State v. Agosta

State v. Agosta (2000-387); 173 Vt. 97; 787 A.2d 1252

[Filed 09-Nov-2001]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of  Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.


                                No. 2000-387


State of Vermont	                         Supreme Court

                                                 On Appeal from
     v.	                                         District Court of Vermont,
                                                 Unit No. 2, Chittenden Circuit

Michael Agosta	                                 October Term, 2001 


Howard E. Van Benthuysen, J.

William H. Sorrell, Attorney General, and John Treadwell, Assistant Attorney 
  General, Montpelier, for Plaintiff-Appellee.

Robert Appel, Defender General, and William A. Nelson, Appellate Attorney, 
  Montpelier, for Defendant-Appellant.


PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.


       MORSE, J.   Defendant Michael Agosta appeals his jury conviction of
  false pretenses,  arguing that the conviction cannot stand because the
  State failed to prove that he misrepresented a  fact affecting the essence
  of the transaction underlying the prosecution.  We reject this argument and 
  thus affirm the conviction.

       In February 1997, Roy Buchsbaum, an out-of-state gun collector,
  obtained a copy of a  circular distributed by defendant advertising exotic
  firearms for sale.  The circular indicated that the  Agosta Firearms
  Company of Williston, Vermont, was clearing out the last of its inventory
  and  "going out of business."  Buchsbaum called defendant at his home in
  Vermont and began negotiating 

 

  a price for three items - two fully automatic rifles and a grenade
  launcher.  As a follow-up to their  conversation, defendant sent Buchsbaum
  correspondence bearing the logo of the Agosta Firearms  Company, Law
  Enforcement Division, and indicating that defendant was federally licensed
  as a class  2 firearms manufacturer and a type 10 manufacturer of
  destructive devices.  In truth, defendant  possessed neither license; his
  class 2 license had expired, and he had withdrawn his previous  application
  for a destructive devices license.

       In correspondence, defendant demanded that Buchsbaum send him half of
  the $8900 sale  price before he would send in the paperwork to get title to
  the three weapons transferred.  In  response, Buchsbaum sent defendant a
  check for $4450 in early March 1997.  Approximately four  weeks later,
  after unsuccessfully attempting to contact one of his local dealers to find
  out if the  transfers for the rifles had been approved, Buchsbaum
  telephoned defendant to have him send the  rifles to a different dealer. 
  Defendant indicated he could do that, but demanded more money.  In  early
  April 1997, Buchsbaum sent defendant another check for $2700.

       When two more months passed without the transfers going through,
  Buchsbaum became  concerned and attempted to call defendant, only to
  discover that defendant's telephone had been  disconnected.  Eventually,
  after finding a listing through the Internet, Buchsbaum was able to locate 
  defendant at a different address and telephone number.  Over the next six
  weeks, Buchsbaum was  unable to reach defendant by telephone or certified
  mail at the new address, even though one of  defendant's relatives had told
  Buchsbaum that defendant was staying at that location.  Finally, in 
  mid-September 1997, Buchsbaum complained to police that he had been
  swindled by defendant.   Police investigated and spoke to defendant on at
  least two occasions.

 

       In March 1998, defendant was arraigned on a charge of false pretenses,
  in violation of 13  V.S.A. § 2002.  After the district court denied
  defendant's motions to suppress certain evidence and  dismiss the charge,
  the case went to trial.  Defendant was convicted by a jury and given a
  suspended  two-to-five-year sentence.  On appeal, he argues that, in a
  prosecution for the crime of false  pretenses, the State must prove that
  the alleged misrepresentation went to the essence of the  transaction. 
  According to defendant, the State failed to make such a showing, the
  evidence was  insufficient to establish that element of the crime, and the
  court committed plain error by failing to  charge the jury on that point.

       Vermont's false pretenses statute, which can be traced back to the
  eighteenth century in one  form or another, imposes criminal penalties upon
  anyone who "designedly by false pretenses" and  "with intent to defraud"
  obtains from another person money or property exceeding twenty-five 
  dollars in value.  13 V.S.A. § 2002.  The basic three elements of § 2002
  are that the defendant must  have (1) acted with intent to defraud, (2)
  used a fraudulent devise or artifice, and (3) obtained money  or property
  valued in excess of twenty-five dollars.  State v. Foley, 140 Vt. 643, 646,
  443 A.2d 452,  453 (1982).  While acknowledging slight variations in the
  laws of different jurisdictions, a leading  treatise has defined the
  statutory crime of false pretenses as "(1) a false representation of a
  material  present or past fact (2) which causes the victim (3) to pass
  title to (4) his property to the wrongdoer,  (5) who (a) knows his
  representation to be false and (b) intends thereby to defraud the victim." 
  2 W.  LaFave & A. Scott, Substantive Criminal Law § 8.7, at 382-83 (1986). 
  This Court has held that, to  obtain a conviction for false pretenses, the
  State must prove that the victim relied materially, but not  necessarily
  solely, upon the false representation.  State v. Bissonette, 145 Vt. 381,
  388, 488 A.2d 1231, 1235 (1985).

 

  Defendant's principal argument on appeal is as follows:  This Court should
  look to the  common law to interpret § 2002's undefined terms, such as
  "false pretenses" and "intent to defraud."  See Neder v. United States, 527 U.S. 1, 23 (1999) (under principle that Congress intends to  incorporate
  well-settled meaning of common-law terms it uses, court must presume that
  Congress  intended to incorporate materiality of misrepresentation as
  element of federal mail fraud statute).   See generally State v. Dixon, 169
  Vt. 15, 18, 725 A.2d 920, 922 (1999) (we assume statutory  terminology is
  consistent with common law).  Vermont common law governing the civil tort
  of fraud  requires plaintiffs to demonstrate that the alleged fraudulent
  misrepresentation affected the essence  of the transaction.  See Goldman v.
  Town of Plainfield, ___ Vt. ___, ___, 762 A.2d 854, 856 (2000);  Silva v.
  Stevens, 156 Vt. 94, 102, 589 A.2d 852, 857 (1991); The Union Bank v.
  Jones, 138 Vt. 115,  121, 411 A.2d 1338, 1342 (1980).  According to
  defendant, the alleged misrepresentation concerning  his status as a
  firearms dealer did not go to the essence of the transaction with Buchsbaum
  because  he (defendant) could have completed the transaction through an
  intermediary dealer, notwithstanding  his lack of a federal firearms
  license; therefore, the misrepresentation was immaterial and could not 
  have served as the basis for his conviction on the false pretenses charge.

       We find this argument unavailing.  Defendant has not cited, nor have
  we found, any authority  suggesting that the statutory crime of false
  pretenses includes an element requiring the alleged  misrepresentation to
  go to "the essence of the transaction."  The only materiality requirement
  that has  been imposed by this Court with respect to § 2002 is the one,
  noted above, that the victim must have  materially relied upon the
  misrepresentation.  Bissonette, 145 Vt. at 388, 488 A.2d  at 1235; cf. 
  Neder, 527 U.S.  at 22 n.5 (citing treatise and Restatement (Second) of
  Torts § 538 for proposition  that a misrepresentation is material if it
  reasonably induces victim to act or if maker of 

 

  misrepresentation has reason to know that it will induce victim to act);
  Black's Law Dictionary 1016  (7th ed. 1999) (material misrepresentation is
  one in which reasonable person would attach  importance in deciding how to
  act with regard to transaction at issue or to which maker has reason to 
  know that recipient would attach some importance); LaFave, supra, at 386 n.
  15, 391-92 (noting that  misrepresentation must concern material fact to
  suffice for false pretenses, and citing People v.  Noblett, 155 N.E. 670,
  670-71 (N.Y. 1927), in which court concluded that lessee's false statement
  to  sub-lessee as to duration of lease was not material misrepresentation
  because it had no effect on  parties' transaction).

       In Bissonette, 145 Vt. 384, 387-88, 488 A.2d  at 1233, 1235, we upheld
  a conviction of false  pretenses that was based on the defendant falsely
  telling his elderly victim that the person who  supervised her affairs had
  approved her paying him to fix her roof.  While this misrepresentation was 
  material in the sense that it induced the victim to part with her money,
  and thus was sufficient to  support the conviction, see id. at 388, 488 A.2d  at 1235, it did not necessarily go to the essence of the  transaction. 
  Cf. State v. Jones, 389 P.2d 398, 402 (N.M. 1964) (defendant's false
  statement that he  was vice-president of company was material
  misrepresentation sufficient to convict defendant of  false pretenses for
  scheming to sell worthless stock).  If we were to accept the argument
  raised by  defendant here on appeal, defendants in cases such as Bissonette
  might not be convicted of false  pretenses.  There is no indication that
  the Legislature intended to limit the reach of the statute in this  manner.  

       Viewed from this perspective, defendant's letterhead concerning his
  licensing status falsely  represented a material fact and thus qualified
  for the crime of false pretenses, given Buchsbaum's  testimony that (1) he
  assumed he was purchasing the weapons from a federally licensed dealer; (2) 

 

  he relied upon defendant's written representation as to that fact; and (3)
  he would not have given  defendant his money and gone through with the
  transaction had he known that defendant did not in  fact have the licenses
  he claimed he did.

       In defendant's view, the alleged misrepresentation in this case would
  not have subjected him  to liability for civil fraud under our case law. 
  That may be so, although the misrepresentations found  to be immaterial in
  the civil cases cited by defendant are substantively different from the
  present one.  See Goldman, ___ Vt. at ___, 762 A.2d  at 856 (statements
  concerning Town's motives for  formulating its bargaining position as to
  contract with plaintiff did not go to essence of transaction  and thus did
  not support plaintiff's fraud action); Stone & Wellington v. Robie, 66 Vt.
  245, 246-47,  29 A. 257, 257 (1894) (statements comparing value and quality
  of defendant's livestock to that of  others were not material
  misrepresentations supporting claim of fraud).  In any event, whether 
  defendant could be found guilty of the statutory crime of false pretenses
  does not depend on whether  he could have been found liable in superior
  court based on a civil fraud complaint.  See State v.  Allen, 146 Vt. 569,
  572, 507 A.2d 975, 977 (1986) (false pretenses "statute creates and defines
  the  offense"); State v. Messier, 145 Vt. 622, 627-28, 497 A.2d 740, 743
  (1985) (task of defining crimes  belongs to Legislature, and definition of
  circumstances under which exculpatory or mitigating  matters will be
  recognized is likewise addressable by Legislature).

       We also note that there is an additional element of false pretenses -
  intent to defraud - that  covers defendant's concerns.  Traditionally, a
  false representation had to relate to a present or past  fact to qualify
  for the crime of false pretenses, but the modern, prevailing view is that
  statements of  intention falsely representing a present state of mind -
  including false promises of future action - will suffice.  LaFave, supra,
  at 386-88; see State v. Vigil, 922 P.2d 15, 24 (Utah Ct. App. 1996) 

 

  (holding that statement of future conduct is regarded as present intent to
  perform, and hence, if made  by one not intending to perform, is actionable
  as false pretense); Jones, 389 P.2d  at 401 (noting more  recent view
  expressed by Justice Traynor that promise made without intention to perform
  is  misrepresentation as to state of mind and thus false pretense).  This
  Court has applied the same  principle to the law of civil fraud.  See Winey
  v. William E. Dailey, Inc., 161 Vt. 129, 133, 636 A.2d 744, 747 (1993)
  (misrepresentations about future actions can be fraudulent if, at time
  statement was  made, defendant intended to act differently from promise);
  Union Bank, 138 Vt. at 121, 411 A.2d  at  1342 (action for fraud and deceit
  will lie for false promises shown to be essential to scheme to  defraud;
  intentional misrepresentation as to future action constitutes
  misrepresentation of existing  fact insofar as it misrepresents actor's
  present intention).

       Although the prosecution relied on defendant's misrepresentation of
  his licensing status as the  fraudulent artifice used to lure Buchsbaum
  into the firearms transaction, the trial court instructed the  jurors that,
  to convict defendant of false pretenses, they would have to determine
  beyond a  reasonable doubt that, during the winter and spring of 1997, he
  designedly acted with intent to  defraud in obtaining the money from
  Buchsbaum.  See LaFave, supra, at 401 (to be guilty of false  pretenses, it
  is not enough that defendant knows or believes representation to be false;
  there must  also be intent to defraud).  The "intent to defraud" element
  requires a scheme to cheat the victim.   See Smith v. Southeastern Fin.
  Corp., 337 So. 2d 330, 333 (Ala. 1976) (" 'Intent to defraud' requires  a
  scheme to unfairly deprive someone of something of value."); see also State
  v. Weigel, 477 A.2d 372, 378 (N.J. Super. Ct. App. Div. 1984) ("In common
  parlance, the word 'defraud' means to cheat  or wrongfully deprive another
  of his property by deception or artifice."); Black's Law Dictionary, 
  supra, at 434 ("defraud" means: "To cause injury or loss to (a person) by
  deceit.").

 

       Defense counsel told the jurors in opening and closing arguments that
  this was simply a case  of a deal gone sour, that there were legitimate
  reasons for the delays in sending the weapons, and that  even if defendant
  decided at some point not to send the weapons, it was only in anger after 
  Buchsbaum had gone to police.  Defense counsel reminded the jurors that, to
  convict defendant of  false pretenses, they would have to determine beyond
  a reasonable doubt, based on the evidence  presented at trial, that he had
  no intention during the winter and spring of 1997 to deliver the  weapons.

       For its part, the State argued that there was substantial
  circumstantial evidence for the jurors  to conclude that defendant had
  intended to swindle Buchsbaum.  Indeed, the State presented  evidence of
  defendant's failure both to follow through on the paperwork necessary for
  transfer of the  weapons and to notify Buchsbaum of his change of address. 
  The jury was entitled to rely on this  evidence in concluding that
  defendant intended to defraud Buchsbaum and in convicting him of false 
  pretenses.  See United States v. Ismoila, 100 F.3d 380, 387 (5th Cir. 1996)
  (standard of review  concerning sufficiency of evidence, regardless of
  whether evidence is direct or circumstantial, is  whether rational jury
  could have found that prosecution proved essential elements of crime beyond 
  reasonable doubt; proof of intent to defraud can arise by inference from
  facts and circumstances  surrounding transaction); State v. Tidlund, 4 S.W.3d 159, 160, 164 (Mo. Ct. App. 1999) (jury may  believe all, some, or
  none of witnesses' testimony and must resolve conflicts in testimony;
  subjective  intent of accused at time of making promise is rarely open to
  direct proof and ordinarily must be  shown through circumstantial
  evidence); People v. Sala, 695 N.Y.S.2d 169, 174 (App. Div. 1999) 
  (fraudulent intent is usually not susceptible of proof by direct evidence
  and ordinarily must be  inferred from circumstantial evidence).

 

       We need not examine this evidence in any detail, however, because
  defendant has not argued  that the evidence was insufficient for the jury
  to conclude that he had intended from the outset to  defraud Buchsbaum. 
  Nor has defendant argued that the State's presentation of its theory of the
  case  relieved the jury of its duty to find each and every element of the
  crime of false pretenses, including  an intent to defraud.  See State v.
  Brewer, 932 S.W.2d 1, 19 (Tenn. Crim. App. 1996) (jury verdict of  guilty
  accredits testimony of state's witnesses, resolves all conflicts in favor
  of prosecution, and  raises presumption of guilt on appeal, where
  prosecution is entitled to strongest legitimate view of  evidence). 
  Finally, we need not consider defendant's arguments concerning the
  sufficiency of the  evidence and the correctness of the charge because they
  depend upon him prevailing on his primary  argument, which we have
  rejected.

       Affirmed.
	

  			               FOR THE COURT:



                                       _______________________________________
            	                       Associate Justice