Case Title: State v. Stans Contracting, Inc.

Citation: 111 Haw. 17

Docket Number: 

State: hawaii

Court: Hawaii Supreme Court

Date: 2006-06-15T00:00:00Z

Document:
‘4+ FOR PUBLICATION #¥+

IN THE SUPREME COURT OF THE STATE OF HAWAT'T

 

00 ==

 

STATE OF HAWAI'I, Plaintiff-Appellant,

 

STAN’S CONTRACTING, INC., ROY SHIOT, G.W, MURPHY CONSTRUCTION

COMPANY, JOHN PATRICK’ HENDERSON and MARK L. HENDERSON,
Defendants-Appellees.

No. 25394

APPEAL FROM THE FIRST CIRCUIT COURT
(CR. NO. 02-1-0991)

JUNE 15, 2006

MOON, ¢.J., LEVINSON, NAKAYAMA, ACOBA, AND DUFFY, JJ.

‘OPINION OF THE COURT BY LEVINSON, J.

‘The plaintiff-appellant State of Hawai'i (hereinafter,
“the State” or “the prosecution”) appeals from the August 9, 2002
order of the circuit court of the first circuit, the Honorable
Reynaldo D. Graulty presiding, dismissing a two-count theft
indictment as time-barred and fatally defective. Count I was
filed against the defendants-appellees Stan’s Contracting, Inc.
and Roy Shioi (hereinafter, collectively, “Stan’s Contracting”,
charging them with theft in the second degree, in violation of

Hawai's Revised Statutes (HRS) § 708-831(1)(b) (1993). Count IT

 

fags § 708-€21(1) provides in relevant part that “{a) person

commits the offense cf theft inthe second degree if the person commits theft:

~(b) Of property, the yelue ef which exceeds 6300." Eftective July

20; i958 and uiy 2, 200%, ‘the Legislature anendea HRS § 708-631 in respecte

inneterial to the present matter. See 2008 Haw. Sess. L. Act 162, 68 3 and 7
1580; 1998 Hox, Seas: La Act 228, $§ land @ at 775-76.

 

 

 

 

   
‘#¢* FOR PUBLICATION *#*

of the indictment was filed against the defendants-appellees G.W.
Murphy Construction Company, John Henderson, and Mark Henderson
(hereinafter, collectively, “Murphy Construction”], charging then
with theft in the first degree, in violation of HRS .
§ 708-830.5(1) (a) (1993).? On appeal, the prosecution argues
that the circuit court erred in concluding: (1) that theft by
deception does not include “an element of . . . fraud” and is
thus not subject to the fraud exception tolling the statue of

and (2) that

 

Limitations under HRS § 701-108(3) (a) (Supp. 1997)
the prosecution is required to prove to the grand jury, and to

allege in the indictment, that the prosecution began within the

1 as § 708-630.5(1) provides in relevant part that [a] person
commits the offense of theft in the firet degree Lf the person commits
there: is) or property «ss , the Yalue of which exceeds $20,000."

 

» as § 701-108 provided tn relevant part:

(2) Except as otherwise provided in this section,
prosecutions for other offenses are subject co the following
Periods of iimitation
ia). ‘A prosecution for manslaughter where the death was not
Caused by the operation of a acter vehicle must be
Gonnenced within ten years after it is committed;

 

 

 

tb) Rprosecution for a class A felony must be commenced within
fix years after it is committed:
lc) Abprésecution for any other felony must be commenced within

three years after st is comitted(.|

ia] is’ene period preserived in subsection (2) has expired,
a prosecution fs be commenced for!
(a), any offense an element of which is... fraud
Mithin theee years after discovery of the offense by
Gn aggrieved party or by 8 person who has a legal duty
fo represent an aggrieved party and who s# oneself not
avparty to the offense, but in no case shall this
Erbvision extend the period of limitation by more than
[Hix years from the expiration of the period of
Limation prescribed in subsection (2)(.]

   

 

   

Effective April 26, 2001 and 3
§ 701-108 in respects innater
L, Act 112, $52 and 7 at 294, 2967
Si, 60.

y 1, 2005, the legisisture amended HRs
to! the present matter. See 2005 Haw. Sess.
2001" Hew. Sess. L. Act 33, §§ Zand i] at

 

 
‘4+ FOR PUBLICATION *#*

time period specified in the fraud exception. We agree with the
prosecution that, for the purposes of HRS § 701-108(3) (a), theft
by deception does include “an element of fraud” so as to invoke
the tolling provisions of that section.

Nevertheless, we hold that when the charged offense is
theft by deception, as defined by HRS § 708-830(2) (1993),1 and
the prosecution is relying on the tolling provision of HRS
§ 701-108(3) (a), relating to “[a}ny offense an element of which
is... fraud,” the prosecution must not only allege the timely
date or dates of commission of the offense in the indictment, but
also the earliest date of the “discovery of the offense by an
aggrieved party or . . . a person who has a legal duty to
represent [the] aggrieved party.” Because the indictment failed
to aver the date of the earliest discovery of the alleged
offenses, we affirm the circuit court's order dismissing the

indictment with prejudice.

BACKGROUND

 

The present matter arises out of the State's
investigation of a Department of Accounting and General Services

(ORGS) employee, Fidel Eviota II. Apparently, Evicta submitted

© ans § 708

 

10 provides in pertinent part:
A perscn ccanits theft if the person does any of the following:
(2) 111 detains, of exerte control over, the property of

Another by Seception with intent fo deprive the other of the
property.

 

Ettective May 2, 2001, the legislature amended HRS § 708-830 in respects
Gmmeterial £6 the present matter. See 2001 Meu, Sess. L. Act 67, $6 1 and S
aaa, 138,

 
‘** FOR PUBLICATION ***

multiple invoices totaling more than $700,000 for unperformed
construction services ostensibly in accordance with construction
contracts and DAGS reimbursement procedures. Stan’s Contracting
and Murphy Construction (hereinafter, collectively, “the
Appellees”) were general contractors involved in two separate
contracts that Eviota oversaw in 1996 and 1997. Shioi was a
project manager for Stan's Contracting, Inc. and the Hendersons
were president and vice president of G.W. Murphy Construction
Company at the time. Boyd Sakai, an auditor for the Department

of the Attorney General, determined that through a series of

 

bogus change orders -~ i,es, unwarranted construction purchase
orders allowing reimbursement for unexpected costs in a state
construction contract ~~ Evicta allegedly funneled at least
$6,117.00 through Stan‘® Contracting and $88,428.00 through
Murphy Construction toward the construction of three hones ovned
by Eviota in MA‘A1i. During the course of the investigation,
Sakai tracked the payments through a number of parties and
accounts, and traveled to California to gather original tissue
copies of some of the checks in question.

on May 1, 2002, an O'ahu grand jury returned an
indictment: (1) charging Stan’s Contzacting with one count of
theft in the second degree, in violation of HRS § 708-831(1) (b),
se supra note 1: and (2) charging Murphy Construction with one
count of theft in the first degree, in violation of HRS

 

§ 708-830.5(1) (a), see supra note 2.

‘The indictment read as follows

continued...)
‘+** POR PUBLICATION ***

On June 19, 2002, Stan’s Contracting filed a motion
pursuant to Hawai'i Rules of Penal Procedure (HRPP) Rule 12° to
dismiss Count I on the grounds: (1) that the prosecution was not
commenced within three years of the conmission of the offense as
required by HRS § 701-108(2)(c), see supra note 3; (2) that the
evidence put to the grand jury regarding the statute of

Limitations vas insufficient; and (3) that the indictment was

 

 

---continved)

Couns I: On ox about the Teh day of July, 1997{,) to and
ineiuding the 11th day of august, 1987, in the City and county of
ignolulo, Seate of Hawai'i, Stan's Contracting, Inc. and Roy Y. Shios,
Gid obtain or exert contrel over the property of {the State), to wit,”
OLS. Currency, the valve of which exceeds Three Hundred Dollars... by
deccation, with the intent to deprive {the State) of the property
Eheresy committing the offence of Theft in the Second Degree in
Holation of (HRS §] 708-83111) (b)

‘COUNT 112" On or about the 10ch'day of February, 1997, to and
including the 29th day of October, 1997, in the City and County of
Honcluiu, State of Hawai[')i, G.W. Morphy Construction Company, John
Patrick Henderson and Mark L. lienderson dig obtain or exert control over
the property of [the State], to mit, Uns. Currency, che value of which
exceeds Twenty Thousand Dellars - .'. , by deception, with intent to
Seprive [the State] of the property, thereby committing the offe
Theft in the First Degree, in violation of [HRS §) 708-830.5(2) (a)

 

 

of

 

 

(emphases added.)

SREP Rule 12 provides in relevent part:

(b) Prateial Motions. Any defense, objection, or request which is
sable. of determination withovt the trial of the general issue may be
Eeised before trial by notion. Motions may be written or oral at the
Giscretion of the judge. The following must se raised prior to trial

t and objections base on defects in the institution of

   

 

(2) defenses and objections based on defects in the charge (other
than thet it fails to show jurisdiction in the court or to charge an
offense which objections shall be noticed by the court at any time
Goring the pendency of the procesdings)?

(al aetions to suppress evidence or for return of property:

(i) Fequeste for disccvery under Role 16)

5} requests for consolidation or seversnce of charges or
detendante under Rules 13 and 14;

ie) motions to dismiss under Rule (c) for failure to join related
offenses; and

(i) motions to transfer under Rule 21

5
‘48 FOR PUBLICATION *#*

fatally defective for failing to allege facts establishing the
tolling of the statute of limitations.’ On July 24, 2002, Murphy
Construction filed a joinder in the motion, asking that the
circuit court dismiss Count IT.

on July 26, 2002, the circuit court conducted a hearing
fon the motion to dismiss. In response to the Appellees’
contention that the indictment was not brought within the statute
of Limitations, the prosecution made an offer of proof that
Ephrain Ho, an investigator for the Department of the Attorney
General, was assigned on June 3, 1999 to investigate criminal
allegations involving Evicta.' In the offer of proof, the
prosecution stated that Ho would testify that he first heard of
the Appellees on June 16, 1999, in an interview with one of the
subcontractors through which the bogus change orders were
funneled. Ho would further testify, however, that it was not
until February 14, 2000 that he first had reason to suspect the
Appellees’ alleged criminal involvement in Eviota’s schemes. The
circuit court and the Appellees accepted the offer of proof, the
latter entering objections that the offer wes insufficient to

cure the indictment’s alleged insufficiencies.

On the sane date, Stan‘s Contracting filed a motion to dismiss
Count 1 with prejudice, siso pursuant to HREP Rule 12, on the ground thet
Sthere was insufficient evidence to establish probable cause presented to the
grane jury." By virtue of ite order granting the Appellees” HRPP Rule 12
Rotion to disnise on statute of limitations grounds, the circuit court
Geclined to rule on the second HREP Rule 12 motion on the ground that it was

 

 

+ there ig no indication on the record ae to why Ho and not Sakai
wos calied to testify as to when the #lleged crininal involvement of Stan's
Contracting and Morphy Construction wes first suspected,

6

 
of fact

‘+** POR PUBLICATION *##

on August 9, 2002, the circuit court entered findings

(FOFs), conclusions of law (COLs), and an order

dismissing the indictment with prejudice. The circuit court

concluded in relevant part:

2._ The Indictment returned by the O["Jahu Grand Jury
fon May iS, 2002 did not require the prosecution (tol prove,
Beyond § Feasoneble doubt as required by (HRS) § 70i-11#(ai
((1993)"), tha the [Appellees] feaudulently cbtained or
contzalled property of the State. « as an element of the
Offense of Theft By Ceception or that they acted with intent
fodefraud. See (HRS) § 708-€30(2)(, supra note 4)

3. For purposes of tolling the statute of limitations
under (ans) '§ 701-108 (2) (a) {, gag aupea note 3], fraud is
Bot synonymous with “deception” for crimes defined under
{its ch.) 706; “See (HRS] § 108-600 (Supp. 1996) (different
statutory definitions fer “deception” and “intent to
Getraus") ("

  

 

  

 

 

HRS § 101-114, entitled “Proof beyond a reasonable doubt,”

provides in relevant part!

(2) Except as otherwise provided in section 701-115, [relating to

defenses negating penal reeponeibility] no person aay be convicted ef an
offense unless the following are proved beyond a reasonable doubt:

 

 

a)" “Each elenent of the offense;

(B} The state of mind required to establish each elenent of the
otfons

(c) Facts eetablishing jurisdiction

(a) Facts eetablishing venue: ana

[e) Facts setablisning that the offense Kas committed within the
tine period specified in (HRS §) 7017108(, ga suka,
note 3)

HRS § 708-600 (2993) provides in relevant part:

“peception” occurs when 2 person knowingly:

 

(2) Sgeates or confirms snother' impression which is false and
Which the defendant does not believe to be tris

(2) Fells to correct false inpression which the person
previously har created ox confirmed:

(3) Prevents another from acquiring snfornation pertinent to the

Gieposition of the property involved;

(4) Selle of otherwise transfers or encunbers property, failing
to disclose a lien, adverse clain, or other legal inpedinent
fo the enjoyment of the property, whether that inpecinent is
of is not valid, or is of is not a natter of officiel

fecores or
(S) Premises performance which the person does not intend to
perform of knows wiil not be performed, put a person's

{eontinaed. .-)
‘+44 FOR PUBLICATION *##

4. thereas (HRS ch.] 708 contains numerous statutes
expressly requiring "intent to defraud” as an elenent of the
offense necessary to sustain a conviction, Theft by
Deception dees aot require the invent to defraud(;] rather,
the State mist prove a defendant knowingly used deception
itn the intent’ to deprive an cuner of Ais/her property.
Soe state 2 Fresman, 70 Haw. 434, 438-39, 774 Pa2a BE
5{3)i (1989) (theft ty Deception is not ah included offense
Sf Fraudvlent Use of 8 Credit Cara because the offenses,
Eaguire different states of mind to be proven beyond &
Feasonsble doubt): Mewei (i [Standard] Jury
Instruction =~ Criminal, 10,19 theft in the Second Degree ~~
Deception (Instruction for Theft by Deception does not
Eequire “fraud” ae an elenent of the offense the finder of
fact must find proven beyond a reasonable doubt) -

5. Thus, the exception provided in (HRS)
§ 701-1083) {a} does not apply’ to the crime of Theft by
Deception, as defined by (HRS) § 708-830(2), wherein fraud
fe not an element that must be proven beyond a reasenable
Goubt for conviction. Accordingly, the indictment of [the
Appellees) for Theft by Deception cn May 15, 2002, for
Ceines siiegeaiy conmitted in 1997, occurred beyond the
[three-iyear tine period permitted by (HRS) § 701-108(2) (c)

G. Furthermore, to commence a prosecution pursuant to
the statute of iimitatsons exception under (HRS)
§ "701-108 (13) (a)], the state ‘must present evidence to
the Grand Jury establishing probable cause of uben the
alleges criminal conduct was discovered, Ley, that Lt was
Siscovered at a tine within the statute of Tinitations
exception. See State v. Outal, 64 Haw(ai't) 96, 63-64, 929
Pioges, Je-177) Lev 1996) 7] Stabe v Arcee, 64 Haw. 1,
15, 928.24 043, 958°('.'. . 1986) (in an ingictnent, the’
Sitense . . . may be stated with so such detail of Eine,
Place, sud circumstances and such particulars . as are
Recessary to identify the transaction, to Bring it within

 

 

 

 

 

(+ .continued)
‘{etention not te perform a promise shall not be inferred
ftom the fact alone that the person did not subsequently
perform the promise,
the term *aecepticn” does not, however, include falsity as to
vers having no pecuniary significance. «

 

Suneent to defraud” means:

(1 "he intent te use deception to injure ancther’s interest
Gihsch has value; oF.

Enowledge by the defendant that the defendant is

facilitating an injury to another's interest which has

 

Effective June 16, 1997, April 24, 2002, June 28, 2002, and July 1, 2008, the
Tegislature anended HRS’ § 708-€00 in retpects inhaterial to the present
matter. Sea 2008 Haw. Sexe. L. Act 162, 562 and 7 at 579, 5607. 2002 How,

i, Ret 224) $84 and 6 at #96: 2002 Haw. Sees. L. Act 45, $9 1 and 3 at
1557 Haw. Sasa, L. het 196, 66 3 end Sat 378,

®
‘48 FOR PUBLICATION ***

the statutory definition of the offense charged, to show
that the court has Jurisdiction, and to give the accuses
Feasonable notice of the facts.) (lemphasis in] original).

J. “the State's... offer of proof.) sof
Hors discovery of the alleged thezts on Jone 26, 1999' failed
to satisfactorily identify when the proper Complainant
(OAGS) First discovered the alleged thefts. Thus, the offer
of proct of... Ho's teatinony could not cure the
evidentiary defect arising from the failure to present any
evidence to the Grand Jury as to the date of discovery of
the alleges offense. Cf, Arcos, €4 Haw. at 13.

es "Accoraingiy, the quantum of evidence presented to the
ot'Jane Grane Jury wae sneusticient to invoke the exception
[provided in (HRS) § 701-108 3) (a) and allow prosecution of the
Defendants beyond the [three-}year time limitation of (HRS)
$°701-108(2)(e)- Ide

3. Lastly, anindictnent must allege information that
provides defencents with reasonable novice of the facts
Recessary for the preparation of an adequate defense,
Unciuding facts that provide notice of possible. punishnent
and the statute of limitations. See (HRPF) Rule Tid) ("The
Gharge shell be a plain, concise and definive written
Statement of the ecsential facts constituting the offense
Gharged."); State v. Keakinaka, 84 kawaii 260, 29(5], 399
P20 613, 6(321 (1957) Tindactnent alleging conspiracy
vielated’ pue Process when charging instrument failed to
provide defendant notice of "the possible punishment and the
Statute of limitations”).

Yo. if the state commences & prosecution
utilizing af] statute ef Limications exception in (HRS)
$ 701-108 (3) (a), information nust be alleged in the
Ingictnent to denonserate che stavuce of limitations was
collec. See People v. Strait, 361 N.z.2d 692, 693. (11
1578) (ossaissing indictment pursuant to long’ standing rule
requiring facts invoking exceptions to stature of
Lisseatione be averred in charging instrument) 2
State, 726 So. 20.255, 258 (Fla. [Cte] APE. 1998)
[information tust allege on sts face facts showing stature
tolled); Moss v State, 469 5-£.24 328, 326 (Ga. (Ct. App.
1996) (Sane); Boobie v. Crosby, 375 F.2d 838, 854 (Cal.
1962) (sane); Bustamante v. Dist, Court, 329'p.2¢ 1023,
1o16-(]17 (Coie. 1958)? Eeate-e Jones, 775 F-34163,
185(-]8€ (Ken. [ct] Agp. 1969) Tsame)’ Stace v, Bovelel,
720 .26 786, 786 (Or. {Ct.) App. 1985{3) (sanely
Gounty, 601 $.w.24 357, 351-58 (Hex. Cle]. Rep. 1980)
sane).

it, thus, the failure to provide information of the
date of discovery of the sileged crines!) necessary to
Envoke the exception in [HRS] —§ 701-108 (3) (a), rendered the
Indictment .. + fatally defective. See Keakinske, 86
Nawai's at 29(5, 933 F.2d at 632).

 

 

     

 

 

 

 

 

(Footnotes omitted.) (Emphases in original.) The circuit court

then granted the Appellees’ notion and dismissed the indictment
404 FOR PUBLICATION *#*

against them with prejudice.
Following a September 5, 2002 grant by the circuit
court of an extension, the prosecution filed a timely notice of
appeal on October 8, 2002.
11, STANDARDS OF REVIEW

AL Hindi 8

 

In this jurisdiction, a triel court's (FOFs] are
subject ‘to the clearly erroneous standard of review.
hn POF se clearly erroneous when, despite evidence to
Support the finding, the appellate court is lett with
tne definite and fitm conviction that a mistake has
been committed.

{COL} ie net Binding upon an appellate court
ang is freely reviewable for Sta correctness. This
Court ordinarily reviews CoLe under the right/wrong
Standerd. ‘thus, 2 COL that is supported by the trial
Goure’e fore and that reflects an application of th
Correct rule of Lav will not be overturned. However,
2°CoL that presents nixed questions of fact and law is
Teviewed under the clearly erfoneaus standard be
Efe eourt’s conclusions ate dependant upon the facts
fang Sircomstances of each individual case.

Casumpang v, ILWU Local 142, 108 Hawai'i 411, 419, 121 P.3d 391,
399 (2005) (some brackets added and some in original) (quoting
Allstate Ins, Co. vs Ponce, 105 Hawai'i 445, 453, 99 P.3d 96, 104
(2004).

8. Interpretation of statutes

 

 

 

 

 

 

 

   

w(t]he interpretation of a statute

ig a question of low reviewable de
hove.” - Brseo, 86 Hawai'i [at] 10,
928 Fad [at] B82.

Grav v. Adeint,1 Dirt.) of the court, 84 Hawai's 138,
$Miy-S3r €.24 $60, S06 (1997). Furthermore, our
Statutory construction is guided by established rules

hen construing statute, our foremost
Sbligation is 20 ascertain and give effect
fo the intention of the legislature, which
$e to'be obtained prinarily fron the
Language contained in the statute itself.
And'we must read statutory lenguage in the

10
‘+++ FOR PUBLICATION #**

content of the entire statute and construe
Se°tn's manner conaiscent with ite

 

yen there is doubt, doubleness of
meaning, or indistinctiveness or
Gneertainey of an expression used in
Statute, an anbiguity exists

Th construing en ambiguous statute,
wieyhe meaning of the ambiguous words ney
bbe ought by examining the context, with
Which che ambiguous words, phrases, and
Sentences aay be compared, in oreer to
ascertain their true sesning.” HRS
$'1-15(1) [(1993)]. Moreover, the courts
may resort to extrinsic side in
Setermining 10318:
wenie 12 the use of legislative history
ae an interpretive tool

      

Gray, €4 Hawas't at 148, 931 P.24 at 590 (footnote

Snitted). This court may alec consider "(t]he reason
Gnd spirit of the lew, and the cause which induced the
{Coislature to enact it”... to discover ea crue
meaning.” #8S § 1-18(2)".".".\. "Laws an Bad

EAteria, or upon the sane subject netters shell be

Spreng seavote ay Be called. upen in aid to explain’

hat is doubtful in another." "aks 5 1-16 (1995)
State v. Koch, 107 Hawai'i 215, 220-21, 112 P.3d 69, 74-75 (2005)
(some internal citations omitted) (sone brackets and ellipses
added and some in original) (quoting State vs Kaua, 102 Hawai'i
1, 7-8, 72 P.3d 473, 479-480 (2003) (quoting State v. Rauch, 94
Hawai'i 315, 322-23, 13 P.3d 324, 331-32 (2000) (quoting State ve
Kotis, 91 Hawai'i 319, 327, 984 P.2d 78, 86 (1999) (quoting State
va Dudoit, 90 Hawas'i 262, 266, 978 P.2d 700, 704 (1999) (quoting
State v. Stocker, 90 Hawai'i 85, 90-91, 976 P.2d 399, 404-05,
(2998) (quoting Ho vy, Leftwich, 88 Hawai‘! 251, 256-57, 965 P.2d
793, 798-99 (1998) (quoting Korean Buddhist Dae Won Se Temple vs
sullivan, @7 Hawai'i 217, 229-30, 953 P.2d 1315, 1327-28

 

(2998)1))))))-

a
‘4 FOR PUBLICATION *#*

III. DISCUSSION

» 5 ‘ Spraua™
S$ 201-108 (3) (ay

‘This court has consistently reaffirmed the proposition
that “where the terms of statute are plain, unambiguous and
explicit, we are not at liberty to look beyond that language for
a different meaning. Instead, our sole duty is to give effect to
the statute's plain and obvious meaning.” State v. Yamada, 99
Hawai'i 942, 953, 57 P.3d 467, 478 (2002) (quoting State v
Richie, @8 Hawai'i 19, 30, 960 P.3d 1227, 1238 (1998).

Furthermore, this court has stated that “where there is
no ambiguity in the language of a statute, and the literal
application of the language would not produce an absurd or unjust
result, clearly inconsistent with the purposes and policies of
the statute, there is no room for judicial construction and
interpretation... .” e. Born, .
109 Hawai'i 399, 408, 126 P.3d 1086, 1095 (2006) (citation and
internal quotation signals omitted).

However, “[wJhen there is doubt, doubleness of meaning,
or indistinctiveness or uncertainty of an expression used in a
statute, an ambiguity exists.” Grav, 84 Hawai'i at 148, 931 P.24
at 590, In construing an ambiguous statute, we may resort to
extrinsic aids in determining legislative intent. Id. This
court may also consider “[t}he reason and spirit of the law, and
the cause which induced the legislature to enact it. . . to
discover its true meaning.” RS § 1-15(2); Koch, 107 Hawai'i at
220-21, 112 P.3d at 14-75.

2
‘** FOR PUBLICATION ***

‘The prosecution's argument for a review of the circuit
court's interpretation of the term “fraud” in HRS § 701-108 (3) (a)
can be reduced to two grounds: (1) that the meaning of the tezm
is ambiguous, in that the term “fraud” is multi-faceted and
inclusive of more criminal activities than those offenses
expressly employing that specific word; and (2) that, assuming
arguendo the plain language requires @ strict construction, the
results are absurd and unjust. We agree with the prosecution on

both grounds.

 

Murphy Construction asserts that the language of the

tolling provision is unambiguous -- that either fraud must be

 

expressly alleged in the indictment or must be contained in the
language of the statute for the offense to qualify as a “crime,

an elenent of which is fraud." It argues that the legislature

an Line with this argument, Stan's Contracting cites to Hawed't
Standard Jury Instructions, Crininai 10,19 (Theft in the Second Degree:
Deception), gointing out chat the word “fraud” is not an element ena
therein. The instruction provided in relevant part!

 

 

‘there are four materisl elenents of the offense of Theft in the
Second Degree, each of which the prosecution must prove beyond &
Feasonable doubt.
‘These four elenents are
1." That, on or about (date) in the [City and) County of (name.
sf-county), the Defendant obtained or exerted control over
fhe property of another; and
That" the Defendant di s0 by deception: and
lat_the Defendant did se with the intent to deprive the
person of property; and
4, That the petendent believed the value of the property
exceeded £300

 

(continued.

 

13
‘4+ FOR PUBLICATION ##*

could have crafted language, for example, applying the tolling
provision to “any offense committed through the use of any
fraudulent act or concealed by any means of fraud,” but chose not
to.

Stan's Contracting adds that, because HRS § 708-800,
see supra note 10, provides a definition of “intent to. defraud”
that is distinct from the definition of “deception” contained in
the sane section, theft by deception is not a species of fraud
within the meaning of the tolling provision.

The prosecution responds that “fraud” cannot be so
facil
to defraud” is, in fact, defined as “an intent to use deception

to injure another’s interest which has value,” HRS § 708-800.

construed as to exclude “deception,” noting that “intent

 

(Emphasis added by prosecution.) Deception, the prosecution
argues, is therefore the characteristic that imbues “intent to
defraud” with its requisite state of mind: in other words,
without “deception,” “intent to defraud” statutes are merely
general intent statutes requiring only that “the defendant
knowingly or intentionally injure another's interest which has
value.” Therefore, the prosecution concludes, if deception does
not contain within it a fraudulent component, then neither does
“intent to defraud.”

The prosecution further notes that there is no precise

 

definition of the term “fraud” -- as opposed to an “intent to
(Emphasis and brackets in original.) Effective February 28, 2006, the

instruction hae oeen amended te add 9 fifth elene!
the property did in fect exceed £300,

 

ay that the value of

4
‘++ FOR PUBLICATION *¥*

defraud” -- in the Hawai'i Penal Code (HPC). The prosecution
highlights the requirement of HRS § 701-104 (1993) that words be
taken “in their usual sense” absent statutory definition and
cites Black's Law Dictionary at 788 (4th ed. 1968), defining .
“fraud” in part as “a false representation of a matter of fact

- which deceives and is intended to deceive another,” and the
oxford Concise Enalish Dictionary at 562 (10th ed. 1999), which
defines “fraud” as “(1) wrongful or criminal deception intended
to result in financial or personal gain [or} (2) a person or
thing intended to deceive.”

‘The prosecution delves into the Model Penal Code (MPC)
for the historic roots of fraud and theft by deception.” It
points out that the MPC drafters consolidated false pretenses and
larceny by trick into theft by deception and that false pretenses
and larceny by trick were a species of fraud dating back to the
1757 English statute of false pretenses. (Citing MPC § 223.3
cmt. (Proposed Official Draft 1962); Wayne R. LaFave & Austin W.
Scott, Jr., Substantive Criminal Law § @.7(a) (1986).)

Marphy Construction counters that while the MEC

discusses theft by deception in MPC § 223, it analyzes crimes of

 

‘The prosecution further argues that this court has in the past
resisted « rigid or nerfow definition ef fraud. "(Quoting Yon Hols zy auo
i shit, 42 Haw. 671, 122 (1958) (" (1) has been stated

that fraud is better left ondefined . . .'. (O]wing to the muleiform
Character of fraud and the great variety of ateendant circumstances no
Gefinition wnich ie all inclusive can be framed, But each case must De
Seternined on ite particular facte.").) (Citing 37 An. Jur. 2d rau and
Deceit $1 (2003

» an 1972, the Legislature reformed the HFC, including the
provisions under digcsseion, besed on the Model Penal Code. K-B. 20, 6th
Yeg-, Reg. Sess. (1972) ge& glge Commentary to HAS §§ 706-830 to ~833.

 

15
‘+44 FOR PUBLICATION ##*

fraud in MPC § 224, demonstrating that the treatment of
fraudulent behavior in MEC § 224 is designed to complement the
coverage of theft offenses set forth in MPC § 223. (Citing MPC
§ 224 introductory note (American Law Institute 1980).) Murphy
Construction argues that the drafters of the MPC viewed theft by
deception as a separate species of crime distinct from fraud and
hence not within the meaning of “fraud” in the tolling statute.

In reply, the prosecution points out that, according to
the introductory notes to MEC § 224, two of the fraud offenses -~
simulating objects and securing execution of documents by
deception -- are both characterized as lesser included offenses
of theft by deception. The prosecution argues that if, as the
Appellees contend, crimes of fraud are addressed in MEC § 224,
then fraud offenses are included within the definition of theft
by deception, and theft by deception itself becomes a species of
fravd.

Stan's Contracting invokes the conmentary to HRS
§ 708-230, see supra note 4, to establish that theft by deception
does not contain an element of fraud. It argues that
paragraph (1) is the repository of the traditional common law
fraud offenses of larceny, embezzlement, and fraudulent
conversion and that because the defendants were charged under
paragraph (2) ~~ through the use of the term “deception” in the
indictment, see supra note 5 -- there is no element of fraud
inherently present in the charged offense.

‘The prosecution retorts that the same commentary to HRS

§ 708-630 cited by the Appellees states that paragraph (2)

16
'*# BOR PUBLICATION ***

“covers the same kind of deprivation to a property.owner as that
covered in [paragraph] (1), except that the deprivation here
proscribed is accomplished by deception.” Therefore, the
prosecution argues, if Stan's Contracting is correct, then HRS
§ 708-830(2) is @ more fraudulent form of theft that includes the
fraud crimes of paragraph (1), accomplished as they are through
deception.

The Appellees also cite to this court’s holding in
Exeeman, 70 Haw. at 438-39, 774 P.2d at 891, that theft by
deception was not a lesser included offense of the charge of
fraudulent use of a credit card, because the two crimes required
different culpable states of mind. The prosecution urges that
Exeeman is not dispositive of the question whether theft by
deception is a crime of fraud, but only of the proposition that
“intent to defraud” and “intent to deceive” are not equivalent
states of mind; the correct analysis, the prosecution maintains,
must focus on whether theft by deception entails 2 requisite
state of mind that is compatible with the historical meaning of
“fraud.”

Murphy Construction, in turn, insists that the correct
analysis is not whether fraud subsumes a quality of deception,

but whether deception alone is fraud. Both answering briefs

i _urphy Constructios quing that fraud encompasses more than
ere deception by including the element of false or fraudulent
Feprecentations, also cites to Nolfer vs Wut. Life Ine, Co. of New York, 3
few. App. 65, 76, 681 P.20 1349, 1357 (1982)? "Actual fraud contemplate:
i including felse and fraudulent misrepresentacions.”
enphasis sdaed Gy Morphy Construction). This pacsege, however, cited as well
by the prosecution in its opening Brief, serves more to bolster the
prosecution's argusent that sctual fraud includes precisely the deception at
(continued.

 

 

uv
‘44 FOR PUBLICATION *#*

cite Shopee v. Gucci America, Inca, 94 Hawai'i 368, 386, 14 P.3d
1049, 1067 (2000), for the proposition that while deception may
be a component of fraud, fraud requires the additional elenent of
detrinental reliance. The prosecution's response is twofold:

(2) criminal fraud need not conform to civil fraud (eiting HRS

§ 701-102 (1993)) ("No behavior constitutes an offense unless it
is @ crime or violation under this Code or another statute of

00, see

 

this state.”); and (2) in the language of HRS § 708;

 

supra note 10, neither “intent to defraud” nor “deception”

 

require that detrimental reliance be proven.

b. Analysis

HRS § 708-800 does not contain a definition of the term
“fraud.” The circuit court, nevertheless, determined that the
existence of separate definitions of “intent to defraud” and
“deception” justified a conclusion that theft by deception did
not contain an element of fraud for the purposes of the tolling
statute. However, in doing so, the circuit court glossed over an
important aspect of the relationship between these two terms.
“Deception” is defined for the purposes of theft by deception as
occurring “when a person knowingly: . . . (2) [f]ails to correct
a false impression which the person previously created or

confirmed,” involving matters having pecuniary significance. HRS

(continued)

jcution also notes that if civil fraud can serve as a
frame of reference for analysie, then according to Cosme, Fin, Corp. 9,
Runnels, 2 Haw. Ape. 33, 625 2.24 390 (1961), "a statement or Claim OF
Gocunent is frauaulene if it is falsely made, of caused to be made, with the
intent to deceive.” 2 Haw. App. at 99, 625 F.2d at 396 (citing
Hawalian ing. Cos. 2 Haw. apps 355, 389-60, 19 P.2d 10B6, 1080. (1580)!

ae

The pe

 

    
‘** FOR PUBLICATION *#*

§ 708-800, see supra note 10. “Intent to defraud,” in turn, is
defined as “[ajn intent to use deception to injure another's

interest which has value . . . .” Id, (emphasis added). Boiled
down, “intent to defraud” is theft -~ i.e., injuring another’s
interest having pecuniary significance -- through the use of

deception.* Inasmuch as defrauding is defined as theft by :
deceiving, it is difficult te conclude that theft by deception is

not @ fraudulent act within the tolling provisions of HRS

§ 701-108(3) (a), see supra note 3.

In our view, the foregoing analysis demonstrates at
least that there is doubt, indistinctiveness, and uncertainty
with respect to the meaning of the term “fraud,” as it appears in
HRS § 701-108(3) (a), and that, therefore, an ambiguity exists as
to whether theft by deception falls under the tolling provision
We may therefore examine the legislative history of the statute
“as an interpretive tool in determining legislative intent.”
Gray, 84 Hawai'i at 151, 931 P.2d at $93 (internal quotations
omitted). We do this “in order to harmonize the wording of the
statute with the purposes and policies underlying [the
provision].” Peterson v. Hawaii Elec. Licht Co., 85 Hawai'i 322,
328, 944 P.2d 1265, 1271 (1997).

 

w_tihile in Ereeman, this court held that “intent to defraud” ss not
eoterminous with “intent to deprive” for purposes of determining thet thefe by
deception was not a lesser included offense of fraudulent use of # credit
card, 70 aw, at 438-35, 174 F.2d at €91, we have never addressed the question
weether the intent to deprive through the use of deception is a type of
fraudulent state of ming. We believe that it is, particularly in Tight of the
traditionally intertwined usage of the terms “fzaud" and “deceptions:
discussed aubre in part T12.A.1.a, at least for the purposes of tolling the
statute of limitations under RS $ 701-108 (21 Ca

 

 

 

 

19
‘#4 POR PUBLICATION *#*
2. . seraud

absurd and uniust results.

In addition to arguing that an ambiguity exists as to
the plain meaning of fraud in the tolling statute, the
prosecution further contends that the circuit court's
interpretation of fraud yields absurd and unjust results. We
concur.

‘The prosecution argues that the circuit court’s narrow
interpretation of “fraud” in the tolling statute excludes a
sizeable nunber of offenses involving clearly fraudulent
behavior, (Citing, inter alia, HRS §§ 19-3 (1993) ("Election
frauds”), 19-3.5 (1993) ("Voter fraud”), 231-34 (Supp. 1999)
(Attempt to defeat or evade tax”), 346-43.5 (1993) (“Medical
assistance frauds"), 431:10C-307.7 (Supp. 2000) (“Insurance
fraud”), 7108-870 (1993) (“Deceptive business practices"), 708-871
(1993) ("False advertising”), 708-873 (1993) ("Defrauding secured
creditors”), 708-874 (1993) (“Misapplication of entrusted
property”), and 708-8200 (1993) ("Cable television service
fraud”). The prosecution points out that the commentaries
accompanying two of the offenses within the rubric of “Business
and Commercial Frauds,” HRS $§ 708-871 and 708-673, suggest that
they are lesser or inchoate misdemeanor forms of theft by
deception. The circuit court's interpretation of HRS
§ 701-108(3) (a), however, would result in these misdemeanors
being tolled, while the felony offense of theft by deception
would not, merely due to the presence or absence of the phrase

“intent to defraud,” thereby rendering the scope of the tolling

20
‘4+ FOR PUBLICATION *¥¥

provision illogically restrictive. A more rational reading of
“fraud,” the prosecution argues, would encompass statutes that

describe fraudulent states of mind or conduct but that may not

expressly contain the word “fraud” or “defraud.”

‘The Appellees counter that while the circuit court’s
interpretation of HRS § 701-108(3) (a) excludes a nunber of :
statutes arguably dealing with fraudulent practices, it
nonetheless does apply to an equal number of offenses involving
fraud, which demonstrates that the circuit court’s interpretation

of the term is not illogically restrictive.”
Nevertheless, the fact that the circuit court’s
interpretation of the tolling statute extends to a number of
statutes involving fraudulent behavior is not itself dispositive
of the issue. More important is that the circuit court's
interpretation excludes felonies from tolling but includes:
misdemeanors by creating a false dichotomy between offenses that
expressly contain the phrase “intent to defraud” in the body of

the statute and those that do not. The interpretation urged by

»  stan's contracting cites 2 host of offenses requiring an “intent
to defraud": HRS $§ 159-52 (¢) (1993) (neat inspection fraud)? 325-37 (1993)
(vaccinations and immunization fraud); 229-42(a) (3) (A) (Supp. 2000)
(Sontrslled substances. fraud)? 346E-16 (Supp. 1994) imureing facility tax
Fraud! 366-38 (a) (Supp. 1996) workers’ compensation fraud): 486~32(a) ()
(1383) (measurements fraud); 708-830(6) (Supp. 2001) (felony shoplifting) ;
708-855.6 (Supp. 2001) (telemarketing fraud); 708-€51 to -652. (Supp. 1997)
(first ang second degree forgery) 708-883 (1993) (third degree forgery):
208-855" (1995). (ersminal simulation) ; 708-856 (1993) (obtaining signatures by
Geception) ; 708-856 (1993) (fraudulent suppression of a testanentary oF
Fecordable instrument); 708-872 (1993) (falsifying Business records) ; 708-891
fo =891.5 (Supp. 2002) (conputer fraua)? 708-8100 (1993), (fraudulent use of @
Efedit card); "708-€100.5 (1983) (fraudulent encoding cf a credit card);
50s=810214) (2993) {eredit card theft); 708-8103 (1995) [creak card fraud by
a provider of goods snd services); 708-£202 to 8203 (Supp. 1996) (telecon
fxasa)

 

     

 

au
‘++ FOR PUBLICATION *

 

the prosecution would eliminate the absurd and unjust result of
subjecting those charged with misdemeanor infractions such as
falsifying business records, making false statements concerning
vaccinations, or tampering with commercial scales to extended ©
exposure to prosecution while those charged with voter fraud,
election fraud, insurance fraud, tax fraud, and other serious
crimes would be afforded early relief from the threat of
prosecution.

Therefore, wholly independent of the statutory
ambiguity discussed supra, and mindful of the language of HRS
§ 1-15(3) that “(e]very construction which leads to an absurdity
shall be rejected,”
tolling provision to determine legislative intent. See State v
Haugen, 104 Hawai'i 71, 77, 85 P.3d 178, 184 (2004) ("Inasmuch as

we may look beyond the language of the

a literal construction would produce an absurd and unjust result,
we are willing to lock beyond the plain, obvious, and unambiguous

Language of the statute and ascertain its underlying legislative

 

intent.”) (Internal quotations, citations, and brackets
omitted.) .
at 2o1-
to theft by deception,

While we “construe penal statutes narrowly, [we
analyze] them in the light of precedent, legislative history, and
common sense.” State v. Soto, 84 Hawai'i 229, 249, 933 P.2d 66,
86 (1997) (citing State v. Gavlord, 78 Hawai'i 127, 137, 890 P.24
1167, 1177 (1995)). “[T]he strict construction rule does not

permit the court to ignore legislative intent, nor require the

22
‘+#4 FOR PUBLICATION *#*

court to reject that construction that best harmonizes with the
design of the statute or the end sought to be achieved.” Gaylord
78 Hawai'i at 138-39, 890 P.2d at 1178-79 (citation and internal
quotations signals omitted) .

The prosecution maintains that the legislature intended
that any statutory offense involving fraudulent behavior
rendering the uncovering and prosecution of an offense
particularly challenging should fall under the tolling provision,
not just those that expressly contain the term “fraud.” The
prosecution cites Senate Judiciary Committee comments pertaining
to the 1986 amendments to HRS § 701-108(3) (a):

Cases involving fraud or breach of fiduciary
goty are sifficult co prosecute secause

7 Snumisieading
bookkeeping ana tvaudolent records. Extending ine

Seibeiatire and extent of cfiminel activicye
Sen. Stand. Comm. Rep. No. 1084-86, in 1986 Senate Journal, at
1283 (emphases added). The prosecution notes that the history of
the present case exemplifies the difficulties envisioned by the
legislature.

HRS § 701-104 requires that construction of the penal
code be “with reference to the purpose of the provision,” an
obligation reinforced by the conentary to HRS § 701-104, which
states that “[t]his section, read in conjunction with § 701-103,
is intended to assure that this Code will be construed by the
courts in such a way as to effectuate the declared purposes of

the law.”

23
‘++ FOR PUBLICATION ***

A review of the legislature's declared purpose of the
tolling statute supports a conclusion that theft by deception
falls within the fraud exception set forth in HRS
$ 701-108(3) (2).

The legislature has amended HRS $ 701-108(3) (a) twice
since its enactment in 1972, Effective May 30, 1986, the
legislature extended the tolling provision from one year
following discovery of the offense to two years and the maximum
tolling period from three years to six years. See 1986 Haw.
Sess. L. Act 296, $§ 1 and 4 at 543. Effective June 12, 1996,
the legislature further extended the tolling period, from two
years to three, and stated more expressly that the six-year
extension for discovery of the offense was consecutive to the
normal three-year period under HRS § 701-108(2), clarifying that
prosecution for crimes involving fraud and fiduciary breaches may
be possible for up to nine years from the date of the incident
giving rise to the charged offense. See 1996 Haw. Sess. L. Act
148, $8 1 and 3 at 325-26.

In recommending passage of the 1986 amendments, the
House Judiciary Committee noted that “[t]hese cases often require
review of financial records covering several years and sometines
records are difficult to obtain because they are in the
defendant's possession." Hse. Stand. Comm. Rep. No. 434-86, in
1986 House Journal, at 1184, Similar sentiments were expressed

by the Senate Judiciary Committee, see supra.

24
4" FOR PUBLICATION ***

In recommending passage of the 1996 amendments, the
Senate Judiciary Committee stated:

{Fler crines involving fraud and breach of fiduciary
Gury, it sometimes taker several years before the
Erine is uncovered. The Giscovery process for
Socunentary evidence is often tedious, voluminous and
aiefieult to unravel Since these complex
Grimes sonetines take years to uncover, snvestigate,
nd’ prove, your Committee Believes these factors
Narrant a reasonable extension of the statute of
Tinltatsone

   

Sen, Stand. Comm. Rep. No. 2030, in 1996 Senate Journal, at 987.
‘The House Judiciary Committee, for its part, noted that

the dnvestigation of fraud can be a complicated and
Jone, idesunvout process in whieh the investigstor
fellows the paper trail step-by-step as each new Lead
ig uncovered’ Fraud cases can involve many victims
and large losses. these cases should not be ended
Before getting off the ground because of statutory
tine Limitaesons

 

 

Hise. Stand. Comm. Rep. No. 1015-96, in 1996 House Journal, at
1430. The effect of these two amendments has been to extend the
time available to prosecute crines characterized by cover-up,
deception, and complex financial fact gathering.

‘The present matter is an exemplar of the type of crime
the legislature envisioned. Eviota has been convicted of using
the Appellees as conduits through which he issued false change
orders pursuant to state construction contracts. By way of these
fraudulent change orders, he billed the State as much as $700,000
for work never scheduled or completed and used the proceeds to
build three homes for himself in Ms‘ili. Uncovering the
cixcunstances of Eviota’s false billings involving the Appellees
obliged Sakai, a certified public accountant, to track multiple

Payments to bogus subcontractors, entailing, among other things,

25
 

‘88 FOR PUBLICATION

a trip to California to gather original tissue copies of sone of
the checks. Application of the conmon meaning of the term
“fraud” tolls the statute of limitations with respect to crimes
employing deception and subterfuge, including theft by deception,
thereby allowing the prosecution sufficient time to investigate
and charge parties to schenes like Eviota’s in clear accord with

the legislature’s intent

4 £ her =
sonclusion that theft by deception contains an “element
of fraud.”

In Wolfer v. Mut, Life Ins, Co. of New York, 3 Haw.
App. 65, 641 P.2d 1349 (1962), the Intermediate Court of Appeals
stated that “{alctual fraud contemplates intentional deception,
including false and fraudulent misrepresentations." 3 Haw. App.
at 76, 641 P.2d at 1357 see also Keanu v. Kamanoulu, 20 Haw. 108
(1910) (concluding that fraud “includes . . . misrepresentation
in all its varied forms, drawing this inference without
departure from any rules of law or common experience”); In zea
Male Minor Child, Born on February 14, 1971, 1 Haw. App. 364,
371, 619 P.2d 1092, 1097 (1980) ("By its nature, fraud involves

deception, which may not come to light during the year following

 

entry of a decree."); Kawaihae v, iawaiian Ins, Cos., 1 Haw. App.
355, 359-60, 619 P.2d 1086, 1090 (1980) ("TA statement is

“fraudulent” if it was falsely made, or caused to be made, with
the intent to deceive. Fraud is. . . a false representation of
a matter of fact . . . which deceives and is intended to deceive
another so that he shall act upon it to his legal injury.'”)
(quoting Black's Law Dictionary (Sth ed. 1979)).

26
FOR PUBLICATION *4*

Federal authority is in accord. tn Lord vs Goddard, 54
U.S. 198, 211 (1851), the United States Supreme Court put it
succinctly: “Fraud means an intention to deceive.” More recent
decisions of the courts of appeals are of the same bent. See
McClellan v. Cantrell, 217 F.3¢ 890, 893 (7th Cir. 2000) (noting
that Collier on Bankruptcy 523-25 (15th ed. 2000), “while .
assuming . . . that ‘actual fraud’ involves a misrepresentation,
defines the term much more broadly -- as ‘any deceit, artifice,
trick or design involving direct and active operation of the
mind, used to circumvent and cheat another’); Kenty v, Bank One,
92 F.3d 384, 389-80 [6th Cir. 1996) ("A scheme to defraud

 

consists of intentional fraud, consisting in deception
intentionally practiced to induce another to part with property
To allege intentional fraud, there must be proof of
misrepresentations or omissions which were reasonably calculated
to deceive persons of ordinary prudence and comprehension.”)
(internal quotation signals and citations omitted); United states
Ye Dial, 757 F.26 163, 168 (7th Cir. 1985) ("Fraud in the common

 

law sense of deceit is committed by deliberately misleading
another by words, by acts, or . . . by silence.”); Blachly v
United States, 360 F.2d 665, 671 (Sth Cir. 1967) (defining a

scheme to defraud as one “accomplished by the most base form of

 

deceit -- a misrepresentation”).
Finally, State vs Wilson, $73 N.W.2d 248, 252 (Iowa
1998), and Commonwealth v. Volk, 444 A.2d 1162, 1187 (Pa. Super.
ct. 1982), both interpret theft by deception and tolling

- in Wilson, without

 

provisions similar to Hawaii's and conclude

27
‘44 FOR PUBLICATION *#*

dispute between the parties

 

that fraud is a component of theft

by deception.

 

Ultimately, any determination that theft by deception

contains an element of fraud must comport with the definition of

 

“element” set forth in HRS § 702-205 (1993): “such (1)
conduct [] (2) attendant circumstances(;] and (3) results of
conduct, as: (a) [a]re specified by the definition of the

offense[;] and (b) [nlegative a defense (other than a defense
based on the statute of limitations, lack of venue, or lack of
jurisdiction) .”

In State v. Aiwohi, 109 Hawai'i 115, 126-28, 123 P.3¢
1210, 1221-23 (2008), we revisited the distinctions between
conduct, attendant circumstances, and results of conduct. See
also 109 Hawai'i at 130-33, 123 P.3d at 1225-28 (Levinson, J.,
concurring); 109 Hawai'i at 133-37, 123 P.3d at 1228-32 (Acoba,
J.» concurring). As we noted in Aivohi, “*the distinction
between conduct and attendant circumstances or result is not
always a bright one.’" 109 Hawai'i at 126, 123 P.3d at 1222
(quoting Model Penal Code § 2.02 cmt. 3 (1962)). Nevertheless,
in this instance it is evident that deception represents a
conduct element of HRS $ 708-830(2) in that it is the accused’s
deceptive conduct in securing the property that gives rise to
penal responsibility, and, pursuant to our analysis, supra, the
common meaning of the term “fraud” encompasses intentionally

deceptive conduct.

 

Therefore theft by deception, containing an

28
‘4+ FOR PUBLICATION +

 

element of fraudulent conduct, invokes the tolling provision of
HRS § 701-108(3) (a) as a “crime, an element of which is fraud.”
Sonclusion

Accordingly, we hold that the circuit court erred in

 

concluding that theft by deception does not constitute = form of
fraud so as to qualify for the tolling provisions of HRS

§ 701-108(3) (a). We hold that for purposes of the tolling
provision, the fraudulent component of HRS § 708-630(2) is the
use of deception in the taking of property.

B. Th wer Lint =

1, The prosecution's contentions

‘The prosecution argues that the requirements of the due
process clause of article 1, section 14 of the Hawai'i
Constitution are fulfilled when an indictment “*contains the
elements of the offense intended to be charged, and sufficiently
apprises the defendant of what he or she must be prepared to
meet’” (quoting State v. Wells, 78 Hawai'i 373, 379-80, 894 P.2d
70, 76-77 (1995) (brackets omitted)) and that, if the indictment
tracks the language of the statute alleged to have been violated,
the indictment is sufficient (citing State v. Silva, 67 Haw. 581,
585, 698 P.2d 293, 296 (1985); State v. Treat, 67 Haw. 119, 680
P.2d 250 (1984); State v, Robins, 66 Haw. 312, 600 P.2d 39
(1983).

‘The prosecution also asserts that the HPC does not
require it to allege limitation-tolling facts in the indictment.

‘The prosecution argues that if, pursuant to HRS § 806-29

28
‘FOR PUBLICATION +¥+

(1993), it is not required to aver facts as to exceptions or
excuses contained within a statute describing an offense, a

fortiori it need not aver facts as to non-elements of the offense
contained in separate statutes. Rather, the prosecution insists,
“*Limitations are imposed by independent statute... . [T]hey
are matters of defense, and avoidance need not be alleged in the
indictment.’” (Quoting People v. Kohut, 262 N.E.2d 312, 315

(W.-Y. 1972).) Statutes of limitation are not fundamental rights,

 

the prosecution urges, nor are they jurisdictional, but they may
be waived by a defendant, reflecting their status as defenses
rather than fundamental elenents of an offense. (Citing State ve
‘Dimoteo, 87 Hawai'i 108, 113-14, 952 P.24 865, 870-71 (1997).)
The prosecution insists that it met the requirements of HRS

§ 806-34 (1993) simply by setting forth the charge with

sufficient detail as to time, place, and circumstances so as to

RS § 606-29 provides:

Exceptions need not be negatived. to indictnent for any offense
creates or defined by statute shall be deened objectionable for the
Feason that it fsile to negative any exception, excuse, or proviso
Contesned in the statute creating cr defining the offense. The fact
that the charge is made shall be considered as an allegation that ne
Tegal encase for the doing of the act existed in a particular case.

ans § 206-38 proviaes:

Sofficiency of avernents az to offente and transaction. In
fan indictnent che offense may be charged either by name or by
Eeference to the statute defining or making it punishable; and the
transaction may be states with so much detail of time, place, and
Sirconstances and such particulars as to the person (if any)
Against when, and the thing (if any) in respect to which the
Offense war Committed, as are necessary to identify the
Exansaction, co Bring it within the statutory definition of the
Gifense charges, to show that the coart has jurisdiction, and to
give the accused reasonable notice of the facts,

‘Rverments which so charge she offense and the transaction
be neld to be sufficient

   

 

 

 

sha

 

30
‘48 FOR PUBLICATION *#*

Give the accused reasonable notice of the facts

2. The informs jury wi
sufficient to-satiefy article I, sections 10 and 14
wai” ity

Article I, section 10 of the Hawai'i Constitution
provides in relevant part that “[nJo person shall be held to
answer for a capital or otherwise infamous crime(] unless on a
presentment or indictment of a grand jury or upon a finding of
probable cause after a preliminary hearing held as provided by
law." We have said that “an indictment must be specific enough

to ensure that the grand jury had before it all the facts

necessary to find probable cause.” State v. Israel, 78 Hawai'i
66, 73, 890 P.2d 303, 310 (1995) (citing State v. Kane, 3 Haw.
App. 450, 457, 652 P.2d 642, 647 (1982)). Furthermore, HRS

§ 806-34, see supra note 19, states that an indictment must set
forth the details of the transaction involving the defendant
‘with so much detail of time, place, and circumstances . . . as
are necessary to identify the transaction, to bring it within the
statutory definition of the offense charged, to show that the
court has jurisdiction, and to give the accused reasonable notice
of the facts.” This requirement is grounded in article 1,
section 14 of the Hawai'i Constitution, which requires that “{iln
all criminal prosecutions, the accused shall enjoy the right

|.» « to be informed of the nature and cause of the

 

on November 2, 2004, Senate Bill No. 2851, anending article 1,
section 10 to allow inaictnent ty written information by s prosecuting
Giticer, was approved by the Voters ins general election. Se 2004 Haw.
Sere. Ll, ae 1085,

 

 

 

a
‘+## FOR PUBLICATION #44

accusation.” In order to honor this right, an indictment must
“apprise the accused of the charges against him, so that he may
adequately prepare his defense.” State v, Vanstory, 91 Hawai'i
33, 44, 979 P.2d 1088, 1070 (1999) (quoting State v. Sword, 68
Haw. 343, 345, 713 P.2d 432, 434 (1986)). Nevertheless, we have
not yet identified which of the substantive components set forth
An HRS § 701-114(1), gee supra note 9, must be factually alleged
in the indictment to ensure that the due process requirement of
article 1, section 14 is fulfilled and, pursuant to article I,

section 10, “to ensure that the grand jury has before it all the

 

facts necessary to find probable cause.” Israel, 78 Hawai'i at

73, 890 P.24 310,

 

An indictment must enable a grand jury to determine
that probable cause exists that the accused committed a violation
of the charged offense both as to the elements of the offense and
the concomitant culpable state of mind. See Ontai, 84 Hawai'i at
63, 929 P.2d at 76 ("Probable cause is established by ‘a state of
facts as would lead a person of ordinary caution or prudence to
believe and conscientiously entertain @ strong suspicion of the
guilt of the accused.’") (quoting State v. Chung, 75 Haw. 398,
409-10, 962 P.2d 1063, 1070 (1993)); State vs Araki, 62 Hawal't
474, 482, 923 P.2d 891, 899 (1996) ("Probable cause has been

 

established when it can be said that a reasonable and prudent

 

   

on Novenber 2, 2004, articie 1, section 14 was amended by
ratification of the electorace in respects’ immaterial to che present matter |
See 2000 aw. Sess. Lay at 1086

 

32 |
44+ FOR PUBLICATION ***

person viewing the evidence would have a strong suspicion that @
crime has been conmitted.”); Kane, 3 Haw. App. at 458, 652 P.2d
at 648 (holding that the grand jury had sufficient facts to find
probable cause that the defendant had committed a violation of
HRS § 134-9, relating to firearms possession); State v. Okumura,
59 Haw. 549, 550, 584 P.2d 117, 119 (1978) (A grand jury

 

indictment must be based on probable cause . . . [, meaning such
facts necessary) to believe and conscientiously entertain a
strong suspicion of guilt of the accused.”) (Internal citation
omitted.). Because “conscientiously entertain{ing] a strong
suspicion of guilt of the accused” necessitates establishing a
Likelihood that (1) all elements of the charged offense are
Present and (2) the accused possessed the requisite state of mind
as to each element of the charged offense, an indictment must,
ipso facto, aver facts sufficient to permit the grand jury to
find probable cause both as to the elements of the charged
offense and to the accused’s state of mind.

b. Jurisdiction and venue

In addition to alleging the elements of the charged
offense, the plain language of HRS § 806-34 requires that an
indictment aver facts sufficient to “show that the court has
jurisdiction.” In turn, HRPP Rule 12(b) (2), see supra note 6,
allows motions to dismiss based on jurisdictional defects at any
time during the pendency of the proceedings. Indeed,
“jurisdiction of the offense charged and of the person of the
accused is @ fundamental and indispensable prerequisite to a

valid prosecution.” Adame v. State, 103 Hawai'i 214, 221, 81

33
444 FOR PUBLICATION +++

P.3d 394, 401 (2003) (citing State v, Mevers, 72 Haw. 591, 593,
825 P.2d 1062, 1064 (1992) (citations omitted)).

Venue too mist be established for an indictment to be
sufficient, though, under Hawai'i law, venue rides the coattail’s
of jurisdiction: HRS § 806-16 (1993) states that “[i]t shall not
be necessary to state any venue in the body of any indictment,
but the jurisdiction named in the margin thereof shall be taken
to be the venue for all facts stated in the body of the
indictment.”

Finally, article I, section 14 of the Hawai‘i
Constitution requires that,

ijn a2 ceiminal prosecstions, the accused
all enjoy the Fight to'a speedy and public trial by
Sn inpareiai jury ef the district whecein the erie

shall have’ been, Committed

hich district shal) have
been -crevicusly ssceztsined Py tamer of sect other
@istrict to which the prosecution may be renoved with

the consent of the aectsed sss

 

(Bmphasis added.) A plain reading of this language supports the

conclusion that proper venue must be ascertained before a

 

prosecution at trial may lawfully proceed.

HRS § 806-17 (2995) provides in relevant part that “(t]he Judicial
circuits of the State established by (HAS §) 603-1 are deened to be the
“districts” referred to in Article I, section 14, of the Constitution of the
Other states have taken the position that venue must be alleged in an
indictnont. “See, gua, State v. WebE, 915 S.W.26 255, 262 (Ack. 1996); Crouse
waState, 611 s-£.24 113, 116 (Ga. ce: App. 2005); Weaver v, State, 503 N-E.ze
136, 141 (Ind. 1991). It is wel! settled, on the other hand, that federal
indictments need not ‘allege verue. See, £.c., United States vw. Brenan, «57

    

 

 

 

Fiza 1062, 10es (eth Cir. 1972); Sonphuii o, Uniteg states, 392 F.20 45, 47
UGth Cer. 1968)7 Carboy. Unised fates, Sid Fiza Tie, 733 (9th Cir. 1963).

 

34
484 FOR PUBLICATION ##*

It is true, as the prosecution urges, that an
indictment need not allege facts golely related to negating
defenses that may be raised by the accused. State v. Adams, 64
Haw. 568, 571, 645 P.2d 308, 309 (1982) (“It has long been held
that indictments need not anticipate and negate possible
defenses; rather, it is left to the defendant to show his
defenses at trial."). It is equally true that the statute of
Limitations is a waivable affirmative defense. See Adams vs.
State, 103 Hawai'i at 226, @1 P.3d at 406 (citing Acevedo-Ramos
vs United States, 961 F.2d 305, 307-09 (1st. Cir. 1992)
(concluding that statute of limitations is a waivable affirmative
defense) }; Timotes, 87 Hawai'i at 115-16, 952 P.2d at 872-73
(holding “that [the defendant] waived the statute of limitations
for the time-barred lesser included offense of simple trespass by
requesting that the trial court instruct the jury on it”).

Nevertheless, while statutes of limitation may be
invoked, and waived, as affirmative defenses, that is not the sum
total of their nature or function. As set forth in HRS
§ 701-114(1) (e), the timeliness of the prosecution in
satisfaction of HRS § 701-108 constitutes a baseline substantive
component that the prosecution must prove beyond a reasonable
doubt at trial; silence by the defendant on the issue of
timeliness does not relieve the prosecution of its burden of
proving that component. Rather, facts establishing timeliness,

Like facte establishing jurisdiction, must be averred in order to

35
‘++ FOR PUBLICATION ##+

 

fulfill due process notice requirements.” This court’s holding
in Kaakinaka implicitly established this proposition.

In Kaakimaka, the defendant was charged, inter alia,
with conspiracy to commit second degree murder, in violation of
HRS § 705-520 (1993), three years and eleven months after the
victin’s murder, Pursuant to HRS § 701-108(2) (e), see supra
note 3, prosecution for conspiracy to comnit second decree
murder, as an unclassified felony, had a statutory limit of three
years. Therefore, in an effort to preserve the conspiracy charge
in the face of the three-year Limit, the prosecution alleged that
the conspiracy included an underlying felony of concealment of
murder which ran continuously past the date of the murder such
that the statute of Limitations had not expired by the tine of

the indictment.

 

% the eizeuit court reached # sinilar conclusion in its COL No. 10,
sypia part c, relying in part on Bowers, 718 Sc. 2¢ 285, and Hoss, 469 8.6.20
525: Esuers' and fous reflect a long tradition in Florida and Georsia,
Fespectively, of requiring the State to allege statute of limitation
exceptions in the indictment if the exception will be relied upon at trial.
Bowers, 716 So. 24 at 256 ("An information must show on its face that the
Prosecution hac begun within the statute of limteations or must allege facts
Eovshow that the statute was tolled."); Moss, 469 8.£.2d at 326 ("It has. long
been the law in Georgia ‘in a crininal case, where an exception is relied upon
fo prevent the bar of the statute of limitations, it must be slleged and
proved."") (quoting Hollingsworth v State, €5 8:8. 1077, 1077 (Ga. Ct. APP.
1509)

 

 

   

 

 

% HRS § 105-820 provides:

   

A person ts guttty of criminal conspiracy if, with intent to
promote Gr facilitate
Tay he agrees with one Gr more persons het they or one or nore of

them will engage in or solicit the conduct or will cause or

Solicit the fesslt specified by the definition of the offens.
(2) fe of another person with whom he

in pursuance of the conspiracy.

 

 

(Emphasis added.)
36
 

‘** FOR PUBLICATION

‘This court held that because “concealment” was not an
identifiable underlying felony offense set forth in the HPC, as
required by HRS § 705-520, see supra note 24, the indictment vas
insufficient. 04 Hawai'i at 293, 933 P.2d at 630, This court
demanded specificity as to which particular felony underlay the
conspiracy charge because of the correlative nature of punishment
for a conspiracy conviction, where “the grade and class of the
conspiracy is contingent upon the grade and class of the most
serious underlying offense that is an object of the conspiracy.”
84 Hawai'i at 295, 933 P.2d at 632 (citing HRS § 705-526
(2993). Thus, we ruled that failure to aver an identifiable
underlying offense “deprives the defendant of notice of the class
and grade of conspiracy and, therefore, deprives him or her of
notice of the possible punishment and the statute of limitations.
Such failure to notify a defendant of the charges he or she must
prepare to meet deprives him or her of due process.” Id.

our decision in Kaakimaka supports the proposition that
an indictment is insufficient if: (1) on its face, it ts
untimely: and (2) it fails to allege facts that invoke an

exception to the standard statute of limitations set forth in HRS

 

RS § 705-526 provided:

(2) A conspizacy to commit « class A felony is a class 8 felony.

(2) Except as provided in [paragraph} (1), conspiracy to commits
crine 1s/an offense of the sane class and grade as the nest serious
offence which is an ebject of the conspiracy

 

  

Extective June 16, 1997, the legislature amended HRS § 705-526 to make
Conspiracy to conmit murder in any degree a class A felony. See 1997 Haw.
Sesse L. Act 249, $5 3 and 9 at 290-91. Nevertheless, the anendnent does not
affect the centre] holding of Kaakinaka: failure to silege facts in an
Indictment invoking exceptions te the statute of limitations relied upon by
ihe prosecution resders the indictment insufficient on due process grounds

 

3
‘** FOR PUBLICATION ***

§ 701-108(2) so that “[the accused] may adequately prepare his
lor her} defense,” Yanstory, $1 Hawai'i at 44, 979 P.2d at 1070,
as required by due process. That is because facts necessary
adequately to prepare a defense include those that put the
accused on notice as to any exception to the applicable statute
of limitations upon which the prosecution is relying.

We therefore hold that, on the facts before us, when
the charged offense is theft by deception, as defined by HRS
§ 708-830(2), and the prosecution is relying on the tolling
provision of HRS § 702-108(3)(a}, relating to “[alny offense an
element of which is. . . fraud,” the prosecution must not only
allege the timely date or dates of commission of the offense in
the indictment, but also the earliest date of the “discovery of
the offense by an aggrieved party or . . . a person who has a
tegal duty to represent [the] aggrieved party.” Inasmuch as the
indictment in the present matter failed to aver facts pertaining
to the date of discovery of the aggrieved party, DAGS, the

circuit court correctly determined that it was insufficient.#

 

 

‘The indictment alleged sufficient facts to put the Appellees on

notice as to which statute of limitations exception the prosecution wes,
Felying spon. Farsuant te sur holding in pare 1i]-Acé, supra, that theft by
deception is an “offense an elenent of which is... fraud,” alleging theft

by deception invoked the Traud exception of HRS § 30i-108(3)(a) and served to
put the Appellees on notice that, because on ite face the indictment was
Untimely, the prosecution was relying on the fraud exception to preser™
timeliness. The Appeliess expressly recognized that reliance in their
fo'disnies, See discussion anira in pare Ji!08.5

38

 
‘48 FOR PUBLICATION ##*

 

An insufficient indictment can be cured. This court

stated in Treat that,

in determining whether the accused's right to be
Informed of the nature and cause of the accusation
agninet him hos been violated, we must lock to all of
the information supplied to nim by the State to the
point where the court passes pon the contention that
hie rignt hae been violates.

   

 

 

67 Haw. at 120, 680 P.2d at 251 (quoting Robins, 66 Haw. at 317,
660 P.2d at 42-43); see also State v. Elliott, 77 Hawai'i 309,
312, 884 P.2d 372, 375 (1994) ("One way in which an otherwise
deficient count can be reasonably construed to charge a crime is
by examination of the charge as a whole.”); State v. Abellira, 67
Haw. 105, 106, 678 P.2d 1087, 1088 (1984) (holding that grand
jury transcripts supplied to defendants served to fully apprise
them of the nature of the charges). In weighing the curative
effect of the supplemental information provided to the accused we
consider only the facts of which the accused is placed on actual
knowledge. Israel, 78 Hawai'i at 70-73, 890 P.2d at 307-10
(citing State v. Tuya, 3 Haw. App. 287, 292, 649 P.2d 1180, 1184
(1982).

Under the tests enunciated in Treat and Israel, the
Appellees had actual knowledge of the prosecution's reliance on
the fraud exception. On June 19, 2002, Stan’s Contracting filed
its motion to dismiss on the grounds that the statute of
Limitations had run and that the fraud exception under HRS

§ 701-108(3) (a), see supra note 3, did not apply to theft by

38
+++ FOR PUBLICATION ++*

deception. On July 24, 2002, Murphy Construction joined that
motion. In the motion, the Appellees acknowledged that the
prosecution was relying on HRS § 701-108 (3) (a) for its authority
to prosecute these charges. .

The indictment, however, is devoid of any facts
averring when the alleged involvement of the Appellees: in
Eviota's scheme was first discovered and, therefore, provides no
facts that, if proven at trial, would establish that the extended
Limitation period had net expired. The prosecution, at the July
26, 2002 hearing, attempted to cure this deficiency through an
offer of proof that Ho first “determined there was sone criminal
Liability on the part of [the Appellees]” on February 14, 2000.
Under HRS § 701-108(3) (a), the period to indict would run until
February 14, 2003, and the States prosecution would therefore be
timely inasmuch as it began on May 15, 2002.

However, under HRS § 701-108(3) (a), the extension
begins to run when either the “aggrieved party” ox the “person
who has @ legal duty to represent (the) aggrieved party”
discovers the scheme. The prosecution's offer of proof
established, at most, when Ho, as an agent of the Department of
the Attorney General, “discover(ed) . . . the offense,” not when
the aggrieved party itself, DAGS, learned of the scheme.
Therefore, to cure the indictment, an affirnative offer of proof
was required that no representative of DAGS had discovered the
alleged involvement of the Appellees prior to May 15, 1999.
Absent such facts, the indictment did not sufficiently allege

that the prosecution was timely

40
44+ FOR PUBLICATION ***

‘Therefore, the circuit court correctly concluded that

the prosecution's offer of proof failed to cure the insufficient

indictment.

IV. CONCLUSTON

Accordingly, we affirm the August 9, 2002 order of the

circuit court granting the Appellees’ motion to dismiss the

indictment with prejudice.

on the briefs:

Adina L.K. Cunninghan
Deputy Attorney General,
for the plaintiff-appellant
State of Hawai'i

David J. Minkin, of MeCorriston
Miller Mukai MacKinnon,
for the defendants-appellees
Stan's Contracting and Roy Shioi

William A. Harrison, of Harrison
& Mateucka, for the defendants~
appellees G.W. Murphy
Construction Co., John Patrick
Henderson, and Mark L. Henderson

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