No
No. 99-003
IN THE SUPREME COURT OF THE STATE OF MONTANA
1999 MT 337
297 Mont. 421
992 P.2d 1283
STATE OF MONTANA,
Plaintiff and Appellant,
v.
PATRICIA LEE KANE,
a/k/a PATRICIA LEE BROMAN,
a/k/a PATRICIA McDONOUGH,
3/22/1941,
Defendant and Respondent.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Dorothy McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
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Hon. Joseph P. Mazurek, Montana Attorney General, Mark W. Mattioli, Assistant
Montana Attorney General, Helena, Montana; Mike McGrath, Lewis and Clark County
Attorney, Helena, Montana
For Respondent:
Ken Gray, Greg Jackson, Jackson & Rice, Helena, Montana
Submitted on Briefs: August 12, 1999
Decided: December 29, 1999
Filed:
__________________________________________
Clerk
Justice William E. Hunt, Sr. delivered the Opinion of the Court.
¶ In April, 1998, the State of Montana (the State) charged Patricia Lee Kane (Kane) by
information, with Theft (Common Scheme), a felony, in violation of § 45-6-301(1)(c) and
(8), MCA, for purposely or knowingly obtaining or exerting unauthorized control over
funds and other items belonging to Bryan Hilger (Hilger) and used, concealed, or
abandoned the funds/items knowing such activity probably would deprive the owner of it.
Kane filed a motion to dismiss claiming that the funds referred to were checks drawn on a
joint account making theft impossible as a matter of law. The State amended the
Information to allege that Kane obtained control over Hilger’s funds by deception. The
District Court granted Kane’s motion to dismiss, and the State filed a notice of appeal,
which it withdrew when it filed a motion requesting the District Court to reconsider the
dismissal. In October, 1998, the District Court denied the State’s motion to reconsider.
The State appeals from that Order. We affirm.
¶ The issue presented for review is whether the District Court erred in concluding that as a
joint tenant on a checking account with Hilger, Kane could not, as a matter of law, be
prosecuted for theft of funds taken from that account.
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¶ A district court’s denial of a motion to dismiss criminal charges is a matter of law which
we review de novo, determining only whether the court correctly interpreted the law. State
ex rel. Booth v. Montana Twenty-First Judicial District, 1998 MT 344, ¶ 10, 292 Mont.
371, ¶ 10, 972 P.2d 325, ¶ 10.
¶ The record in this matter is limited as a result of this appeal originating from a motion to
dismiss. However, the essential facts presented by the parties on appeal are not in dispute.
Hilger, at the time of the State’s appeal, was in his mid-eighties and in poor health. Kane
was a long-time friend of Hilger’s whom he had allowed to manage his affairs. In January,
1992, Hilger gave Kane a general power of attorney so that she could assist him with his
finances. In July, 1994, Hilger and Kane established a joint checking account. The bank
signature card stated "[t]his account/certificate of deposit is jointly owned by the parties
named hereon. Upon the death of any of them, ownership passes to the survivor(s)." From
1995 through 1997, Kane wrote checks from the account to herself, which she claims were
to pay bills and to reimburse herself for cash purchases she had made on Hilger’s behalf.
The State indicates that the checks were written out of sequence from three different books
of checks and those at issue were not recorded in Hilger’s check book register. Overall,
Kane transferred around $26,000 from the joint account with Hilger to her personal
account.
¶ The State alleges that the funds were for her personal use, thereby depriving Hilger of
the use of that money. Their contention is that the power of attorney gave Kane authority
to make financial decisions for Hilger’s benefit, but not to personally benefit at Hilger’s
expense. As Hilger’s agent, the State claims, Kane owed him the utmost duties of loyalty
and fidelity and was not entitled to transfer money from the joint account into her personal
account, to which Hilger did not have access. The State asks this Court to conclude that
Kane’s use of Hilger’s funds, in violation of her position of trust, violates the criminal
theft statute, § 45-6-301(2)(c), MCA.
¶ Section 45-6-301, MCA, provides the following;
(1) a person commits the offense of theft when he purposely or knowingly
obtains or exerts unauthorized control over the property of the owner and: (a)
has the purpose of depriving the owner of the property; (b) purposely or
knowingly uses, conceals, or abandons the property in a manner that deprives
the owner of the property; or (c) uses, conceals, or abandons the property
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knowing that the concealment, or abandonment probably will deprive the
owner of the property.
Section 45-6-301, MCA. Section 45-6-303(1), MCA, states "it is no defense to a charge of
theft of property that the offender has an interest therein when the owner also has an
interest to which the offender is not entitled." Section 45-6-303(1), MCA (emphasis
added). The State argues that the District Court erroneously relied upon our decision in
State v. Haack (1986), 220 Mont. 141, 713 P.2d 1001, to conclude that there was no legal
basis upon which to charge Kane with Theft.
¶ In Haack, a contractor was alleged to have taken funds from a joint checking account
with homeowners containing the funds for construction of a home. He was charged with
theft for writing checks on the joint account and moved to dismiss the charges. The district
court found that as a matter of law, he could not be convicted of theft because he was a
joint tenant in the account. In affirming the district court’s decision, we stated "[a] joint
tenancy bank account is a special relationship between co-owners . . . that may create an
equal unrestricted and absolute interest in such co-owners with neither co-owner having an
interest to which the other is not entitled." Haack, 220 Mont. at 143, 713 P.2d at 1002. For
guidance, we turned to § 32-1-442, MCA, noting "[w]hen a deposit has been made . . . in
the names of two or more persons, payable to either . . . such deposit, or any part
thereof . . . may be paid to any of said persons. . . ." Haack, 220 Mont. at 144, 713 P.2d at
1002. We concluded that the special relationship between joint tenants in a bank account
precludes application of the theft laws, and means that "co-owners in a joint tenancy bank
account cannot have any ‘unauthorized control’ or ‘interest to which the offender is not
entitled’ " as required by § 45-6-301, and 303, MCA. Haack, 220 Mont. at 145, 713 P.2d
at 1003.
¶ The State does not argue that our decision in Haack was incorrect, but rather that it is
inapplicable to Kane. They claim that Kane’s access to and use of the joint account is a
function of her status as Hilger’s agent and that Kane was not authorized to use Hilger’s
funds for her personal use or to permanently deprive him of his property. Therefore, they
insist that Kane’s status as a joint tenant is no defense to the charge of theft because she
was not entitled to the money. See § 45-6-303(1), MCA. The State claims instead that our
decision in State v. Curtis (1990), 241 Mont. 288, 787 P.2d 306, is controlling in this
matter.
¶ In Curtis, Bullock, an elderly man living alone in Hamilton, Montana, hired Curtis, who
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was a licensed practical nurse, to help with his daily affairs. Two months later, he had his
attorney draw up a will appointing her as his personal representative, and, among other
dispositions, leaving her his home. Bullock provided Curtis with a power of attorney
giving her access to his safety deposit box and bank accounts. Over the next year,
Bullock’s check writing increased from five to seven checks per month to twenty to thirty
checks per month. In that year, Curtis received 161 checks totaling $34,540, with her sons
receiving several thousand more. Bullock and Curtis then took a $20,000 certificate of
deposit held jointly by Bullock and his brother, cashed it, and purchased a new certificate
held jointly by Bullock and Curtis. One week later, the certificate was cashed, and the
proceeds were deposited in Curtis's and her son’s checking accounts, and taken in cash.
See generally, Curtis, 241 Mont. at 292-93, 787 P.2d 309.
¶ Contrary to the State’s argument, Curtis is distinguishable from the present case. In
Curtis, Bullock had given Curtis joint ownership of the certificate of deposit, and a power
of attorney. The issue was whether Curtis deceived or threatened him into doing so. The
problem with the State’s contention in the present case is that like Bullock, when Hilger
entered into a joint checking account with Kane, he expressly authorized her to sign on
this account. Unlike the prosecution in Curtis, in the present case the State does not claim
that Hilger did so under duress or deception. Instead, they argue that the alleged deception
occurred during Kane’s management and expenditure of the funds in the account, after she
was listed as a joint tenant on the account with Hilger.
¶ Kane insists it is this timing of the alleged deception which must decide the present case.
If Hilger willingly, absent threat or deception, entered into the joint account agreement,
then co-ownership with Kane entitled her to withdraw funds from the account. As a result
the State cannot, as a matter of law, make out the elements of theft under § 45-6-301,
MCA.
¶ The State counters that § 72-6-211(2), MCA, governs the joint checking account at issue
and permits prosecution for theft in situations like this one. Section 72-6-211(2), MCA,
provides: "[d]uring the lifetime of all parties, an account belongs to the parties in
proportion to the net contribution of each to the sums on deposit unless there is clear and
convincing evidence of a different intent." Section 72-6-211(2), MCA.
¶ The District Court disagreed with this contention, stating "§ 72-6-206 limits the
application of the above statute ‘only to the controversies between [co-tenants] and their
creditors and other successors and [does] not apply to the right of those persons to
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payment as determined by the terms of the account’ " (alteration in original). As the
District Court pointed out:
the official comments to § 72-6-211, MCA, include the following language:
"[t]his section does not undertake to describe the situation between parties if
one party withdraws more than that party is then entitled to as against the
other party. Sections [72-6-221] and [72-6-226] protect a financial institution
in that circumstance without reference to whether a withdrawing party may be
entitled to less than the party withdraws as against another party. Rights
between parties in this situation are governed by general law other than this
part."
¶ We agree with the District Court that § 72-6-211, MCA, does not apply to controversies
between co-tenants as urged by the State. Although, the wisdom of the arrangement
between Kane and Hilger was certainly questionable, and Kane’s actions may have
breached the duty of loyalty as an agent, because the State does not allege that Kane
deceived or threatened Hilger into establishing the joint tenant arrangement her actions do
not make out the elements of the criminal theft statute. We hold that the District Court did
not err in concluding that as a matter of law, Kane could not be prosecuted for theft of
funds from the joint account with Hilger.
¶ Affirmed.
/S/ WILLIAM E. HUNT, SR.
We Concur:
/S/ KARLA M. GRAY
/S/ W. WILLIAM LEAPHART
/S/ JIM REGNIER
/S/ TERRY N. TRIEWEILER
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