State v. Watson

484 P.3d 877

STATE of Kansas, Appellee,

v.Jasmon Devar WATSON, Appellant.

No. 118,710

Supreme Court of Kansas.

Opinion filed April 23, 2021.

Jennifer C. Roth, of Kansas Appellate Defender Office, argued the cause and was on the brief for appellant.

Kristafer Ailslieger, deputy solicitor general, argued the cause, and Rachel L. Pickering, assistant solicitor general, and Derek Schmidt, attorney general, were with him on the brief for appellee.

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

The State charged Jasmon Devar Watson with one count of making a false claim to the Medicaid program (i.e., Medicaid fraud), in violation of K.S.A. 2019 Supp. 21-5927(a)(1)(B), and one count of felony theft, in violation of K.S.A. 2019 Supp. 21-5801(a)(2), after discovering Watson had submitted inaccurate times sheets as part of his employment with Best Choice Home Health Care Agency, a home health-care agency enrolled with Medicaid. At trial, Watson admitted his time sheets did not accurately record the exact times of day he delivered services to Medicaid beneficiaries as a Best Choice employee. However, Watson testified that he worked the total number of hours recorded on the time sheets and delivered all the services billed to the Medicaid program.

The jury convicted Watson of Medicaid fraud but was unable to reach a verdict on the theft charge. Based on his Medicaid fraud conviction, the district court ordered Watson to pay $13,077.22 in restitution. Watson appealed both his conviction and the district court's restitution order.

On review, the Court of Appeals found one instance of prosecutorial error and one instance of instructional error but concluded the errors were harmless and affirmed Watson's conviction. State v. Watson , No. 118,710, 2019 WL 3511827 (Kan. App. 2019) (unpublished opinion). But the panel vacated the restitution order, concluding it was supported by insufficient evidence. Watson petitioned for review, arguing the panel erred by affirming his conviction.

Upon thorough review of the record and the parties' briefing, we conclude the State committed two errors during closing argument. The prosecutor misstated the evidence by arguing Watson failed to provide any proof that he had worked the total hours recorded on his time sheets, an argument that disregarded Watson's own testimony. The prosecutor also misstated the law by arguing Watson was guilty of Medicaid fraud based solely on his submission of inaccurate timesheets, without regard to whether Watson had acted with intent to defraud. These errors substantially diminished, or effectively eliminated, an essential element of the crime of conviction—the defendant's intent to defraud Medicaid. Simultaneously, the errors undermined Watson's central defense to this charge—that he acted without intent to defraud.

The prosecutorial errors substantially prejudiced Watson and deprived him of a fair trial. An additional instructional error contributed to this prejudice. Accordingly, we reverse the judgment of the Court of Appeals, reverse the judgment of the district court based on the jury verdict, and remand the case for a new trial.

FACTS AND PROCEDURAL BACKGROUND

Between February 2013 and August 2014, Watson worked two different jobs in Kansas City, Kansas. First, he worked as a transitional living skills (TLS) assistant with Best Choice, a home healthcare agency owned and managed by his aunt and uncle. In that position, Watson provided TLS services to individuals with traumatic brain injuries to help them develop or relearn skills necessary to optimize independence and enhance their quality of life. Best Choice contracted with Medicaid to provide these TLS services to Medicaid beneficiaries. In turn, Medicaid reimbursed Best Choice for services delivered each billing cycle through a claim submission and review process. Best Choice relied on its employees' time sheets and case notes to prepare its claim submissions to Medicaid.

In addition to his job at Best Choice, Watson also worked part-time as a store clerk for QuikTrip. At the time of trial, Watson had worked at QuikTrip for six years. During this tenure, Watson worked part-time, averaging 20-25 hours per week, with no set schedule. His manager knew Watson had another job but never had to change Watson's schedule to accommodate his employment with Best Choice.

Based on Watson's dual employment, Special Agent Darren Brown in the Medicaid Fraud and Abuse Division of the Kansas Attorney General's Office launched an investigation into possible Medicaid fraud. Agent Brown collected Watson's personnel files from both QuikTrip and Best Choice, which contained QuikTrip timecards and timesheets from Best Choice. From these time entry records, the Attorney General's Office had its research analyst, Cindy Ludwig, identify Watson's overlapping work hours between QuikTrip and Best Choice. Ludwig's summary showed a total of 247 instances where time reported on Watson's QuikTrip time sheets overlapped with the scheduled work hours reported on Watson's Best Choice time sheets. Assuming all overlapping hours were devoted to QuikTrip, rather than Medicaid beneficiaries, Ludwig concluded that Medicaid had been overbilled and paid fraudulent claims totaling $13,077.22.

The State charged Watson with one count of Medicaid fraud and one count of felony theft. At trial, the State presented four witnesses: Kim Reynolds, a traumatic brain injury program manager for the Kansas Department for Aging and Disability Services; Special Agent Brown; Corey Hanover, Watson's manager at QuikTrip; and Ludwig. The State also introduced Ludwig's table of overlapping hours and Watson's personnel records from his employers. The State acknowledged its case was "based on these records" showing the overlapping hours in the time sheets from Watson's two employers.

Watson took the stand in his defense. He admitted that it was not unusual for his two work schedules to overlap, and he did not disagree that it happened over 200 times, as the State alleged. However, he insisted that everyone at Best Choice knew his work schedules overlapped on paper, but the flexible nature of his duties at Best Choice allowed him to work around his QuikTrip schedule. He testified adamantly that he always worked the total number of hours documented on his Best Choice time sheet, but not necessarily during the schedule reflected in those records.

Watson explained his flexible work schedule was made possible, in part, due to the State's guidelines that restricted the amount of TLS services that could be provided to beneficiaries. Under these guidelines, TLS providers could deliver no more than 15 hours of TLS services per week and no more than 4 hours per day for any client. Thus, in any 24-hour period, Watson only had 4 hours to work with a client to assist with varying transitional living activities, skills, and goals. To illustrate how his flexible work schedule operated, Watson explained he might go help one of his Best Choice clients with a morning-oriented goal, such as waking up with an alarm clock, making coffee, and starting one's day. Then, he could go to work at QuikTrip to work his scheduled hours. When his shift ended at QuikTrip, he could finish out the day reviewing and assessing daily progress with a Best Choice client. Through this flex time approach, Watson claimed he always worked the total hours reported, even though he delivered the TLS services outside the schedule reflected on his Best Choice time sheet.

Watson acknowledged that each Best Choice time sheet contained the warning, "any misrepresentation or falsification will result in Medicaid fraud and will be punishable to the full extent of the law." But Watson insisted he discussed with Best Choice the variance between the work schedule reflected on his Best Choice time sheets and the hours he actually worked outside this schedule. Watson said Best Choice never took issue with this discrepancy. Watson testified that he asked Best Choice to change his schedule to reflect the times he delivered services, but Best Choice told him changing the schedule would "throw their coordination off."

Watson also explained that Best Choice required all time sheets be accompanied by case notes. The case notes described all TLS services Watson provided to clients each day and how these services related to the clients' overall goals. Best Choice strictly enforced its case notes requirement and refused to pay TLS providers if they did not submit case notes with their time sheets. Watson's case notes were not submitted as evidence, but he testified that his clients signed off on all his time sheets to verify the total hours worked and the content of the case notes, and he never missed a paycheck for failing to provide the required case notes. Watson admitted his case notes did not itemize the hours worked with each client but did contain the total number of hours worked and other details tending to corroborate that he delivered the TLS services billed to Medicaid.

Following Watson's testimony, the defense rested, and the district court held a jury instruction conference. Watson objected to jury instruction No. 10, which stated:

"It is not a defense that others who participated in the commission of the crime have or have not been convicted of the crime, any lesser degree of the crime, or some other crime based on the same act."

Watson objected on the grounds that no one else had been charged with a crime. The district court overruled his objection because Watson testified that others may have been involved in the commission of a crime.

The jury convicted Watson on the first count of making a false claim to Medicaid but could not reach a verdict on the second count of felony theft. The district court sentenced Watson to probation with an underlying prison term of five months. The court also ordered restitution in the amount of $13,077.22.

On appeal, Watson claimed several trial errors. He argued the prosecutor erred during...