Opinion
No. A06-2050.
Filed October 30, 2007.
Appeal from the District Court, Hennepin County, File No. 05-3231.
Lori Swanson, Attorney General, and Michael O. Freeman, Hennepin County Attorney, Donna J. Wolfson, Assistant County Attorney, (for respondent).
John P. Farrell, Farrell Law Offices, (for appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
In this appeal from a conviction of failing to use payment proceeds to pay for contributions to an improvement to real estate, appellant argues that the statute that he was convicted of violating is unconstitutional and that his conviction is precluded as a matter of law by his acquittal of a separate theft-by-swindle charge. We affirm.
FACTS
Kevin and Diane Bagley entered into a contract with Boyce Built Construction (Boyce Built) to remodel their home. Boyce Built is solely owned by appellant Timothy Charles Boyce. Under the contract, the Bagleys agreed that they would
pay to the said Contractor $78,000 "Seven-Eight Thousand dollars" for said materials and work, said amount to be paid as follows: 30% to start, 30% start siding, 20% when windows arrive, 10% when firewall is installed and the remaining amount upon completion.
The Bagleys issued a $20,000 check to Boyce Construction, a subcontractor of Boyce Built that is owned by appellant's brother, Dan Boyce. The Bagleys later issued checks to Boyce Built in the amounts of $3,500 and $15,000.
In March 2005, appellant attempted to collect the amounts that he believed were due under the contract. The Bagleys were unhappy with the progress and quality of the construction, and they fired Boyce Built. A mechanic's lien for lumber and related materials was later served on the Bagleys by Stock Building Supply.
Appellant was charged with felony theft by swindle in violation of Minn. Stat. § 609.52, subd. 2(4) (2004), and felony failure to use payment proceeds to pay for contributions to an improvement to real estate in violation of Minn. Stat. § 514.02 (2004). Following a jury trial, Boyce was acquitted of theft by swindle and convicted of failing to use payment proceeds to pay for an improvement to real estate. The district court stayed imposition of sentence and placed appellant on probation. This appeal challenging appellant's conviction followed.
DECISION I.
Appellant argues that his conviction under Minn. Stat. § 514.02 (2004) must be reversed because Minn. Stat. § 514.02 is unconstitutional under the United States Constitution and the Minnesota Constitution. The constitutionality of a statute is a question of law, which this court reviews de novo. State v. Wright, 588 N.W.2d 166, 168 (Minn.App. 1998), review denied (Minn. Feb. 24, 1999). Minnesota statutes are presumed to be constitutional, and a court's "`power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary.'" State v. Machholz, 574 N.W.2d 415, 419 (Minn. 1998) (quoting In re Haggerty, 448 N.W.2d 363, 364 (Minn. 1989)). "A party challenging a statute has the burden of demonstrating beyond a reasonable doubt that the statute is unconstitutional." Id. (quotation omitted).
Appellant argues that Minn. Stat. § 514.02 (1) violates Minnesota's constitutional prohibition against imprisonment for debt, (2) violates the Supremacy Clause of the United States Constitution because enforcing the statute might frustrate enforcement of federal bankruptcy law, and (3) is void for vagueness. But the record demonstrates that the first two of these three constitutional claims were raised for the first time on appeal.
In the district court, appellant moved to dismiss the count charging that he violated Minn. Stat. § 514.02, claiming only that "application of Minn. Stat. Sec. 514.02 in the present case is unconstitutional as being void for vagueness in violation of [appellant's] due process rights under the United States Constitution and the State of Minnesota Constitution." Appellant's motion did not raise either an imprisonment-for-debt claim or a preemption claim.
Appellant contends that respondent's "oral argument [in the district court] and a nine-page pretrial brief entitled `State's Memorandum of Law in Opposition to the Defendant's Motion to Dismiss Count 2'" address the constitutionality of the statute with respect to the state prohibition of imprisonment for debt. But appellant has not provided a transcript of the oral argument before the district court, and the pretrial brief that appellant cites is not in the district court record. More importantly, appellant has not explained how any arguments that respondent made in the district court raised a challenge to the constitutionality of Minn. Stat. § 514.02.
Because appellant did not raise in the district court the first two of the three constitutional claims that he has raised on appeal, those claims are waived. See State v. Henderson, 706 N.W.2d 758, 759 (Minn. 2005) (stating that ordinarily, appellate court does not decide issue raised for first time on appeal); Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (stating that party may not obtain review by raising same general issue litigated below, but under a different theory).
Void for vagueness
Appellant argues that "Minn. Stat. § 514.02 violates the Due Process clause of the Fourteenth Amendment to the United States Constitution and Article I, Section 7, of the Minnesota Constitution "because it is void for vagueness and fails to provide constitutionally adequate notice of what is criminal and what is not." This claim was raised in the district court and is properly before us on appeal.
A statute "is void for vagueness if its prohibitions are not clearly defined." Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S. Ct. 2294, 2298 (1972). The law must "give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly" and "provide explicit standards for those who apply them." Id., 92 S. Ct. at 2298-99; see also State v. Becker, 351 N.W.2d 923, 925 (Minn. 1984) ("The twin evils of vague laws are that they trap the innocent by not providing adequate warning of unlawful conduct and unleash the potential for unfair and uneven law enforcement by not establishing minimal guidelines.")
Minn. Stat. § 514.02, subd. 1, states:
(a) Proceeds of payments received by a person contributing to an improvement to real estate within the meaning of section 514.01 shall be held in trust by that person for the benefit of those persons who furnished the labor, skill, material, or machinery contributing to the improvement. Proceeds of the payment are not subject to garnishment, execution, levy, or attachment. Nothing contained in this subdivision shall require money to be placed in a separate account and not commingled with other money of the person receiving payment or create a fiduciary liability or tort liability on the part of any person receiving payment or entitle any person to an award of punitive damages among persons contributing to an improvement to real estate under section 514.01 for a violation of this subdivision.
(b) If a person fails to use the proceeds of a payment made to that person for the improvement, for the payment for labor, skill, material, and machinery contributed to the improvement, knowing that the cost of the labor performed, or skill, material, or machinery furnished remains unpaid, and who has not furnished the person making such payment either a valid lien waiver under section 514.07, or a payment bond in the basic amount of the contract price for the improvement, conditioned for the prompt payment to any person entitled thereto for the performance of labor or the furnishing of skill, material, or machinery for the improvement, shall be guilty of theft of the proceeds of the payment and is punishable under section 609.52. For an improvement to residential real estate made by a person licensed, or who should be licensed, under section 326.84, a shareholder, officer, director, or agent of a corporation who is responsible for the theft shall be guilty of theft of the proceeds.
(Emphasis added.)
Appellant argues that the inconsistency between stating that proceeds are held "in trust" but that no "fiduciary liability" is created makes the statute confusing. He argues that "it is simply incorrect to assert that an ordinary person, with or without the benefit of legal training, is going to understand his/her obligations as a trustee under this statute." But even if we assume that the language in paragraph (a) is inconsistent with respect to the obligations that it places on a person who receives payments, we are not persuaded that this inconsistency deprives a person of ordinary intelligence of a reasonable opportunity to know what is prohibited by paragraph (b) of the statute.
The language in paragraph (b) that is emphasized above unambiguously prohibits a person who receives a payment for an improvement to real property from using the proceeds of the payment for any purpose other than paying any outstanding amount owed for labor, skill, material, or machinery that was contributed to the improvement if the person knows that there is any amount outstanding. The emphasized language informs a person of ordinary intelligence that if the person knows that labor, skill, material, or machinery that were contributed to an improvement have not been paid for when the person receives a payment for the improvement, the person must use the proceeds of the payment to pay for these items. Appellant has not met his burden of demonstrating beyond a reasonable doubt that Minn. Stat. § 514.02 is void for vagueness. See Machholz, 574 N.W.2d at 419 (stating burden of proof).
II.
Appellant argues that his acquittal of theft by swindle in violation of Minn. Stat. § 609.52, subd. 2(4) (2004), precludes his conviction under Minn. Stat. § 514.02, subd. 1(b), because section 514.02, subd. 1(b), states that a violation of that statute "is punishable under section 609.52," and he cannot be punished for the same crime that he was acquitted of committing. Appellant essentially contends that section 514.02, subd. 1(b), creates an offense under section 609.52. This argument raises an issue of statutory interpretation, which this court reviews de novo. State v. Anderson, 666 N.W.2d 696, 698 (Minn. 2003).
When interpreting a statute, a court must "ascertain and effectuate the intention of the legislature." Minn. Stat. § 645.16 (2006). In doing so, the court must first determine whether the statute's language is ambiguous on its face. Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312 (Minn. 2001). A statute is ambiguous only when its language is subject to more than one reasonable interpretation. Amaral v. Saint Cloud Hosp., 598 N.W.2d 379, 384 (Minn. 1999). The court must construe statutory words and phrases according to their plain and ordinary meaning. Am. Tower, 636 N.W.2d at 312 (citing Frank's Nursery Sales, Inc. v. City of Roseville, 295 N.W.2d 604, 608 (Minn. 1980)); see also Minn. Stat. § 645.08(1) (2006) (providing that words are construed according to their common usage). When the legislature's intent is clearly discernible from a statute's plain and unambiguous language, the court interprets the language according to its plain meaning without resorting to other principles of statutory construction. State v. Kelbel, 648 N.W.2d 690, 701 (Minn. 2002).
"The general rule is that statutes in pari materia should be construed together. Statutes `in pari materia' are those relating to the same person or thing or having a common purpose." Apple Valley Red-E-Mix, Inc. v. State, Dep't of Pub. Safety, 352 N.W.2d 402, 404 (Minn. 1984) (citations omitted). Minn. Stat. § 514.02, subd. 1(b), and Minn. Stat. § 609.52 are in pari materia because they have the common purpose of defining a crime and prescribing the punishment for the crime. Therefore, we construe the statutes together, and we conclude that any ambiguity that may exist when Minn. Stat. § 514.02, subd. 1(b), is read alone does not exist when the statutes are construed together.
Minn. Stat. § 609.52 (2004) is divided into subdivisions. Minn. Stat. § 609.52, subd. 2, defines acts that constitute theft, and Minn. Stat. § 609.52, subd. 3, prescribes the punishment for persons who commit theft. The prescribed punishments vary depending on factors such as the value of the property that is taken, the type of property that is taken, and the circumstances under which the property is taken. Minn. Stat. § 609.52, subd. 3. When Minn. Stat. § 514.02, subd. 1(b), and Minn. Stat. § 609.52 are construed together, it is apparent that Minn. Stat. § 514.02, subd. 1(b), does not simply create an offense under section 609.52. Instead, Minn. Stat. § 514.02, subd. 1(b), is intended to define an act that constitutes theft, just as Minn. Stat. § 609.52, subd. 2, defines acts that constitute theft, and the prescribed punishment for the act defined as theft is the punishment set forth in Minn. Stat. § 609.52, subd. 3, for acts of theft.
Determining that appellant did not commit theft by swindling did not preclude the jury from also determining that appellant failed to use payment proceeds to pay for contributions to an improvement to real estate. Proving a violation of Minn. Stat. § 609.52, subd. 2(4), requires a showing that a person obtained property of another "by swindling, whether by artifice, trick, device, or any other means." A jury could conclude that appellant violated Minn. Stat. § 514.02 without concluding that he obtained property by swindling.