's counsel brought this out several times on cross-examination. Appellant argues that this proves that appellant did not prove appellant took the money subject to a duty to disburse. We think the evidence shows the opposite, that appellant took the money knowing that she would have to disburse the funds to others. Appellant conceded at trial that the element was present and we so find.
Id., 240 Pa. Super. at 17, 367 A.2d at 1095. We see no distinction between what was established in Crafton, and what was established here. Appellant solicited funds from various businesses for the publication of a directory. Appellant had received funds under agreement to publish the directory and was to pay a third party to print this directory. When it came time to publish the directory, the funds solicited had been paid to appellant and members of his family in salaries. All the elements required by statute were established in appellant's written and oral guilty plea colloquies.
It is understandable that some confusion prevails due to the reporting of prior cases dealing with this offense. Although Commonwealth v. Crafton, 240 Pa. Super. 12, 367 A.2d 1092 (1976) correctly states and applies the law in the official Superior Court Reports, the Atlantic Reporter version of the opinion incorrectly states the first two elements of the offense as:
1) The obtaining of property of another;
2) Subject to an agreement of known legal obligation upon recipient to make specified payments or other disposition thereof.
The statutory provision defines the first two elements using the words:
[a] person who obtains property upon agreement, or subject to a known legal obligation. . . .
By substituting "of" for "or" an entirely new meaning is given the statute. Had the statute required the property to be obtained under agreement of known legal obligation, perhaps there would be some merit to this appeal. However the statute requires only that property be received under agreement or known legal obligation. It is understandable that some confusion has resulted due to the misstatement of law contained in the Atlantic Reporter, but this court is constrained to apply the statute as it appears at 18 Pa.C.S.A. § 3927.
In Commonwealth v. Ohle, 291 Pa. Super. 110, 435 A.2d 592 (1981), this court quoted the incorrect, Atlantic Reporter, version of the Crafton, opinion. Ohle, 291 Pa. Super. at 121, 435 A.2d at 597 (citing Commonwealth v. Austin, 258 Pa. Super. 461, 393 A.2d 36 (1981)). The Supreme court in Commonwealth v. Ohle, 503 Pa. 566, 470 A.2d 61 (1983) correctly cites Crafton and the statute.
The fact that appellant was not sentenced to probation, as he had expected, does not establish the manifest injustice that is required before this court can allow his guilty plea to be withdrawn after sentencing. We cannot say that the guilty plea was involuntary or entered without knowledge of the charge. Commonwealth v. Warren, 307 Pa. Super. 221, 453 A.2d 5 (1982). During the plea colloquy, appellant had the benefit of present counsel, the court correctly stated the law, and appellant indicated that he understood the charges. Appellant appears not so much dissatisfied with his guilty plea as he is disappointed with his sentence. The post sentence withdrawal of a guilty plea was never intended as a sentence testing device. Commonwealth v. Shaffer, Supra. No manifest injustice is shown simply because appellant did not receive the sentence he expected.
From the transcript of the guilty plea it appears that appellant expected a sentence of probation. The plea agreement provided that the commonwealth would not argue against such a sentence.
Judgment of sentence affirmed.
Appellant also challenges discretionary aspects of sentencing. Since he failed to include in his brief a concise statement setting out a substantial question as to the appropriateness of the sentence under the sentencing code and the Commonwealth raised an objection to this failure, we cannot address this issue. Commonwealth v. Tuladziecki, 513 Pa. 508, 522 A.2d 17 (1987).
Dissenting opinion filed by HUDOCK, J., joined by MONTEMURO, BECK and POPOVICH, JJ.
I respectfully dissent. The majority mischaracterizes Appellant's complaint on appeal. The issue is not, as stated by the majority, whether "[Appellant] was not properly informed of the elements for which he was charged particularly the second element." Majority Opinion at p. 460. Such a characterization of the issue focuses on the words and conduct of the trial court and the Commonwealth in informing Appellant of the nature of the charge brought against him. It does not focus, as it should, on Appellant's understanding and acknowledgement of the charge as expressed by him on the record.
The elements of the crime of Theft By Failure to Make Required Disposition of Funds Received are as follows:
1. The obtaining of the property of another;
2. Subject to an agreement or known legal obligation upon the receipt to make specified payments or other disposition thereof;
3. Intentional dealing with the property obtained as the defendant's own; and
4. Failure of the defendant to make the required disposition of the property.
Commonwealth v. Ohle, 503 Pa. 566, 581, 470 A.2d 61, 69 (1983) quoting Commonwealth v. Crafton, 240 Pa. Super. 12, 16, 367 A.2d 1092, 1094-95 (1976); 18 Pa.C.S.A. § 3927.
As stated by Appellant, the issue on appeal is whether Appellant failed to "acknowledge that he had `an agreement or known legal obligation' to dispose of the money in a particular fashion." (Appellant's Brief at p. 9). So phrased, this claim necessarily calls into question whether a factual basis for the plea was established on the record. Such an inquiry is mandatory. Commonwealth v. Reno, 303 Pa. Super. 166, 449 A.2d 630 (1982). To establish a factual basis for the plea, the trial court is required to determine whether the facts acknowledged by the defendant constitute the prohibited offense. Commonwealth v. Anthony, 504 Pa. 551, 475 A.2d 1303 (1984). As stated by Mr. Justice McDermott in Anthony:
This salutary requirement is to prevent a plea where in fact the legal requirements have not been met; and, name and define the offense, supported by the acts, so the defendant will know the legal nature of the guilt to which he wishes to plead.
Id., 504 Pa. at 559, 475 A.2d at 1307.
A careful review of the record reveals that the only facts acknowledged by Appellant were that he had collected the monies, with the intent of publishing a directory, and had used some of these funds, excluding the funds held in escrow, to prepare the directory. As a necessary part of undertaking the task of publishing, Appellant acknowledged that he paid salaries to his employees who also happened to be members of his immediate family. These acknowledged facts do not, in my view, constitute the prohibited offense. Thus, the trial court erred in accepting the plea since Appellant did not knowingly enter it. Appellant has, therefore, established "manifest injustice" and should be allowed to withdraw his plea.
This case does not present a similar factual scenario as that presented in Commonwealth v. Crafton, 240 Pa. Super. 12, 367 A.2d 1092 (1976), where a travel agent took funds as payment for a trip, commingled them with working funds, and subsequently failed to maintain enough funds to pay the airline carrier, or the facts presented in Commonwealth v. Turrell, 526 Pa. 42, 584 A.2d 882 (1990), where an attorney commingled funds and thus failed to keep client's funds, entrusted to escrow, inviolate. There is no indication in the present case that Appellant commingled any funds held in escrow. Unlike Crafton and Turrell, an additional obligation rested upon Appellant after collecting the funds for the directory; rather than holding money to buy airline tickets or in escrow until making the directed payment, Appellant had to create and produce the product for which he solicited the funds. How can any reasonable business man or woman accomplish such a feat without spending any money earmarked for the venture?
While I also agree that Crafton, as reported in the Atlantic Reporter, misquotes the criminal statute at issue, and may have caused confusion below, I believe that this confusion on the part of the trial court and defense counsel only bolsters a finding that the plea was unknowingly made.
The difficulty in finding that the facts acknowledged by Appellant constitute the prohibited offense is the fact that Appellant allegedly solicited the funds to "print" a directory but, of necessity, needed to use some of these same funds to "publish" the directory. While the participants in the colloquy sometimes use the terms "print" and "publish" interchangeably, in common parlance "publish" has a broader meaning than "print". To "publish" a work involves many production functions such as advertising, sales, and administration as well as the actual printing of it. A careful reading of the plea transcript demonstrates this inherent difficulty:
[Defense Counsel]: Your Honor, just to comment in regard to what [the A.D.A.] has indicated, first, I would indicate that at the preliminary hearing only four people would have indicated that there was an escrow that they were promised that their monies would be put into an escrow account and it wasn't — I think we should state on the record [Appellant] specifically denies that fact and, in fact, we have contracts signed by at least some of those four which would indicate to the contrary that they had actually agreed to the one third, one third, one third plan, we're not going to acknowledge or admit today that there was any intentional deception in terms of telling a particular client that monies were going to go into an escrow account and that he failed to put them into that escrow account, that's not what we're admitting to, what were admitting to isn't what the Court can find.
THE COURT: Is using the money that was not agreed to put into the escrow account for his own personal purposes rather than for publishing a directory.
[Defense Counsel]: Yes, Your Honor, I think it should be stated for the purpose of sentencing although I'm fully aware that ignorance of the law is no excuse and he's still responsible for those actions, we are not in this guilty plea colloquy admitting or acknowledging that this was intentional that he intentionally took the money and at the time he took the money had no intention to publish the directory, what we are saying is that he failed to use the money for that particular purpose, I think it's important to note that.
THE COURT: Then I think you just talked yourself right out of the guilty plea, one of the requirements is that [Appellant] intentionally is his conscious object and purpose dealt with the property of his own and failed to make the required disposition and if there was no intention on his part I cannot accept the plea.
[Defense Counsel]: Where the intention comes in, Your Honor, he took the money and used the money and did not specifically use the money for its intended purpose.
THE COURT: But now you're saying this is intention and there either was or was not intention on his part to use this money as his own and failed to make the required disposition that intention was either there or it was not there. If you're stating for him and he agrees to your statements that it was not there from the recitation of the facts you gave me I could certainly find that that intention was there from the statement that there was no intention coupled with his statement that there was no — couple of his statements that his problem began when he realized that the escrow account had been mailed back and then no longer had the money, your statement there was no intention to deceive anybody or to use the property as his own he intended to do this all along the required intent is not there for this kind and I cannot accept the plea.
[A.D.A.]: Your Honor, if I could —
[Defense Counsel]: If I could speak to that I opened up this discussion, let me explain it. He's not charged with Theft by Deception that at the time he took the money he deceived these individuals.
THE COURT: No, it's —
[Defense Counsel]: What he's charged with is Theft by Failure to Make Required Disposition.
THE COURT: One of the elements of that charge is that [Appellant] intentionally dealt with the property obtained as his own and failed to make the required disposition.
[Defense Counsel]: And according to the statement that he took the money and used it, paid the money out in salaries and used the money on behalf of the English family during that time without using the money for the publication of the directory is the crime.
THE COURT: I would agree with that, but I thought you were saying that there was no intention to do that.
[Defense Counsel]: He intentionally used the money from the time he began to collect it through March 15th of 1987, he used the money and paid that money out throughout the course of that time to his family.
THE COURT: And failed to make the required disposition by failing to print or produce the directory.
[Defense Counsel]: Yes. What I'm saying, Your Honer, is he intended throughout the course as he was using this money he still felt that he could financially publish.
THE COURT: That's a matter for argument at sentencing.
[Defense Counsel]: I just thought it was appropriate to bring it up at this time for the guilty plea because that is our primary argument at the sentencing.
THE COURT: I understand what your argument will be at sentencing, you had me thoroughly confused. [A.D.A.], do you have any questions?
[A.D.A.]: Your Honor, I would just state that the reason the Commonwealth was willing to take the plea to the Theft By Failure to Make Required Disposition is that, I think that there may be some validity to the Defense argument that in the initial instance when he first began to collect money his intentions may have been honest, but as time went along and it did not financially fly, he began to use the money for his own purpose.
(N.T. 3/22/89 at pp. 21-25).
Had Appellant already composed the directory and had it ready for printing, I would find that the subsequent collection of funds, and improper use of them, would constitute the prohibited offense. So, too, if he had used the funds for purposes other than publishing the directory, such as luxurious vacations, cars, or investments in the stock market. The final statement above, made by the Assistant District Attorney, totally mischaracterizes the facts acknowledged by Appellant. There never was an acknowledgment of Appellant that he used the funds other than for legitimate production costs such as salaries.
As stated above, the facts in this case are not such that the Appellant was given funds to hold inviolate, commingled them, and then later failed to disburse them in a manner agreed to by the other party. I find the facts acknowledged by Appellant to be similar to those presented to this Court in Commonwealth v. Austin, 258 Pa. Super. 461, 393 A.2d 36 (1978). In Austin, a contractor received advance money for the purchase of materials on a construction contract. The defendant performed for two months when he realized that he had underestimated the job. Having run out of money, the defendant stopped work on the project. Although some of the advance money was not spent on materials, the evidence showed that all of the money was spent in a manner which could be construed to have been necessary for the completion of the job.
Initially, in Austin, this Court, per the Honorable William F. Cercone, found that the first above-enumerated element was not met as it was not believed that the acceptance of advance money on a construction contract constituted the property of another. Citing to Commonwealth v. Bartello, 225 Pa. Super. 277, 301 A.2d 885 (1973), this Court stated that "the title as well as the ownership of the money passed to the defendant." Commonwealth v. Austin, 258 Pa.Super. at 467, 393 A.2d at 39. The funds solicited in the present case are also properly characterized as advance money for a service which is to be provided in the future, i.e., to prepare, produce and print a telephone directory. As the funds at issue were not placed in escrow, I would find that these funds did not constitute "property of another." § 3927.
The Austin court also distinguished the facts with which it was presented from those of Commonwealth v. Crafton, supra:
In Commonwealth v. Crafton, [ supra ], a travel agent received money which she was required to turn over to a travel wholesaler as payment for a scheduled tour. This procedure made the travel agent exactly what her title says — an agent of the plaintiffs in turning their money over to a third person. This is an entirely different situation from the one before us where appellant received advance money on a construction contract.
Commonwealth v. Austin, 258 Pa.Super. at 467, 393 A.2d at 39.
The Austin court next found that there was insufficient evidence as to the second element enumerated above, i.e., subject to an agreement or known legal obligation upon receipt to make specified payments or other disposition. In Austin, the Commonwealth argued that the defendant violated the criminal statute by failing to use the entire sum of money to purchase materials. Upon reviewing the documentary evidence, this Court found that while the defendant was certainly obligated to ultimately purchase the materials necessary to complete the work, the evidence failed to establish, beyond a reasonable doubt, that the defendant was legally obligated to utilize the advance payment solely for the purchase of construction materials. This discussion gets to the real issue in the present case. The evidence of the contracts or agreements, either verbal or written, are scarce in the present record. As stated above, it is my view, upon review of the entire guilty plea colloquy, that the funds that were solicited and not placed in escrow were not given for the specific purpose of printing the directory, but rather, constitute contributions to the general production costs of the directory, or "publishing" costs.
As to the third element, the intentional dealing with the property as the defendant's own, the Austin court again found that the evidence was once again insufficient since the expenditures made by the defendant could have been construed to have been necessary for the ongoing operation of his sole proprietorship and his completion of the project. Once again, in the case sub judice, the monies paid out in salaries by Appellant were obviously part of the production costs of the directory. Thus, I would find that it was not knowingly acknowledged at the plea colloquy that Appellant used these funds for his own purposes.
In discussing the final element, the failure to make the required disposition of funds received, the Austin court held that the cumulative effect of the lack of evidence as to the three prior elements was highly probative of the defendant's lack of criminal intent. The court reiterated its earlier statement that while the defendant "may have to answer for his actions in a civil forum, [the defendant's] conduct does not constitute a criminal offense." Commonwealth v. Austin, 258 Pa. Super. at 471, 393 A.2d at 41. The earlier statement made by the court is as follows: "[H]is duty was to perform the services under the contract and failure to perform was a breach of that contract with its proper remedy in a civil forum." Id., 258 Pa. Super. at 467, 393 A.2d at 39. In the present case, Appellant clearly acknowledged his continuing intention to publish the directory had he been financially able to do so. He also acknowledged, via his attorney, that he had performed some work on the project, including the submission of proofs to several of his clients. These acknowledged facts do not constitute the crime to which he pleaded guilty.
The effect of the majority opinion is to make criminal the use of funds for general operating purposes of a business when those funds are received in exchange for a product to be produced and delivered in the future. In effect, the recipient of any such funds becomes a guarantor of the success of his business.
I would reverse the order of the trial court and remand to allow Appellant to withdraw his guilty plea.
I find the Commonwealth's argument that the above quoted excerpt from the colloquy came after the plea was entered and therefore to be of no effect, to be without merit. As noted by the majority, when determining whether a showing of manifest injustice has been made, this Court must look to the totality of the circumstances attendant upon the entry of the plea. Majority Opinion at p. 124, citing Commonwealth v. Shaffer, 498 Pa. 342, 446 A.2d 591 (1982). It is my belief that the subsequent exchange between the trial court and defense counsel demonstrated that the earlier perfunctory exchange between the trial court and Appellant was not truly representative of the facts acknowledged by Appellant. The fact that Appellant truly intended on publishing the directory at all times, was not as characterized by the trial court and defense counsel, a matter for sentencing, but was the pivotal issue in determining whether the acts acknowledged by Appellant constituted the crime charged.
MONTEMURO, BECK and POPOVICH, JJ. join this dissenting opinion.