State v. McWilliams

February 20 2008

05-168

IN THE SUPREME COURT OF THE STATE OF MONTANA
2008 MT 59

STATE OF MONTANA,

Plaintiff and Appellee,

v.

CHRIS J. McWILLIAMS,

Defendant and Appellant.

APPEAL FROM: District Court of the Sixth Judicial District,
In and For the County of Park, Cause No. DC 2002-012
Honorable David Cybulski, Presiding Judge

COUNSEL OF RECORD:

For Appellant:

Stephen R. McCue, Debt Relief Law, Helena, Montana

For Appellee:

Hon. Mike McGrath, Montana Attorney General, Mark W. Mattioli,
Assistant Attorney General, Helena, Montana

Brett Linneweber, Park County Attorney, Livingston, Montana

Submitted on Briefs: January 11, 2006

Decided: February 20, 2008

Filed:

__________________________________________
Clerk
Justice James C. Nelson delivered the Opinion of the Court.

¶1 Chris McWilliams appeals his conviction in the District Court for the Sixth

Judicial District, Park County, of issuing bad checks, a felony. We affirm.

¶2 McWilliams raises four issues on appeal which we have restated as follows:

¶3 1. Whether the District Court erred in denying McWilliams’ pretrial motion to

dismiss the Information charging him with issuing bad checks.

¶4 2. Whether the District Court erred in denying McWilliams’ motion for a directed

verdict at the close of the State’s case-in-chief.

¶5 3. Whether the District Court erred in denying McWilliams’ motion for judgment

notwithstanding the verdict or, in the alternative, for a new trial.

¶6 4. Whether the District Court erred in sentencing McWilliams to pay restitution of

sums that had been discharged by his bankruptcy proceeding.

Factual and Procedural Background

¶7 A jury convicted McWilliams of issuing bad checks to Larry Johns, d/b/a Big Sky

Consignment, and Robert Curry, d/b/a Curry and Sons Electric. The facts surrounding

the issuing of those checks are as follows.

¶8 In April 2001, McWilliams, d/b/a C & L Construction, agreed to construct a home

for Dennis and Gwendolyn Noyes (the Noyeses) for the amount of $146,529.00. The

construction was to be financed by a loan from Empire Bank in Livingston. The loan

was initially approved in the amount of $169,000.00.

¶9 McWilliams had a business arrangement with Johns wherein McWilliams

obtained a series of short term loans from Johns for $1,000.00 each. At the time of each

2
loan, McWilliams gave Johns a check for $1,250.00. The checks were postdated to the

date that repayment of the loan was due (typically 20 to 30 days after each loan was

made). The additional $250.00 in each check was considered interest on the loan. In

addition, with each loan, McWilliams and Johns executed a handwritten agreement

wherein McWilliams agreed to convey to Johns the security interest in a flatbed trailer if

the loan was not repaid in full. Johns made the last of these loans to McWilliams on

December 26, 2001. In payment of that loan, McWilliams wrote Johns a check for

$1,250.00 and postdated it for January 16, 2002.

¶10 McWilliams hired Curry as a subcontractor to do the electrical wiring on the

Noyeses’ home. Curry completed the rough-in wiring on the home in September or

October 2001, and the finish electrical work in November or December 2001. On

January 7, 2002, McWilliams went to Curry’s home and wrote him a check in the amount

of $4,920.64 for the electrical work on the Noyeses’ home. Curry testified at trial that

McWilliams told him that there currently were insufficient funds in the account to cover

the check. McWilliams testified at trial that he wrote the check to Curry because he

expected to receive a substantial final payment for the construction of the Noyeses’ home

within a few days.

¶11 McWilliams’s wife, Angela, testified that on January 8, 2002, she heard a rumor

that the Noyeses were not going to make the final payment for the construction of the

home. Angela further testified that after several unsuccessful attempts to contact Dennis

Noyes, they decided that Angela should seek the advice of someone from their bank.

Angela visited the bank on January 9, 2002. She testified that she was advised that a stop

3
payment was better than an insufficient funds check, hence she stopped payment on both

the check to Johns for $1,250.00 and the check to Curry for $4,920.64.

¶12 McWilliams and his wife had filed for Chapter 13 bankruptcy in May 1997. On

January 24, 2002, they converted their Chapter 13 bankruptcy action to a Chapter 7. That

same day, McWilliams was arrested on charges based upon allegations of another unpaid

subcontractor who subsequently was paid. McWilliams was released the following day.

One of the conditions of his release was that he close all of his checking accounts.

¶13 On January 31, 2002, Dennis Noyes contacted the Park County Sheriff’s

Department to file a complaint against McWilliams for theft in relation to various issues

that had arisen in the construction of the home. At about the same time, Johns and Curry

each brought complaints against McWilliams in relation to the check transactions

described above.

¶14 In February 2002, the State brought criminal charges against McWilliams for theft

and issuing bad checks. McWilliams was arrested on February 21, 2002, on these

charges and released the same day. On April 29, 2002, McWilliams filed a motion to

dismiss the Information charging him with issuing bad checks. The District Court denied

the motion in writing but without written comment.

¶15 McWilliams received his Chapter 7 discharge in bankruptcy on May 14, 2002.

Thereafter, McWilliams and his wife moved to Oregon. McWilliams alleged that Park

County Attorney Tara DePuy had full knowledge of his move and that the District Court

had given permission for the move. He further alleged that he advised the court of his

address in Oregon and how to contact him.

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¶16 On July 13, 2004, McWilliams was arrested in Deschutes County, Oregon, on a

“Fugitive Information” issued by the Deschutes County District Attorney’s Office based

upon a teletype from DePuy. Trial was held in the Park County District Court from

November 30, 2004 to December 2, 2004. At the close of the State’s case-in-chief,

McWilliams’ counsel moved to dismiss the charges against McWilliams contending that

the State had failed to meet its burden of proof. The District Court corrected counsel

calling it a motion for a directed verdict and counsel agreed. The District Court denied

the motion.

¶17 The jury acquitted McWilliams of the theft charge and found him guilty of the

charge of Issuing Bad Checks, common scheme, a felony, in violation of § 45-6-316,

MCA. Thereafter, McWilliams moved the court for judgment notwithstanding the

verdict or, in the alternative, for a new trial. In his motion, McWilliams requested that,

pursuant to § 46-16-702(3)(c), MCA, the court modify the jury’s verdict by finding him

not guilty on the charge of issuing bad checks. In the alternative, McWilliams requested

that, pursuant to § 46-16-702(3)(b), MCA, the court grant him a new trial. The court

denied McWilliams’ alternative motions. The court subsequently deferred imposition of

McWilliams’ sentence for four years subject to various terms and conditions including

that he pay restitution, that he not possess a checking account unless approved by his

probation officer, and that he perform 100 hours of community service each year.

¶18 McWilliams appealed the various orders and judgment of the District Court, and

requested a stay of the sentence pending appeal, which the court granted.

Issue 1.

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¶19 Whether the District Court erred in denying McWilliams’ pretrial motion to
dismiss the Information charging him with issuing bad checks.

¶20 Shortly after the State filed the Information alleging that McWilliams committed

the offense of issuing bad checks, McWilliams moved to dismiss the charge on the

grounds that the series of transactions with Johns was an illegal series of deferred deposit

loans within the meaning of Montana’s Deferred Deposit Loan Act (the Act), Title 31,

chapter 1, part 7, Montana Code Annotated. In addition, McWilliams argued that the

check to Curry was also a deferred deposit loan as defined in § 31-1-703(5)(a), MCA.

McWilliams contended that he could not be criminally prosecuted for issuing those

checks based on § 31-1-723(2), MCA, which provides that a licensee making deferred

deposit loans may not threaten to use a criminal process to collect on the loan made to a

consumer in this State. The District Court denied his motion. McWilliams contends that

the District Court erred and he renews these arguments on appeal.

¶21 The State argues that whether the loan to McWilliams from Johns violated the Act

is a civil matter between McWilliams and Johns, and the Act does not foreclose the State

from prosecuting a bad check case. In addition, the State argues that McWilliams’

suggestion that the check to Curry constituted a deferred deposit loan is completely

frivolous as the Act applies to loan arrangements and Curry was not a lender.

¶22 The denial of a motion to dismiss in a criminal case is a question of law and we

review a district court’s conclusions of law to determine whether those conclusions are

correct. State v. Tichenor, 2002 MT 311, ¶ 18, 313 Mont. 95, ¶ 18, 60 P.3d 454, ¶ 18

6
(citing State v. Hocevar, 2000 MT 157, ¶ 115, 300 Mont. 167, ¶ 115, 7 P.3d 329, ¶ 115;

State v. Weaver, 1998 MT 167, ¶ 43, 290 Mont. 58, ¶ 43, 964 P.2d 713, ¶ 43).

¶23 The statute McWilliams relies on to support his contention that he cannot be

criminally prosecuted for issuing the checks to Johns and Curry provides in pertinent

part:

Prohibited acts. A licensee making deferred deposit loans may not
commit, or have committed on behalf of the licensee, any of the following
prohibited acts:
....
(2) threatening to use or using a criminal process in this or any other
state to collect on the loan made to a consumer in this state or any civil
process to collect the payment of deferred deposit loans not generally
available to creditors to collect on loans in default . . . . [Emphasis added.]

Section 31-1-723, MCA. McWilliams fails to recognize that neither Johns nor Curry are

licensees under this Act.

¶24 In addition, McWilliams relies on § 30-3-104, MCA, the statute defining

negotiable instruments, to conclude that in order for an instrument to meet the definition

of a “check” under Montana law, it must be payable on demand. McWilliams argues that

the checks to Johns and Curry were not payable on demand and were, instead, in the

nature of a future promise, thus they were not checks within the meaning of § 30-3-104,

MCA. Contrary to McWilliams’ assertions, neither check contained any type of

restrictive endorsement and, although both Johns and Curry agreed to hold the checks for

a short period of time, both checks were payable on demand.

¶25 McWilliams also argues that under § 45-2-211, MCA, consent is a defense and

both Johns and Curry consented to hold the checks. This argument is also without merit.

7
While Johns and Curry may have consented to take the checks and refrain from

presenting them immediately, they did not consent to nonpayment of the checks or to

having McWilliams stop payment on the checks altogether.

¶26 McWilliams cites State v. Patterson, 75 Mont. 315, 243 P. 355 (1926), in support

of his contention that there has to be evidence of an intent to defraud at the time the check

was given. As the State points out in its brief on appeal, the statute in effect at the time

Patterson was decided provided:

Any person who, with the intent to defraud, shall make or draw or utter or
deliver any check, draft, or order for the payment of money . . . knowing at
the time that the maker or drawer has not sufficient funds in or credit with
such bank or depository for the payment of such check, draft, or order, . . .
shall be guilty . . . .

Section 11369, RCM (1921) (emphasis added). In Patterson, the defendant obtained title

to several horses after providing a postdated check. The attorney general conceded that

the conviction could not be sustained because the “gist of the action is the intent to

defraud,” and there was a lack of evidence to show such intent. Patterson, 75 Mont. at

317, 243 P. at 355.

¶27 Montana’s current statute does not contain an “intent to defraud” element. Rather,

§ 45-6-316, MCA, provides in relevant part:

Issuing a bad check. (1) A person commits the offense of issuing a
bad check when the person issues or delivers a check or other order upon a
real or fictitious depository for the payment of money knowing that it will
not be paid by the depository.
(2) If the offender has an account with the depository, failure to
make good the check or other order within 5 days after written notice of
nonpayment has been received by the issuer is prima facie evidence that the
offender knew that it would not be paid by the depository.

8
Although there was evidence that McWilliams intended to deceive or defraud Johns by

obtaining a duplicate title to the trailer to defeat Johns’ security interest in the trailer, that

evidence was not required to sustain a conviction for issuing bad checks.

¶28 Similarly, with respect to the check to Curry, the issue was not whether

McWilliams defrauded Curry into providing electrical work, rather, the State was obliged

to prove only that the check was issued “knowing that it will not be paid by the

depository.” Section 45-6-316(1), MCA.

¶29 As to the District Court’s denial of McWilliams’ motion to dismiss the

Information filed against him, under § 7-4-2716(1), MCA, county attorneys in Montana

are charged with a duty to conduct, on the State’s behalf, all prosecutions for public

offenses. In discharging that duty, a county attorney has broad discretion to determine

whether to prosecute an offender and what offense to charge. Tichenor, ¶ 26 (citing State

ex rel. Fletcher v. Dist. Court, 260 Mont. 410, 414-15, 859 P.2d 992, 995 (1993)).

¶30 An information

is a written accusation of criminal conduct prepared by a prosecutor in the
name of the State. The information must reasonably apprise the accused of
the charges against him, so that he may have the opportunity to prepare and
present his defense. We read the information, and the affidavit in support
thereof, as a whole to determine the sufficiency of the charging documents.
We apply the “common understanding” rule to determine if the charging
language of a document allows a person to understand the charges against
him. Under this standard, the test of the sufficiency of a charging
document is whether the defendant is apprised of the charges and whether
he will be surprised.

State v. Wilson, 2007 MT 327, ¶ 25, 340 Mont. 191, ¶ 25, 172 P.3d 1264, ¶ 25 (internal

citations and quotation marks omitted).

9
¶31 This Court has held that “[l]eave to file an information shall be granted when

probable cause exists that an offense has been committed by an identified suspect” and

that “[d]istrict court judges should use their common sense when reviewing affidavits of

probable cause.” State v. David, 266 Mont. 365, 367-68, 880 P.2d 1308, 1310 (1994)

(citing § 46-11-201, MCA; State v. Thompson, 243 Mont. 28, 30, 792 P.2d 1103, 1105

(1990)). Thus, “[t]he determination of whether a motion to file an information is

supported by probable cause is left to the sound discretion of the trial court.” State v.

Dunfee, 2005 MT 147, ¶ 31, 327 Mont. 335, ¶ 31, 114 P.3d 217, ¶ 31.

¶32 In the case sub judice, the District Court had already granted the State’s motion for

leave to file an Information against McWilliams, thus establishing that the State had

probable cause to bring the charges. The State had no further burden of proof with regard

to these charges until trial. Tichenor, ¶ 22 (citing State v. Nichols, 1998 MT 271, ¶ 4, 291

Mont. 367, ¶ 4, 970 P.2d 79, ¶ 4 (“holding that the defendant’s challenge to the evidence

through a pretrial motion to dismiss ‘was premature because such a challenge can only be

made after the State has had an opportunity to present its evidence to the trier of fact’ ”)).

¶33 Accordingly, we hold that the District Court did not err in denying McWilliams’

pretrial motion to dismiss the Information charging him with issuing bad checks.

Issue 2.

¶34 Whether the District Court erred in denying McWilliams’ motion for a directed
verdict at the close of the State’s case-in-chief.

10
¶35 McWilliams’ counsel moved for dismissal of the charges against McWilliams at

the close of the State’s case-in-chief. The District Court corrected counsel calling it a

motion for a directed verdict and then denied the motion without comment.

¶36 Many Montana cases refer to a motion to dismiss for insufficient evidence as a

“motion for a directed verdict” or a “motion for a directed verdict of acquittal.” However

denominated, these motions have a common denominator—i.e., that the prosecution has

failed as a matter of law to prove the charges beyond a reasonable doubt; that the

prosecution’s evidence is insufficient as a matter of law. That said, there is no statutory

authority for referring to a motion to dismiss for insufficient evidence as a “motion for a

directed verdict” or a “motion for a directed verdict of acquittal.” Section 46-16-403,

MCA, provides:

Evidence insufficient to go to jury. When, at the close of the
prosecution’s evidence or at the close of all the evidence, the evidence is
insufficient to support a finding or verdict of guilty, the court may, on its
own motion or on the motion of the defendant, dismiss the action and
discharge the defendant. [Emphasis added.]

Accordingly, we will deem McWilliams’ motion as a motion to dismiss for insufficient

evidence made pursuant to § 46-16-403, MCA, and we will apply the same standard of

review that we use in evaluating what have previously been denominated as “motions for

a directed verdict of acquittal.”1

¶37 The proper standard of review for the denial of a motion to dismiss for insufficient

evidence (heretofore a “motion for a directed verdict of acquittal”) is de novo. State v.

1
We urge the Bench and Bar to refer to such motions in future cases by their correct name—i.e.,
“motions to dismiss for insufficient evidence.”

11
Skinner, 2007 MT 175, ¶ 14, 338 Mont. 197, ¶ 14, 163 P.3d 399, ¶ 14 (citing State v.

Swann, 2007 MT 126, ¶ 19, 337 Mont. 326, ¶ 19, 160 P.3d 511, ¶ 19). Furthermore,

determinations of the credibility and weight of testimony are within the exclusive

province of the jury, and conflicting testimony does not render the evidence insufficient

to support a guilty verdict. State v. Borsberry, 2006 MT 126, ¶ 20, 332 Mont. 271, ¶ 20,

136 P.3d 993, ¶ 20 (citing State v. Shields, 2005 MT 249, ¶ 19, 328 Mont. 509, ¶ 19, 122

P.3d 421, ¶ 19).

¶38 As noted above, a person commits the offense of issuing a bad check if he “issues

or delivers a check or other order upon a real . . . depository for the payment of money

knowing that it will not be paid by the depository.” Section 45-6-316, MCA. The State’s

evidence showed that McWilliams issued checks to Johns and Curry upon a real

depository. Both Johns and Curry testified in the State’s case-in-chief that they accepted

checks from McWilliams and that those checks were not honored by McWilliams’ bank

because, in one case, there were insufficient funds in McWilliams’ account, and, in the

other case, because McWilliams had stopped payment on the check. Indeed, Curry

testified that McWilliams told him that there were not sufficient funds in McWilliams’

account to cover the check at the time it was issued and Johns testified that payment was

stopped on his check. Viewing this evidence in a light most favorable to the prosecution

as we are constrained to do, there was sufficient evidence upon which a rational trier of

fact could find the essential elements of the crime of issuing bad checks beyond a

reasonable doubt. Skinner, ¶ 14; Swann, ¶ 16.

12
¶39 Accordingly, we hold that the District Court did not err in denying McWilliams’

motion to dismiss for insufficient evidence (“motion for a directed verdict of acquittal”)

at the close of the State’s case-in-chief.

Issue 3.

¶40 Whether the District Court erred in denying McWilliams’ motion for judgment
notwithstanding the verdict or, in the alternative, for a new trial.

¶41 This Court has stated on numerous occasions that Montana’s statutes governing

criminal procedure do not provide for judgment notwithstanding the verdict. State v.

Bell, 277 Mont. 482, 485, 923 P.2d 524, 526 (1996), cert. denied, 519 U.S. 1098, 117

S. Ct. 781 (1997) (citing State v. Mummey, 264 Mont. 272, 276, 871 P.2d 868, 870

(1994)). Instead, § 46-16-702, MCA, permits a defendant to move for a new trial

following a verdict of guilty and permits the district court to modify or change the verdict

by finding the defendant guilty of a lesser included offense or finding the defendant not

guilty. Bell, 277 Mont. at 485, 923 P.2d at 526. We held in both Bell and Mummey, that

the defendants’ motions for judgment notwithstanding the verdict would be deemed

motions for a new trial made under § 46-16-702, MCA. Bell, 277 Mont. at 485, 923 P.2d

at 526; Mummey, 264 Mont. at 276, 871 P.2d at 870. Similarly, we deem McWilliams’

motion for judgment notwithstanding the verdict as a motion for a new trial.

¶42 A decision to grant or deny a motion for a new trial lies within the sound

discretion of the district court and we will not disturb that decision on appeal unless the

13
appellant demonstrates that the district court abused its discretion.2 State v. Grace, 2001

MT 22, ¶ 23, 304 Mont. 144, ¶ 23, 18 P.3d 1008, ¶ 23 (citing State v. Clay, 1998 MT

244, ¶ 13, 291 Mont. 147, ¶ 13, 967 P.2d 370, ¶ 13)).

¶43 McWilliams argues that the prosecutor, in his closing arguments, made several

assertions concerning Montana law that were inaccurate, and the jury relied upon those

assertions in convicting McWilliams. These “inaccuracies” as delineated by McWilliams

include: (1) commenting that “if it walks like a duck and quacks like a duck, it means it’s

usually a duck” (referring to whether the checks written to Johns and Curry met the

definition of a check); (2) arguing that McWilliams had a duty to perform an act

(reissuing the checks) that would have constituted the very crime with which he was

charged; and (3) arguing that the act constituting the offense can be separated in time

from the requisite state of mind for the offense.

¶44 McWilliams’ counsel did not object to these statements at the time they were

made, but instead, filed a motion for a new trial claiming that the jury misapplied the

facts to the law “because the State’s arguments told the jury that the law was something

other than it is.” The State argues on appeal that because McWilliams’ trial counsel

failed to contemporaneously object during the prosecution’s closing argument, the

objection was waived and we should not consider the issue on appeal.
2
We review McWilliams’ motion for a new trial in this case for abuse of discretion because he
bases his motion on prosecutorial misconduct. We observe, however, that § 46-16-702, MCA,
also authorizes the trial court to find the defendant guilty of a lesser included offense or find him
not guilty based on “the weight of the evidence.” Section 46-16-702(3)(c), MCA. Where a
motion for a new trial under § 46-16-702, MCA, is based on sufficiency of the evidence, we
review the grant or denial of that motion de novo. State v. Ariegwe, 2007 MT 204, ¶ 164, 338
Mont. 442, ¶ 164, 167 P.3d 815 ¶ 164 (citing Giambra v. Kelsey, 2007 MT 158, ¶¶ 24-27, 338
Mont. 19, ¶¶ 24-27, 162 P.3d 134, ¶¶ 24-27).

14
¶45 To be timely, an objection must be made as soon as the grounds for the objection

become apparent. Grace, ¶ 35 (wherein this Court affirmed the district court’s denial of a

motion for a new trial) (citing State v. Whitlow, 285 Mont. 430, 442, 949 P.2d 239, 247

(1997)); see also State v. Misner, 2007 MT 235, ¶ 24, 339 Mont. 176, ¶ 24, 168 P.3d 679,

¶ 24 (Because the defendant made no objection to the prosecutor’s remarks when they

were made, but instead objected for the first time in a motion for a new trial, we

concluded that the defendant waived his claim of prosecutorial misconduct, and we held

that the district court did not abuse its discretion in denying the motion for a new trial.);

State v. Paoni, 2006 MT 26, ¶ 16, 331 Mont. 86, ¶ 16, 128 P.3d 1040, ¶ 16 (“A defendant

waives an objection and may not seek appellate review when a defendant fails to make a

contemporaneous objection to an alleged error in the trial court.”).

¶46 McWilliams argues on appeal that under § 46-16-702, MCA, he had 30 days

following the trial “to bring forward arguments that there were either procedural

improprieties at trial, or improper statements on the part of the prosecution, or any other

irregularities . . . .” However, the problem here is not with the timeliness of McWilliams’

motion for a new trial, but with the timeliness of his objections to the prosecutor’s

statements.

¶47 Because McWilliams’ trial counsel failed to contemporaneously object during the

prosecution’s closing argument, the objection was waived and we will not consider this

issue any further.

Issue 4.

15
¶48 Whether the District Court erred in sentencing McWilliams to pay restitution of
sums that had been discharged by his bankruptcy proceeding.

¶49 The District Court ordered McWilliams to pay restitution to Johns and Curry in

the amount of the bad checks that McWilliams had written to them. McWilliams argues

on appeal that he cannot be ordered to pay restitution to Johns and Curry because those

debts were discharged in his bankruptcy proceeding. He maintains that although the

automatic stay provisions of the Bankruptcy Code do not apply to a criminal action or

proceeding against a debtor, “[a]n action calculated to collect on a dischargeable debt is

distinguishable from a criminal prosecution.” He further maintains that since relief from

the automatic stay was not requested by any of his creditors following the conversion of

his bankruptcy, the criminal prosecution should not be used as a vehicle to collect sums

that were discharged in that proceeding. McWilliams contends that the criminal

prosecution was a subterfuge for the collection of the discharged debts.

¶50 McWilliams had been operating his business as a sole proprietorship under a

confirmed plan of reorganization pursuant to 11 U.S.C. § 1325, since 1997. He

converted this Chapter 13 bankruptcy to a Chapter 7 on January 24, 2002. McWilliams

contends that at the time he converted to Chapter 7, the debts he and his wife incurred to

that point, including the amounts owed to Johns and Curry, were added to the debtors’

creditor list and those creditors were duly notified of the applicability of the stay.

McWilliams further contends that Johns and Curry failed to petition for relief from the

automatic stay prior to bringing their complaints to the Park County Attorney and the

16
Park County Attorney brought criminal charges against McWilliams in an attempt to

collect on debts that had already been discharged in the bankruptcy proceedings.

¶51 Under 11 U.S.C. § 362(a), the commencement of a proceeding under the

Bankruptcy Code stays all judicial proceedings against a debtor which could have been

brought before the commencement of the case, except in those cases specifically

enumerated in 11 U.S.C. § 362(b). In re Hartung, 258 B.R. 210, 213 (Bankr. D. Mont.

2000) (citing In re Tucson Estates, Inc., 912 F.2d 1162, 1166 (9th Cir. 1990)). The

automatic stay “is designed to effect an immediate freeze of the status quo by precluding

and nullifying post-petition actions, judicial or nonjudicial, in nonbankruptcy fora against

the debtor . . . .” Hartung, 258 B.R. at 213 (quoting Hillis Motors, Inc. v. Hawaii Auto

Dealers’ Ass’n, 997 F.2d 581, 585 (9th Cir. 1993)).

¶52 Moreover, the automatic stay is self-executing and is effective upon the filing of

the bankruptcy petition. In re Gruntz, 202 F.3d 1074, 1081 (9th Cir. 2000) (citing 11

U.S.C. § 362(a); In re Minoco Group of Companies, LTD, 799 F.2d 517, 520 (9th Cir.

1986)).

The automatic stay gives the bankruptcy court an opportunity to harmonize
the interests of both debtor and creditors while preserving the debtor’s
assets for repayment and reorganization of his or her obligations. By
halting all collection efforts the stay affords the debtor time to propose a
reorganization plan, or simply to be relieved of the financial pressures that
drove him into bankruptcy. The automatic stay also assures creditors that
the debtor’s other creditors are not racing to various courthouses to pursue
independent remedies to drain the debtor’s assets.

Gruntz, 202 F.3d at 1081 (internal citations and quotation marks omitted).

17
¶53 Nevertheless, in Gruntz, the Ninth Circuit Court of Appeals pointed out that

although the automatic stay is extremely broad, there are a number of statutory

exceptions. Gruntz, 202 F.3d at 1084. One such exception provides that the filing of a

petition under the Bankruptcy Code “does not operate as a stay . . . of the commencement

or continuation of a criminal action or proceeding against the debtor.” Gruntz, 202 F.3d

at 1085 (citing 11 U.S.C. § 362(b)(1)). Moreover, the Ninth Circuit held in Gruntz that

the automatic stay does not apply to criminal proceedings even if the debtor asserts that

the underlying purpose of the criminal proceedings is simple debt collection. Gruntz, 202

F.3d at 1087.

[A]ny criminal prosecution of the debtor is on behalf of all the citizens of
the state, not on behalf of the creditor. Once the state has made an
independent decision to file criminal charges, the prosecution belongs to
the government, not to the complaining witness. We cannot, and should
not, require a prosecutor to conduct a searching inquiry into the public
spirit of the victim of a crime before proceeding with what appears to be an
otherwise valid criminal prosecution. In our system, so long as the
prosecutor has probable cause to believe that the accused committed an
offense defined by statute, the decision whether or not to prosecute, and
what charge to file or bring before a grand jury, generally rests entirely in
his discretion.

Gruntz, 202 F.3d at 1086 (internal citations and quotation marks omitted).

¶54 In the case before us on appeal, the State points out, and we agree, that writing bad

checks is a criminal offense and the action brought by the County Attorney was a

criminal prosecution within the meaning of 11 U.S.C. § 362(b)(1), and is, as the Ninth

Circuit held in Gruntz, an exception to the automatic stay.

¶55 McWilliams argues that Gruntz is not applicable to this case because the reason

the Ninth Circuit took the action it did in Gruntz was because the criminal proceeding in

18
Gruntz dealt with nonpayment of child support, which is not a dischargeable debt in

bankruptcy. However, the Ninth Circuit did not limit its holding in Gruntz to only child

support proceedings. On the contrary, it specifically stated that the automatic stay does

not apply to criminal proceedings. Gruntz, 202 F.3d at 1087. Furthermore, the United

States Bankruptcy Court for the District of Montana, relying on the Ninth Circuit’s

holding in Gruntz, came to the same conclusion in another case involving the issuance of

a bad check. Hartung, 258 B.R. at 215.

¶56 McWilliams cites numerous cases in support of his theory that courts must look at

whether the intent of the criminal prosecution is to vindicate the public good or to collect

a debt. However, all of the cases McWilliams cites for this proposition predate the Ninth

Circuit’s determination in Gruntz that the automatic stay does not apply to criminal

proceedings even if the debtor asserts that the underlying purpose of the criminal

proceedings is simple debt collection. Gruntz, 202 F.3d at 1087.

¶57 McWilliams failed to mention in his brief on appeal that he had already applied to

the United States Bankruptcy Court for the District of Montana for a temporary

restraining order under F. R. Civ. P. 65 and a preliminary injunction under 11 U.S.C.

§ 105(a) to enjoin the State “from taking any steps in furtherance of criminal

prosecution” against him. McWilliams v. DePuy, et al., Case No. 97-21378-7 (Bankr.

D.Mont. 2004). The Bankruptcy Court dismissed the proceeding based on the holdings

in Gruntz and Hartung, and the exception from the automatic stay in 11 U.S.C.

§ 362(b)(1). In so doing, the Bankruptcy Court noted that “the only fair reading of the

Bankruptcy Code is that Congress did not intend the § 362(a) stay to enjoin all state

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criminal proceedings automatically. ‘The bankruptcy courts were not created as a haven

for criminals.’ ” McWilliams, p.4 (quoting Gruntz, 202 F.3d at 1087; Barnette v. Evans,

673 F.2d 1250, 1251 (11th Cir. 1982); Hartung, 258 B.R. at 215).

¶58 Accordingly, we hold that the District Court did not err in ordering McWilliams to

pay restitution to Johns and Curry.

¶59 Affirmed.

/S/ JAMES C. NELSON

We Concur:

/S/ JOHN WARNER
/S/ PATRICIA COTTER
/S/ JIM RICE

Justice W. William Leaphart, specially concurring.

¶60 I concur in the Opinion of the Court. I write separately to point out the

inconsistencies inherent in the provisions of § 46-16-702, MCA, discussed by the Court

in resolution of Issue 3. Section 46-16-702, MCA, allows a defendant to request a “new

trial” following a verdict or finding of guilty. The statute provides that, if justified by law

and the “weight of the evidence,” the court may: (a) deny the motion, (b) grant a new

trial, or (c) modify the verdict, find the defendant guilty of a lesser included offense or

find the defendant not guilty. Section 46-16-702(3)(a)-(c), MCA.

¶61 As to subsection b (granting a new trial), the statute creates a constitutional

anomaly. If a court, having weighed the evidence, concludes that there is insufficient

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evidence to justify a guilty verdict, the court cannot, as contemplated by the statute, grant

a new trial. To do so would contravene the double jeopardy clauses of the United States

and Montana Constitutions. U.S. Const. amend. V; Mont. Const. art. II, § 25. When

there is insufficient evidence to support a guilty verdict, the court must find the defendant

not guilty, at which point the defendant cannot be subjected to further jeopardy. See

Monge v. California, 524 U.S. 721, 727-28, 118 S. Ct. 2246, 2250 (1998); State v.

Barker, 260 Mont. 85, 91, 858 P.2d 360, 363 (1993).

¶62 Our code of criminal procedure is deficient in that it does not provide for a

judgment notwithstanding the verdict. Rather it requires a defendant who believes that

that there is insufficient evidence to support a guilty verdict to file a motion for a “new

trial” under § 46-16-702, MCA, when, in fact, the defendant does not want a new trial but

rather a judgment of acquittal. Although motions for judgment notwithstanding the

verdict are not contemplated by the code of criminal procedure, I completely understand

why counsel continue to file such motions. Why should defense counsel be put in the

untenable position of having no option but to file a motion for a “new trial” and then

having to argue to the court, “The double jeopardy clause precludes the court from again

placing my client in jeopardy by granting him/her a new trial”?

/S/ W. WILLIAM LEAPHART

Justice Jim Nelson joins the concurring opinion of Justice Leaphart.

/S/ JAMES C. NELSON

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