Opinion
DOCKET NO. A-4034-13T4
05-10-2016
STATE OF NEW JERSEY, Plaintiff-Respondent, v. CATARINA YOUNG, Defendant-Appellant.
Joseph E. Krakora, Public Defender, attorney for appellant (Michael C. Kazer, Designated Counsel, on the brief). Robert Lougy, Acting Attorney General, attorney for respondent (Teresa A. Blair, Deputy Attorney General, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Ostrer, Haas and Manahan. On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Indictment No. 11-12-1881. Joseph E. Krakora, Public Defender, attorney for appellant (Michael C. Kazer, Designated Counsel, on the brief). Robert Lougy, Acting Attorney General, attorney for respondent (Teresa A. Blair, Deputy Attorney General, of counsel and on the brief). PER CURIAM
On December 15, 2011, a Middlesex County grand jury returned an indictment charging defendant Catarina Young with second-degree theft by unlawful taking or disposition, N.J.S.A. 2C:20-3 (count one); second-degree misapplication of entrusted property of a financial institution, N.J.S.A. 2C:21-15 (count two); and third-degree forgery, N.J.S.A. 2C:21-1(a)(2) (count three). In October 2013, the matter proceeded to trial before a jury.
During the trial, the judge denied defendant's motion to bar the State from calling a witness based on an alleged discovery violation. The judge also denied defendant's motion for a judgment of acquittal at the close of the State's case.
At the conclusion of the trial, the jury found defendant guilty of second-degree theft (count one), and second-degree misapplication of entrusted property (count two). The jury found defendant not guilty of third-degree forgery (count three). The judge denied defendant's motion for a judgment of acquittal notwithstanding the verdict and for a new trial.
The judge sentenced defendant to concurrent seven-year terms in prison on counts one and two, and imposed appropriate fines and penalties. This appeal followed.
On appeal, defendant raises the following contentions:
POINT I
SINCE THE PROSECUTOR'S POST-OPENING STATEMENT INTERROGATION OF PATRICIA MIRAILH RESULTED BOTH IN AN OVERZEALOUS PROSECUTION AND A VIOLATION OF THE STATE'S DISCOVERY OBLIGATIONS, THE TRIAL COURT COMMITTED HARMFUL ERROR IN PERMITTING HER TO TESTIFY AS A STATE'S WITNESS.
POINT II
IN THE CONTEXT OF THE STATE'S THEORY OF THE CASE, SINCE THE GUILTY VERDICTS ON COUNTS ONE AND TWO WERE INCONSISTENT WITH THE NOT GUILTY VERDICT ON COUNT THREE, DEFENDANT'S CONVICTIONS SHOULD BE REVERSED BECAUSE THE JURY DID NOT RATIONALLY APPLY THE REASONABLE DOUBT STANDARD.
POINT III
DEFENDANT'S CONVICTIONS SHOULD BE REVERSED BECAUSE HER DUE PROCESS RIGHT TO BE PROTECTED AGAINST AN INTENTIONAL PROSECUTORIAL BREACH OF THE ATTORNEY-CLIENT PRIVILEGE WAS VIOLATED.
POINT IV
THE TRIAL COURT MISAPPLIED ITS DISCRETION IN DENYING DEFENDANT'S POST-VERDICT MOTIONS FOR A JUDGMENT OF ACQUITTAL AND FOR A NEW TRIAL.
POINT V
THE SEVEN[-]YEAR BASE TERMS IMPOSED ON DEFENDANT'S CONVICTION FOR THEFT ON COUNT ONE AND MISAPPLICATION OF ENTRUSTED PROPERTY ON COUNT TWO [WERE] MANIFESTLY EXCESSIVE.
After reviewing the record in light of the contentions advanced on appeal, we affirm.
I.
We derive the following facts from the evidence produced by the parties at trial. The Multi-Skilled Employers and Employees Welfare Fund (the Fund) provided health benefits and prescription drug coverage to approximately twenty employers and their employees. Six uncompensated trustees supervised the Fund, including the Fund's attorneys, Ronald Tobia and Jill Sorger. Manuel Mirailh also served as a trustee. The trustees were responsible for negotiating rates with Horizon Blue Cross and Blue Shield (Horizon) and Benecard Services (Benecard) for the coverage the Fund offered to the participating employers.
From 1987 to 2003, a company called Consulting Actuaries Incorporated (CAI) served as the Fund's third-party administrator. CAI was responsible for collecting insurance payments from employers participating in the Fund. CAI deposited these monies into the Fund's bank account and then paid monthly premiums to Horizon and Benecard for the coverage they provided to the employers. The Fund required that all checks issued by CAI be signed by one of the trustees.
The Fund did not pay CAI for the administrative services it performed. Instead, after CAI submitted the full amount of the monthly premiums to Horizon and Benecard, the two insurance companies paid commissions to CAI.
Defendant worked for CAI as an account executive for seventeen years. She handled the Horizon and Benecard accounts for the Fund. Defendant was responsible for making sure that the employers made their payments to the Fund each month; preparing the monthly checks sent to the two insurance companies; and ensuring that the checks were signed by a trustee.
In 2004, defendant left CAI and formed her own company, Elite Benefits (Elite), with the assistance of several partners, including defendant's two sisters, and Mirailh's daughter-in-law, Patricia. The Fund's trustees then retained Elite to replace CAI as the third-party administrator. The Fund was Elite's sole client, and defendant was the individual who was responsible for handling this account. The trustees dealt directly with defendant, as did Horizon and Benecard.
Because Mirailh and Patricia share the same surname, we shall refer to Patricia by her first name to avoid confusion. In doing so, we intend no disrespect.
Despite the change in administrators, the Fund's procedures remained the same. Elite collected payments from the employers for their insurance coverage, deposited these payments into the Fund's bank account, and then paid the monthly premiums to Horizon and Benecard. Again, all of the checks issued by Elite to the insurance companies had to be signed by a trustee. The Fund did not pay Elite for its services. Instead, Horizon and Benecard paid commissions to Elite based on the monthly premiums Elite paid to the two companies.
In 2006, Benecard and Horizon began experiencing problems with Elite because they were not receiving the monthly premiums in a timely manner. The two companies complained to defendant each month. Sometimes she gave personal excuses for the late payments, but most of the time she said she would try to submit the premiums as soon as possible.
At one point, defendant alleged that Horizon had misapplied the payments she made. Horizon conducted several audits and found no evidence of any misapplication of the premiums. In January 2007, Horizon terminated the Fund's policy because of the late and unpaid premiums, and it notified defendant of this action. Defendant did not advise the trustees.
In January 2007, Tobia began receiving complaints from participating employers that their employees' claims were being denied by Horizon. Tobia notified the other trustees, and arranged a meeting with Horizon. At the meeting, Horizon told the trustees that the Fund was approximately $1.4 million in arrears on its premiums. The trustees and Horizon worked out a repayment plan in order to reinstate health insurance coverage for the employers participating in the Fund.
Following the meeting with Horizon, the trustees took direct control of the administration of the Fund. Tobia and Sorger were responsible for collecting payments from the employers and paying the premiums to Horizon. Once Tobia and Sorger took over this task, there were no further problems with coverage.
Based upon their investigation, the trustees discovered that between November 17, 2003 and December 24, 2006, eighty-six checks, totaling $399,737, were drawn on the Fund's account and apparently signed by Mirailh. All of the checks were made out to defendant and then either cashed or deposited into her personal account. Most of the checks had the word "commission" or "commissions" in the memo section. In addition, the trustees discovered sixteen wire transfers, totaling $62,595, from the Fund's account into defendant's personal account.
Mirailh denied signing any of the checks. He also testified that he never authorized defendant to sign his name on any checks.
Sorger questioned defendant about the checks. Defendant told Sorger that the checks were commissions for Elite's work on the accounts. However, all commissions to Elite were paid by Horizon and Benecard, not by the Fund.
At trial, defendant claimed that the hundreds of thousands of dollars she received in the checks and wire transfers represented repayments for "loans" she made to the Fund. Defendant asserted that employers often failed to make their monthly payments to the Fund. When this occurred, defendant alleged that she put her own money into the Fund's account, so that Horizon and Benecard could be paid. Defendant did not maintain any records documenting these alleged loans. Defendant stated that the check-writing computer program she used automatically put the words "commission" or "commissions" on most of the checks, and she did not know how to change the setting to reflect that the checks were being issued as repayments for her personal loans to the Fund. Defendant testified that Mirailh signed all of the checks and was aware that they were loan repayments.
Defendant's husband testified that defendant made loans to the Fund when there were shortages in the premiums due to Horizon and Benecard. He estimated that defendant loaned approximately $280,000 of her own money to the Fund over the years. Defendant's sister, Margaret DeVito, testified that as one of the partners in Elite, she made two loans to the Fund, totaling $128,000, with Mirailh's approval. DeVito claimed that Mirailh agreed to repay $50,000 she loaned to the Fund by giving defendant $50,000.
On June 24, 2012, five years after the Fund terminated its relationship with Elite, and about six months after defendant was indicted, defendant took Patricia to her attorney's office. The attorney showed Patricia a promissory note dated July 30, 2005, that stated that the Fund promised to pay either defendant or her sister, Angela DeCosta, $100,000 on demand. The note bore Mirailh's name as the borrower and was purportedly signed by him "[o]n behalf of the [t]rustees." Patricia's signature was on the note as a witness to Mirailh signing the note.
However, Patricia had not signed the note, and she did not witness Mirailh sign it. Nevertheless, when defendant's attorney asked her about the note, Patricia lied and said she had. Patricia testified that she did this because defendant was her friend and she wanted to help her. On June 24, 2012, Patricia signed a certification falsely stating that she witnessed Mirailh sign the promissory note.
Patricia was on defendant's witness list. On October 2, 2013, during the jury selection process, two detectives visited Patricia at her home to serve a subpoena on her to testify at the trial. The detectives also interviewed Patricia about the 2005 promissory note and her 2012 certification. Patricia told the detectives that she did not sign the note and did not witness Mirailh sign it. She also told the detectives she was worried she would get into trouble for falsifying documents.
The next day, October 3, 2013, the detectives presented Patricia with a non-prosecution agreement stating she would not get into trouble for falsifying the documents as long as she testified truthfully in court. After conducting a Rule 104 hearing and concluding that the detectives did not pressure Patricia in any way, the trial judge permitted her to testify at trial over defendant's objection. Patricia testified that she did not witness Mirailh sign the promissory note.
None of the trustees who testified at trial were aware of any loans being made by defendant or any of her partners. Each testified that defendant had no authority to issue checks without a trustee's signature; only Horizon and Benecard paid commissions; and no trustee ever authorized the Fund to borrow money from defendant and her partners, or issue checks to defendant's personal account.
Patricia testified that, in 2005, defendant told her that the Fund bank account balance was low and they needed money. Patricia borrowed $6000 from a personal home equity loan account and had the money wired into the Fund's account. Patricia stated that defendant later repaid her with a deposit directly into her account from the Fund bank account.
One of defendant's partners, Simone Ur, testified that defendant was in charge of Elite and made all of the decisions. Ur confirmed that the Fund did not pay commissions to Elite and stated there was no reason for any of the employer's payments to be deposited into Elite's bank accounts. Ur also testified that, although some employers paid late, all of the employers would pay for their coverage by the end of the month.
According to Ur, defendant's handwriting appeared on all eighty-six of the checks. A forensic expert testified for the State that all of the checks were signed by the same person, and were not signed by Mirailh. The expert also opined that Mirailh did not sign the July 30, 2005 promissory note. Defendant's expert testified that the signature that appeared on all of the checks was written by the same person who signed Mirailh's name on the signature exemplars that the expert reviewed. However, those exemplars included the signature on the promissory note that Mirailh testified he did not sign.
II.
In Point I of her brief, defendant argues that the trial judge erred by permitting Patricia to testify as a prosecution witness. Defendant asserts that the prosecutor acted in an overzealous manner by deciding to interview Patricia about the July 2005 promissory note and her June 2012 certification indicating that she witnessed Mirailh sign the note. Defendant contends that the prosecutor's actions constituted a discovery violation. She also alleges that she was prejudiced because her attorney made references to Patricia's expected testimony concerning the note and certification in his opening statement to the jury on October 3, 2013, before the prosecutor advised him of Patricia's prospective recantation later that day. These contentions lack merit.
As the trial judge found after conducting a Rule 104 hearing, there was nothing untoward about the prosecutor's decision to interview Patricia. At the hearing, Patricia testified that two detectives visited her at her home on October 2, 2013. She stated that the detectives were "not obnoxious" to her; never mentioned the word "perjury"; and did not threaten her with any criminal charges. They simply asked her about the note and the certification. Patricia told the detectives that she did not witness Mirailh sign the note and that her certification was therefore incorrect.
The next day, October 3, the detectives called and asked if they could return. Patricia agreed. Again, the detectives were polite to Patricia and gave her a non-prosecution agreement stating she would not get in trouble for falsifying documents if she testified truthfully at the trial.
At the Rule 104 hearing, one of the detectives testified that he and his partner went to Patricia's home to serve her with a subpoena to testify at trial. They knew that Mirailh denied signing the note and wanted to speak to Patricia about her signature on that document and her later certification. Patricia told the detectives that she falsely told defendant's attorney that her signature was on the note, and that her certification was also incorrect. Because Patricia expressed concern about her actions, the detective who testified at the hearing spoke to the prosecutor, who authorized the non-prosecution agreement. Patricia signed the agreement on October 3, 2013, and the detective contacted the prosecutor. In turn, the prosecutor advised defendant's attorney of the information Patricia provided to the detectives later that day.
Based upon this testimony, the judge correctly found that no discovery violation had occurred. Rule 3:13-3(f) provides that "[t]here shall be a continuing duty to provide discovery" in criminal proceedings. The State complied with this rule by advising defense counsel of Patricia's statements concerning the note and the certification as soon as the detectives completed their interviews.
Contrary to defendant's contention, there was also no evidence that the detectives coerced Patricia into speaking with them or stating that she did not witness Mirailh sign the note. Defendant's reliance upon State v. Feaster, 184 N.J. 235 (2005), is therefore misplaced as that case is readily distinguishable.
In Feaster, the defendant filed a petition for post-conviction relief (PCR) following his conviction for murder. Id. at 239. In support of defendant's petition, a key witness at the defendant's trial gave the PCR attorneys a "certified statement" recanting his trial testimony. Id. at 239-40. However, after the prosecutor stated that the witness would be prosecuted for perjury if he testified, the witness "withdrew his certified statement and invoked his Fifth Amendment privilege against self-incrimination" at the PCR hearing. Id. at 240.
Under these circumstances, the Court found that "the prosecutor's conduct made [the witness] unavailable[.]" Id. at 263. The Court held that "the State may not use threats or intimidating tactics that substantially interfere with a witness's decision to testify for a defendant." Id. at 262.
The Court ordered that two alternate remedies be considered by the PCR judge in determining whether the defendant was entitled to a new trial. Id. at 262-64. First, the State could grant the witness "testimonial use immunity" for his testimony at the PCR hearing. Id. at 263. In the alternative, the PCR court could consider whether the "absence" of the witness's testimony "'would have the probable effect of raising a reasonable doubt as to the defendant's guilt' in the minds of the jury[,]" thus warranting a new trial. Id. at 264 (quoting State v. Ways, 180 N.J. 171, 189 (2004)). --------
Here, unlike in Feaster, there was simply no evidence that the detectives threatened Patricia in any way. Patricia remained available to testify for, and be cross-examined by, either party.
Finally on this point, defendant argues that she was prejudiced because defense counsel specifically told the jury that he "would present testimony from a witness who observed . . . Mirailh sign a note on behalf of the Fund promising to repay [defendant's sister, Angela,] or [defendant] for a $100,00 0 personal loan made to the Fund." However, contrary to defendant's contention that her attorney previewed Patricia's testimony to the jury, defense counsel did not mention Patricia or her expected testimony at any point in his opening statement. Instead, defense counsel told the jurors that they would "hear testimony from a Margaret DeVito[, defendant's sister]. Ms. DeVito had full knowledge of the loans and witnessed Mirailh sign the checks and the $100,000 promissory note made payable to" defendant. (emphasis added). Thus, there is no factual support in the record for defendant's claim of prejudice, and we therefore reject her contention.
III.
The jury acquitted defendant of forgery. In Point II of her brief, defendant asserts that this verdict was inconsistent with the jury's decision to convict her of theft and misapplication of entrusted property. Defendant argues that "there exists no other evidence other than . . . forgery to establish the unlawful acts of theft and misapplication of entrusted property" and, therefore, "the jury misapplied the reasonable doubt standard in finding [her] guilty" of those two charges. We disagree.
Contrary to defendant's contention, the verdicts were not inconsistent. Forgery is simply not a necessary element of either theft, N.J.S.A. 2C:20-3(a), or misapplication of entrusted property, N.J.S.A. 2C:21-15. Thus, the theft and misapplication charges were not contingent on a finding that defendant signed Mirailh's name to the checks without his authority. Based upon the trustees' testimony that defendant was not authorized to take over $450,000 belonging to the Fund and deposit this money into her personal bank account, there was sufficient evidence to support defendant's convictions on the theft and misapplication of entrusted property charges.
Moreover, inconsistent verdicts are permitted in New Jersey. State v. Banko, 182 N.J. 44, 54-55 (2004). "[S]o long as the evidence [is] sufficient to establish guilt on the substantive offense beyond a reasonable doubt[,]" an inconsistent verdict will not invalidate a conviction. Ibid. (quoting State v. Petties, 139 N.J. 310, 319 (1995)). Because the jury was entitled to evaluate each count of the indictment on its own merits, and there was sufficient evidence in the record to support both of defendant's convictions beyond a reasonable doubt, we discern no basis for disturbing defendant's convictions.
IV.
At trial, Tobia testified that he had known defendant for approximately twenty-five years. Sometime prior to 2003, he stated he "might have done some closings on some houses" for defendant. In Point III of her brief, defendant argues that because Tobia represented her prior to her involvement with Elite and the issuance of the eighty-six checks and sixteen wire transfers to her, her attorney-client privilege was breached when the State relied upon Tobia's testimony regarding his investigation of defendant's activities in 2007. Therefore, she alleges the indictment should have been dismissed or, in the alternative, that Tobia's testimony at trial should have been suppressed. The trial judge rejected this argument, as do we.
In general, "communications between lawyer and his [or her] client in the course of that relationship and in professional confidence, are privileged, and a client has a privilege (a) to refuse to disclose any such communication, and (b) to prevent his [or her] lawyer from disclosing it . . . ." N.J.R.E. 504. "For a communication to be privileged it must initially be expressed by an individual in his capacity as a client in conjunction with seeking or receiving legal advice from the attorney in his capacity as such, with the expectation that its content remain confidential." Fellerman v. Bradley, 99 N.J. 493, 499 (1985). "The person asserting the privilege thus bears the burden to prove it applies to any given communication." Horon Holding Corp. v. McKenzie, 341 N.J. Super. 117, 125 (App. Div. 2001); see also L.J. v. J.B., 150 N.J. Super. 373, 378 (App. Div.) (The burden of proof is on the person asserting the privilege to show that the communication occurred "for the purpose of retaining the lawyer or securing legal service or advice from him [or her] in his [or her] professional capacity."), certif. denied, 75 N.J. 24 (1977).
As the judge correctly found, there is absolutely nothing in the record indicating that Tobia's trial testimony breached the attorney-client privilege. Although Tobia was not sure, he testified that he might have represented defendant as her attorney in some real estate closings prior to 2003. None of his trial testimony pertained to those matters.
Tobia represented the Fund, not defendant, during the investigation. He certainly did not act as defendant's attorney during the criminal case. As the trial judge noted, defendant failed to identify "any evidence with specificity" that could remotely have been covered by the attorney-client privilege. Under these circumstances, we conclude that defendant failed to demonstrate any violation of her attorney-client privilege.
V.
In Point IV, defendant asserts that the trial judge improperly denied her post-verdict motions for a judgment of acquittal, and for a new trial based upon defendant's contention that the verdict was against the weight of the evidence. This contention lacks merit.
The standard to be applied by a trial judge in deciding a motion for an acquittal under Rule 3:18-2 after the jury has been discharged is the same as that which applies when a motion for acquittal is made before the case is submitted to the jury under Rule 3:18-1.
On a motion for judgment of acquittal, the governing test is: whether the evidence viewed in its entirety, and giving the State the benefit of all of its favorable testimony and all of the favorable inferences which can reasonably be drawn therefrom, is such that a jury could properly find beyond a reasonable doubt that the defendant was guilty of the crime charged.
[State v. D.A., 191 N.J. 158, 163 (2007) (citing State v. Reyes, 50 N.J. 454, 458-59 (1967)).]
We have stated that "the trial judge is not concerned with the worth, nature[,] or extent (beyond a scintilla) of the evidence, but only with its existence, viewed most favorably to the State." State v. DeRoxtro, 327 N.J. Super. 212, 224 (App. Div. 2000) (quoting State v. Kluber, 130 N.J. Super. 336, 341 (App. Div. 1974), certif. denied, 67 N.J. 72 (1975)). Our review of a trial court's denial of a motion for acquittal is "limited and deferential[,]" and is governed by the same standard as the trial court. State v. Reddish, 181 N.J. 553, 620 (2004).
In considering whether a guilty verdict was against the weight of the evidence produced at trial under Rule 3:20-1, "our task is to decide whether 'it clearly appears that there was a miscarriage of justice under the law.'" State v. Smith, 262 N.J. Super. 487, 512 (App. Div.) (quoting R. 2:10-1), certif. denied, 134 N.J. 476 (1993). "We must sift through the evidence 'to determine whether any trier of fact could rationally have found beyond a reasonable doubt that the essential elements of the crime were present.'" Ibid. (quoting State v. Carter, 91 N.J. 86, 96 (1982)). Our "objective is not to second-guess the jury but to correct [an] injustice that would result from an obvious jury error." State v. Saunders, 302 N.J. Super. 509, 524 (App. Div.), certif. denied, 151 N.J. 470 (1997). We do not evaluate the evidence and determine anew how we might have decided the issues.
Applying these standards, we conclude that the State presented sufficient proofs to establish beyond a reasonable doubt that defendant was guilty of theft and misappropriation of property. To prove theft by unlawful taking or disposition, the State was required to prove that defendant unlawfully took movable property of another with the purpose to deprive that person of it. N.J.S.A. 2C:20-3(a). To show misapplication of entrusted funds, the State had to prove that defendant disposed of property that had been entrusted to her as a fiduciary, knowing it was unlawful and involved a substantial risk of loss or detriment to the owner of the property or to a person for whose benefit the property was entrusted. N.J.S.A. 2C:21-15.
The State's proofs regarding both offenses were overwhelming. Defendant admitted receiving all eighty-six checks and all sixteen wire transfers, totaling over $450,000. While defendant claimed that she was authorized to accept this money, the State presented evidence that the Fund never paid commissions directly to defendant or Elite, and never sought or accepted "loans" from defendant. Mirailh denied signing the checks or the July 2005 promissory note.
Giving the State the benefit of all favorable inferences from the testimony it presented, the trial judge properly denied defendant's motions for a judgment of acquittal and for a new trial. Therefore, we reject defendant's contention on this point.
VI.
In Point V of her brief, defendant argues that her sentence was excessive. We disagree.
Trial judges have broad sentencing discretion as long as the sentence is based on competent credible evidence and fits within the statutory framework. State v. Dalziel, 182 N.J. 494, 500 (2005). Judges must identify and consider "any relevant aggravating and mitigating factors" that "'are called to the court's attention[,]'" and "explain how they arrived at a particular sentence." State v. Case, 220 N.J. 49, 64-65 (2014) (quoting State v. Blackmon, 202 N.J. 283, 297 (2010)). "Appellate review of sentencing is deferential," and we therefore avoid substituting our judgment for the judgment of the trial court. Id. at 65; see State v. O'Donnell, 117 N.J. 210, 215 (1989); State v. Roth, 95 N.J. 334, 365 (1984).
We are satisfied that the sentencing judge made findings of fact concerning aggravating and mitigating factors that were based on competent and reasonably credible evidence in the record, and applied the correct sentencing guidelines enunciated in the Code. The sentence the judge imposed does not shock our judicial conscience. Case, supra, 220 N.J. at 65; O'Donnell, supra, 117 N.J. at 215-16. Accordingly, we discern no basis to second-guess the sentence.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION