Opinion
Nos. 01–12–01142–CV, 01–12–01143–CV.
2014-11-06
John B. KENNEDY, Appellant v. The STATE of Texas, Appellee.
Mark C. Kratovil, Assistant Public Defender, Houston, TX, for Appellee. Devon Anderson, District Attorney, Heather A. Hudson, Assistant District Attorney, Harris County, Houston, TX, for State of Texas.
Affirmed.
Mark C. Kratovil, Assistant Public Defender, Houston, TX, for Appellee. Devon Anderson, District Attorney, Heather A. Hudson, Assistant District Attorney, Harris County, Houston, TX, for State of Texas.
Panel consists of Justices HIGLEY, BLAND, and SHARP.
OPINION
LAURA CARTER HIGLEY, Justice.
After pleading guilty, John B. Kennedy was convicted of two felony offenses: (1) falsely holding oneself out as a lawyer and (2) money laundering. The trial court sentenced Kennedy to concurrent terms of 10 years in prison. Thereafter, in each case, Kennedy filed a motion for the restoration of property pursuant to Chapter 47 of the Code of Criminal Procedure. Kennedy asserted “rightful ownership” to money being held as evidence by the State. The State claimed that the money was stolen property, unlawfully acquired by Kennedy in committing his crimes. Following an evidentiary hearing, the trial court ruled against Kennedy, rejecting his request to obtain the currency.
See Tex. Penal Code Ann. § 38.122(a) (Vernon 2011).
See id. § 34.02(a)(1), (e)(4) (Vernon 2011).
See Tex.Code Crim. Proc. Ann. arts. 47.01–.12 (Vernon 2006 & Supp.2014).
Kennedy appeals the order in each case. Raising two identical issues in each appeal, he asserts that no evidence supports the trial court's order.
We affirm.
A question has arisen in the instant appeals regarding which provision of Chapter 47 applies to the proceeding initiated by Kennedy in his motion to recover property. Kennedy asserts that the proceeding was governed by Article 47.01a. The State asserts that Article 47.02 applies. We agree with the State that Article 47.02 governs here. Article 47.01a, the provision relied on by Kennedy, applies only to Chapter 47 proceedings occurring when a criminal action relating to the allegedly stolen property is not pending. Crim. Proc. art. 47.01a (Vernon 2006). In other words, Article 47.01a applies when no indictment or information has been filed initiating a criminal action. See Perry v. Breland, 16 S.W.3d 182, 189 (Tex.App.-Eastland 2000, pet. denied) (holding that Article 47.01a applies only to Chapter 47 proceedings occurring before filing of indictment or information); see also VSC, 347 S.W.3d at 235 (discussing utilization of Article 47.01a procedure to remedy party's claim to interest in motor vehicles seized by government; facts there show no criminal action pending). In contrast, if a criminal action is pending, jurisdiction to dispose of the property lies with the trial court under article 47.02. See Crim. Proc. art. 47.02; Perry, 16 S.W.3d at 189. Article 47.02(a)'s express language allows the trial court to restore stolen property to its owner during or after a criminal trial. Crim. Proc. art. 47.02(a); see, e.g., Nelms v. State, 761 S.W.2d 578, 579–80 (Tex.App.-Fort Worth 1988, no writ) (involving appeal by criminal defendant from trial court's order restoring stolen funds to their owners, pursuant to Article 47.02, after defendant's criminal trial). Specifically, Article 47.02(a) provides, “On the trial of any criminal action for theft or any other offense involving the illegal acquisition of property, the court trying the case shall order the property to be restored to the person appearing by the proof to be the owner of the property.” Code Crim. Proc. art. 47.02(a). Here, the circumstances fit under the rubric of Article 47.02(a). Kennedy filed his motion to restore property the same day that he pleaded guilty to offenses of falsely holding himself out as an attorney and money laundering. The trial court signed the judgments of conviction that day. The Court of Criminal Appeals has made clear that a plea proceeding is considered a trial under Texas law. Murray v. State, 302 S.W.3d 874, 880 (Tex.Crim.App.2009). In addition, the trial involved “the illegal acquisition of property.” See Crim. Proc. art. 47.02(a). The record reflects that Kennedy pleaded guilty to charges of falsely holding himself out as a lawyer and money laundering in an amount of at least $200,000, which constituted the proceeds of falsely holding himself out as a lawyer. Article 47.11 provides that Chapter 47 extends to property acquired in any manner which makes the acquisition a penal offense. Crim. Proc. art. 47.11. Thus, we conclude that Article 47.02 governed the Chapter 47 proceeding to restore property initiated by Kennedy in these cases. We now turn to the merits of the appeals. Sufficiency of the Evidence On appeal, Kennedy raises two issues, asserting that there was “no evidence,” that is, legally insufficient evidence, to support the trial court's order disposing of the currency. A. Standard of Review When the appellate record includes the reporter's record, the trial court's factual findings, whether express or implied, may be challenged for legal and factual sufficiency. See McMahon v. Zimmerman, 433 S.W.3d 680, 691 (Tex.App.-Houston [1st Dist.] 2014, no pet.). We review the sufficiency of the evidence supporting a trial court's challenged findings of fact by applying the same standards that we use in reviewing the sufficiency of the evidence supporting jury findings. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994). When deciding a legal-sufficiency challenge, we view the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex.2005). We credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. Id. at 827. The evidence is legally sufficient if it would enable a reasonable and fair-minded person to reach the verdict under review. Id. B. Analysis Pursuant to Article 47.02, “the court trying the case shall order the property to be restored to the person appearing by proof to be the owner of the property.” Crim. Proc. art. 47.02(a) (emphasis added). On appeal, Kennedy points to his own testimony, explaining the origin of the cash found in the storage unit. He indicates that his testimony establishes that he is the owner of the recovered currency and that he acquired it by legal means. In his brief, Kennedy summarizes his testimony on this point as follows: [Kennedy] explained that the money was his personal savings collected over fifty-seven years in the workforce, including twenty-four years of practicing law. Put simply, [Kennedy] explained that money in the storage unit was collected “before this alleged criminal event occurred.”
The cash seized by Delaware police never entered Texas, according to [Kennedy]. Instead, [Kennedy] had stored the money in Washington, D.C. with an acquaintance named Frank Madison while he worked there, then picked it up once he left Texas and then took the cash to Delaware with him. The reason that [Kennedy] stored the money in cash rather than in a checking account was due to problems he was experiencing with the IRS, which claimed [Kennedy] owed approximately $3 million in back taxes.
Kennedy also points to his testimony in which he explained that the monetary entries in the ledger, totaling $778,663.58, are unrelated to the cash found in the storage unit. According to Kennedy, the ledger entries represent money collected by the licensed attorney for whom he worked as a secretary. He claimed that the names listed in the ledger were the clients of the licensed attorney. Kennedy testified that he did not personally receive the monies reflected in the ledger; rather, those funds went directly to pay the law office's expenses, such as rent. As the factfinder in the Chapter 47 proceeding, the trial court was the sole judge of Kennedy's credibility and was permitted to resolve any inconsistencies in the testimony. See McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex.1986). Thus, it was the trial court's prerogative to disbelieve Kennedy's testimony regarding the origin of the cash recovered from the storage unit. See City of Keller, 168 S.W.3d at 819; McGalliard, 722 S.W.2d at 697. In its order, the trial court found “that the approximately $702,792.99 in United States currency was acquired by theft or other criminal acts as that term is used Chapter 31 of the Texas Penal Code.” From this express finding, it may be implied that Kennedy was the person who had acquired the currency “by theft or other criminal acts.” See Smith v. McDaniel, No. 12–12–00165–CV, 2013 WL 5302492, at *4 (Tex.App.-Tyler Sept. 18, 2013, no pet.) (mem. op.) (recognizing that, “if the findings are not as definite and specific as they should be, a reviewing court will consider not only the facts expressly found, but those that are implied from those expressly found”). As the thief of the recovered currency, Kennedy would not be a “person appearing by proof to be the owner of the property” under Article 47.02. See Crim. Proc. art. 47.02(a). Accordingly, the trial court's express and implied findings support its rejection of Kennedy's request to recover the currency. See Nelms, 761 S.W.2d at 580 (holding that, despite the appellant's acquittal of the related criminal offense, the evidence nonetheless showed that the appellant had “staged a robbery” related to the funds he sought to recover under Article 47.02; thus, the trial court's award of the funds to the original issuers of the funds was supported by the evidence). On appeal, Kennedy asserts that the evidence was legally insufficient to establish a link between the offenses of which he was convicted—falsely holding oneself out as an attorney and money laundering—and the currency recovered from the storage unit. We disagree. The State offered adequate evidence from which a factfinder could reasonably infer that the recovered cash was laundered funds unlawfully acquired by Kennedy by falsely holding himself out as a lawyer. The record reflects that, in 2009, Kennedy was arrested at his Harris County law office, where he admitted working, on a warrant for the offense of falsely holding himself out as a lawyer. Kennedy was the only person listed on the lease as renting the law office space. A van parked in front of the office displayed a large banner, which read, “We beat everybody's price! Divorce Cheap Quick!” The license plates on the van were registered to Kennedy. The record further shows that Kennedy fled Texas, while out on bond, ending up in Delaware. The Delaware police arrested Kennedy in August 2011 as a fugitive. There, the police obtained a search warrant for his Delaware storage unit. In the unit, the police recovered trash bags stuffed with over $800,000 in cash. Along with the cash, the police found numerous other documents and paperwork, a number of which appeared to correspond to the operation of a law practice. These included “Attorney at Law Divorce Interview Sheets,” three of which were admitted into evidence. These indicated that client information and payment had been received from those persons. Along with the cash in the storage locker, the police also recovered a ledger, listing hundreds of names and corresponding monetary entries. The monetary entries totaled $778,663.58. The entries covered the period of July 2009 through June 2011. Kennedy admitted that he worked at the Harris County law office from 2005 until 2011. Lastly, the records shows Kennedy pleaded guilty to falsely holding himself out as a lawyer and to laundering funds in an amount of at least $200,000. In so doing, he stipulated to, and confessed as true, the facts alleged in the corresponding indictments. From the evidence, the trial court, as the factfinder, could have reasonably inferred that Kennedy unlawfully earned a minimum of $778,663.58 by falsely holding himself out as an attorney at his Harris County law office and then fled to Delaware with the currency. We conclude that the evidence could have enabled a reasonable and fair-minded person to find that Kennedy acquired “approximately $702,792.99 in United States currency ... by theft or other criminal acts,” as found by the trial court. See City of Keller, 168 S.W.3d at 827. We hold that the evidence was legally sufficient to support the trial court's order disposing of the property and implicitly refusing to award the currency to Kennedy. See Crim. Proc. art. 47.02(a); Nelms, 761 S.W.2d 578, 579–80. We overrule Kennedy's first and second issues in each appeal. Conclusion We affirm the trial court's August 10, 2012 order in each appellate cause.
-------- Notes:
Kennedy advocates for the application of criminal substantive law to the underlying proceeding. However, a proceeding to restore property under Article 47.02 is considered a civil case because it concerns the disposition of property. See A. Benjamini, Inc. v. Dickson, 2 S.W.3d 611, 612 (Tex.App.-Houston [14th Dist.] 1999, no pet.); Four B's Inc. v. State, 902 S.W.2d 683, 684 (Tex.App.-Austin 1995, writ denied); cf. Bretz v. State, 508 S.W.2d 97 (Tex.Crim.App.1974) (dismissing appeal because Court of Criminal Appeals lacks jurisdiction over appeals from order disposing of property under 47.02, indicating that such proceeding was a civil matter over which it had no jurisdiction).
The State asserts that the appeals should be dismissed because Kennedy did not properly perfect his appeals from an Article 47.01a proceeding. See Crim. Proc. art. 47.12 (defining procedure for appeal following an Article 47.01a hearing). We need not reach this issue because we have determined that Article 47.02 applies here.
Much of Kennedy's argument in his brief incorrectly presumes that Article 47.01a governed the disposition of the funds. In addition, he cites law pertaining to civil forfeiture to support his position. As mentioned, there are distinctions between civil forfeiture proceedings and Chapter 47 proceedings. Nonetheless, to the extent possible and applicable, we construe Kennedy's legal-sufficiency challenges “reasonably, yet liberally” to review the merits of his appeals. Perry v. Cohen, 272 S.W.3d 585, 587 (Tex.2008). (“[A]ppellate courts should reach the merits of an appeal whenever reasonably possible.”).
A person commits the offense of theft “if he unlawfully appropriates property with intent to deprive the owner of property.” Tex. Penal Code Ann. § 31.03(a) (Vernon Supp.2014). Consent is not effective if induced by deception. Id. § 31.01(3) (Vernon Supp.2014). “Deception” includes “creating or confirming by words or conduct a false impression of law or fact that is likely to affect the judgment of another in the transaction ....” Id. § 31.01(1)(A). As mentioned, Kennedy pleaded guilty to the offense of falsely holding oneself out as an attorney.
Kennedy also asserts that the evidence is insufficient because there is a difference in the total amount of money seized from the storage unit ($851,651.00) and the total amount of money reflected in the ledger ($778,663.58). This difference is $72,987.42. As mentioned, the ledger entries cover the period of June 2009 to July 2011. By his own testimony, Kennedy worked at the Harris County law office from 2005 to 2011. Thus, the evidence supports an inference that Kennedy unlawfully acquired the additional $72,987.42 by falsely holding himself out as a lawyer in the period preceding the entries in the ledger. Moreover, in its order, the trial court found that $702,792.99 had been acquired by theft or other criminal acts. This amount is less than the total amount contained in the ledger. And, as mentioned, the balance of the $851,651.00 recovered from the storage unit was seized by the IRS for taxes owed by Kennedy.
Because this finding supports the trial court's judgment, we need not address Kennedy's challenges to the other findings made by the trial court in its order. See Tex.R.App. P. 47.1. We note that Kennedy has asserted that the State's evidence failed to meet some of the requirements of Article 47.01a; however, as discussed, that is not the governing provision in these cases.