No. 92-204
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
STATE OF MONTANA,
Plaintiff and Respondent,
-vs .-
SHARON F. YOUNG,
Defendant and Appellant.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable Robert W. Holmstrom, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Arthur J. Thompson, Thompson Et Sessions, Billings,
Montana
For Respondent:
Hon. Joseph P. Mazurek, Attorney General, Cregg W.
Coughlin, Assistant, Helena, Montana; Dennis
Paxinos, Yellowstone County Attorney, Billings; Mark
J. Murphy, Assistant Attorney General, Special
Deputy County Attorney, Helena, Montana
Justice James C. Nelson delivered the Opinion of the Court.
This is an appeal from a jury verdict in the ~hirteenth
Judicial District convicting Defendant of conspiracy to commit
felony theft by deception. We affirm.
We state the issues on appeal as follows:
1. Was there sufficient evidence to support the jury's
guilty verdict?
2. Does collateral estoppel bar the State from prosecuting
the Defendant for conspiracy to commit felony theft by deception?
The Defendant Sharon F. Young (Sharon) was charged with
conspiracy to commit felony theft for obtaining workersf
compensation benefits by deception. In January 1983, Sharon and
her husband, co-defendant Robert Young, applied for workersf
compensation insurance coverage through the State Fund Mutual
Insurance Company (State Fund) for themselves as owners and
employees of the West Parrot Creek Properties. The Youngsf
application for coverage indicated that the nature of their
business was raising fur animals, and claimed an estimated $42,000
annual earnings for the business. The coverage began March 1,
1983.
Thereafter, Robert Young filed a claim for benefits, claiming
he had injured himself on March 30, 1983. He reported he was
rebuilding a set of corrals when cross-ties fell on him. Sharon
was listed as a witness to t h e accident and s i g n e d t h e c l a i m form
as employer. The claim form indicated that Robert Young was
earning $400 per week, which amount would provide him with the
2
maximum amount of benefits allowable under law. Robert Young began
receiving biweekly benefits after this alleged injury occurred.
Subsequently, on May 6, 1983, Sharon filed a claim for
benefits, claiming that she had injured herself while lifting a
bale of hay on May 4, 1983. Sharon also reported that she earned
$400 per week. Sharon began receiving benefits on May 6, 1983. On
that same day, Robert Young canceled their workerst compensation
insurance.
In November 1983, Robert Youngfs doctor advised the State Fund
that Robertts medical condition had stabilized. The State Fund
notified Robert Young that his benefits would be terminated on
December 28, 1983.
Thereafter, on December 21, 1983, Sharon and Robert Young
again applied for workerst compensation insurance as partners in
the West Parrot Creek Properties. The Youngsr application for
coverage i n d i c a t e d that the nature of their business was raising
beef and feed, and claimed $41,600 annual earnings for the business
(or $400 per week per person). The insurance coverage was
effective on December 21, 1983. Thereafter, Robert Young filed a
new claim for benefits, stating he was injured on December 31,
1983, after inhaling the pesticide Furadan 44. Again, Sharon was
listed as a witness to the accident and signed the claim form as
employer. The claim form indicated that Robert Young was earning
$425 per week.
From April 1983 to December 1988, the State Fund paid Robert
Young total compensation payments in the amount of $72,426.71.
From May 1983 to July 1987, the State Fund paid Sharon compensation
payments. On July 23, 1987, Sharon entered into a Full and Final
Compromise Settlement with the State Fund. Sharon received total
benefits in the amount of $116,148.14, plus an additional $21,650
for medical expenses.
An investigation into Sharon and Robert Young's 1983 claims
was initiated after a failed attempt by Robert Young and co-
defendants Edith and Jack Wilkerson to fraudulently obtain workers'
compensation benefits in 2988. Subsequently, criminal charges were
filed against Sharon and Robert Young and Edith and Jack Wilkerson.
Evidence presented at trial in support of the State's case
against Sharon was as follows. At the time that the Youngs claimed
annual earnings of $42,000 and $41,600, the West Parrot Creek
Properties was an eighty-acre parcel of land near Roundup, Montana.
In July 1983, a State Fund field examiner went to the Youngst
property and found no corrals, no livestock, and no farm equipment.
The field examiner met with Robert Young again in February, 1984,
regarding the pesticide claim. Robert Young was unable to produce
the package of pesticide but claimed to have purchased it in
Hardin. The field examiner was unable to locate any business in
Hardin which sold any pesticide to Robert Young.
other evidence presented by the State showed that no game or
fur farm license was ever issued to either Sharon or Robert Young.
There were no state tax records which showed that either Young paid
any taxes on any equipment or machinery. The Montana Department of
Livestock records indicated that between 1982 and 1989, the Youngs
owned or shipped only sixteen head of cattle. There was no other
documentation of any fur animal or cattle business.
In 1986, Dr. William Shaw, a board-certified physician
specializing in occupational medicine, examined the Youngs upon the
State Fund's request. Dr. Shaw indicated that Robert Young had a
long history of medical problems, but concluded that none of Robert
Young's preexisting injuries were aggravated by any injuries in
1983. He also concluded that Robert Young's lung problems were not
associated with the inhalation of pesticide, but were the result of
smoking. Dr. Shaw reported that, during the examination, Robert
Young made the following statements: "That subsidy that Workers'
Comp is the best thing I v
'e ever had," "All these injuries have
Workers' Comp is better
caused me to be this way," and llCollecting
than stealing."
Dr. Shaw also examined Sharon, who also had a long history of
medical problems. Sharon told Dr. Shaw that her May 4, 1983,
injury occurred when she fell off the back of a pickup while
feeding cattle. There were no cattle on the property in May, 1983,
and Sharon's prior claim to the State Fund did not state that she
fell from a pickup.
During Dr. Shawls examination of Sharon, he saw no evidence
that she had any problems sitting or moving, nor did she exhibit
any signs of pain or discomfort. Dr. Shaw concluded that Sharon's
medical problems predated the alleged injury of May, 1983.
This evidence was presented to a jury on August 19 and 20,
1992. The jury found Sharon guilty of conspiracy to commit felony
theft by deception. Sharon was sentenced to five years in prison,
all suspended, and was ordered to make restitution. From that
verdict and sentence, she appeals.
When the issue on appeal is whether there was sufficient
evidence to support a jury verdict, the standard of review is
lrwhether,after viewing the evidence in the light most favorable to
the prosecution, any rational trier of fact could have found the
essential elements of the crime beyond a reasonable doubt.I1 State
v. McLain, (1991), 249 Mont. 242, 246, 815 P.2d 147, 150.
I - SUFFICIENCY OF THE EVIDENCE
Sharon was convicted of conspiracy to commit felony theft by
obtaining unauthorized control of State Fund monies through
deception. Sharon contends that there was insufficient evidence to
support her conviction because the State Fund "authorizedrror
frconsented"to her actions by entering into a Full and Final
Compromise Settlement of her workers' compensation claim. Viewing
the evidence in the light most favorable to the prosecution, we
hold that there is sufficient evidence to support the conviction.
The only issue raised by Sharon regarding the sufficiency of
the evidence is whether or not she obtained the workers'
compensation benefits by deception. Section 45-2-211, MCA, states
that "the consent of the victim to conduct charged to constitute an
offense or to the result thereof is a defense." Sharon would use
this statute as a complete defense, and thus a bar to this
conviction.
We note that consent is ineffective if it is induced by
deception. Deception, as defined at 3 45-2-101 ( 1 7 ) , MCA, means
knowingly to:
(a) create or confirm in another an impression which is
false and which the offender does not believe to be
true ;
(b) fail to correct a false impression which the
offender previously has created or confirmed; ...
There are a number of instances in this case where Sharon
Itdeceivedtt t h e S t a t e Fund. For example, Sharon deceived t h e S t a t e
Fund into issuing workerst compensation insurance on the West
Parrot Creek Properties, when the same was not a legitimate,
ongoing enterprise. She indicated that Robert Young and she both
earned $400 per week, when she knew the same to be untrue. Sharon
created or confirmed in the State Fund the impression that she had
been injured while in the course and scope of her legitimate
employment with the West Parrot Creek Properties. After the State
Fund accepted liability for Sharon's purported injury, Sharon
failed to correct the false impression that she created regarding
her injury, the nature of her business, and the earnings of that
business.
There is no question that the State Fund's consent to
liability in this case was induced through Sharon's deception. The
State Fund did not know Sharon's claim for benefits was fraudulent
at the time it entered into the settlement agreement. Had the
State Fund received accurate information from Sharon, they would
not have extended over $135,000 in benefits to her. The State Fund
did not consent to Sharon's actions in this case.
Sharon claims that the State Fund could have ascertained the
7
fraudulent nature of her claim if it had exercised due diligence.
In essence, Sharon would have the State Fund conduct a "merits
evaluation" of each and every claim filed with the State Fund
before accepting liability and beginning benefits payments. We
refuse to impose this burden on the State Fund. The State Fund
should be able to rely on the truthfulness, completeness, and
accuracy of the representations made by the claimant and employer.
Willern Visser, a claims manager for the State Fund, estimated that
the State Fund h a s approximately 20,000 claims per year. To force
the State Fund t o thoroughly i n v e s t i g a t e each claim on its m e r i t s
before providing benefits would cause undue hardship on an already-
burdened system. In addition, such a requirement would hurt
claimants, in that it would unreasonably delay benefits payments
and settlement of legitimate claims.
We hold that the State presented sufficient evidence to
support the conviction in this case.
IT - COLLATERAL ESTOPPEL
Sharon contends that the doctrine of collateral estoppel bars
the State from prosecuting her in this case. She argues that the
State is precluded from prosecution by the State Fund's compromise
settlement of the workers' compensation claim. We disagree, and
hold that collateral estoppel does not apply in this case.
The doctrine of collateral estoppel is also known as ltissue
preclu~ion.~ is similar to res j u d i c a t a ; however, res judicata
It
"bars the same parties from relitigating the same cause af action
while collateral estoppel. bars the same parties from relitigating
issues which were decided with respect to a different cause of
action." Boyd v. ~ i r s t
Interstate Bank (1992), 253 Mont. 214, 218,
833 P.2d 149, 151. This Court has previously established a three-
prong test to determine if the doctrine of collateral estoppel
applies to a particular case. Boyd, 833 P.2d at 151.
1. The identical issue raised has been previously decided in
a prior adjudication;
2. A final judgment on the merits was issued in the prior
adjudication; and
3. The party against whom the plea is now asserted was a
party or in privity with a party to the prior
adjudication.
m, 833 P.2d at 151. The first prong, identity of issues, is the
most crucial of the three elements. Anderson v. State (1991), 250
Mont. 18, 21, 817 P.2d 699, 702. In order to satisfy this element,
the identical issue or "precise questionw must have been litigated
in the prior action. Anderson, 817 P.2d at 702.
Collateral estoppel does not apply in this case, because
Sharon cannot establish the threshold first element. The Full and
Final Compromise Settlement reached between the State Fund and
Sharon on July 23, 1987, dealt solely with the amount of benefits
thought to be owed to Sharon. Sharon's conspiracy to commit theft
was not known at the time the compromise agreement was reached, and
thus the fraud issue was not actually raised or litigated.
Therefore, the issue in the workers1 compensation case and the
issue in this criminal prosecution are not identical.
A party who obtains workers' compensation benefits through
trick and deception cannot assert the doctrine of collateral
estoppel against the innocent victim. The State Fund is entitled
to rely upon facts presented by the employer when applying for
insurance coverage and by the employee when applying for benefits.
If it is later discovered that the State Fund provided coverage or
benefits because of fraud or deception, the State has the right to
criminally prosecute those individuals to the fullest extent of the
law.
Affirmed.
We Concur:
July 20, 1993
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
Marvin L. Howe, Esq.
Simonton, Howe & Schneider, P.C.
P.O. Box 1250
Glendive, MT 59330
Gary L. Day, Esq.
Lucas & Monaghan, P.C.
P.O. Box 728
Miles City, MT 59301
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA