State v. Coleman

ADKINS, J. In this case, we consider the State’s effort to criminalize the breach of residential construction contracts. We are asked to determine whether the evidence adduced at trial was sufficient to convict the Respondent, Leon Thomas Coleman, Jr., of theft by deception under Md.Code (2009), § 7-104(a) of the Criminal Law Article. We are also asked to determine whether the Deposits on New Homes Subtitle (“Act”), Md.Code (1998, 2010 Repl.Vol.), § 10-301(a) of the Real Property Article, applies to money received in exchange for land without a residential unit on it. After Coleman failed to perform eight construction contracts for detached homes, he was convicted of eight counts of theft by deception and eight counts of failure to escrow under the Act.

The Court of Special Appeals reversed all sixteen convictions, holding that the Act did not apply and that there was insufficient evidence of intent to support the theft convictions. We granted certiorari, State v. Coleman, 419 Md. 646 , 20 A.3d 115 (2011), and answer the following questions: 1. Did Respondent’s breach of contract give rise to a criminal action for theft? 2. Is a transfer of property from the victim to a party other than the defendant a “transfer of interest or possession” within the meaning of the theft statute? 3.

May intent to commit theft by deception be inferred based upon facts occurring after the date the defendant allegedly obtained or exerted control over the property of the victim? 4. Does the Deposits on New Homes Act apply when the land and new residential unit are not conveyed simultaneously? 1 ⁶⁷⁰ We shall affirm the Court of Special Appeals. The evidence was insufficient to conclude that Coleman intentionally deprived the buyers of their property, as required under the theft statute. 2 Thus, like the Court of Special Appeals, we assume, without deciding, that a breach of contract may give rise to a criminal action for theft in some circumstances. We also confirm our precedents establishing that (1) a transfer of property from the victim to a party other than the defendant is a “transfer of interest or possession” within the meaning of the theft statute and (2) intent may be inferred based on acts subsequent to the alleged crime.

Finally, we hold that the plain meaning of the Act indicates that it did not apply to Coleman. Facts and Legal Proceedings In February and March of 2004, Coleman entered into contracts to convey eight lots in a subdivision and build homes on those lots. 3 The subdivision was called Kings Grant Court, a collection of eleven lots in Prince George’s County. Earlier that year, Coleman had acquired the right to purchase Kings Grant Court for $550,000. 4 ⁶⁷¹ The contracts provided that the buyers would purchase the unimproved lots before their homes were constructed. Seven of the eight contracts identified the price of the unimproved lots, which ranged from $89,959 to $100,000.

For at least seven of the eight lots, this price was at or below the appraised value of the land at the times the contracts were executed. The total price under the contracts ranged from $256,000 to $360,891, inclusive of constructing the homes. The buyers paid for the unimproved lots by obtaining loans with an initial advance for the purchase of the land. At closing, Coleman used the initial advances to purchase one lot for each buyer and convey title by deeds to them.

He received $667,993.19 from the advances and used $500,000 of it to buy the lots. The remaining balance on the buyers’ loans was held in escrow by the lenders pursuant to a draw schedule under which Coleman would make draws to cover his ongoing construction costs. To make draws, Coleman would have needed to certify that materials were received or work was done, that payment was due, and that the Bank had inspected and approved the work or materials. Coleman never applied for any construction draws, however, because construction never went forward.

The only payments that Coleman received from the buyers were the initial land advances, used to purchase the lots, and amounts ranging from $900 to $3500 for paper work costs such as blueprints and site plans. Construction never went forward because Coleman ran out of money before he was able to obtain the required permits. He had hired MDB Design Group LLC on June 30, 2004, to prepare drawings and designs and obtain the permits. His contract with MDB provided that its work would be completed by August 31, 2004.

He also consulted a builder about the project and retained two individuals to process permits and provide real estate consulting. When MDB failed to obtain the permits by the deadline, Coleman contacted James Reid, CEO of Civtech Designs, Inc., to discuss replacing MDB. ⁶⁷² Coleman extended MDB’s deadline to November 10, 2004, but MDB again failed to meet it, so he retained Civteeh on November 12, 2004, to do the work that MDB was supposed to have done. He notified the buyers of this change on December 3, 2004, stating that he would still be able to complete the project. By the end of December, however, Coleman’s operating account had a negative balance and he began to ignore inquiries from the buyers.

Ultimately, the buyers either filed for bankruptcy, had their lots foreclosed, or refinanced or modified their loans. Sufficiency of the Evidence for Theft by Deception When reviewing a criminal conviction for sufficiency of the evidence, “[w]e will consider the evidence adduced at trial sufficient if, ‘after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’ ” Facon v. State, 375 Md. 435, 454 , 825 A.2d 1096, 1107 (2003) (quoting Jackson v. Virginia, 443 U.S. 307, 319 , 99 S.Ct. 2781, 2789 , 61 L.Ed.2d 560 (1979)); see also Winder v. State, 362 Md. 275, 325 , 765 A.2d 97, 124 (2001) (holding that a conviction must be upheld when “the record evidence could reasonably support a finding of guilt beyond a reasonable doubt”). The prosecution needed to prove that Coleman “obtain[ed] control over property by willfully or knowingly using deception” with one of these states of mind: (1) intends to deprive the owner of the property; (2) willfully or knowingly uses, conceals, or abandons the property in a manner that deprives the owner of the property; or (3) uses, conceals, or abandons the property knowing the use, concealment, or abandonment probably will deprive the owner of the property. Md.Code § 7-104(b) of the Criminal Law Article.

The statute defines “deprive” as to withhold property of another: ⁶⁷³ (1) permanently; (2) for a period that results in the appropriation of a part of the property’s value; (3) with the purpose to restore it only on payment of a reward or other compensation; or (4) to dispose of the property or use or deal with the property in a manner that makes it unlikely that the owner will recover it. Md.Code § 7-101(c) of the Criminal Law Article. Property can be “obtained,” for purposes of theft by deception, even when it is transferred to a third party. Maryland Code § 7-101(g) of the Criminal Law Article (“ ‘Obtain’ means ... in relation to property, to bring about a transfer of interest in or possession of the property[.]”); Cicoria v. State, 332 Md. 21, 32 , 629 A.2d 742, 747 (1993) (observing that “obtain,” for purposes of theft, means “to bring about a transfer of interest or possession, whether to the offender or to another”).

The requirement of intentional deprivation makes theft a specific intent crime. Jones v. State, 303 Md. 323, 340 , 493 A.2d 1062, 1070 (1985) (“To steal property is to take it with an intent to deprive the owner of the rights and benefits of ownership.”) (citing U.S. v. Turley, 352 U.S. 407, 411 , 77 S.Ct. 397, 399 , 1 L.Ed.2d 430 (1957)); Murray v. State, 214 Md. 383, 386 , 135 A.2d 314, 315 (1957) (“Theft is defined as [a] crime consisting in the intentional taking, without legal warrant, of the personal property of another with the unlawful intention to deprive the owner of such property.” (citation and quotations omitted)); see also Charles E. Moylan Jr., Maryland’s Consolidated Theft Law and Unauthorized Use 61 (2002) (Theft requires “a more remote intent to achieve some purpose or bring about some end result above and beyond the mere intentional commission of the actus reus.... It is required that the alleged thief ... has the purpose of depriving the ⁶⁷⁴ owner of property!.]”). 5 Intent may be inferred from acts occurring subsequent to the commission of the alleged crime. As we observed in Sorrell v. State, Flight by itself is not sufficient to establish the guilt of the defendant, but is merely a circumstance to be considered with other factors as tending to show a consciousness of guilt and therefore guilt itself....

The flight doctrine has been applied to a broad spectrum of behavior occurring after the commission of a crime: flight from the scene or from one’s usual haunts after the crime, assuming a false name, shaving off a beard, resisting arrest, attempting to bribe arresting officers, forfeiture of bond by failure to appear, escapes or attempted escapes from confinement, and attempts of the accused to take his own life. (Emphasis added and citations omitted.) 315 Md. 224, 228 , 554 A.2d 352, 353-54 (1989); see also U.S. v. Latney, 108 F.3d 1446, 1449-50 (D.C.Cir.1997) (“[L]ater acts are most likely to show the accused’s intent when they are fairly recent and in some significant way connected with prior material events!.]” (citations omitted)); Cash v. U.S., 700 A.2d 1208, 1212 (D.C.1997) (“Evidence of a subsequent act, if connected in some material way with the event in question, can be probative of a prior state of mind.”); Commonwealth v. Oliver, 443 Mass. 1005 , 820 N.E.2d 194 (2005) (holding that the appeals court properly considered “the defendant’s subsequent conduct as probative of his intent at the time” of the act of theft); State v. Hastings, 137 N.H. 601 , 631 A.2d 526, 529 (1993) (“[T]o be relevant to a defendant’s earlier state of mind, subsequent acts must be fairly recent and in some significant way connected with prior material events.”). The State argues that Coleman’s intent to deprive was proved by the fact that he entered into the contracts, and took the initial advances, with no intent to perform them fully. ⁶⁷⁵ Specifically, the State argues that the jury could have rationally concluded that Coleman never intended to perform based upon his failure to put monies he received from advances toward development of the property; the lack of diligence with which he pursued the development process; and his misrepresentations and his lack of responsiveness to inquiries about the development’s progress, both of which forestalled any legal action against him. We disagree.

When a defendant has a right to receive money or property, he cannot be guilty of stealing it. See Md.Code § 7-101(j) of the Criminal Law Article (“ ‘Property of another’ means property in which a person other than the offender has an interest that the offender does not have the authority to defeat or impair[.]”); State v. King, 95 Md. 125, 128 , 51 A. 1102 , 1103 (1902) (“[T]he Court must be able to determine judicially that the property alleged to have been stolen was the property of another and not the property of the aecused[.]”); see also State v. Galbreath, 525 N.W.2d 424, 427 (Iowa 1994) (“[T]he term ‘property of another’ as it is used in [the theft statute] means property in which the owner retains an interest.... Thus, in the context of an ordinary construction contract, cash advanced as a down payment will not qualify as ‘property of another’ because title and possession are transferred from the owner to the contractor ... outright.”); Shelley v. State, 447 So.2d 124, 125-26 (Miss.1984) (reversing a conviction for embezzlement even though the defendant received $13,250 under “a clearly written and executed contract” for home construction and failed to perform. The buyers “parted with their money and gave it completely to [the defendant].

When he received the money, it belonged to him [even though] he did not produce what is now claimed to have been the ‘proceeds’ under the quoted embezzlement statute.”); State v. Marshall, 541 N.W.2d 330, 333 (Minn.Ct.App.1995) (“Because money paid by customers became the property of respondent ... the district court properly dismissed theft ... charges.”). ⁶⁷⁶ Indeed, as we observed in Sibert v. State, even an honest belief in the right to receive money or property negates the mens rea element of theft: In elaborating upon the claim of right defense, the Joint Subcommittee observed: The claim of right defense springs from the notion that in cases of common law larceny the defendant must have had an intent to permanently deprive the owner of the property. If the defendant acted under a mistake as to his right to deal with the property, he could not be guilty of larceny. Similarly, if the defendant can produce evidence that he was acting under an honest belief he had a “claim of right”, this will be weighed by the trier of the facts in resolving the issue of whether the defendant possessed the requisite mens rea to commit the offense of theft. According to this legislative commentary, the claim of right defense in Maryland originated in Saunders v. Mullinix, 195 Md. 235 , 72 A.2d 720 (1950).

The Saunders Court, in referring to this defense in dicta, stated: It is a generally accepted rule in criminal prosecutions that one who either takes or retains the property of another without the latter’s consent for a debt which he in good faith claims to be due him by the owner of the property is not guilty of larceny, because the existence of the debt or the bona fide belief in its existence shows a lack of felonious intent in the taking or detention of the property. (Emphasis added and citations omitted.) 301 Md. 141, 147-148 , 482 A.2d 483, 486-87 (1984). There is no evidence that Coleman lacked either a right to the money he received or “an honest belief’ in that right. See id.

The evidence at trial shows that he gave value, i.e. conveyed the lots, for the money he received in the way of advances to pay for the lots, as provided under the contracts. In exchange for the initial draws and miscellaneous payments, ⁶⁷⁷ the buyers received land and also construction blueprints. Coleman received no further payments or draws. The State argues that Coleman took money not only for the land and blueprints, but also for his promise to build the homes.

Thus, it argues, he stole the money that he took in exchange for the promise to build, because he never intended to complete construction. The State produced no evidence to support this, however, except to note that Coleman received more for the lot sales than he paid for the land. Importantly, there is no evidence that he received more than market value for the land he conveyed. Indeed, for at least seven of the eight lots, the price he charged was at or below the appraised value of the land. 6 In short, making a profit on a land transaction is not theft.

At trial, the State also attempted to introduce evidence that Coleman had used money from the initial draws for expenses unrelated to the contracts, but the trial judge did not allow the evidence. The State now argues that Coleman’s failure to spend some of the money implies that he kept it for himself or used it for personal expenses. Specifically, the State asserts that Coleman “appear[ed] to develop the lots so that he could evade detection until he had spent the money” and “profited handsomely from selling [the] land.” There is no evidence, however, that Coleman used the money for anything but the Kings Grant Court project. With these facts, no rational jury could conclude that Coleman intentionally deprived the buyers of their money by overcharging