State v. Moeller

1

State of Kansas, Appellee, v. David W. Moeller, Appellant.

No. 124,611

Court of Appeals of Kansas

June 30, 2023

NOT DESIGNATED FOR PUBLICATION

Appeal from Jefferson District Court; CHRISTOPHER ETZEL, judge. Opinion filed June 30, 2023.

Randall L. Hodgkinson, of Kansas Appellate Defender Office for appellant.

Kristafer R. Ailslieger, deputy solicitor general, and Derek Schmidt, attorney general, for appellee.

Before COBLE, P.J., HILL and ATCHESON, JJ.

MEMORANDUM OPINION

PER CURIAM:

In a bench trial in July 2021, the Jefferson County District Court convicted David W. Moeller of one count of securities fraud for wheedling $9,500 from an acquaintance supposedly as seed money for a corporate venture. The money went elsewhere, and the venture never materialized. Before his lawyer filed an appellate brief, Moeller died. Because this appeal challenges the sufficiency of the evidence, it did not die with him. We find the conviction sufficiently supported and, therefore affirm the judgment and the resulting sentence, including a substantial restitution order.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

The evidence suggests Moeller serially engaged in small commercial transactions through a business he called Midwest Surplus Group. We begin with one of those transactions by way of explaining how he later came to solicit money from Diane Brunner, the victim of the securities fraud. Moeller purchased carpet remnants from a distributor in Kansas City and asked that his check not be cashed until he resold the carpet to a buyer he had lined up. According to Moeller, the carpet delivered to him was inferior to what he had agreed to purchase, and, in turn, his customer paid him only about half of their negotiated price. The check Moeller gave the distributor bounced. The Wyandotte County District Attorney's Office filed criminal charges against Moeller as a result.

In the meantime, Moeller ran into Brunner and Mike Maxie. Moeller knew them because Maxie used to work for him and Brunner had been Maxie's girlfriend. As they were visiting, Brunner said she had money she wanted to invest. At trial, Brunner explained that she had just closed a couple of IRA accounts. She testified that Moeller said he had an investment opportunity for her: He was starting a company to manufacture a product he called "Blade Caddy," a protective shield for knives he claimed to have patented years earlier. According to Brunner, Moeller said she would recoup her investment with a profit in several months. Brunner asked Maxie if the venture sounded like a good deal; Maxie said it did. Brunner gave Moeller a check for $9,500 and wrote "Blade Caddy" on the memo line. Brunner and Moeller had no written agreement, and Moeller never provided her with any documentation related to the startup company.

The trial evidence showed that Moeller used the money to pay off the Kansas City carpet distributor, prompting the dismissal of the criminal theft charge against him in Wyandotte County.

After hearing little from Moeller for about six months, Brunner began regularly inquiring about her investment. Over the next few months, Moeller gave Brunner several thousand dollars-money she testified he described as a return on her investment. But the money stopped coming, and a frustrated Brunner lodged a complaint with the Kansas Securities Commissioner's Office. An investigator from that office interviewed Moeller and testified that Moeller said Brunner made a private "investment" with him unrelated to Blade Caddy, an idea he came up with 20 years earlier and never pursued. The State charged Moeller in the alternative with felony theft by deception, a violation of K.S.A. 2013 Supp. 21-5801(a)(2), and with securities fraud, a violation of K.S.A. 17-12a501(3) punishable as a severity level 6 nonperson felony based on the amount involved. See K.S.A. 2022 Supp. 17-12a508(a)(2)(E) (sentences for criminal securities violations).

Brunner and the investigator, among other witnesses, testified during the bench trial. Moeller testified in his own defense and characterized the money he received from Brunner as a loan she made to him rather than an investment in a business opportunity. The district court convicted Moeller on the securities fraud charge. At a later hearing, the district court sentenced Moeller to a 27-month prison term followed by postrelease supervision for 24 months, a standard guidelines punishment given his criminal history, and placed him on probation for 24 months, a dispositional departure. The district court also ordered Moeller to pay Brunner $5,500 in restitution. Moeller's trial lawyer filed a notice of appeal, and the Kansas Appellate Defender Office took over the representation.

On February 23, 2023, we issued an order directing the lawyers handling the appeal to make "independent inquiries" into whether Moeller had died and, if so, when. We also invited the lawyers' views on mootness of the appeal. We received timely responses and now conclude Moeller died on or about May 8, 2022, when he would have been 64 years old. The Appellate Defender Office provided a copy of a district court order filed after the record on appeal had been prepared terminating Moeller's probation because he had died. The State provided information confirming that a death certificate for a David W. Moeller with the same birthdate and other identifying information as the defendant had been filed with the Kansas Department of Health and Environment, Office of Vital Statistics.

In its response, however, the Appellate Defender Officer disclaimed any ability to promptly investigate whether Moeller had died or to confirm the basis for the termination of his probation and simply assumed for the sake of argument that he was dead. We believe a court may properly inquire of a lawyer whether his or her client is alive or dead and may fairly expect an informed answer that typically would not equivocate. See Kingara v. Secure Home Health Care, Inc., 489 Mass. 393, 396, 183 N.E.3d 1140 (2022) (recognizing "duty of candor" usually requires lawyer to inform court and opposing counsel of client's death); In re Forrest, 158 N.J. 428, 434-35, 730 A.3d 340 (1999); Marentette v. City of Canandaigua, No. 19-205-CV, 799 Fed.Appx. 48, 50 (2d Cir. 2020) (unpublished opinion); ABA Formal Op. 95-397 (September 18, 1995) (though inquiry posed in context of settlement negotiations in personal injury action, opinion recognizes broad duty of candor requiring lawyer to disclose client's death to court and opposing counsel).

We accept that verification might be difficult in unusual circumstances, such as a client gone missing without explanation or later communication with family, friends, or other associates. Here, however, a readily available online obituary for a David W. Moeller includes names of close relatives and their places of residence, providing an obvious avenue of inquiry to determine whether that person is also the defendant. There undoubtedly are other ways the Appellate Defender Office could have looked into the matter without expending a lot of time and then informed us of the results. This is not the first time the Appellate Defender Office has been less than forthcoming with this court about whether a client had died during an appeal. See State v. Baker, No. 119,832, 2020 WL 1649850, at *3-4 (Kan. App. 2020) (unpublished opinion).

ANALYSIS

Setting the Legal Scene

On appeal, Moeller raises two issues he casts as challenges to the sufficiency of the evidence. Assuming Moeller died last year-an assumption about which we harbor no real doubt-this appeal has not been rendered moot. See State v Hollister, 300 Kan. 458, 458-59, 329 P.3d 1220 (2014). In Hollister, the court held that issues raised in a criminal defendant's appeal should not be dismissed on mootness ground despite the defendant's death if they would result in his or her exoneration, among other reasons. 300 Kan. at 458-59. A successful challenge to the sufficiency of the evidence supporting a conviction requires the reviewing court to enter a judgment of acquittal, effectively exonerating the defendant. See 300 Kan. at 467-68 (insufficient evidence results in exoneration); see also State v. Baumgarner, 59 Kan.App.2d 330, 331, 481 P.3d 170 (2021) (court orders entry of judgment of acquittal when defendant established conviction not supported by sufficient evidence). Consistent with Hollister, we take up the merits of Moeller's points.

In considering a challenge to the sufficiency of the evidence we construe the evidence in a light most favorable to the party prevailing in the district court, here the State, and in support of the judgment of conviction. An appellate court will neither reweigh the evidence generally nor make credibility determinations specifically. State v. Aguirre, 313 Kan. 189, 209, 485 P.3d 576 (2021); State v. Jenkins, 308 Kan. 545, Syl. ¶ 1, 422 P.3d 72 (2018); State v. Butler, 307 Kan. 831, 844-45, 416 P.3d 116 (2018); State v. Pham, 281 Kan. 1227, 1252, 136 P.3d 919 (2006). The issue for review is simply whether a rational fact-finder-either a juror in a jury trial or a district court in a bench trial-could have found the defendant guilty beyond a reasonable doubt. Butler, 307 Kan. at 844-45; State v. Frye, 294 Kan. 364, 374-75, 277 P.3d 1091 (2012) (outlining standard and noting its application to both jury and bench trials).

Given how Moeller has framed his arguments, we recite the statutory language defining securities fraud as a foundation for analyzing them:

"It is unlawful for a person, in connection with the offer, sale, or purchase of a security, directly or indirectly:

"(1) To employ a device, scheme, or artifice to defraud;

"(2) to make an untrue statement of a material fact, or omit

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