ACCEPTED
03-14-00605-CR
7139507
THIRD COURT OF APPEALS
AUSTIN, TEXAS
9/29/2015 10:18:05 AM
JEFFREY D. KYLE
CLERK
CAUSE No. 03-14-00605-CR
FILED IN
IN THE COURT OF APPEALS 3rd COURT OF APPEALS
FOR TI-IE THIRD COURT OF APPEALS DISTRlCT AUSTIN, TEXAS
AUSTIN, TEXAS 9/29/2015 10:18:05 AM
JEFFREY D. KYLE
Clerk
Dr. HOW ARD THOMAS DOUGLAS,
Appellant,
vs.
THE STATE OF TEXAS,
Appellee.
On appeal from Cause No. D-1-DC-10-900204, in the 331st Judicial District Comi,
Travis County, Texas
APPELLANT'S REPLY BRIEF
TO THE HONORABLE THIRD COURT OF APPEALS:
COMES NOW, Appellant, Dr. Howard Thomas Douglas (hereafter
"Appellant"), and files his Appellant's Reply Brief, and in support thereof
respectfully shows the following:
I.
ARGUMENT
Reply Issue One
No legally sufficient evidence supports the jurisdictional amount because
State did not segregate the proper amounts billed from allegedly
fraudulent amounts billed.
This appeal presents a unique question of law: In the prosecution for the
APPELLANT'S REPLY BRIEF PAGE 1
offense of securing execution of a document by deception, pursuant to
Texas Penal Code Sec. 32.46(b)(5), must the State prove the value of the
property, service or pecuniary interest that was actually secured by deception?
This Court of Appeals, in a case involving similar facts and Appellant,
answered this question "no" when it held that the "State was not required to
detennine and then segregate the false amount from the amount that might be
deemed legitimate had [Appellant's co-defendant therein, Western Medical
Evaluators] filed legally." See Douglas v. State, Cause No. 03-13-00092-CR, *1, at
p. 12 (Tex. App.-Austin, Aug. 26, 2015, n.p.h.), a true and correct copy of Hlhich is
attached to the Appendix hereto as Exhibit "1. "
However, this Court of Appeals erred in holding that the state did not need to
segregate the value of the property, service or pecuniary interest that was actually
secured by deception from the value of the property, service or pecuniary interest
that was not secured by deception. See Appellant's Motion for Rehearing and
Rehearing En Banc, a true and correct copy of which is attached to the Appendix
Jwreto as Ex Jn"b zt. "2 . "
Because Appellant was charged with securing execution of a document by
deception as a third degree felony -- $20,000 or more but less than $100,000 -- the
State was required to prove a value of property, service or pecuniary interest that
was sufficient to satisfy the jurisdictional requirement of its pleading. See Lehman v.
APPELLANT'S REPLY BRIEF PAGE 2
State, 792 S.W.2d 82, 84 (Tex. Crim. App. 1990); Simmons v. State, 109 S.W.3d
469, 472 (Tex. Crim. App. 2003). See also Lee v. State, 29 S.W.3d 70, 575 (Tex.
App.-Dallas 2000). In other words, the State had to prove that the value of the
pecuniary interest of the pmiion of the documents that were executed as a result of
Appellant's deception had to have an aggregate value of $20,000 or more but less
than $100,000. Otherwise, the State would not have established the jurisdictional
amount of the offense (i.e., that it was a third degree felony) by legally sufficient
evidence.
In holding that the State was not required to detennine and then segregate the
false amount from the amount that might be deemed legitimate had Appellant's co-
defendant filed legally, see Op., at p. 12, this Court did not cite a single case,
statute or other recognized legal authority that would obviate the State's
requirement to prove the value of the prope1iy, service or pecuniary interest secured
by Appellant's alleged deception. See Tex. Pen Code Ann., sec. 32.46(a)(l). See
also State's Brief, p. 36 (citing no authority).
The distinction between any false amounts and any legitimate amounts must
be relevant because the elements require that an offense is c01runitted only if the
defendant, with intent to defraud or ha1111 any person, and by deception, causes
another to sign or execute any document affecting prope1iy or service or the
pecuniary interest of any person. Id. In other words, to be an offense, the alleged
APPELLANT'S REPLY BRIEF PAGE3
victim would not have acted but for the defendant's deception. See Goldstein v.
State, 803 S.W.2d 777, 791 (Tex. App.-Dallas 1991, pet. refd); Smith v. State, 681
S.W.2d 71, 75-76 (Tex. App.-Houston [14 1h Dist.] 1983), ajf'd, 722 S.W.2d 408
(Tex. Crim. App. 1986).
Presumably, this Court's rejection of the State's need to first "determine and
then segregate" the false amount from any legitimate amount of the property, service
or pecuniary interest involved has removed the amount of value as an essential
element from an offense stated in Texas Penal Code Section 32.46. Rather,
according to the Comi's logic, the State need only allege a random value to the
prope1iy, service or pecuniary interest involved, solely to set the degree of felony
with which the State seeks to charge the defendant. See Tex. Penal Code Ann., Sec.
32.46(b )(5). Then, at trial, the State need only prove that the total value of the
property, service or pecuniary interest involved falls within the paii.icular degree of
felony for the State to satisfy its burden of proof, regardless of whether that prope1iy,
service or pecuniary interest involved was the result of deception. See Op., at p. 12.
According to this Comi's apparent interpretation of Section 32.46(b)(5), ifthe
State alleged that the pecuniary interest involved was between $1,500.00 and
$20,000.00 but the evidence at trial showed that only $10.00 out of the total value of
the pecuniary interest affected was the product of defendant's deception, and that the
remaining value was the product of legitimate or non-deceptive conduct, then the
APPELLANT'S REPLY BRJEF PAGE4
hypothetical defendant would still be guilty of a third-degree felony for securing the
execution of a document by deception even though the alleged victim had been
defrauded of only $10.00. See Ex. "],"Op., at p. 12.
Such a result is mandated if the State does not have to first determine and then
segregate the false amount of the value of the prope1iy, service or pecuniary interest
at issue from the amount that might be deemed legitimate. See Ex. "J," Op., at p.
12.
There is no question that a p01iion of each check paid by Texas Mutual
Insurance Company to Appellant included billing and payment for services that were
actually and properly earned by Appellant's company. As a result, even the State
prosecuted this case with the belief that it had to first determine and then segregate
the value of the prope1iy, service or pecuniary interest that was actually obtained by
deception from the value of the property, service or pecuniary interest that was not
obtained by deception. [3 RR 71-85]
Although the State acknowledged its burden to segregate the value obtained by
deception from the value obtained by legitimate or non-deceptive conduct, the State
failed to discharge that burden because its testimony about the value obtained by
deception constituted nothing more than mere speculation or factually unsupp01ied
inferences or presumptions. Hooper v. State, 214 S.W.3 9, 13 (Tex. Crim. App.
2007); Appellant's Brief, pp. 11-17.
APPELLANT'S REPLY BRJEF PAGES
Because the State failed to fully segregate the properly billed amounts from
the amounts that were based on alleged deception or fraud, there was no legally
sufficient evidence to establish the jurisdictional limits of this offense, and the State
failed to satisfy its burden. See Sowders v. State, 693 S.W.2d 448, 450 (Tex. Crim.
App. 1985) (when the State alleges an exact value for stolen prope1iy, it need not
prove the exact value pled, but must only prove a value sufficient to satisfy the
jurisdictional requirement of the State's pleading). See Nitcholas v. State, 524
S.W.2d 689, 691 (Tex. Crim. App. 1975). See Lehman, 792 S.W.2d at 84; Simmons,
109 S.W.3d at 472; Lee, 29 S.W.3d 75. See also Appellant's Brief, pp. 11-17.
In order for Appellant to be convicted of the offense of securing execution of
a document by deception, the State had to establish by legally sufficient evidence
the portion of the amount of each check relied upon in the indictment that was
executed as a result of Appellant's deception and.fraud. In other words, the State
had to prove, beyond a reasonable doubt, the amount of each check that did not
represent the value of services actually rendered by co-defendant NTME, and,
therefore, was paid as a result of fraud.
The State presented testimony that NTME could not properly bill for time
in which the physician or other healthcare provider (i.e., nurse, technician, etc.)
was not in the presence of the patient. Additionally, the State presented evidence
that NTME had, in fact, billed TMIC for time that was not spent in a face-to-
APPELLANT'S REPLY BRJEF PAGE6
face meetings or consultations with each patient. However, there is no question
that a portion of each check paid by TMIC to NTME, and each invoice from
NTME on which those checks were based, included billing and payment for
services that were actually and properly earned by NTME [5 RR 108-116; State's
Ex. 5]. As a result, the State should have segregated the value of each
docunient executed that was allegedly induced by Appellant's allegedly
deceptive conduct from the value of each document that was not procured by
fraud or deception.
Ms. Haden admitted that TMIC was just guessing about the amount of time
actually spent during the FCEs. [3 RR 115-16] Even the State's bank records,
which showed payments from TMIC to NTME, cannot identify the actual amounts
paid to NTME for allegedly fraudulent invoices:
Q: So all you can tell from Exhibits 15A and 15B is these were checks from
Texas Mutual Insurance Company that were deposited in a North Texas
Medical Evaluators bank?
A: Yes, sir.
***
Q: Okay. So there is no way for you to tell, from Exhibits 15A and 15B,
whether these payments are for FCEs or for some other service, cmTect?
A: No, sir.
Q: Okay. And you don't know if North Texas Medical Evaluators billed
Texas Mutual Insurance Company for any other services, besides FCEs, do
you?
APPELLANT'S REPLY BRJEF PAGE 7
A: No, sir.
[3 RR 174]
No other witness testified that TMIC was billed by NTME only for FCEs, nor
did any witness testify that TMIC only paid for allegedly fraudulent FCEs. William
Muhr, TMIC's senior fraud investigator, also paiiicipated in the investigation of
NTME, and he also admitted that there was no rhyme nor reason behind which
people he actually spoke with:
Q: Okay. You didn't try to talk to everybody, did you?
A: No, I did not.
Q: What deten11ined who you tried to talk to?
A: There was no stipulation, just call people and find out how long the
examination took.
[3 RR 188]
The State simply never bothered to accurately segregate the amount of the
checks that were procured lawfully, and without deception, from the amount of the
checks that allegedly were induced by Appellant's purpmied deception. As a result,
the testimony showed that the State's statistical underpinnings that allegedly made
up its proposed amount of purported fraud were clearly based on convenient and
rudimentary math and not on actual conduct. In other words, the }WJl was simply
APPELLANT'S REPLY BRIEF PAGE 8
guessing about the amounts of the documents that allegedly were secured by
deception.
Juries are pennitted to draw multiple reasonable inferences as long as each
inference is suppmied by the evidence presented at trial, but juries are not
permitted to come to condusions based on mere speculation or factually
unsupported inferences or presumptions. See, e.g., Megan Wi11frey v. State, 393
S.W.3d 763, 771 (Tex. Crim. App. 2013). '"[A]n inference is a conclusion reached
by considering other facts and deducing a logical consequence from them,' while
' [s]peculation is mere theorizing or guessing about the possible meaning of facts and
evidence presented."' Id. (quoting Hooper v. State, 214 S.W.3d 9, 16
[Tex.Crim.App. 2007]). A conclusion reached by speculation is not sufficiently
based on facts or evidence to suppmi a finding beyond a reasonable doubt. Id.
If the evidence presented at trial raises only a suspicion of guilt, even a strong
one, then that evidence is insufficient to convict. Richard Winji-ey v. State, 323
S.W.3d 875, 882 (Tex. Crim. App. 2010).
An alten1ative way of viewing this issue is to argue that the evidence was
legally insufficient to show that TMJC's pecuniary interest had a value of
$20,000 or more but less than $100,000. Section 32.46 of the Texas Penal Code,
regarding securing execution of a document by deception, does not define the
term "pecuniary interest." See Tex. Penal Code Ann., Sec. 32.46(a)(l ). Thus,
APPELLANT'S REPLY BRJEF PAGE9
the tenn is to be given its plain and ordinary meaning. See Goldstein, 803
S.W.2d at 791. The Dallas comi of appeals has stated that "pecuniary" is a
synonym for "financial" and that "pecuniary interest" means a direct interest
related to money. Fisher v. State, 803 S.W.2d 828, 830 (Tex. App.-Dallas
1991, pet. ref d).
Because the State failed to fully segregate the properly billed amounts from
the amounts that were based on alleged deception or fraud, there was no legally
sufficient evidence to establish the jurisdictional limits of this offense, and the State
failed to satisfy its burden. See Sowders v. State, 693 S.W.2d 448, 450 (Tex. Crim.
App. 1985) (when the State alleges an exact value for stolen prope1iy, it need not
prove the exact value pled, but must only prove a value sufficient to satisfy the
jurisdictional requirement of the State's pleading). See Nitcholas v. State, 524
S.W.2d 689, 691 (Tex. Crim. App. 1975). See also Lehman, 792 S.W.2d at 84;
Simmons, 109 S.W.3d at 472. See also Lee, 29 S.W.3d at 75. To hold otherwise
would allow the jury to convict Appellant on conduct that was decidedly not
fraudulent or deceptive. Rather, the jury had to speculate as to the amounts that were
proper by giving "credits" to NTME. See Lehman, 792 S.W.2d at 84; Simmons, 109
S.W.3d at 472. See also Lee, 29 S.W.3d at 75.
Because the jury had to guess at the value of the pecuniary interest that was
induced by Appellant's allegedly deceptive conduct, no legally sufficient evidence
APPELLANT'S REPLY BRJEF PAGE JO
exists to support the jury's verdict, and this Comi should reverse and render a
judgment of acquittal in favor of Appellant.
II.
The trial court erred in refusing to admit evidence that TMIC
provided funding to the State's prosecutors who prosecuted Appellant.
The State does not dispute that Texas Mutual Insurance Corporation had a financial
relationship with the Travis County District Atton1ey's Office, in general, and
specifically with the two prosecutors who tried this case against Appellant. See
State's Brief, p. 39. The issues regarding this relationship on appeal are: (1) whether
evidence of the relationship between TMIC and the Travis County District
Att0111ey's Office (including the two assistant district attorneys who prosecuted
Appellant) was relevant to Appellant's case, and (2) whether the trial court eITed in
excluding evidence of that relationship.
Like the argument in Issue One, the exclusion of such a relationship from the
trial appears to be a case of first impression.
Relevance, in Texas jurisprudence, "means evidence having any tendency to
make the existence of any fact that is of consequence to the detennination of the
action more probable or less probable than it would be without the evidence. Tex.
R. Evid. 401.
TMIC pays for the salaries of two prosecutors, one paralegal and one part-
time staff within the Workers' Compensation Fraud Unit of the DA's Public
APPELLANT'S REPLY BRJEF PAGE 11
Integrity Unit. [5 RR 60-68] As a result, TMIC, the alleged victim in this case,
actually pays the salaries of the two prosecutors Ms. Dom1a Crosby and Ms. Meg
Brooks - who prosecuted Appellant for this matter.
Based on the discovery of this information, Defendant's counsel informed the
trial comi of his desire to question Ms. Crosby, in front of the jury, about the
financial relationship between TMIC and the DA's Office. [5 RR 60-83]
However, the trial corni denied Appellant the right to present evidence to the jury of
the financial relationship between TMIC and the State, and Appellant has
repeatedly couched that objection based on the relevance of the excluded evidence.
[5 RR 68-73, 83] Furthennore, the Court clearly stated that he would not permit
such infonnation to be admitted in front of the jury, based on the purported lack of
relevance. [5 RR 77-83]
The State never contends in its brief that the anangement between TMIC and
the State adhered to ethical standards prohibiting conflicts of interest between the
State and an alleged victim. See State's Brief, pp. 41-42. Instead, the State simply
argues that the Appellant failed to preserve enor as to this complaint and that the
trial comi did not abuse his discretion in excluding evidence of the State's financial
relationship with TMIC. Id., at pp. 41-42.
Appellant's reliance on ethical standards that prohibit conflicts of interest
between the State and an alleged victim does not raise a separate point of eITor; the
APPELLANT'S REPLY BRJEF PAGE12
issue that remains is whether evidence of the financial relationship between the
State and TMIC was relevant because it showed the State's bias against Appellant
and its willingness to prosecute the case at the insistence of the State's TMIC.
See Appellant's Brief, pp. 31-38. Tex. R. Evid. 613.
Appellant's discussion of the AB A's Criminal Justice Standards and other
authorities that reject the type of financial anangement engaged in by the State and
TMIC reveals that the trial corni failed to follow any guiding principles and,
therefore, abused its discretion in dete1111ining that evidence of the State's financial
relationship with TMIC was relevant. See Roger A. Fairfax, Jr., "Delegation of the
Criminal Prosecution Function to Private Actors, " 43 University of California
Davis L. J. 411, 438 (2009).
It follows that if an alleged crime victim provides financial suppmi to a state
prosecuting authority, a defendant who is being prosecuted by that state prosecuting
authority should, at the very least, be pe1111itted to adduce evidence at trial of the
financial relationship between the prosecutor and the alleged crime victim, thereby
revealing to the jury the potential bias held by the State against the defendant. Tex.
R. Evid. 613.
In this case, the trial corni's exclusion of evidence about the financial
relationship between the State and TMIC, the alleged victim, was painfully
relevant. See Montgome7Jl v. State, 810 S.W.2d 272, 291 (Tex.Crim.App. 1990)
APPELLANT'S REPLY BRJEF PAGE 13
(op. on rehearing). The jury should have been allowed to know that TMIC paid
the salaries of the two prosecutors who were prosecuting Appellant for his alleged
fraudulent conduct against TMIC, especially when in-house fraud investigators
from TMIC, rather than an independent law enforcement agency, had conducted
the investigation that led to Appellant being indicted by Ms. Crosby, who testified
that she presents her own cases to the Grand Jury. A jury reasonably could have
inferred that the DA's office acted as the personal attorneys for TMIC with respect
to this case, and such a revelation would have complemented Appellant's argument
that TMIC was strong-anning Appellant because it did not want to compensate
him for the full 16 units that Appellant believed was compensable.
No judgment may be reversed on appeal on the ground that the trial court
made an error of law unless the error complained of probably caused the rendition of
an improper judgment. Tex. R. App. P. 44. l(a)(l ). See Horizon/CMS Healthcare
C01p. v. Auld, 34 S.W.3d 887, 906 (Tex. 2000); Beam v. A.H Chaney, Inc., 56
S.W.3d 920, 924 (Tex. App.-Fort W01ih 2001, pet. denied) (comi found no harmful
error after holding that evidence should have been excluded pursuant to Rule
193.6[a]).
IV.
PRAYER
APPELLANT'S REPLY BRJEF PAGE14
WHEREFORE PREMISES CONSIDERED, Appellant Howard Thomas
Douglas respectfully moves this Court to reverse the verdict and judgment of the trial
comi and render a verdict of not guilty in favor of Appellant; or, in the alten1ative,
reverse and remand this matter for a new trial because the trial court committed
hannful enor by refusing to allow Appellant to present evidence of the State's
improper financial relationship with TMIC.
Respectfully submitted,
IS/ Craig M. Price
Craig M. Price
State Bar No. 16284170
Email address: cmp@hammerle.com
Hammerle Finley Law Firm
2871 Lake Vista Dr., Suite 150
Lewisville, Texas 75067
Telephone: (972) 436-9300
Facsimile: (972) 436-9000
Atto111eys for Appellant
CERTIFICATE OF SERVICE
This is to ce1iify that on September 28, 2014, a true and cmTect copy of the
above and foregoing document was served on the Travis County District Attorney
Rosemary Lelu11berg, via email to Lisa.Stewmi@traviscountytx.gov.
/S/ Craig M. Price
Craig M. Price
CERTIFICATE OF COMPLIANCE
The undersigned counsel hereby ce1iifies, pursuant to Tex. R. App. 9 .4(i)(4 ),
that the foregoing Appellant's Brief contains a total of 3,357 words.
IS/ Craig M. Price
Craig M. Price
APPELLANT'S REPLY BRIEF PAGE 15
TEXAS COURT OF APPEALS, AT AUSTIN
NO. 03-B-00092-CR
v.
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 331ST JUDICIAL DISTRICT
NO. D-1-DC-10-900204, HONORABLE DAVID JUDGE PRESIDING
MEMORANDUM OPINION
Howard Thomas Douglas was found gi.1]lty by a jury of the offense of securing
execution of a document by deception, a felony of the third degree. 1 The trial court assessed his
sentence at eight years' confinement in the Institutional Division of the Texas Department of
Criminal Justice but suspended the sentence and placed him on community supervision for ten years.
In addition, Douglas was ordered to pay a fine of$5,000 and restitution of$98,411.03. Douglas filed
a motion for new h·ial, which the trial comi denied. He appeals. We will affirm.
1
We note that the judgment does not cmTectly conform to the procedures at trial. Although
the finding of guilt and the sentencing portion are correct, me judgment recites that Douglas waived
a jury and pleaded guilty, when in fact he pleaded not gill]ty and submitted the case to the jury.
While the jury was deliberating punishment, Douglas waived the jury and submitted punishment to
the trial comi.
DEFENDANT'S
EXHIBIT
(
BACKGROUND
In about 2004, Douglas, a medical doctor, and his 23-year-old daughter,
Barbara Douglas, established a business called Western Medical Evaluators, Inc. (WME). 2 Douglas
was the medical director and Barbara was named president of the company. WME provided
medical services in the workers' compensation sector to entities insured by Texas Mutual Insurance
Company. WME contracted with designated doctors to perforn1 designated doctor examinations
(DDE) on patients claiming workers' compensation benefits. Designated doctors travel all over the
state performing their examinations. The purpose of a DDE is to obtain an independent assessment
of the injured employee's condition at the request of the Texas Depaiiment of Insurance (the
Depaiiment). Douglas also perfonned examinations himself.
During the course of performing a DDE, the designated doctor may request a
functional capacity evaluation (FCE) of the employee to detem1ine the employee's ability to return
to work or perform ce1iainjobs. An FCE is administered by a technician. WME employed several
technicians who accompanied doctors to patient examinations. Upon the doctor's order, a technician
performed the FCE while still with the patient. After perfonning an examination, WME billed
Texas Mutual by means of a fom1 entitled HCFA 1500. The fonn is completed by employing codes,
lmown as CPT codes, to infom1 the insurance company what test or exam was perfonned in the
examination and the amount of time it took.3 The fonn reflects the time the doctor or technician
spent on the matter in increments of quarter hours.
2
For clarity, we will refer to appellant's daughter by her first name.
3
The code for an FCE is 97750 or 97750FC
2
When WME was first fonned, it only perfonned DDE exams and Douglas was the
only doctor. Later, the company added other doctors and staff and began administering FCE exams.
The designated doctors receive about 60% of the charges for a DDE; WME received almost all of
the compensation for an FCE.
The evidence was undisputed that, under the medical guidelines, the maximum
amount of time that can be billed for an FCE is 16 quaiier-hour increments, or 4 hours. Based upon
the HCF A 1500 fonn submitted, Texas Mutual would issue a check to WME. Texas Mutual issued
checks to WME totaling $103,821.99 during the time period at issue.
William Muhr, an investigator for Texas Mutual, became susp1c10us when he
recognized that every bill received from WME requested the maximum compensation of 4 hours for
every FCE. Muhr spoke to 146 patients examined by WME and detennined that the average time
the WME technician actually spent with patients was only 39 minutes. Muhr filed a complaint with
the Travis County District Attorney's Office. The underlying prosecution ensued.
Douglas, Barbara, and WME were each charged in separate indictments with the
offense of seeming execution of documents by deception. See Tex. Penal Code§ 32.46(a)(l ). 4 That
is, to paraphrase as to Douglas, the State alleged that, pursuant to a scheme or course of conduct
and with intent to defraud or harm Texas Mutual, Douglas by deception created or confirmed a
false impression of fact by causing HCF A fonns to be submitted to Texas Mutual for payment of
services of sixteen units when these services were not rendered, not believing it to be trne, which
4
A person cormnits an offense if, with intent to defraud or hann any person, he, by
deception, causes another to sign or execute any document affecting property or service or the
pecuniary interest of any person. Tex. Penal Code § 32.46( a)(l ).
3
deception caused Texas Mutual to execute documents affecting its property. The pecuniary
value of the prope1iy affected was alleged to be $20,000 or more but less than $100,000. Thus,
the offense charged was a third degree felony. Id.§ 32.46(b)(5). 5 Douglas and WME were tried
together, although by the time of trial WME had ceased functioning and was out of business. Before
her father's trial, Barbara pleaded no contest to her charges and received deferred adjudication. She
testified at trial, as did Douglas.
Douglas complains on appeal that the evidence at trial was legally insufficient to
prove that he acted with the intent to defraud or hann, that he engaged in deception that caused
Texas Mutual to execute any document, or that the pecuniary amount of the documents met the
jurisdictional amount required for a third degree felony. He also complains that the evidence did not
support the amount of restitution ordered. In the alternative, Douglas requests a new trial on the
basis that he was denied effective assistance of counsel.
DISCUSSION
Legal sufficiency of evidence supporting conviction
When reviewing the sufficiency of the evidence to suppmi a criminal conviction, the
appellate court must examine the evidence in the light most favorable to the verdict to detennine
whether any rational trier of fact could have found the essential elements of the offense beyond a
5
The offense is a felony of the third degree if the value of the prope1iy, service, or pecuniary
interest is $20,000 or more but less than $100,000. Id. § 32.46(a)(5). The indictment includes a list
of Texas Mutual payments by patients' names, dates, ammmts charged, and amounts paid, and
the State introduced voluminous records into evidence to support the charges. The State abandoned
payments received after January 31, 2008, and the indictment was amended to reflect the
amendment.
4
reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319 (1979); Brooks v. State, 323 S.W.3d 893,
899 (Tex. Crim. App. 2010). We must keep in mind that it is the factfinder's duty to weigh the
evidence, resolve any conflicts, and make reasonable inferences from basic facts to ultimate facts.
Jackson, 443 U.S. at 319. We presume that any conflicting inferences were resolved in favor
of conviction, and we defer to that resolution. Clayton v. State, 235 S.W.3d 772, 778 (Tex. Crim.
App. 2007).
The underlying basis for the criminal allegations arose out of the amount of time and,
therefore, money that WME charged Texas Mutual for performing FCEs. As Douglas acknowledges
in his brief, the State presented testimony from numerous witnesses that WME was not entitled
to bill for time in which the physician or other health care provider was not in the presence of
the patient. He also recognizes that the State presented evidence that WME had, in fact, billed
Texas Mutual for time that was not spent in face-to-face meetings or consultations with each patient.
In his testimony, Douglas acknowledged that WME billed for time not spent with the patient and
that it was his decision to bill the maximum time for each FCE, but he insists that the practice
was justified.
Mmiha Luevano, an employee of the Department's Workers' Compensation Division,
testified about the medical fee guidelines, Labor Code Rules, and American Medical Association
CPT Codes used in Texas that describe, define, and govern FCEs and the billing and paying of FCE
fees. She testified that compensation for an FCE requires direct one-on-one patient contact and can
only be billed for actual time spent face-to-face with a patient, billed in quarter-hour increments, for
5
a maximum of 16 units, or 4 hours. 6 Preparation time and time spent generating a repo1i cannot
be included in billing time. The Depaiiment has a website, training, and a dedicated telephone help
line for medical providers. She was not aware of any communication that WME or Douglas had
attempted with the Depa1iment concerning FCE billing.
Three patients and several WME teclmicians were among the witnesses who testified.
The patients testified that the FCE took only 15 to 30 minutes. One patient stated that she did not
undergo a second FCE, although WME billed for a second one. Three technicians testified that "face
to face" time with a patient for an FCE took between 15 to 40 minutes, 45 minutes to an hour, and
25 to 35 minutes, respectively. The rep01is took 10 to 15 minutes to complete. No one spent four
hours on an FCE, although WME billed the maximum for each one. One technician testified that
teclmicians were paid an extra $25 as an incentive to do more FCEs.
The head of WME's accounts receivable, Michelle Worden, testified that an exam
room was across from her office and that the exams took about 30 minutes. According to her, there
was a directive from Douglas to bill the maximum on all FCEs. When she refused to collect the
maximum on inflated bills, Barbara fired her.
The manager ofWME's accounts receivable, Kenna Johnson, had an office near the
exam rooms. The longest exams took 45 minutes. She never saw one take 4 hours. She noticed that
6
The CPT code for an FCE reads as follows:
Tests and Measurements
Requires direct one-on-one patient contact.
*****
977 50 Physical perfonnance test or measurement (e.g., musculoskeletal, functional capacity), with
written report, each 15 minutes.
6
the number of FCEs increased and that eve1y exam began to have an FCE, all billed at 4 hours.
Johnson told Barbara that the bills were not correct Barbara informed Johnson that Douglas had
talked to the Department and that WME's billing was perfectly fine, which Johnson did not believe.
Johnson refused to collect on the bills, and Barbara fired her.
Lena Schockley worked in accounts receivable and billing. She testified that Douglas
and Barbara told the technicians to perfonn an FCE on eve1y patient, even if the doctor did not
request one. If the repo1i showed that no FCE was needed, Shockley was instructed to change the
repo1i to reflect that an FCE was needed; Barbara told her to bill each FCE at 4 hours. If the repo1i
showed only 6 units of time were spent with the patient, employees were instructed to put a 1 in front
of the 6, to reflect 16 units of time, the maximum.
Mimi Stout, who worked in accounts receivable, testified that an FCE was
always billed at 4 hours. She was one of several WME employees who drove to Austin to repo1i the
inapprop1iate billing to the Department.
Warren King solicited insurance companies and designated doctors for WME. He
noticed that every patient had an FCE and that every one was billed at 4 hours. One tech billed
12 FCEs in 1 day-each requesting 4 hours' compensation. King testified that an FCE takes
15 minutes to 2 hours. He was concerned that these exams were being done without doctors' orders
and were being billed for more than the time taken. He was one of the employees who repo1ied
fraudulent billing to the Depa1iment.
Douglas left WME in early 2008. The new medical director who replaced Douglas,
Dr.Jerry Franz, noticed that too many FCEs were being perfom1ed and that some techs were billing
10 to 12 per day. Franz informed the technicians that they could no longer perfonn an FCE unless
7
a doctor ordered one, and that they required accurate time keeping for billing. He was one of the
employees who reported inappropriate billing to the Department.
Barbara testified that when her father first established the company, WME only did
DDE examinations. Eventually, the company began doing FCE exams. When they found out that
the cap for FCEs was 4 hours, she and her father decided to charge the maximum. She claimed
that they did not intend to defraud Texas Mutual by doing so, even though she conceded that an FCE
did not take 4 hours. She identified two letters in which Douglas stated that WME would do an FCE
on all patients. She did not explain why the company charged the maximum fee but acknowledged
that the work was lucrative; she estimated that charges for FCEs equaled about $1,000,000 in a year.
Douglas testified on his own behalf. When he began perfonning FCEs, he stated that
he called other doctors' offices about how to bill, although he did not offer any other doctor to testify
on FCE billing. He also claimed to have called the Department, although its records did not reflect
an inquiry regarding FCEs, only DDEs.
Douglas disputed the amount his business should be entitled to legally bill for an
FCE. He insisted that, despite the State's constmction of the rules, WME could bill for all the time
a doctor or agent spent on a patient's matter, in addition to time with the patient, including ananging
for the appointment and travel, preparing for the exam, obtaining records, reviewing records in
advance, working on the patient's file, and preparing a report after the exam. He personally did a
time study to detennine how long these matters required and concluded that, on average, the whole
process took 4.5 to 5.5 hours, sometimes over a 2-week period or so. Based on his own conclusion
about the average time required, he made the decision to bill the maximum 4 hours on every FCE
8
without regard to actual time each required; the billing form reflected that the 4 hours was on 1 day.
He confirmed that it was his decision for WME to bill 4 hours on every FCE.
Because in his view an FCE required advance preparation and review of the patient's
records, he believed that he could bill this time. At the same time, he acknowledged that the
D DE exam also required arranging for location and travel, obtaining patient's records, and reviewing
them in advance, and that this work was properly included in billing for a DDE. He did not
distinguish the preparation time relating to a DDE from any time related to an FCE or explain
whether the same time and work was being billed for both a DDE and an FCE on one patient. He
also could not explain why work was required in advance of an FCE, in light of the fact that there
was no way to know whether a doctor would request an FCE until the DDE examination itself, other
than to say that the preparation was perfonned in case the doctor requested one.
Douglas denied telling the technicians to perform an FCE on every patient; he did
not remember signing letters to the contrary on his letterhead that were in evidence, and he denied
that it was his signature on the letters. Apaii from the letters, however, he acknowledged that WME
began doing an FCE on almost every patient in anticipation that the doctor might want one. He
stated that the company did not charge for the ones the doctor did not want, but he admitted that they
could have charged for these also, as he did not work in billing.
The CPT code does not make any reference to aITangements, travel, or
pre-examination preparation; Douglas admitted that this time was included in his decision to bill the
maximum. Douglas insisted, however, that he was at least entitled to bill for preparing a written
post-exam repmi concerning the FCE because a repmi was mentioned in the code description.
9
He denied an intent to defraud Texas Mutual, but a large portion of his testimony was
spent contradicting the State and justifying the billing method utilized. He never denied that eve1y
FCE perfonned was billed at the maximum four hours. He implied that his billing practice was a
mistake because he believed that he was justified in billing as WME did; at the same time, he
insisted that the billing method was reasonable and proper and denied that the billing procedure
violated the medical fee guidelines. He did not contend that he was operating under a mistaken
understanding of the rnles; instead, he insisted that the State's construction was incorrect, he
disagreed with it, and his constrnction was c01Tect.
Douglas offered the testimony of Komad Kuenstler, an attorney and physical therapist
who has perfonned over 1,000 FCEs. Kuenstler testified that doctors can bill for the time spent on
medical review and written reports. Kuenstler worked in Texas until about 2009 but practiced law
in California at the time of trial.
Douglas argues that the evidence failed to prove that he: ( 1) acted with intent to
defraud or harm Texas Mutual because the State failed to adduce evidence that he personally sent
inflated invoices to Texas Mutual or authorized WME to bill for unauthorized fees; (2) engaged in
any deception with respect to the bills sent to Texas Mutual; or (3) caused the forms HCF A 1500 to
be submitted to Texas Mutual for payment. We disagree. He also argues that the State was required
to prove that but for his conduct, Texas Mutual would not have paid the fees it did.
A person acts with intent with respect to his conduct when it is his conscious
objective or desire to engage in the conduct or cause the result. Tex. Penal Code§ 6.03(a). Intent to
deceive can be infened from the accused's acts, words, and conduct. Goldstein v. State, 803 S. W .2d
777, 791 (Tex. App.-Dallas 1991, pet. refd). A person engages in deception by creating or
10
confirming by words or conduct a false impression oflaw or fact that is likely to affect the judgment
of another in the transaction, and that the actor does not believe to be true. Tex. Penal Code
§ 31.0l(l)(A).
Douglas was the medical director for WME. Although Barbara was the president,
it was not shown that she had any medical training. Our review of the evidence reveals that Douglas,
as the owner and medical director of the company, acting alone or in concert with Barbara,
established WME's policy for submitting its bills to Texas Mutual, that he determined that it should
submit four hours on every FCE, regardless of the actual time required, that he lmew that WME was
submitting bills for time not spent with the patient, and that he knew this was done for the purpose
of causing Texas Mutual to pay fees based upon the fonns submitted.
Douglas also argues that Barbara was clearly an accomplice witness as a matter of
law, whose testimony was uncoIToborated and thus must be excluded, leaving no legally sufficient
evidence to support the verdict. Again, we must disagree. Even assuming that Barbara should be
considered an accomplice, her testimony was corroborated by employees who worked at WME, by
patients, and by Douglas himself. Nothing in her testimony contradicted his version of facts, except
the two letters she identified on his letterhead. These letters, however, were written to designated
doctors, explaining the benefit of FCEs for their examination and the reason that WME intended to
perform an FCE on most patients in the future, a fact that Douglas himself confin11ed. Like Douglas,
Barbara testified that neither she, WME, nor Douglas acted with intent to defraud or deceive
Texas Mutual.
Finally, Douglas insists that the evidence is legally insufficient to prove the
jurisdictional amount required to classify the offense as a third degree felony because with respect
11
to each payment Texas Mutual made, the State failed to segregate the portion paid for services
actually rendered from the amount the State alleged was fraudulently billed. For the same reason,
he contends, the evidence does not supp01i the amount of restitution he is ordered to pay.
The evidence showed that Texas Mutual was defrauded into paying WME based
upon falsified form requests. The fact that WME may have been entitled to paiiial payment for
work actually done had it filed conectly does not defeat the fact that the requests for payment it did
file were untrue. Each fonn was incorrect because each contained false infonnation. The State
was not required to detern1ine and then segregate the false amount from the amount that might be
deemed legitimate had WME filed legally. Thus, the evidence proves that the pecuniary value of
the prope1iy Texas Mutual transferred was within the range of a third degree felony and based upon
the evidence restitution was properly ordered. Fmiher, because Douglas did not object to the amonnt
ofrestitution ordered by the trial comi, such complaint is waived. See Gutierrez-Rodriguez v. State,
444 S.W ..3d 21, 23-24 (Tex. Crim. App. 2014).
Ineffective assistance of counsel
Douglas served as the corporate representative for WME at trial, although WME
was treated almost as an afte1ihought at trial, since it was no longer in business. Douglas has new
counsel on appeal who did not serve as trial counsel. He contends that his trial counsel rendered him
ineffective assistance because counsel allowed the State to consolidate Douglas's case with that of
the corporation WME, allowed the State to consolidate without a formal motion for consolidation,
failed to request a severance from WME, and failed to request an instruction on mistake of fact or
due diligence of a corporation. The charge submitted to the jury was identical as to both Douglas
12
and WME and was submitted in a single charge but the jury was instructed that Douglas and WME
were subject to decision separately and that the jury could decide the same or different verdicts for
each. Douglas did not object at trial to the joint trial or to the jury charge.
A defendant who claims he is entitled to a reversal of his conviction because
his counsel rendered ineffective assistance must show that his counsel's representation failed
to meet a two-pronged test. Strickland v. Washington, 466 U.S. 668, 687-88 (1984); Hernandez
v. State, 726 S.W.2d 53, 55 (Tex. Crim. App. 1986). An appellant must show by a preponderance
of the evidence that (1) his counsel's representation was deficient and fell below an objective
standard of reasonableness, and (2) the deficient representation caused him prejudice, in that there
is a reasonable probability that, but for counsel's deficiency, the result of the nial would have
been different. Strickland, 466 U.S. at 687; Andrews v. State, 159 S.W.3d 98, 101-02 (Tex. Crim.
App. 2005); Thompson v. State, 9 S.W.3d 808, 812 (Tex. Crim. App. 1999). A failure to make a
showing under either prong of the Strickland test defeats the claim. Andrews, 159 S.W.3d at 101;
Rylanderv. State, 101S.W.3d107, 110-11 (Tex. Crim. App. 2003).
The appellate comi considers the totality of the evidence to detennine whether, but
for counsel's errors, the jury would have had a reasonable doubt concerning the defendant's guilt.
Strickland, 466 U.S. at 694-95; see Hernandez, 726 S.W.2d at 56-57.
Allegations of ineffective counsel must be finnly founded in the record. McFarland
v. State, 928 S.W.2d 482, 500 (Tex. Crim. App. 1996). Our review of counsel's performance
must be highly deferential. Andrews, 159 S.W.3d at 101. There is a strong presumption that
counsel's conduct falls within a wide range of reasonable professional assistance, and the defendant
must overcome that presumption. Strickland, 466 U.S. at 688-89. A claimant must g'e-nera11yprove
13
deficiency using affo111ative evidence in the trial record sufficient to overcome the presumption.
See id. at 689; Lopez v. State, 343 S.W.3d 137, 142 (Tex. Crim. App. 2011).
To prove prejudice, a claimant must establish a "reasonable probability" that the
result of the proceeding would have been different if counsel had not been deficient. Strickland,
466 U.S. at 694. A reasonable probability is one that is sufficient to undennine confidence in the
outcome of the trial. Id. Whether there is a reasonable probability that confidence in the outcome
of the trial is undermined can turn on evidence adduced at trial because "a verdict or conclusion
only weakly suppo1ied by the record is more likely to have been affected by errors than one with
overwhelming record suppmi." Id. at 696.
Trial counsel should be afforded an opportunity to explain his actions. Bone v. State,
77 S.W.3d 828, 836 (Tex. Crim. App. 2002). Under nonnal circumstances, therefore, the record
on direct appeal will not be sufficient to show that counsel's representation was so deficient and
so lacking as to overcome the presumption that counsel's representation was reasonable and
professional. Id. at 833; Mitchell v. State, 68 S.W.3d 640, 642 (Tex. Crim. App. 2002). A record
on ineffective assistance is best developed in an evidentiary hearing on a motion for new trial or
applicationforwritofhabeascorpus. Rylander, 101S.W.3dat110.
The Texas Comi of Criminal Appeals has stated that a motion for new trial is not
required in order to raise ineffective assistance of counsel on appeal, partly because of the time limit
on filing a motion and because of the awkward situation of expecting trial counsel to challenge
his or her own legal assistance. Robinson v. State, 16 S. W .3d 808, 809-11 (Tex. Crim. App. 2000)
(holding failure to file motion for new trial does not procedurally prohibit appellate claim of
ineffective assistance of counsel). In this instance, however, Douglas retained appellate counsel
14
who timely filed a motion for new trial with the trial court. In his motion, he alleged ineffective
assistance of counsel at trial; however, the basis for the complaint was different at trial than he now
urges on appeal. Douglas did not complain below that his trial counsel was ineffective because the
two causes were tried together, that this procedure was undertaken without a fonnal motion, or
that trial counsel failed to request a severance. Fmiher, appellate counsel did not complain that
trial counsel failed to request an instruction on mistake of fact or due diligence of a corporation. No
hea1ing was held on the motion for new trial.
We believe that in this instance we could hold that Douglas waived this issue by
not raising it below. However, assuming that it is not waived, based upon this record, and applying
the correct legal review, we cannot say that Douglas has shown that trial counsel rendered him
ineffective assistance. See, e.g., Okonkwo v. State, 398 S.W.3d 689, 696 (Tex. Crim. App. 201.3)
(rejecting appellant's argument that his counsel was ineffective in failing to request instruction on
mistake of fact because that instruction would have required jury to detennine whether appellant's
mistaken belief was reasonable and would have allowed for conviction on lessened burden of
proof if jury concluded that his mistake was umeasonable); Burton v. State, No. 14-06-00022-CR,
2007 Tex. App. LEXIS 5000, at *6 (Tex. App.-Houston [14th Dist.] June 28, 2007, no pet.)
(not designated for publication) (mem. op.) (concluding that appellant did not overcome presumption
that his counsel's failure to seek accomplice or co-conspirator instruction was sound trial strategy
because record was silent as to trial counsel's reasons for that decision); Ti'oods v. State, 998 S. W.2d
633, 635 (Tex. App.-Houston [1st Dist.] 1999, pet. refd) (concluding that appellant did not
overcome presumption that his counsel's failure to seek severance was sound trial strategy because
record was silent as to trial counsel's reasons for that decision); see also Tex. Penal Code§ 7.24 cmt.
15
(West 1974) (noting that due diligence defense for corporation does not apply to felony
prosecutions); 6 Michael B. Charlton, Texas Practice Series.' Texas Criminal Law § 5.7 (2d ed.
2001) (same).
CONCLUSION
We hold that there is legally sufficient evidence to suppmi the verdict and that
Douglas has failed to show on this record that his trial counsel rendered him ineffective assistance
of counsel.
We ovenule the issues on appeal and affinn the judgment.
Marilyn Aboussie, Justice
Before Chief Justice Rose, Justices Bourland and Aboussie*
Affirmed
Filed: August 26, 2015
Do Not Publish
* Before Marilyn Aboussie, Chief Justice (retired), Third Comi of Appeals, sitting by assignment.
See Tex. Gov't Code§ 74.003(b).
16
ACCEPTED
03-13-00092-CR
6875842
THIRD COURT OF APPEALS
AUSTIN, TEXAS
9/10/20154:58:17 PM
JEFFREY D KYLE
CLERK
CAUSE No. 03-1.3~00092-CR
IN THE COURT OF APPEALS FILED IN
FOR THE THIRD COURT OF APPEALS DIST&IiCC'BuRT OF APPEALS
AUSTIN TEXAS AUSTIN, TEXAS
' 9/10/2015 4:58:17 PM
JEFFREY ~t-->LE--
Clerk
Dr. HOW ARD THOMAS DOUGLAS,
Appellant,
VS.
THE STATE OF TEXAS,
Appellee.
On appeal from Cause No. D-1-DC-10-900204, in the 331 st Judicial District Comi,
Travis County, Texas
APPELLANT'S MOTION FOR REHEARING AND
MOTION FOR REHEARllNG EN BANC
TO THE HONORABLE THIRD COURT OF APPEALS:
COMES NOW, Appellant, Dr. Howard Thomas Douglas, and files his
Motion for Rehearing and l\1otion for Rehearing En Banc, pursuant to Texas R.
App. P. 49.1and49.7, and states that this Comi should grant a rehearing or, in the
alternative, rehearing en bane, and after rehearing reverse the judgment against
Appellant and render a verdict of acquittal in his favor, and in suppmi thereof
respectfully shows this Comi the follmving:
; DEFENDANT'S
fa E~
APPELLANT'S MOTION FOR REHEARING PAGE I
I.
Court JEnedi Jlltll Holding Tlhtat State Did Not Have To Prove
Value of Pecuniary Interest Obfailrlled By Fraud
This appeal presents what appears to be a case of first impression. In the
prosecution for the offense of securing execution of a document by deception,
pursuant to Texas Penal Code Sec. 3 2.46(b )(5), must the State prove the value of
the prope1ty, service or pecuniary interest that 1vas actually secured by deception?
Stated another 1vay, must the State prove the amount by which the victim
·was defrauded in order to detennine the jurisdictional amount of the offense, or the
degree of felony of which the defendant is to be punished?
The Comi of Appeals answered this question "no" when it held that the
"State was not required to detennine and then segregate the false amount from the
amount that might be deemed legitimate had WJVIE filed legally." Op., at p. 12.
Tlhte Court of Appeals en-edl in holding tlhiat the state did not rneed to
segregate the vallLile of the prnperty, service or pec11.u11ia1Q1 interest that was
actllllaHy secm·ed by d!eceptioJrJ. from the vallLile of tlhe pnoperty, servnce or
pecmJtiary interest flrnt was not sec1U!red by dleceptllolrll.
After rehearing, the Comi of Appeals should withdraw its current opinion,
reverse its judgment in this matter and render a verdict of acquittal for Appellant
APPELLANT'S MOTION FOR REHEARJNG 2
because the evidence was legally insufficient to establish the value of the property,
service or pecuniary interest that was secured by deception.
Because Appellant was charged with securing execution of a document by
deception as a third degree felony -- $20,000 or more but less than $100,000 -- the
State was required to prove a value of prope1iy, service or pecuniary interest that
was sufficient to satisfy the jurisdictional requirement of its pleading. See Lehman
v. State, 792 S.W.2d 82, 84 (Tex. Crim. App. 1990); Simmons v. State, 109 S.W.3d
469, 472 (Tex. Crim. App. 2003). See also Lee v. State, 29 S.W.3d 70, 575 (Tex.
App.-Dallas 2000). In other words, the State had to prove that the value of the
pecuniary interest of the pmiion of the documents that were executed as a result of
Appellant's deception had to have an aggregate value of $20,000 or more but less
than $100,000. Otherwise, the State would not have established the jurisdictional
amount of the offense (ie., that it was a third degree felony) by legally sufficient
evidence.
In holding that the State was not required to determine and then segregate
the false amount from the amount that might be deemed legitimate had WME filed
legally, see Op., at p. 12, this Court did not cite a single case, statute or other
recognized legal authority that would obviate the State's requirement to prove the
value of the prope1iy, service or pecuniary interest secured by Appellant's alleged
deception. See Tex. Pen Code Ann., sec . .32.46(a)(l) ("A person commits an
APPELLANT'S MOTION FOR REHEARING 3
offense Hf, with inte!I1lt to defraud oir lhann any person, he, by deceptnon, causes
another to sign or execute any document affecting "property or servnce on· the
pecuniary ilfllterestt of any person .... ") (emphasis added).
The distinction between any false amounts and any legitimate amounts must
be relevant because the offense requires that the offense is committed only if the
defendant, with intent to defraud or ham1 any person, and by deception, causes
another to sign or execute any document affecting prope1iy or service or the
pecuniary interest of any person. Id. In other words, to be an offense, the alleged
victim would not have acted butfor the defendant's deception. See Goldstein v.
State, 803 S.W.2d 777, 791 (Tex. App.-Dallas 1991, pet. refd); Smith v. State,
1
681 S.W.2d 71, 75-76 (Tex. App.-Houston [14 h Dist.] 1983), aff'd, 722 S.W.2d
408 (Tex. Crim. App. 1986).
Presumably, this Court's dismissal of the State's need to first "determine
and then segregate" the false amount from any legitimate amount of the prope1iy,
service or pecuniary interest involved has removed the amount of value as an
essential element from an offense stated in Texas Penal Code Section 32.46.
Rather, according to the Court's logic, the State need only allege a random value to
the prope1iy, service or pecuniary interest involved, solely to set the degree of
felony \Vith \Vhich the State seeks to charge the defendant. See Tex. Penal Code
Ann., Sec. 32.4(b)(5). Then, at trial, the State need only prove that the total value
APPELLANT'S MOTJON FOR REHEARING 4
of the property, service or pecuniary interest involved - regardless of whether that
value was the result of deception falls within the paiiicular degree of felony for
the State to satisfy its burden of proof.
In other words, if the State alleged that the pecuniary interest involved was
between $1,500.00 and $20,000.00, a third degree felony, but the evidence at trial
showed that only $]0.00 out of the total $1,500.00 of the pecuniary interest
affected was the product of defendant's deception, and that the remaining value
was the product of legitimate or non-deceptive conduct, then the hypothetical
defendant would still be guilty of the third-degree felony for securing the execution
of a document by deception.
Such a result would be mandated if the State, as pem1itted by this Court of
Appeals, did not have tofirst dete1111ine and then segregate the false amount from
the amount that might be deemed legitimate. See Op., at p. 12.
This cannot be the law.
In fact, even the State did not believe this to be the law at the time of trial
because the State tried to segregate the value of the property, service or pecuniary
interest obtained by deception from the value of the property, service or pecuniary
interest that was obtained by legitimate or non-deceptive conduct. [3 RR 71-85]
The State not only had to guess at the length of the actual functional capacity
evaluations, but it also had to admit that a po1iion of each test was legitimate and,
APPELLANT'S MOTJON FOR REHEARING 5
therefore, not all of the payment \Vas secured by alleged deception; rather, at least a
p01iion of each document was based on legitimate entitlement to payment:
State: Okay. The first one [reviewing State's Ex. 15, p. 4], it says
TMI, two units. Is that giving [WME] credit for doing two units' worth of
work-
Mu.lhir: Yes . .30 minutes.
***
State: And so tlwtrs not saying that they didn't do any work with these
people. That's giving them credit for either 30 minutes to an hour. Is that
COITect?
Mulhr: That is conect.
[3 RR 83-85 (emphasis added)]
There is no question that a p01iion of each check paid by Texas Mutual
Insurance Company to Western Medical Evaluators ("WME") included billing and
payment for services that were actually and properly earned by WME. [3 RR 84
("And so that's not saying that they didn't do any \711ork with these people."]
As a result, even the State prosecuted this case with the belief that it had to
first determine and then segregate the value of the prope1iy, service or pecuniary
interest that was actually obtained by deception from the value of the property,
service or pecuniary interest that was not obtained by deception. Compare with
Op., at p. 12.
APPELLANT'S MOTION FOR REHEARJNG 6
Although the State aclmowledged its burden to segregate the value obtained
by deception from the value obtained by legitimate or non-deceptive conduct, the
State failed to discharge that burden because its testimony about the value obtained
by deception constituted nothing more than mere speculation or factually
unsupp01ied inferences or presumptions. Hooper v. State, 214 S.W.3 9, 13 (Tex.
Crim. App. 2007); Appellant's Brief, pp. 11-17.
Because the State failed to fully segregate the properly billed amounts from
the amounts that were based on alleged deception or fraud, there \Vas no legally
sufficient evidence to establish the jurisdictional limits of this offense, and the
State failed to satisfy its burden. See Sowders v. State, 69.3 S.W.2d 448, 450 (Tex.
Crim. App. 1985) (when the State alleges an exact value for stolen prope1iy, it
need not prove the exact value pled, but must only prove a value sufficient to
satisfy the jurisdictional requirement of the State's pleading). See Nitcholas v.
State, 524 S.W.2d 689, 691 (Tex. Crim. App. 1975). See Lehman, 792 S.W.2d at
84; Simmons, 109 S.W.3d at 472; Lee, 29 S.W.3d 75. See also Appellant's Brief,
pp.11-17.
This Comi should grant Appellant's motion for rehearing or motion for
rehearing en bane and, on rehearing, reverse the judgment of the Comi of Appeals
and render a verdict of acquittal in favor of Appellant.
APPELLANT'S MOTION FOR REHEARING 7
n.
Court Erred In Hollding That AppeHant Waived!
Complaint About Amoumt Of Restitution.
The Comi also erred in holding that Appellant waived any complaint about
the amount of restitution because he did not object to the amount of restitution
ordered by the trial comi. See Op., at p. 12.
An appellate comt reviews challenges to restitution under an abuse of
discretion standard. One of the due process considerations underlying a review of
restitution requires that the amount must be just and supp01ted by a factual basis
within the record. Campbell v. State, 5 S.W.3d 693, 697 (Tex. Crim. App. 1999).
In holding that Appellant waived any complaint about restitution by not
objecting to the amount ordered by the trial comi, this Comi simply cited, without
any analysis, the Texas Comi of Criminal Appeals' decision in Gutierrez-
Rodriguez v. State, 444 S.W.3d 21 (Tex. Crim. App. 20 J4) (which was issued vvell
after the trial in Appellant's case). See Op., at p. 12.
The Comi. of Criminal Appeals did not distinguish between an argument that
restitution is not authorized versus an argument that the evidence is not sufficient
to supp01i the amom1t of restitution. Gutierrez-Rodriguez, 444 S.W.3d at 23-24,
n.20. Rather, the Comi based its decision on the assumption that a sentence of
probation, conferred by the judge, "extends clemency to the defendant and creates
APPELLANT'S MOTION FOR REHEARlNG 8
a sort of contractual relationship" between the defendant and the trial comt. Id.
Based on this contractual relationship, then, the defendant must o~ject to the
imposition of restitution or otherwise accept the tern1s of the probation "contract."
Id.
The Comi of Criminal Appeals did not specify the method by \7'ihich a
defendant must object to or complain about restitution in order to preserve error.
Rather, the Comi explained that a defendant should object about restitution to the
trial court in order to give the trial comi "the oppmiunity to reconsider the
condition of probation or to reconsider the appropriateness of the probation
contract without the objected-to condition." Id., at 24 (citation omitted).
In this case, Appellant did "object" that the amount of restitution imposed by
the trial comi was not supported by a factual basis within the record when he
complained in his Motion for New Trial that "there was no legally or factually
sufficient evidence that Defendant committed fraud in the amount as alleged in the
indictment and as found by the jury." [CR 172] The trial comi was, therefore,
presented with the oppo1iunity to reconsider the condition or appropriateness of the
amount of restitution imposed on Appellant, including whether - as required by
due process -- the amount of restitution imposed was just and suppmied by a
factual basis within the record. Campbell, 5 S.W.3d at 697.
APPELLANT'S MOTION FOR REHEARlNG 9
No talismanic words are needed to preserve error as long as the comi can
understand what the complaint is from the context. Clark v. State, 365 S.W.3d
333, 33 7 (Tex. 2012). See also Bedolla v. State, 442 S. W.3d 313, 316 (Tex. Crim.
App. 2014). The Texas Court of Criminal Appeals has stated that strict reliance on
patiicular phrases when making objections at trial are a thing of the past:
To be sure, there are repmied cases which seem to take a more slavish and
unforgiving approach, but these have dwindled in impo1iance as they have in
frequency. Contemporary examples are now few and far betv-,1een, and H ns
01.u- p1mrpose that they become even less common in the fotmre.
Lankston v. State, 827 S.W.2d 907, 909 (Tex. Crim. App. 1992) (emphasis added).
More recently, the Comi of Criminal Appeals has stated that "'magic words"
are not required to preserve enor, and a complaint will be preserved if the
substance of the complaint is conveyed to the trial judge. Bennett v. State, 235
S.W.3d 241, 243 (Tex. Crim. App. 2007).
Appellant clearly o~jected, in his Motion for New Trial/ Anest of Judgment,
that there was no factual support in the record for a finding of fraud in the amount
found by the jury, which necessarily included a complaint about the amount of
restitution imposed by the trial comi.. To hold othenvise, vwuld require a slavish
and unforgiving approach to preservation of a complaint about restitution.
Lankston v. State, 827 S.\V.2d at 909.
APPELLANT'S MOTION FOR REHEARING 10
As a result, Appellant properly preserved his objection to the amount of
restitution, and this Comt of Appeals should, after rehearing, reverse its judgment
and reverse the judgment on the grounds that no legally sufficient evidence
supports the amount of restitution imposed and either render a judgment that no
amount ofrestitution should be imposed or, in the alternative, remand this issue to
the trial comt for a new trial on the amount of restitution, if any, to be imposed on
Appellant.
HI,
PRAYER FOR RELIEF:
V\IHEREFORE, PREMISES CONSIDERED, Appellant Howard Douglas,
respectfully moves this Third Comt of Appeals to grant Appellant's Motion for
Rehearing or Motion for Rehearing En Banc and, after rehearing, reverse the trial
comi's judgment against Appellant and enter a verdict of not guilty in his favor or,
in the alternative, reverse the imposition of restitution on Appellant and either enter
a judgment that no restitution should be imposed or remand this matter to the trial
court for a new trial on whether restitution should be imposed and, if so, in \Vhat
amount.
APPELLANT'S MOTION FOR REHEARING 1l
Respectfully submitted,
/s/ Craig M. Price
Craig M. Price
State Bar No. 16284170
Email: cmp@hammerle.com
HAMMERLE FINLEY LAW FIRM
2871 Lake Vista Dr., Suite 150
Lewisville, Texas 75067
Tel: (972) 436-9300
Fax: (972) 436-9000
Attorney for Appellant
CERTIFICATE OF SERVJICE
This is to certify that on September 10, 2015, a true and c01Tect copy of the
above and foregoing document was served on the Travis County District Attorney's
Office, Travis County, PO Box 1748, Austin, Texas 78767, by facsimile 512-854-
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Craig I'vL Price
CERTIFICATE OF COMPLIANCE
The undersigned counsel hereby certifies, pursuant to Tex. R. App.
9.4(i)( 4 ), that the foregoing Motion for Rehearing, et al., contains a total of
2, 5 3 4 words.
APPELLANT'S MOTION FOR REHEARING 12