Mattingly v. State

ROSALYN B. BELL, Judge. J. Thomas Mattingly was convicted by a jury in the Circuit Court for Baltimore City of three counts of theft under Md.Code Ann., Art. 27, § 342 (1957, 1987 Repl.Vol.), and three counts of fraudulent misappropriation by a fiduciary under Md.Code Ann. Art. 27, § 132 (1957, 1987 Repl.Vol., 1991 Cum.Supp). On appeal Mattingly raises a number of issues, including: —whether the trial judge gave an inadequate and incorrect instruction as to the defenses of “good faith claim of right” and “honest belief”; —whether the State impermissibly multiplied a single alleged act of theft into six charges and convictions, three for alleged theft and three for alleged misappropriation by a fiduciary; —whether he was improperly convicted of misappropriation by a fiduciary under Art. 27, § 132 when, as he claimed, the funds had not “come into his hands” as a fiduciary; and —whether he was deprived of a fair trial when the prosecutor, in rebuttal, made references to the fact that ¹⁹⁰ Mattingly was a tax cheat and a person of generally bad character. The six charges in this case all relate to contract payments Mattingly received from the State of Maryland as payment for three road construction projects.

In the early 1980s, two companies with which Mattingly was associated, Mattingly Construction, Inc. and Mattingly Builders, a sole proprietorship headed by Mattingly’s wife (collectively, the Mattingly Companies), entered into certain highway construction contracts with the Maryland State Highway Administration (SHA). All of Mattingly’s projects were bonded by the Fidelity and Deposit Company (F & D), but it is the Allegany and Washington County paving jobs, designated A684, A685 and W786, which were the source of Mat-tingly’s convictions and are central to this appeal. In the spring of 1985, Mattingly informed F & D that he was financially unable to complete performance on the outstanding road construction contracts and was unable to pay his bills. This was due, in part, to interference Mat-tingly encountered in the performance of contracts, including the unavailability of previously available raw materials, the sabotage of heavy equipment, and threats to employees.

Rather than place Mattingly in immediate default, F & D agreed to guarantee a $2.5 million line of credit at Maryland National Bank to enable Mattingly to complete the contracts. In return, Mattingly agreed that all remaining payments from the SHA on F & D bonded contracts would be paid directly to F & D as a surety. Ultimately, F & D poured between $9 and $10 million into the projects in an effort to complete the jobs and pay the labor and suppliers. In October of 1985, the Mattingly Companies filed for protection under Chapter 11 of the United States Bankruptcy Code.

Approximately one year later, Mattingly negotiated an agreement with F & D whereby F & D would pay Mattingly a portion of the receivables remaining on the State contracts in return for Mattingly’s assistance in securing final payments from the SHA. Mattingly asked that F & D advance his share of the money to be collected on jobs ¹⁹¹ A684, A685 and W786 to cover the expense of pursuing the payments. F & D then advanced $20,000 to Mattingly Construction to cover A684 and A685, and $15,000 to Mat-tingly Builders for W786. Through early 1987, contract payments were made by the SHA directly to F & D pursuant to letters of default which the Mattingly Companies had executed in 1985.

On February 3, 1987, F & D advised SHA that Mattingly could negotiate final payments and pursue claims on behalf of F & D. No such negotiations would be final until F & D approved them. F & D also reminded the State that all payments were to be sent to F & D. By a letter dated February 17, 1987, SHA acknowledged F & D’s instructions. Also, on February 6, 1987, the Deputy Chief Engineer of SHA prepared memoranda authorizing that the semi-final payments be made to F & D. Copies of these memoranda were sent to the Mattingly Companies and to F & D. In February of 1987, notwithstanding F & D’s instructions to the contrary, the SHA mistakenly sent payments on all of the defaulted jobs, including over $163,000 for jobs A684, A685 and W786, to Mattingly. Two checks arrived in the Mattingly Companies’ offices.

Mattingly retained the funds, depositing them into the respective operating accounts of the Mattingly Companies. When questioned as to why he deposited the checks, Mattingly stated that he had unresolved financial issues with the State and F & D, and believed that he “had a responsibility to his companies, creditors and others.” On November 10, 1987, an official of F & D wrote to SHA, inquiring about the status of payments. The SHA examined the relevant records and determined that the funds had been sent to the Mattingly Companies. In the summer of 1988, after some negotiating between F & D and the SHA, the SHA issued a second payment to F & D on the same contracts.

Charges of theft and fraudulent misappropriation by a fiduciary were brought against Mattingly. The jury returned a guilty verdict as to all six counts. After denying ¹⁹² his motion for a new trial, the trial judge sentenced Mat-tingly to a cumulative total of 39 years, with all but one year of each sentence suspended, to run concurrently. Mat-tingly was also ordered to pay $163,000 in restitution and to perform 300 hours of community service work.

We affirm the convictions in part and reverse them in part, and vacate the sentences. We explain. JURY INSTRUCTIONS Mattingly contends that the trial court committed two errors in its instruction on the “good faith claim of right” and “honest belief” defenses to theft. The first is that the instruction consisted of only the most perfunctory recitation of the statutory language embodying those defenses.

Mattingly argues that the language is not self-defining and, while he requested the judge to assist the jury by defining the critical element of these defenses, the judge declined to do so. Mattingly also claims the judge incorrectly narrowed the defenses, which are based on a subjective state of mind, thus eliminating altogether the defense that Mattingly believed he had the right to use the funds because his companies had valid set-offs against the State and F & D. Md.Code Ann., Art. 27, § 343(c)(1) and (2) spell out two defenses to theft: “(c) It is a defense to the offense of theft that: “(1) The defendant acted under a good faith claim of right to the property involved; “(2) The defendant acted in the honest belief that he had the right to obtain or exert control over the property as he did[.]” In the case now before us, the judge in instructing the jury said: “It is a defense to the offense of theft that the Defendant acted under a good faith claim of right to ... the property or in the honest belief that he had the right to obtain or exert control over the property as he did.” ¹⁹³ The judge’s instructions, therefore, were an almost verbatim recitation of the statutory language. This Court has upheld the adequacy of such instructions. In Pearlstein v. State, 76 Md.App. 507, 517 , 547 A.2d 645 (1988), cert. denied, 314 Md. 497 , 551 A.2d 867 (1989) and Cardin v. State, 73 Md.App. 200, 219, 533 A.2d 928 (1987), cert. denied, 312 Md. 126 , 538 A.2d 777 (1988), cert. denied, 488 U.S. 827 , 109 S.Ct. 78 , 102 L.Ed.2d 55 (1988), we held that the verbatim reading of the statutory language was sufficient and “not so technical or complicated as to confuse the jury, but instead was quite straightforward and lucid.” Cardin, 73 Md.App. at 219 , 533 A.2d 928 .

Mattingly argues that under the holding in Sibert v. State, 301 Md. 141, 154 , 482 A.2d 483 (1984), he was entitled to have the jury receive an explanation of the meaning of “honest belief.” In Sibert , however, the judge gave no jury instruction at all on the honest belief defense. The Court of Appeals in Sibert held that, when there is enough evidence adduced during the course of a trial to generate a jury issue as to whether the defendant had on honest belief that he had a right to obtain or exert control over the property, a jury instruction on the honest belief defense is required. The Court of Appeals did not, as Mattingly claims, delineate the form the instruction should take; it merely stated when such an instruction was required. Mattingly further contends that the trial court erred in instructing the jury that “before you may apply the concept of a good faith claim of right as a defense in this case you must find that the Defendant believes he had an entitlement to the monies in Contracts A684, A685 and W786.” Mat-tingly complains that, with this instruction, the trial court effectively refused to allow consideration of the set-offs Mattingly believed he had against the SHA and F & D as a “claim of right.” We fail to see, however, how this additional instruction by the judge limited Mattingly’s claim of right defense.

Under the language of Art. 27, § 343(c)(1), the defendant must have acted under a “good faith claim of right to the ¹⁹⁴ property involved.” (Emphasis added). Here, the “property involved” was the proceeds from SHA contracts A684, A685 and W786. The judge, in denying the motion for a new trial, explained: “The way I phrased the instructions did not confine the Defendant’s or [ — ] did not confine the Defendant’s legal entitlement theory to that money. It simply said that he had to believe that he was entitled to that money.

It made no reference to whether he was entitled to that money because it’s money that should have come to him or money by virtue of a set off or a claim of some other sort. All it dealt with was whether or not he had an entitlement to the monies that were, in fact, received.” The trial judge was not trying to limit Mattingly’s defense; he was merely trying to clarify for the jury which property, in this case the checks, was involved. We do not find that this prejudiced Mattingly’s defense in any way. MULTIPLICITY AND MERGER Mattingly next contends that the State impermissibly proliferated a single act of theft into three theft convictions and three misappropriation convictions.

Mattingly argues that “this profusion of guilty findings cannot stand because it violates the Double Jeopardy clause of the Constitution of the United States; does violence to principles of fundamental fairness; contravenes Maryland common law principles relating to double jeopardy and transgresses applicable statutory mandates as to the proper unit of prosecution and the inclusion of embezzlement offenses in the crime of theft.” The State argues that Mattingly did not properly preserve this issue for our review. The State contends that at trial Mattingly did not request the court to instruct the jury that it could not find him guilty of both crimes nor did he take exception to the instructions the trial court actually gave. The State also claims that Mattingly did not request ¹⁹⁵ that the court address or correct the allegedly inconsistent convictions. This is not, however, precisely correct.

At trial, when Mattingly moved for judgment of acquittal at the conclusion of all the evidence, the trial judge stated that he “treat[ed]” the renewed motion “as incorporating all of the grounds previously set forth.” The trial judge said: “As I understand it, there were some arguments that had to do with whether or not the indictment was duplicitous. You’ve made those arguments. You don’t have to make them in any great detail at this point. Because they have been presented, I’m aware of what your position is.

I’ll hear anything else you have to say regarding a motion for judgment of acquittal.” Mattingly then argued that he did not violate any fiduciary duty in receiving and depositing the checks. The prosecutor understood Mattingly’s point for, in response, he asserted: “On the fraud and misappropriation counts, that the defendant was a fiduciary with regard to these funds, I think is amply set forth in the very documents that the defendant signed.” Mattingly’s indictment charged him with a total of six counts. The first four counts of the indictment all related to the $90,644.11 check. Count I charged theft of $26,-763.61 (for contract A684); Count II charged fraudulent misappropriation of the same $26,763.61; Count III charged theft of $63,879.50 (for contract A685); and Count IV charged misappropriation of the same amount.

The last two counts stem from the second $73,134.46 check for contract W786. Count V charged theft of $73,134.46 and Count VI was for misappropriation of the same amount. On Count I, Mattingly was sentenced to eight years, with all but one suspended; on Count II, he was sentenced to five years, with all but one suspended; on Count III, he was sentenced to eight years, with all but one suspended; on Count IV, he was sentenced to five years with all but one suspended; on Count V, he was sentenced to eight years with all but one suspended; and on Count VI, he was sentenced to five years, with all but one suspended. ¹⁹⁶ The Court of Appeals in Brown v. State, 311 Md. 426, 432 , 535 A.2d 485 (1988), stated: “Whether a particular course of conduct constitutes one or more violations of a single statutory offense affects an accused in three distinct, albeit related, ways: multiplicity in the indictment or information, multiple convictions for the same offense, and multiple sentences for the same offense. All three turn on the units of prosecution of the offense and this is ordinarily determined by reference to legislative intent.” In Ball v. United States, 470 U.S. 856, 864-65 , 105 S.Ct. 1668, 1673-74 , 84 L.Ed.2d 740 (1985), the Supreme Court held that both multiple convictions and multiple sentences come within the double jeopardy prohibition against multiple punishment for the same offense.

Mattingly argues that under the facts and the evidence presented in the case, he could only be convicted of one act of theft. We agree. The money disbursed to Mattingly was made through a special manual payment system, which differed from the