State v. Moeller

549 P.3d 1106

STATE of Kansas, Appellee,

v.David W. MOELLER, Appellant.

No. 124,611

Supreme Court of Kansas.

Oral Argument Held March 27, 2024.

Opinion Filed June 7, 2024.

Syllabus by the Court

1. Kansas precedent establishes that the death of a criminal defendant during the appeal of his or her conviction does not automatically abate the appeal but may render some issues moot.

2. Under the doctrine of stare decisis, once a point of law has been established by a court, that point of law will generally be followed by the same court and all courts of lower rank in subsequent cases where the same legal issue is raised. Even so, this court will overturn precedent, no matter how longstanding, if it is clearly convinced the rule of law was originally erroneous or is no longer sound because of changing conditions and that more good than harm will come by departing from precedent.

3. As used in the securities fraud statute, K.S.A. 17-12a501(3), the words "fraud" and "deceit" carry their ordinary meanings.

4. Under the Kansas Uniform Securities Act, K.S.A. 17-12al01 et seq., an investment contract is a type of security. An investment contract consists of four elements: (1) an investment of money; (2) in a common enterprise; (3) with the expectation of profits; and (4) from the efforts of others.

5. For purposes of an investment contract as defined in K.S.A. 17-12a102(28)(D) under the Kansas Uniform Securities Act, K.S.A. 17-12al01 et seq., a common enterprise may be shown either by horizontal commonality—an enterprise common to a group of investors—or by vertical commonality—an enterprise common to the investor and the seller, promoter, or some third party.

Review of the judgment of the Court of Appeals in an unpublished opinion filed June 30, 2023. Appeal from Jefferson District Court; Christopher Etzel, judge.

Randall L. Hodgkinson, of Kansas Appellate Defender Office, argued the cause and was on the briefs for appellant.

Kristafer R. Ailslieger, deputy solicitor general, argued the cause, and Derek Schmidt, former attorney general, and Kris W. Kobach, attorney general, were with him on the briefs for appellee.

The opinion of the court was delivered by Wall, J.:

[1] In State v. Hollister, 300 Kan. 458, Syl. ¶ 1, 329 P.2d 1220, 329 P.3d 1220 (2014), this court held that the death of a criminal defendant during the appeal of his or her conviction does not automatically abate the appeal but may render some issues moot. And the doctrine of stare decisis directs us to adhere to this precedent in subsequent cases raising the same legal issue. Nevertheless, we may depart from established precedent under certain conditions. This appeal requires us to decide whether stare decisis warrants our continued adherence to Hollister. We conclude it does.

David Moeller was convicted of securities fraud after finagling an acquaintance out of $9,500 by promising an investment opportunity in a new business that never materialized. Moeller appealed, arguing there was insufficient evidence to support his conviction. But he died during the pendency of his appeal. Applying Hollister, the Court of Appeals held Moeller’s death did not render his appeal moot. The panel thus addressed the merits of Moeller’s sufficiency challenge and affirmed his conviction and sentence. State v. Moeller, No. 124,611, 2023 WL 4278212, at *2-5 (Kan. App. 2023) (unpublished opinion). Defense counsel petitioned for review, arguing that we should overrule Hollister and that the panel erred in concluding his conviction was supported by sufficient evidence.

Today, we continue to adhere to Hollister under the doctrine of stare decisis. For one, we are not clearly convinced Hollister was originally erroneous. Furthermore, we are not clearly convinced that more good than harm would come from departing from Hollister. Hollister strikes a fair balance between the competing interests in a criminal appeal, and any alternative approach would raise problems of its own.

We also hold the State presented sufficient evidence to support Moeller’s conviction for securities fraud under K.S.A. 17-12a501(3). Moeller argues the State failed to prove he violated that statute because the trial evidence does not show he engaged in "an act [of] … fraud or deceit’’ upon the victim, nor does it show the transaction between Moeller and the victim involved a security as that term is defined by law. K.S.A. 17-12a501(3); see also K.S.A. 17-12al02(28) (defining "security"). But Moeller’s argument essentially asks us to reweigh the evidence, which appellate courts do not do. When viewed in the light most favorable to the State, the evidence was sufficient to support Moeller’s conviction. We thus affirm Moeller’s conviction and sentence.

Facts and Procedural Background

Diane Brunner gave Moeller a check for $9,500 to invest in a new business that would manufacture and sell the "Blade Caddy," a carrying case for saw blades. There was no new business. Instead, Moeller used the money to pay off a personal financial obligation, and he never fully reimbursed Brunner. After a bench trial, Moeller was convicted of securities fraud, sentenced to 24 months’ probation, and ordered to pay $5,500 in restitution to Brunner and $513 in court costs and fees. Moeller appealed, arguing there was insufficient evidence to support his conviction. The evidence supporting his conviction will be discussed in more detail in Issue II along with the merits of his sufficiency challenge.

After both parties filed their opening briefs, the Court of Appeals issued an order indicating it "ha[d] become aware of information suggesting that [Moeller] died after filing this appeal." The Court of Appeals directed both defense counsel and the State to investigate whether Moeller had died and to inform the court of the results of their investigations. In his response, defense counsel provided an order from the district court terminating Moeller’s probation because of his death. Defense counsel also disclaimed the ability to conduct a more extensive investigation in a timely manner and thus he did not definitively confirm or deny Moeller’s death. The State responded by providing confirmation of a death certificate for Moeller. 2023 WL 4278212, at *2.

In its decision, the panel found Moeller had died, but also chastised defense counsel for not conducting a more extensive investigation and not providing a definitive answer on whether Moeller had died. 2023 WL 4278212, at *2. Nonetheless, the panel held the appeal was not moot under Hollister because the only issue Moeller raised—sufficiency of the evidence to support his conviction—could exonerate him. Moeller, 2023 WL 4278212, at *2; see Hollister, 300 Kan. at 458-59, 329 P.3d 1220 (court may address issues that may exonerate defendant). And the panel affirmed Moeller’s convictions. Moeller, 2023 WL 4278212, at *3-5.

Defense counsel petitioned for review, asking us to revisit the abatement rule in Hollister. He also petitioned for review of the panel’s holding that sufficient evidence supported Moeller’s conviction.

We granted review, and we heard oral argument on March 27, 2024. Jurisdiction is proper. See K.S.A. 20-3018(b) (providing for petitions for review of Court of Appeals decisions); K.S.A. 60-2101(b) (Supreme Court has jurisdiction to review Court of Appeals decisions upon petition for review).

Analysis

I. We Adhere to Hollister Under the Doctrine of Stare Decisis

[2, 3] The main issue in this appeal is whether we should continue to adhere to Hollister. Defense counsel asks us to overrule that decision and adopt the doctrine of abatement ab initio. Under that doctrine, "a criminal defendant’s death abates the appeal and all proceedings from the beginning of the criminal case." Hollister, 300 Kan. at 435, 329 P.3d 1220. Thus, in jurisdictions that follow the doctrine, the appellate court net only abates the appeal but also vacates the conviction and remands the case for the district court to dismiss the indictment. See, e.g., United States v. Libous, 858 F.3d 64, 66 (2d Cir. 2017). Alternatively, defense counsel asks us to allow the appeal to continue as to all issues after substitution of a party for the deceased defendant.

The State responds that we should continue to adhere to Hollister. It argues Hollister is sensible and allows both the defendant and the State to vindicate important rights. The State also adamantly opposes adoption of the doctrine of abatement ab initio, arguing the doctrine harms both the public generally and crime victims specifically.

A. Standard of Review and Relevant Legal Framework

[4, 5] Because this issue involves consideration of a court policy developed through court precedent, our review is unlimited. See State v. Hilton, 295 Kan. 845, 849, 286 P.3d 871 (2012) ("A court policy necessarily comes about through prior opinions of the court, i.e., the mootness doctrine developed through court precedent. Accordingly, our review is unlimited."); State v. May, 293 Kan. 858, 862, 269 P.3d 1260 (2012) ("To the extent our decision involves … the interpretation and application of prior court precedent, we are resolving questions of law and, thus, exercising unlimited review.").

[6–8] Under the doctrine of stare decisis, " ‘once a point of law has been established by a court, that point of law will generally be followed by the same court and all courts of lower rank in subsequent cases where the same legal issue is raised.’ " Crist v. Hunan Palace, Inc., 277 Kan. 706, 715, 89 P.3d 573 (2004). "Stare decisis—while not a ‘rigid inevitability’—serves as a ‘prudent governor on the pace of legal change.’ " McCullough v. Wilson, 308 Kan. 1025, 1035, 426 P.3d 494 (2018). Even so, "this court will overturn precedent, no matter how longstanding, if it is ‘ "clearly convinced [the rule of law] was originally erroneous or is no longer sound because of changing conditions and that more good than harm will come by departing from precedent." ’ " 308 Kan. at 1036, 426 P.3d...