Commonwealth v. Littles

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SJC-12238

COMMONWEALTH vs. CASANDRA B. LITTLES.

Essex. March 9, 2017. - June 28, 2017.

Present: Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ.

Larceny. Fraud. Practice, Criminal, Instructions to jury,
Harmless error. Due Process of Law, Inference.
Constitutional Law, Harmless error. Error, Harmless.
Evidence, Fraud, Prima facie evidence, Inference.

Complaint received and sworn to in the Lawrence Division of
the District Court Department on January 21, 2014.

The case was tried before Michael A. Uhlarik, J.

The Supreme Judicial Court on its own initiative
transferred the case from the Appeals Court.

Philip A. Mallard, Assistant District Attorney (Lindsay M.
Nasson, Assistant District Attorney, also present) for the
Commonwealth.
Joseph K. Kenyon, Jr., for the defendant.

LOWY, J. The case before us challenges the

constitutionality of a jury instruction for the crime of drawing

or uttering a fraudulent check. The challenged instruction
 2

informed the jury that they could infer that the defendant had

both (1) knowledge of insufficient funds and (2) fraudulent

intent if they found that the defendant "failed to make good on

th[e] check within two days after she was notified that the bank

had refused payment because of insufficient funds." The

instruction stems from G. L. c. 266, § 37, which designates the

failure to make the required payment on the bad check within two

days of notice as "prima facie evidence" of the defendant's

intent and knowledge. We conclude that the statute's

designation of prima facie evidence and the corresponding

instruction are constitutionally infirm because a defendant's

failure to pay a check within two days of being notified of its

dishonor is, without more, insufficient to warrant a jury in

finding the essential elements of the crime beyond a reasonable

doubt. Nevertheless, we conclude that the error was harmless

beyond a reasonable doubt in this case, and therefore we affirm

the defendant's convictions.

Background. The jury could have found the following facts.

Between July 26 and 28, 2013, the defendant deposited four

checks, totaling $15,000, into certain bank accounts she held at

TD Bank via automated teller machines (ATMs). The funds were

credited to the respective accounts electronically on the day of

the transaction, before the checks were finally negotiated.

Each check was drawn from a single Citizens Bank account in the
 3

defendant's name that had been closed for years. All four

checks eventually bounced and were returned to TD Bank by July

31, 2013.

Between the time she deposited the checks and the

negotiation of the checks, the defendant transferred funds

between her accounts at TD Bank, in the manner of a "check-

kiting" scheme.1 After transferring the funds, but before the

checks had been returned, the defendant made a number of

expenditures, including nearly $3,000 on Walt Disney World and

1
The United States Supreme Court has described a "check-
kiting" scheme as follows:

"The check kiter opens an account at Bank A with a
nominal deposit. He then writes a check on that account
for a large sum, such as $50,000. The check kiter then
opens an account at Bank B and deposits the $50,000 check
from Bank A in that account. At the time of deposit, the
check is not supported by sufficient funds in the account
at Bank A. However, Bank B, unaware of this fact, gives
the check kiter immediate credit on his account at Bank B.
During the several-day period that the check on Bank A is
being processed for collection from that bank, the check
kiter writes a $50,000 check on his account at Bank B and
deposits it into his account at Bank A. At the time of the
deposit of that check, Bank A gives the check kiter
immediate credit on his account there, and on the basis of
that grant of credit pays the original $50,000 check when
it is presented for collection.

"By repeating this scheme, or some variation of it,
the check kiter can use the $50,000 credit originally given
by Bank B as an interest-free loan for an extended period
of time. In effect, the check kiter can take advantage of
the several-day period required for the transmittal,
processing, and payment of checks from accounts in
different banks . . . ." (Citation omitted.)

Williams v. United States, 458 U.S. 279, 281 n.1 (1982).
 4

Sea World tickets, nearly $600 on her cellular telephone bill,

over $700 on clothing and shoes, and a $2,000 cash withdrawal.

The defendant ultimately overdrew her accounts at TD Bank by

roughly $12,000.

In early August of 2013, a representative of TD Bank

contacted the defendant by telephone and informed her that the

checks had been returned. The defendant responded that she was

out of town, but would remedy the situation when she returned.

The defendant never did so, however, and testified at trial that

she "forgot" and was overwhelmed by her own, and her mother's,

health problems. By August 21, 2013, no repayment had been made

and TD Bank sent a demand letter informing the defendant that

she owed TD Bank $11,664.20. Within a week, the defendant still

had not made any deposit. When TD Bank attempted to follow up

with the defendant, it discovered that the defendant's cellular

telephone number was no longer in service.

At trial, the defendant testified that she believed that

her account at Citizens Bank was still open and that her tax

refund had been deposited into that account. There was

evidence, however, that the Citizens Bank account had been

closed for years, and that she already had spent much of her

$13,000 tax refund, which had been previously deposited into one

of her accounts at TD Bank, well in advance of the four bounced

checks.
 5

The jury convicted the defendant on four counts of larceny

by uttering a false check. The defendant appealed, and we

transferred the case to this court on our own motion.

Discussion. Pursuant to § 37, an individual commits

larceny if, with the intent to defraud, she obtains goods or

services in exchange for a check that the individual wrote

knowing there were insufficient funds in the account from which

the check draws.2 Section 37 further provides that the act of

"making, drawing, uttering or deliver[ing] such a check"

constitutes "prima facie evidence of intent to defraud and of

knowledge of insufficient funds . . . , unless the maker or

drawer shall have paid the holder thereof the amount due thereon

. . . within two days after receiving notice that such check

. . . has not been paid by the drawee."

Based on the statutory language, the District Court has

promulgated a model supplemental instruction in larceny by check

cases in which the defendant does not take the requisite action

within two days of notice of dishonor. Instruction 8.460 of the

Criminal Model Jury Instructions for Use in the District Court

2
In relevant part, G. L. c. 266, § 37, states: "Whoever,
with intent to defraud, makes, draws, utters or delivers any
check, draft or order for the payment of money upon any bank
. . . , with knowledge that the maker or drawer has not
sufficient funds or credit . . . for the payment of such
instrument . . . , and if money or property or services are
obtained thereby shall be guilty of larceny."
 6

(2009). The instruction given in this case over the defendant's

objection, which conformed with the model instruction, stated:

"There has been some evidence in this case suggesting
that the defendant failed to make good on this check within
two days after she was notified that the bank had refused
payment because of insufficient funds. If you find that to
have been proved, it may be relevant to the issues of the
defendant's knowledge and intent.

"If the defendant failed to make good on a check
within two days after being notified that it had bounced,
you are permitted to infer two other things: that at the
time when the defendant originally wrote the check, she
knew that there were insufficient funds or a line of credit
to cover it at the bank, and also that she wrote the check
with the intent to defraud. You are not required to draw
such an inference of knowledge and intent, but you may.

"Even if there has been contrary evidence, you may
still consider a failure to make good on the check within
two days of notice as some evidence on the questions of
knowledge and intent, and you may weigh it in your
deliberations along with all the rest of the evidence on
those two issues."

The defendant argues that the prima facie designation in

§ 37 and the related instruction are unconstitutional, because

an individual's failure to pay a check within two days of notice

of dishonor does not have a sufficiently strong, logical

connection to the individual's knowledge of insufficient funds

or intent to defraud at the time the check was written. We

agree. Because the defendant objected to the instruction at

trial, we will affirm the convictions only if the error was

harmless beyond a reasonable doubt. See Commonwealth v.

Petetabella, 459 Mass. 177, 189 (2011). Cf. Commonwealth v.
 7

Klein, 400 Mass. 309, 314-315 (1987) (instruction did not create

substantial risk of miscarriage of justice).

1. Statutory designation of prima facie evidence in

criminal statutes. In criminal cases in the Commonwealth, when

the Legislature designates "evidence 'A' [to be] prima facie

evidence of fact 'B,' then, in the absence of competing

evidence, the fact finder is permitted but not required to find

'B' beyond a reasonable doubt." Commonwealth v. Maloney, 447

Mass. 577, 581 (2006). See Mass. G. Evid. § 302(c) (2017). The

designation of prima facie evidence in this context is

"structurally the same as" a "permissive inference."

Commonwealth v. Pauley, 368 Mass. 286, 292-293 (1975). In other

words, the permissive inference satisfies the Commonwealth's

burden of production as to one or more elements of a crime. As

reflected in the judge's instruction in this case, when contrary

evidence is introduced, the basic fact (i.e., the first fact)

continues to be some evidence of the inferred fact (i.e., the

second fact or resultant fact). Mass G. Evid. § 302(c).

When a jury may find an inferred fact based on proof of a

basic fact, there must be a strong, logical connection between

the two facts to ensure that the defendant receives the full

benefit of the reasonable doubt standard. See Tot v. United

States, 319 U.S. 463, 467-468 (1943). See generally Pauley, 368

Mass. at 294-299. An instruction explaining a permissive
 8

inference should only be given when it will "not undermine the

factfinder's responsibility at trial, based on evidence adduced

by the State, to find the ultimate facts beyond a reasonable

doubt." County Court of Ulster County, N.Y. v. Allen, 442 U.S.

140, 156 (1979). Provisions designating prima facie evidence,

such as § 37, "do not . . . alter the Commonwealth's substantive

burden of proof . . . . Rather, when properly employed . . . ,

such provisions are merely a matter of administrative

convenience that eliminate uncertainty as to what will

constitute sufficient proof." Maloney, 447 Mass. at 581-582.

We have yet to address the constitutionality of the prima

facie designation in § 37. See Klein, 400 Mass. at 315 (not

reaching constitutionality issue). But see id. at 316-320

(O'Connor, J., dissenting) (relationship between initial and

inferred facts in § 37 not sufficiently rational to satisfy due

process). The key inquiry in assessing the constitutionality of

a permissive inference is the strength of the relationship

between the basic fact and the inferred fact "in light of

present-day experience." See Barnes v. United States, 412 U.S.

837, 844-845 (1973). The constitutionally required connection

between the two facts has been described as a "rational

connection," a connection that is "more likely than not," and as

a connection that leaves no "reasonable doubt." Id. at 841-843,

and cases cited. Yet, this "ambiguity is traceable in large
 9

part to variations in language and focus rather than to

differences of substance." Id. at 843. Accordingly, other

circumstances involving permissive inferences in criminal

statutes are illustrative.

a. The connection between the basic fact and the inferred

fact. In Pauley, 368 Mass. at 289, 292, 297, we found no

constitutional infirmity in a regulation that permitted the fact

finder to presume that the registered owner of an automobile was

responsible for evading a toll. We concluded that the

relationship between the basic fact (ownership of the vehicle)

and the inferred fact (that the owner was the individual driving

the vehicle) was sufficient to allow the fact finder to find the

defendant guilty beyond a reasonable doubt. Id. at 298.

Similarly, in Barnes, 412 U.S. at 843-846, the United States

Supreme Court upheld the constitutionality of drawing "an

inference of guilty knowledge . . . from the fact of unexplained

possession of stolen goods," where the defendant possessed

"recently stolen Treasury checks payable to persons he did not

know." In these circumstances, the Court determined that the

unexplained possession of such items was "sufficient to enable

the jury to find beyond a reasonable doubt that [the] petitioner

knew the checks were stolen." Id. at 845-846.

Where courts have rejected the sufficiency of the

connection between the initial and inferred facts, they
 10

typically have done so where the inferred fact has a

sufficiently probable, noncriminal explanation. For example, in

Tot, 319 U.S. at 466, 472, the Supreme Court reversed a

conviction premised on an inference that a defendant who

possessed firearms and ammunition after being convicted of a

violent crime had received the alleged illicit material via

interstate commerce -- an element of the Federal crime. In the

absence of additional evidence regarding the mechanisms by which

the defendant received the material, "there [was] no reasonable

ground for a[n] [inference] that its purchase or procurement was

in interstate rather than in intrastate commerce." Id. at 468.

Compare United States v. Gainey, 380 U.S. 63, 69-71 (1965)

(upholding inference that person's unexplained presence at

illegal still could be used to infer guilt for participation in

crime of illegal distilling), with United States v. Romano, 382

U.S. 136, 141-144 (1965) (striking down inference that person's

unexplained presence at illegal still could be used to infer

guilt for crime of possessing illegal still).

b. The permissive inference of § 37. We agree with the

dissent in Klein that the prima facie designation in § 37 and

the corresponding jury instruction are unconstitutional; that

is, the basic fact (that the defendant did not make good on a

check with insufficient funds within two days of being notified

that it had bounced) does not constitute prima facie evidence of
 11

the two inferred facts, both of which are elements of the crime:

that the defendant, at the time the check was issued, (1) knew

there were insufficient funds and (2) had fraudulent intent.

The instruction in this case informed the jury that, based

on the defendant's failure to make good on the checks within two

days of notice of dishonor, "[they were] permitted to infer two

other things: that at the time when the defendant originally

wrote the check, she knew that there were insufficient funds or

a line of credit to cover it at the bank, and also that she

wrote the check with the intent to defraud." This instruction

suggested that no more evidence was needed to prove these

elements, which the Commonwealth had to prove beyond a

reasonable doubt. A permissive inference cannot have the effect

of reducing the Commonwealth's burden to prove a crime beyond a

reasonable doubt. See Maloney, 447 Mass. at 581-582.

Without a stronger, rational connection between a

defendant's failure to correct a bad check within two days of

notice and the defendant's knowledge and intent, "the

combination of natural chance and absence from the evidence of

an explanation consistent with innocence" does not prove the two

inferred facts beyond a reasonable doubt. Pauley, 368 Mass. at

293. "Surely, a defendant's inability to make restitution for a

bad check within two business days after notice of dishonor does

not warrant a finding beyond a reasonable doubt that an honest
 12

mistake or inattention was not the genesis of the check."

Klein, 400 Mass. at 319 (O'Connor, J., dissenting). See Tot,

319 U.S. at 468 (inference invalid in light of probable,

innocent explanation). Further, the essential question is

whether the defendant had the requisite knowledge and intent at

the time she wrote the check. Section 37 does not establish any

temporal limitation between the writing of the check and notice

of dishonor. If, for example, a defendant received notice of

dishonor regarding a check written three months earlier, the

defendant's failure to pay the check within two days of the

notice would say little about her state of mind at the time she

wrote the bad check.

Unlike the possession of stolen checks made out to persons

unknown to a defendant and knowledge that the checks were

stolen, Barnes, 412 U.S. at 844-846, the defendant's failure to

make the appropriate payment after notice of dishonor does not

tilt the "balance of probabilities . . . in favor of the

Commonwealth." Klein, 400 Mass. at 319 (O'Connor, J.,

dissenting). See Tot, 319 U.S. at 468. See also Pauley, 368

Mass. at 292-293. Because the designation of prima facie

evidence in § 37 effectively dilutes the Commonwealth's burden

of proof, it is constitutionally infirm and thus the instruction

given by the judge was invalid.
 13

2. Harmless error. When faced with a preserved

constitutional error, we reverse a conviction unless we are

satisfied that the error was harmless beyond a reasonable doubt.

Petetabella, 459 Mass. at 189. "Finding that an improper

instruction was harmless beyond a reasonable doubt is the

equivalent of saying that the error was 'unimportant in relation

to everything else the jury considered on the issue in

question,' requiring the reviewing court 'to make a judgment

about the significance of the [inference] to reasonable jurors,

when measured against the other evidence considered by those

jurors independently of the [inference].'" Commonwealth v.

Nolin, 448 Mass. 207, 218 (2007), quoting Yates v. Evatt, 500

U.S. 391, 403-404 (1991).

This analysis involves two steps. First, we determine

"what evidence the jury actually considered" by evaluating the

instructions given to them, and assuming that the jury

considered "relevant evidence on a point in issue when they are

told that they may do so." Nolin, 448 Mass. at 218. Second, we

weigh the probative effect of the evidence actually considered

against the probative effect of the inference. Id. at 218-219.

For a conviction to survive the second step, we must conclude

that "the evidence considered was 'so overwhelming as to leave

it beyond a reasonable doubt that the verdict resting on that

evidence would have been the same in the absence of the
 14

[improper inference]." Id. at 219, quoting Commonwealth v.

Medina, 430 Mass. 800, 803 (2000). Both steps are satisfied in

this case.

As to the first step, we have acknowledged already that the

instruction incorrectly informed the jury that proof of the

defendant's failure to address the bounced checks within two

days was sufficient to infer the defendant's knowledge of

insufficient funds and intent to defraud. However, unlike the

instruction challenged in Nolin, 448 Mass. at 219, the

instruction did not go so far as to "direct" the jury to find

knowledge and intent on proof of the defendant's failure to make

the checks good.3 Rather, the instruction in this case told the

jury that they were permitted to find intent and knowledge, but

not required to do so.

The instruction further made clear to the jury that, if

evidence contradicted the defendant's knowledge and intent, they

could consider the failure to pay as some evidence of knowledge

and intent. Because the defendant testified that she did not

have the knowledge or intent, we presume that the jury

considered the basic fact in this manner. See Nolin, 448 Mass.

at 218; Klein, 400 Mass. at 314. Therefore, the jury were

3
In Commonwealth v. Nolin, 448 Mass. 207, 217 (2007), the
judge informed the jury that "a person is presumed to intend the
natural and probable consequences of his acts. So, in
considering intent, remember that."
 15

instructed in a manner that conveyed that the unconstitutional

permissive inference did not apply in this case, due to the

defendant's testimony that she lacked the requisite knowledge

and intent.

Although an insufficient basis to find the requisite

knowledge and intent, a defendant's failure to make good on a

bad check may still be relevant evidence to support those

elements.4 We can then resolve the second step of the Nolin

analysis by determining whether instructing the jury that the

failure to make good on the check within two days after notice

of dishonor constitutes reversible error. Because the

instruction was unnecessary, although its substance was not

legally incorrect, it should not have been given. We are

convinced, however, that any error is harmless beyond a

reasonable doubt in light of all of the evidence. Commonwealth

4
In many cases, if a defendant knowingly wrote a check with
insufficient funds with the intent to defraud, the defendant
would not voluntarily make the aggrieved party or parties whole.
Thus, the defendant's failure to make good on the check may make
it "more probable" that the defendant knew of the insufficient
funds and intended to defraud than "it would be without the
evidence." Mass. G. Evid. § 401 (2017). Simply because
evidence is relevant, however, does not require that an
instruction be given to the jury explaining its relevance. Nor
does the statute mandate the provision of an instruction. A
prosecutor may argue a defendant's failure to pay as evidence of
intent, and a defendant may introduce evidence to the contrary.
Similarly, a trial judge may consider a defendant's failure to
make good on a bounced check as evidence of knowledge or intent,
when considering whether to grant a motion for a required
finding of not guilty.
 16

v. Vasquez, 456 Mass. 350, 362 (2010) (error harmless when other

evidence is so overwhelming that it nullifies any effect).5

The overwhelming evidence demonstrated that the defendant

knowingly with the intent to defraud, rather than mistakenly as

she testified, wrote checks that drew funds from a long-closed

account. Further, the defendant utilized ATM deposit systems

that posted funds electronically, allowing her to move funds

before the checks cleared -- which she promptly did in the

manner of a check-kiting scheme. Finally, the defendant did not

merely fail to make good on the checks within two days of notice

of dishonor, but did not enter into a repayment agreement for an

additional nine months. The strength of the Commonwealth's

case, when juxtaposed against the defendant's testimony

explaining her conduct, "nullif[ies] any effect" that the minor

instructional error "'might have had' on the fact finder or the

findings." Vasquez, 456 Mass. at 362, quoting Commonwealth v.

Tyree, 455 Mass. 676, 704 n.44 (2010).

Conclusion. The designation of prima facie evidence in

§ 37 is unconstitutional and, thus, so too was the corresponding

instruction. The instruction suggested that proof of a

defendant's failure to make good on a bad check within two days

5
We need not decide whether the error of unnecessarily
providing this instruction should be viewed as constitutional or
prejudicial error, because even under the less forgiving
constitutional standard, we conclude that reversal is not
warranted.
 17

of being notified was sufficient to infer that the defendant (1)

knew of the insufficient funds and (2) possessed the intent to

defraud. Each of the inferred facts is an essential element of

the crime that must be proved beyond a reasonable doubt, and

proof of the basic fact alone does not warrant finding the

inferred facts by that standard. Nevertheless, the defendant

offered contrary evidence through her testimony, and the jury

were instructed that, when there is contrary evidence, they may

consider a failure to honor the check within two days of notice

only as "some evidence" of the defendant's knowledge and intent.

In light of the overwhelming evidence of the defendant's

knowledge and intent, the instructional error was harmless

beyond a reasonable doubt. We therefore affirm the defendant's

convictions.

Judgments affirmed.