Andrew Houston Allen v. State ( 2016 )

Affirmed and Memorandum Opinion filed July 7, 2016.
In The
Fourteenth Court of Appeals
NO. 14-15-00115-CR
NO. 14-15-00116-CR
ANDREW HOUSTON ALLEN, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 300th District Court
Brazoria County, Texas
Trial Court Cause Nos. 66050 & 66951
MEMORANDUM OPINION
Appellant Andrew Allen was charged by two separate indictments and
convicted of misapplication of trust funds.1 Appellant presents three issues. We
affirm.
1
Tex. Prop. Code Ann. § 162.031 (West 2009).
Factual and Procedural Background
On June 19, 2008, appellant, owner of Allen Brothers Construction, entered
into a $1,069,000 contract with the owner and general manager of the Texas
location of SYNEO, LLC (formerly, Technical Innovations), to construct a new
office building. Appellant received an initial “pre-mobilization draw” from
SYNEO of $40,679.94 and a “mobilization draw” of $55,000 to begin
construction. From June 2008 through May 2009, appellant made additional draws
from SYNEO to cover project expenses. Appellant’s wife, Johni Jack Allen,
signed the releases for these draws and was “very involved in . . . keeping the
paperwork” related to the SYNEO contract.
By May 2009, appellant had drawn 84.2% of the funds allotted for the
project. Gary Cordell, owner and general manager of SYNEO, hired a third party
to assess appellant’s progress on the project. The third party informed Cordell that,
despite the drawing of nearly 85% of the allotted funds, the project was not 85%
complete. Cordell also learned that appellant’s subcontractors were not being paid
for work completed. Cordell contacted each subcontractor to determine how much
work was done and how much each had been paid. Cordell discovered that many
of the subcontractors had not been paid commensurate with their completed work.
In order to rectify the situation, Cordell paid the contractors what they were owed.
These payments brought the total cost of the project to $498,549.98 over the initial
contract price.
On July 14, 2008, the engineering firm of Baker and Lawson partnered with
appellant to complete two projects for the City of Angleton—an addition to the
City’s fire station and an addition to its City Hall. The contract for the fire station
addition was worth $106,750, and the contract for the City Hall addition was worth
$485,605.
2
Each project had a draw schedule that corresponded with different phases of
the project. According to the schedule, appellant was to make a draw by invoicing
Baker and Lawson each time the subcontractors completed a phase of the project.
Appellant drew $10,750 for “mobilization” costs incurred for the fire station
project—insurance, performance bonds, and equipment costs. However, appellant
did not use this money to obtain any performance bonds for the project.
Appellant also received a $20,000 draw for the fire station project.
However, the City later contacted Baker and Lawson to complain of the lack of
performance on the fire station contract. Baker and Lawson contacted the
company responsible for building the fire station’s framework and was informed
that the framework had not been completed. Baker and Lawson requested that
appellant refund the $20,000 draw, but appellant refused. Baker and Lawson
reimbursed the City for the $20,000 draw and for $8,700 of the initial mobilization
draw. The City forbade Baker and Lawson from continuing work on the fire
station project.
A few months later, appellant’s subcontractors began calling Baker and
Lawson to complain that appellant had not paid them for their work on the City
Hall project. Appellant made multiple withdrawals—totaling as much as
$450,000—from money being held in trust for the subcontractors. However, when
the subcontractors invoiced appellant for the work performed, appellant either
refused to pay them or issued checks that bounced.
After it became apparent that appellant was not going to pay the
subcontractors, Baker and Lawson began paying the subcontractors directly.
Baker and Lawson issued a check to one subcontractor, Ben Brown Electric, for
$16,000 with the understanding that appellant would reimburse Baker and Lawson.
Appellant presented Baker and Lawson with a reimbursement check, which the
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firm was unable to cash due to insufficient funds. After several attempts to cash
the check, Baker and Lawson learned that appellant had stopped payment on the
check. Appellant never reimbursed the firm. As a result of appellant’s failure to
pay the subcontractors, the City Hall project cost an additional $24,395 to $34,395
over the contract price.
Appellant was charged by two separate indictments of misapplication of
trust funds. The first indictment, cause number 66050, contained four counts, with
one paragraph in each count and charges related to the SYNEO (Technical
Innovations) project. The second indictment, cause number 66951, contained two
counts, with three paragraphs in count one and one paragraph in count two and
charges related to the Baker and Lawson projects.
Evidence presented at trial indicated that throughout the time he was under
contract with both Baker and Lawson and SYNEO, appellant had sufficient funds
to pay the subcontractors, but instead made payments to other parties. During the
time he was under contract, appellant and appellant’s wife issued checks to
appellant, his mother-in-law, his father, his Capital One credit card account, and a
health insurance company.
The trial court granted a directed verdict for appellant on the fourth count in
cause number 66050. The jury found appellant guilty on counts one, two, and
three in the indictment for cause number 66050 and on counts one and two in cause
number 66951.2 The jury assessed punishment at eight years’ confinement in the
Texas Department of Criminal Justice, Institutional Division in both cause
numbers, to be served concurrently. Additionally, the jury assessed a $10,000 fine
in cause number 66050. Appellant timely appealed.
2
The trial court also granted a directed verdict for paragraph three of count one in cause
number 66951. Two paragraphs remained in count one; the jury found appellant guilty of both.
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Analysis
In three issues, appellant contends the trial court erred by (1) admitting
extraneous-offense evidence during the guilt-innocence phase of trial; (2) failing to
require the State to make a paragraph election for cause number 66951; and (3)
including a law of parties instruction in the jury charge.
I. Extraneous-Offense Evidence
In his first issue, appellant argues the trial court erred in admitting evidence
of extraneous offenses during the guilt-innocence phase of trial. Appellant
complains of testimony regarding: (1) his failure to pay five subcontractors who,
though under contract for the Baker and Lawson projects, were not named in the
indictment; and (2) his manipulation of his business records.
Robin Crouch, the vice president of Baker and Lawson, testified that the
firm began paying subcontractors directly “after it was apparent that [appellant]
was not going to pay them.” Crouch continued:
A. He told us that he wasn’t paying them. I mean, he would send e-
mails.
Q. Tell me what you mean, “told us”. He would send e-mails that
said what?
A. There was one that stated he was paying this, this, and this; and
after that, he was broke. So I mean - -
Q. And did you - - when you were getting - - when you were
corresponding with the subcontractors about not getting paid, did they
show you any documents or anything?
A. Well, they would show me the invoices. Some of them had where
Andy paid some, but there was still a balance remaining.
Appellant objected to the testimony under Rules 403 and 404, arguing that it was
extraneous-offense evidence not relevant to the subcontractors listed in the
indictment; that the testimony was more prejudicial than probative; and that the
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State was engaging in a “character assassination.” The trial court overruled this
objection.
Connie Roswell, bookkeeper for appellant’s construction business, also
testified to appellant’s extraneous fraudulent acts. Roswell testified:
Q. At any time during the course of your employment, were you
asked to change entries on bids that were being prepared?
A. Not bids; but on documents, yes.
Q. You were asked to change entries on documents. Could you tell
us which documents you were asked to change?
A. It was on an Excel spreadsheet.
Q. Do you know why this Excel spreadsheet was being prepared?
A. To the best of my recollection, costs were being put together for a
job, a church job; and job costs came out of the system into an Excel
spreadsheet. And at that point, I was asked to add some expenses
from a previous job to increase the expenses on that which we were
looking at at that time.
Q. And who asked you to perform these adjustments?
A. Andy Allen.
Q. Just so I understand this, Andy was asking you to inflate the bid
using expenses and costs from a previous job.
A. Correct.
Following a voir dire of Roswell outside the presence of the jury, appellant
objected to Roswell’s testimony on several grounds. Appellant objected under
Rules 401, 402, 403, and 404(b), arguing that the evidence was not relevant, was
more prejudicial then probative, and was inadmissible character evidence. The
trial court overruled each of appellant’s objections.
Evidence of extraneous offenses is “not admissible to prove a person’s
character in order to show that on a particular occasion the person acted in
accordance with this character.” Tex. R. Evid. 404(b)(1). However, such evidence
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“is admissible when the extraneous act is: (1) relevant to a fact of consequence in
the case aside from its tendency to show action in conformity with character” and
(2) “its probative value is not substantially outweighed by the danger of unfair
prejudice.” Hedrick v. State, 473 S.W.3d 824, 829 (Tex. App.—Houston [14th
Dist.] 2015, no pet.); see Tex. Rs. Evid. 401, 402, 403, 404(b). Evidence is
relevant if: (a) it has any tendency to make a fact more or less probable than it
would be without the evidence; and (b) the fact is of consequence in determining
the action. Tex. R. Evid. 401. We review the trial court’s decision to admit
evidence for abuse of discretion and defer to the trial court’s determinations of
whether extraneous-offense evidence has relevance apart from character
conformity and whether the probative value is substantially outweighed by the
danger of unfair prejudice. Hedrick, 473 S.W.3d at 829 (citing Moses v. State, 105
3
S.W.3d 622, 627 (Tex. Crim. App. 2003); see Tex. R. Evid. 404(b). We will
uphold the trial court’s evidentiary ruling “if there is any ground for doing so, even
if the trial court did not rely upon the proper ground and even if the defendant did
not assert a proper ground for excluding the evidence.” K.J. v. USA Water Polo,
Inc., 383 S.W.3d 593, 610 (Tex. App.—Houston [14th Dist.] 2012, pet. denied).
Appellant argues that the witnesses’ testimony was improperly admitted as
character evidence to show conformity with prior instances of fraud. Appellant
also argues that the evidence was highly prejudicial. Upon review of the trial
court’s evidentiary decision, we conclude that (1) the testimony was properly
admitted as evidence tending to prove appellant’s intent to defraud the
subcontractors named in the indictment and (2) the evidence’s probative value was
3
The State must also provide reasonable notice to the defendant before trial that it
intends to introduce extraneous offense evidence. Tex. R. Evid. 404(b) (West 2015).
Approximately one year before trial, the State provided appellant with notice of its intent to use
extraneous-offense evidence.
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not substantially outweighed by the risk of unfair prejudice.
The relevance of extraneous offenses to show intent is derived from the
“doctrine of chances.” Sifuentes v. State, —S.W.3d—, 2016 WL 1128175, at *7
(Tex. App.—Houston [14th Dist.] March 22, 2016, no pet.). The doctrine of
chances provides that “evidence that appellant had on other occasions committed
similar offenses to the one he is charged with serves to reduce the possibility that
the act in question was done with innocent intent.” Id. (quoting Plante v. State,
692 S.W.3d 487, 492 (Tex. Crim. App. 1985)). Once the defendant claims
accident, mistake, or lack of intent, intent “can no longer be inferred from other
uncontested direct evidence, and the State is allowed to prove intent through
evidence of other crimes, wrongs, or acts.” Johnson v. State, 932 S.W.2d 296, 302
(Tex. App.—Austin 1996, pet ref’d) (citing Montgomery v. State, 810 S.W.2d 372,
375 (Tex. Crim. App. 1990)).
In order to convict appellant of misapplication of trust funds, the State was
required to prove that appellant, “with intent to defraud, . . . divert[ed] trust funds
without first fully paying . . . the beneficiaries of the trust funds.” Tex. Prop. Code
Ann. § 162.031 (West 2009). Appellant repeatedly argued that he lacked the
requisite intent to defraud and maintained he was merely a bad businessman.
Appellant’s opening statement is illustrative: “The State’s going to present
evidence that Andy Allen owes money. But owing money is not an intent to
defraud . . . You’re going to hear evidence of poor business, bad judgment, [and]
bookkeeping by people that aren’t really trained, not by Mr. Allen.” Appellant also
elicited testimony on cross-examination that he did not “really have [his] ducks in
a row to run a construction business.”4
4
The credit manager for one of appellant’s subcontractors testified the following:
Q. ’09 was a tough time; wasn’t it?
8
Appellants’ prior fraudulent activities as to subcontractors not listed in the
indictment make it more probable that he intended to perpetrate the same or similar
fraud against the subcontractors that are listed in the indictment. See Plante, 692
S.W.2d at 498. The extraneous acts discussed in Crouch’s and Roswell’s
testimony are “sufficiently similar to the charged offense for the purposes of the
doctrine of chances,” and so are relevant to appellant’s intent to defraud the
subcontractors listed in the indictment. Sifuentes, 2016 WL 1128175, at *7.
Having concluded that the testimony was relevant, we now determine
whether the probative value of the extraneous-offense evidence substantially
outweighs the danger of unfair prejudice, beginning with the presumption that it
does. Id. at *8 (citing Montgomery 810 S.W.2d at 389). It is the defendant’s
burden to demonstrate that the danger of unfair prejudice substantially outweighs
the probative value. Id. “In reviewing trial courts’ balancing determinations under
Rule 403, we reverse only rarely and upon a clear demonstration of abuse of
discretion.” Id. A Rule 403 analysis considers the following factors: (1) the
A. Yes, sir.
Q. And you had met Andy a few times and understood his business practices, you
might say?
A. I had met him when he had come into the office to make payments.
Q. Did he seem well experienced in running such large projects?
A. I honestly didn’t know. I couldn’t say one way or the other. If he was capable
or not, that’s not for me to say.
Q. You had told me earlier he didn’t seem to quite - - it takes - - you got to really
have your ducks in a row to run a construction business; correct?
A. That is correct, yes, sir.
Q. And I think you told me that you saw that Andy may not have quite had those
abilities; is that correct?
A. What I had stated was that if you don’t have your ducks in a row, you could
sink very easily.
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strength of the evidence in making a fact more or less probable; (2) the potential of
the extraneous offense evidence to impress the jury in some irrational but indelible
way; (3) the amount of time the proponent needed to develop the evidence; and (4)
the strength of the proponent’s need for the evidence to prove a fact of
consequence. Id.
Both Crouch’s and Roswell’s testimony “cast[] serious doubt on appellant’s
claim that he lacked the intent” to defraud the subcontractors listed in the
indictment. Id. Further, the trial court instructed the jury that it could not consider
evidence of extraneous offenses for any purpose unless it found that the offenses
were proven to exist by competent evidence beyond a reasonable doubt and, even
then, the evidence could only be considered to show motive, opportunity,
preparation, intent, absence of mistake, notice, plan, or knowledge or to rebut a
defensive theory. “We generally presume a jury followed a trial court’s instruction
regarding consideration of evidence.” Id. Crouch’s and Roswell’s testimony was
clear and concise and there is nothing in the record that indicates that it was
misleading, confusing, or cumulative. We therefore conclude that the trial court
did not abuse its discretion in admitting this extraneous-offense evidence. We
overrule appellant’s first issue.
II. Paragraph Election
In his second issue, appellant contends that the trial court erred in not
requiring the State to elect between the two separate paragraphs set forth in count
one of the indictment for cause number 66951.
The first paragraph of the indictment charged that appellant:
. . . on or about the 1st day of July, 2009, . . . did then and there
intentionally or knowingly, and with the intent to defraud, directly and
indirectly retain[], use[], disburse[] or otherwise divert[] trust funds in
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an amount of $500 of more, held by ANDREW ALLEN as Trustee,
under a professional services contract on specific real property,
namely 120 South Chenango, Angleton, Brazoria County, Texas
without first fully paying all current and past due obligations incurred
by the Trustee to all artisans, laborers, mechanics, contractors,
subcontractors, and materialmen, namely, Ben Brown Electric
Incorporated, incurred in connection with construction for which the
funds were received.
The second paragraph of the indictment was identical to the first except that it
charged that appellant diverted trust funds without first paying subcontractor Air
Temp Controls. After both the State and appellant rested, appellant requested that
the trial court require the State to elect which paragraph it planned to rely upon for
conviction. The trial court denied appellant’s request.
The trial court in its discretion may order the State to make its election at
any time prior to the resting of the State’s case in chief. O’Neal v. State, 746
S.W.2d 769, 772 (Tex. Crim. App. 1988). However, “once the State rests its case
in chief, in the face of a timely request by the defendant, the trial court must . . .
order the State to make its election. Failure to do so constitutes error.” Id.
Requiring the State to elect “protects fundamental rights such as notice and
unanimity, insuring both that the defendant is aware of precisely which act he must
defend himself against, and that the jurors know precisely which act they must all
agree he is guilty of in order to convict him.” Phillips v. State, 193 S.W.3d 904,
910 (Tex. Crim. App. 2006). Therefore, the trial court’s failure to require an
election upon timely request is constitutional error. Fleck v. State, 201 S.W.3d
268, 271 (Tex. Crim. App. 2006). When reviewing a constitutional error, we
“must reverse unless we find beyond a reasonable doubt that the error did not
contribute to the conviction or had but a slight effect.” Id.; Tex. R. App. P.
44.2(a).
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Appellant contends that he was denied appropriate notice of which act he
“would be called upon to defend” even though he did not make his election request
until after he rested his defense. However, because “the purpose of election is
more than to aid the defendant in preparing a valid defense,” we will review the
trial court’s denial of appellant’s election request to determine whether it
prejudiced appellant’s right to a unanimous jury and, therefore, resulted in harmful
error. Palmer v. State, No. PD-1746-04, 2006 WL 2846864, at *1 (Tex. Crim.
App. Oct. 4, 2006) (not designated for publication); Phillips, 193 S.W.3d at 912.
The Texas Constitution and the Code of Criminal Procedure require juries to
reach a unanimous verdict in all felony prosecutions. Landrian v. State, 268
S.W.3d 532, 535 (Tex. Crim. App. 2008); see also Tex. Const. art. V, § 13; Tex.
Code Crim. Proc. art. 36.29. “Unanimity in this context means that each and every
juror agrees that the defendant committed the same, single, specific criminal act.”
Ngo v. State, 175 S.W.3d 738, 745 (Tex. Crim. App. 2005). “The unanimity
requirement is undercut when a jury risks convicting the defendant on different
acts, instead of agreeing on the same act for a conviction.” Francis v. State, 36
S.W.3d 121, 125 (Tex. Crim. App. 2000).
There was no such risk in this case. The jury returned a unanimous verdict
for paragraph one of the indictment and a separately-signed unanimous verdict for
paragraph two of the indictment. The separate verdict forms in this case ensured
that each juror agreed that the defendant committed not only one, but both, specific
criminal acts described in each paragraph of the indictment. Appellant received a
unanimous verdict as to both acts alleged in the indictment. Therefore, we
conclude that the trial court’s failure to require an election did not contribute to
appellant’s conviction. We overrule appellant’s second issue.
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III. Law of Parties
In his third and final issue, appellant contends that the trial court erred in
including an instruction regarding the law of parties in the jury charge. The jury
charge authorized appellant’s conviction as either a principal or as a party to the
misapplication of trust funds perpetrated by appellant’s wife, Johni Jack Allen.
“When the evidence is sufficient to support both primary and party theories
of liability, the trial court does not err in submitting an instruction on the law of
parties.” Ransom v. State, 920 S.W.2d 288, 302 (Tex. Crim. App. 1994). A party
may be held “criminally responsible as a party to an offense” if the offense was
committed “by his own conduct, by the conduct of another for which he is
criminally responsible, or by both.” Tex. Penal Code Ann. § 7.01(a). In
determining whether the accused participated as a party, the court may look to
events occurring before, during, and after the commission of the offense, and may
rely on actions of the defendant that show an understanding and common design to
do the prohibited act. See Gross v. State, 380 S.W.3d 181, 186 (Tex. Crim. App.
2012) (citing Wygal v. State, 555 S.W.2d 465, 468–69 (Tex. Crim. App. 1977)).
Viewed in its entirety, the evidence is sufficient to support both primary and
party theories of liability. The record demonstrates appellant’s wife was active in
his business and maintained records for the company. Appellant’s wife signed
releases for draws of funds to appellant and was also responsible for the delivery of
checks to subcontractors. In fact, the record shows that appellant’s wife wrote
more checks for the business than appellant did. It is therefore plausible that, by
his own fraudulent activity, appellant could have been a party to his wife’s
misapplication of trust funds. We conclude that the trial court did not err in
submitting an instruction to this effect. Appellant’s third issue is overruled.
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Conclusion
Having overruled each of appellant’s issues, we affirm the trial court’s
judgments.
/s/ Marc W. Brown
Justice
Panel consists of Justices Jamison, Donovan, and Brown.
Do Not Publish — Tex. R. App. P. 47.2(b).
14