No. 13476 

### IN THE SUPREME COURT OF THE STATE OF MONTANA 1977

THE STATE OF MONTANA,Plaintiff and Appellant,

JACK M. SCANLON, Defend-antand Respondent.

Appeal from: District Court of the First Judicial District, Honorable Gordon R.Bennett, Judge presiding. Counsel of Record: ForAppellant: Hon. Mike Greely,Attorney General, Helena, Montana Robert Keller, Special AssistantAttorney General,

argued, Helena,Montana For Respondent: Donald Garrity argued, Helena,Montana

Submitted: February 23, 1977 Decided

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Filed:



## -.~ws J.&~RNE~ clerkMr. Justice Daniel J. Shea delivered the Opinion of the Court.

This case involvesproceedings before a grand jury in Lewis and Clark County in which the defendantwas indicted on 18 counts of perjury relating to his testimony before the grand jury as to how his clientswho had industrial accident claims came to him. In State v. Scanlon, 33 St.Rep. 1355 (December30, 19761, this Court affirmed the dismissal of 16 of the 18 countsby the district court,but ordered a trial on two of the counts (counts9 and 10). Thereafter, defendantpetitioned for a rehearing, and the state petitioned for a rehearing, the thrust of both was that the defendant and the state requested a dismissal of all 18 counts of perjury. This Court granted the petitions for rehearing. As part of the grand jury investigation into the handling of industrial accident claimsby the Industrial Accident Board and by attorneys in Montana, the grand jury called defendant to testify as to how the attorney-client relationshipwas initiated. The purpose 

### of this inquirywas to determine if there were leaks from the Industrial Accident Board to certain lawyers in Montana concerning persons in Montana who had filed industrial accident claims with the Board. The focuswas whether anyone within the Industrial Accident Board either referred claimants to the defendant or whether they provided him with names of claimants who would be potential clients.When he was first called to testify before the grand jury, defendant refused to answer questions asked him, asserting his right against self-incrimination. Thereafter, in an effort to find how defendant acquired his clients, the grand jury granted immunity againstprosecution to the defendant except prosecution for contempt and perjury. 

### For two days defendant testified before the grand jury, and denied he solicited his clients and explained howthey became his clients. As a result of this testimony the grand jury indicted defendant on 18 counts of perjury. The district court dismissed each of the 18 counts based either on lack of direct evidence as to the falsity of the statement, lack of corroborationas to the falsity of the statement, or lack of materiality. Several of the counts against defendant arose out of transactions where defendant testified the clients were referred to him by an uncle and aunt,Mr. and Mrs. Richard Mullins, or by Mr. and Mrs. Herman Myers, long-time family friends. At the time of his testimonybefore the grand jury, all of these persons had died. The clients who appeared before the grand jury denied ever knowing any of the people named. The district court dismissed these counts for lack of direct evidence as to the falsity. These dismissals were proper. These counts were not supported by direct evidence of the falsity of the defendant's statements. This appeal concerns the evidentiary standard required for the proof of perjury, which essentially revolves around three statutes. Section 94-7-202(7), R.C.M. 1947,provides: "Noperson shall be convicted of an offense under this section where proof of falsity rests solely upon the testimony of a singleperson other than the defendant." Section 93-401-1,R.C.M. 1947,provides: "Thedirect evidence of one witness who is entitled to full credit is sufficient for proof of any fact, except perjury and treason." Section 93-1401-2,R.C.M. 1947,provides: "Perjury and treasonmust be proved by testimony of more than one witness; treason by the testimony of two witnesses to the same overt act; and perjury by the testimony of two witnesses, or onewitness and corroborating circumstances." (Emphasisadded.) The basis for unusually stringent evidence requirements is set out in an article in 19 UCLA Law Review 638, 642, 643 entitled"Perjury and Related Offenses Under the Proposed California Criminal Code." That same article points out at p. 645, that Tentative Draft No. 6 of the Model Penal Code on this point reads: "Corroboration. Proof of guilt beyond a reasonable doubt shall suffice for convictionunder this section as in other criminal cases,without special requirement of two witnesses or corroborating circumstances. "[Alternate,rejected by the council: No person shallbe convicted of an offense under this Section where proof of falsity rests solely upon contradiction by testimony of a person other than the defendant.]

### " The official draft of the Model Penal Code,which served as the basis for section 94-7-202(7),R.C.M. 1947,used the alternate provision. InMontana Criminal Code, 1973,Annotated, Prof. William F. Crowley

### - Editor, at page 293 the annotator points out: "The common law rule that falsehoodbe established by two witnesses is adopted in part by subsection

(7). At the common law this rule was adopted to deal with the problem of an oath against an oath. Themodern rationale is a policy determinationbased on a balancing of the need for protection of witness and the need to maintain the sanctions for false testimony. In adopting the requirement of more than one witness Montana has followed the majority of states in affording additional protection to the witness at the possible cost of being unable to convict an apparentperjurer. 

## * * * " As noted above, the standard of proof required inMontana under the

new code section 94-7-202(7), R.C.M. 1947,requires that the proof of the falsity of a statement must be more than the contradiction testimony of a person other than the defendant. The legislature recentlymade thispolicy determination and despite the contrary rule urged by the state, this is the rule in Montana. The exact requirements of this evidentiary rule in perjury cases are apparent from an examination of the California cases interpreting the section of the California Civil Code, identical to Montana's section 93-1401-2,R.C.M. 1947. In an article entitled "Proof of Perjury: The Two Witness Requirement",35 Southern California Law Review 86, 97, it is stated:

### "In summary, the California attitude is,and remains, that direct testimony of at least one witness must alwaysbe introduced to prove the falsity of the statement set forth in the indictment; circumstantial evidence alone will not support a perjury conviction." In People v. Roubus, 53 Cal.Rptr. 281, 417 P.2d 865, 866, 867, the California SupremeCourt, sitting In Bank, outlined this evidentiary requirement: "Perjurymust be proved by the testimony of two witnesses, or of onewitness and corroborating circumstances.

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## * This statutory provision has been interpreted asprescribing not only the amount but also the kind of evidence necessary to support a perjury conviction. 

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## * * Direct, as distinguished from circumstantial,evidence of the falsity of the defendant's testimony by at least one witness is generally required. 

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## * Thisdoes not mean that there must be a denial in the very words of the defendant's testimony

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## * but that there must be testimony by at least onewitness furnishingdirect evidence of facts contrary to, or absolutely incompatible orphysically inconsistentwith, that sworn to by the accused

## * * *.Evidence that establishes facts fromwhich the falsity of an alleged perjured statement may or may not be inferred is insufficient under the direct evidence rule.* 

## * * "The rule requiringproof of falsity by direct evidence has been criticized.

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## * * However, this requirementwas early established in this state by decisions construing our statutoryprovision. It is noteworthy that amajority of jurisdictionswhich apply the rule that falsitymust be proved by the testimony of two witnesses, or of onewitness and corroborating circumstances,hold that circumstantial evidence alone is generally insufficient to establish falsity.

### " An early Montana case indicated this is the law in Montana

as well. In Statev. Gibbs, 10Mont. 213, 219, 25 P. 289, it is said: "'It isnot necessary that there should be two livingwitnesses in contradiction of the statement of the defendant to justify a conviction of perjury. It is sufficient if, in addition to one directlyopposing witness, corroborating circumstances sufficient to turn the scale and overcome the oath of the defendant and the legalpresumption of his innocence are proved.'" The Court in Gibbs approved this instruction as to proof of per

### j ury:

### "'

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## * * that such act ofperjury has been established to your satisfaction beyond a reasonable

- doubt by more than one witness, or that the testimony of suchwitness has been corroboratedupon that point by other factsand circumstancesproved on the trial. In other words, the direct evidence of one witness alone is not sufficient to convict of the crime of perjury, unless corroborated by other facts and circumstancesproved on the trial.'" In Gibbs the Court was construing the then equivalent code section to section 93-401-1,R.C.M. 1947. Section 93-1401-2 had not been enacted at that time. In State v. Jackson, 88 Mont. 420, 293 P. 309, the Court cited Gibbs as authority of the requirement that perjury must be proved by the testimony of two witnesses, or one witness and corroborating circumstances indicating that thiswas the law even prior to the passage of section 93-1401-2,R.C.M. 1947. A subsidiary question to be determined regards the nature of the corroborating circumstances that must be proved. The rule in California, that the state argueswe should adopt, is stated in People v. Casanova, 54 Cal.App. 439, 202 P. 

### 45, 47: 

## "** * The statute respecting the quantum of evidence necessary in perjury cases will be satisfied, if there be the testimony of one witness to facts that are absolutely incompatible with the innocence of the accused,corroborated by circumstanceswhich, of themselves and independently of such directly inculpatory evidence, tend,with a reasonable degree of certitude, to show that the accused is guilty as charged." See also: People v. Pustau, 39 C.A.2d 407, 103 P.2d 224, 228. In Gibbs the Court said that "corroborating circumstances sufficient to turn the scale and overcome the oath of the defendant and the legalpresumption of his innocence" are all that is required. In People v. Todd, 9 C.A.2d 237, 49 P.2d 611, 614, it is pointed out: "It is also well settled that motive and design to commit a crime, if proved,may be considered a guilty 

### circumstance 

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## * * and consequentlymay serve legally as corroborative evidence; and in this behalf it has been repeatedly held that where, as here, it is claimed that several offenses have been committed as part of one scheme or plan, all of the same general character,tending to the same common end, evidence thereofmay be received to show theprocess or motive and design to commit the particular offense with which the accused is charged,and as tending to show logically that the particular offense for which he is being tried was part of such common scheme." The second issue involves the requirement that the alleged perjured statementbe material. TheNontana statute, section 94-7- 202(3),R.C.M. 1947,provides: "Falsification ismaterial, regardless of the admissibilityof the statement under rules of evidence, if it could have affected the course or outcome of the proceeding. It is no defense that the declarant mistakenly believed the falsification to be immaterial. Whether a falsification ismaterial in a given factual situation is a question of law." The Commission Commentpoints out: "The proposed definition of 'materiality' in subsection (3)does not differ substantially from that given by prior law." In State v. Hall, 88Mont. 297, 304, 292 

### P. 734, the Court said: 

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## * * * Also itmay be conceded that the general rule is that anything so connected with the matter at issue as to have a legitimate tendency to prove or disprove some material issue by giving weight or probability to, or detracting from, the testimony of a witness, ismaterial

## * * * and that, if evidence is circumstantially material, it is sufficient to sustain a perjury charge." The test formateriality as set out by the statute is not particularly difficult to meet, it requires only that in the actual factual situation involved would it be reasonable to find that the defendant's statement, if believed, could have altered the course of the investigation. The grand jury statute, section 95-1408(c), R.C.M. 1947, provides: "The grand jury shall find an indictment when all the evidence before it, taken together, if unexplained or uncontradicted,would, in its judgment, warrant a convictionby a trial jury." While it is the right of the grand jury to return an indictment, it is,nevertheless, the duty of the courts to determine if therewastherequiredminimum evidence toprove each of theelements of the of thecharge of perjury. Both sidesconceded here that therewas

no more evidencewhich could go before a trialjury than what the grandjury had alreadyheard. Accordingly, thisisnot a situation where the indictment is faultybut where thedefendant can be reindicted. Rather, it is a situationwhere ifthe indictment is faulty, the defendant cannot again be indicted because thereisno other evidence topresent tothegrand jury. This Court has carefully reviewed 

### allcounts and conclude that allcounts were properly dismissed. Sixteen of the 18counts

were situationswhere theywerenot supported by direct evidence of the falsityof defendant's statements. However, counts 9 and 10 deservemore attention indiscussingour reasons fortheirdismissal. The two charges are summarized as follows:
A summary of count 9 charges thatJack M. Scanlon, falsely testified that Grace A. Rieker firstcontacted him on the telephone, when intruth and facthe knew that he had instigated the telephone conversation with claimant for thepurpose of initiatinga clientattorney relationship; and that he so testified todeceive and frustratethe grand jury inits investigation contrary to section 94-7-202, R.C.M. 1947. A summary of count 10 charges that defendant falselytestifiedthatprior tothe telephone callfrom claimant he had never heard of the claimant nor the fact that shewas injured, while in truth and facthe knew the claimant and that she had been injured prior toever talking toher, and he sotestified for thepurpose of deceiving and frustrating the grand jury contrary tosection 94-7-202, R.C.M. 1947. The gistof count 9 isthe contradictory statementsof attorney Scanlon and Rieker astowho called theother first. Scanlon claims she calledhim firstand she claims that Scanloncalled her first. A determination must be made whether attorney Scanlon's testimony, if false, was material to the grand jury investigation; that is,would itbe reasonable to find that the defendant's statement, if believed, could have altered the course of the investigation. Section 94-7-202(3), R.C.M. 1947,provides that I' 

## * * * Whether a falsification ismaterial in a given factual situation is a question of law." Accordingly,wemust determine if the testimonywas material. We conclude that itwas not. The focus of the grand jury inquirywas to determine if there

were any personnel within the Industrial Accident Board who were leaking information concerning claimants' cases to certain attorneys. The testimony elicited fromMr. and Mrs. Rieker and from attorney Scanlon must be weighed in light of this inquiry; Was anyone within the Industrial Accident Board referring claimants to attorney Scanlon, orwere they providing him with the names of potential clients? The testimony centers around Mrs. Rieker, a secretaryreceptionistat the Boulder River School in Boulder; Ron Fuller, the principal of Jefferson County High School in Boulder; and attorney Scanlon. Fuller and Scanlon are closepersonal friends dating back to high schooldays. Fuller and Mrs. Rieker were casual acquaintances in Boulder. Mrs. Rieker's industrial accident claim occurred at the school when she slipped on the steps and sustained back or neck injuries. Fuller had no connectionwith the Industrial Accident Board which handled claims sustained by injured workers. Mrs. Rieker testified that itwas Ron Fuller, and him alone, who twice suggested that she obtain a lawyer to handle her claim. On the first occasion she claims Fuller told her she should see a lawyer,and 

### he would help her get one. On the second contact made by Fuller she claims that Fuller telephoned her and asked herif shewould like to talk to attorney Scanlonwho was with Fuller at the time. She claims she did talk to Scanlon and he later came

over to her house to discuss her case. Therewas no evidence that Mrs. Rieker became a client of Scanlon as a result of inside contacts Scanlonhad with the Industrial Accident Board. Therewas no evidence that personnel of the Industrial Accident Board were referring possible clients to Scanlon or providing him with the names of potential clients. After Mrs. Rieker testified that itwas Fullerwho furnished the contactwith attorney Scanlon,there was simply no evidence that personnel of the Industrial Accident Board had leaked information concerningMrs. Rieker to attorney Scanlon. However,when Scanlonwas later called before the grand jury, they wanted to knowwho had first done the contacting. Did Plrs. Rieker contact attorney Scanlon first or did Scanlon contact her first? Regardless of the answer given to this question by Scanlon, itwould not have affected the outcome of the proceedings ormisled the grand jury in its investigation into possible leaks from the Industrial Accident Board. If they chose to believe Mrs. Rieker, they could conclude that Fuller telephoned her on behalf of attorney Scanlon and then put Scanlon on the phone to talk to her about her accident claim. If they chose to believe Scanlon they could con- ' clude that Mrs. Rieker went to him on her own volition and that he could not recall how she happened to call him as an attorney. 

### either conclusion suggests a leak to Scanlon from the Industrial~ccident Board. It is clear that Scanlon's testimony was not material to the grand jury's inquiry. Count 9must be dismissed for yet another reason. Mrs. Rieker's testimony that attorney Scanlon called her firstwas not corroborated by admissible evidence. There was only the direct testimony of Mrs. Rieker that Scanlon called her first. The onlyattempted corroboration was testimony fromMrs. Rieker's husband that his wife told him that attorney Scanlon had called. It is manifest that section 93-1401-2,R.C.M. 1947,which sets out the requirement of corroboration, contemplates only admissible corroboration. Here, the testimonywas not admissible because it was hearsay and because it attempted to obtain corroboration from the

samewitness who was the source of the direct evidence. In Statev. Newman, 162 Mont. 450, 457, 513 P.2d 258,we defined hearsay as follows: 

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## * * 'Hearsay'is testimony or evidence of someone'swords or conduct outside the court,when offered in court to prove the truth of the thing being asserted, and thus resting for itsvalue upon the credibility of the out-of-court asserter." Here, the state attempted to use the statement made by Mrs. Rieker to her husband to prove that Scanlonhad actually called Mrs. Rieker

on the telephone. Its credibility rested not onMr. Rieker but on Mrs. Rieker. Thisplainly is hearsay. The vice of this kind of evidence is even more apparentwhen considered in relation to the kind of proof needed for a prima facie

case of perjury. To allow the testimony of Mr. Rieker as corroboration would be to fly in the face of Montana statutes requiring corroboration. Section 93-401-1,R.C.M. 1947,provides that the direct testimony of one person is not sufficient to prove the crime of perjury. Section 93-1401-2,R.C.M. 1947, requires that 

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## * * * perjury [mustbe proved] by the testimony of two witnesses,or one witness and corroborating circumstances." (Emphasisand bracketed material added.) Mrs. Rieker was the only person who testified directly that attorney Scanlon had called her first and so therewas a need for corroborating circumstances. To be admissible, the corroborative evidencemust be independent of the testimony of the samewitness who is the source of the direct evidence. See, for example,United Statesv. Freedman, 445 F.2d 1220 (2ndCir.1971); United Statesv. Thompson, 379 F.2d625 (6thCir. 1967) and United Statesv. Rose, 215 F.2d 617 (3rd Cir. 1954),which cases engraft a requirement of corroboration onto the federalperjury statute. Here, the grand jury had to rely on the direct testimony of Mrs. Rieker that attorney Scanlon had called her first,but also, for corroboration, ithad to rely on her indirect testimony by virtue of her husband testifying to what she told him. What Mrs. Rieker told her husband is not corroboration under the perjury statute. For these reasons count 

### 9must be dismissed. Count 10 concerns the nature of the proof required for a charge of perjury, specifically, the requirement of direct evidence. The gist of count 10 concerns a conflict as to whether attorney claim Scanlonknew of Mrs. Rieker's compensation/before the first time he talked to her about the case. Scanlon claims he did not;Mrs. Rieker claims he did. Regardless of who is right, there is no direct evidence as required by section 93-1401-2 to establish a prima facie

case.The only evidence concerning attorney Scanlon'sprior knowledge of Mrs. Rieker's claim came fromMr. and Mrs. Rieker. They testified Scanlon told them he knew of Mrs. Rieker's claim before he talked to her on the telephone. However, this is not direct evidence. Rather, under section 93-301-10,R.C.M. 1947, it is indirect evidence. That sectionprovides: "Indirect evidence is that which tends to establish the fact in dispute by proving another,and which, though true, does not of itself conclusively establish that fact, but which affords an inference or presumption of its existence. For example, a witness proves an admission of the party to the fact in dispute. This proves a fact fromwhich the fact in dispute is inferred." Under this statute any statement made to them by Scanlon is in the nature of an admission and, therefore, is indirect evidence of the fact sought to be proved. The result is that there is no direct evidence to sustain a prima facie case of perjury as required bysections 93-401-1 and 93-1401-2,R.C.M. 1947. There being no direct evidence, count 10 must also be dismissed. Defendant has raised other issues in his petition for rehearing,but in light of our holding, we find no need to discuss them. Counts 9 and 10 are ordered dismissed and the dismissal order of the district court is affirmed 

### in its entirety. 

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Justice

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We Concur: ,--3

JusticesMr. Justice John Conway Harrison dissenting:

I dissent. As the author of the earlier 4-1 opinion of this Court fromwhich this rehearingwas granted, I find no reason to change that opinion. Two recent opinions of the United States Supreme Court considering perjury before a grand jury are of import in consideration of the instant case. Both were decided onMay 23, 1977: United States v. Wong, No. 74-635, 45 LW 4464;United States v. Washington, No. 74-1106, 45 LW 4465. InWong, the Court reversed the suppression of testimony of a Chinesewoman of limited education given to a grand jury concerning illegalgambling and obstructionof state and local law enforcement. Referring to its holding in United States

### v. Mandujano, 425 U.S. 564, 96 S.Ct. 1768, 48 L ed 2d 212, the Court, inWong, noted: 

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## * * * the Fifth Amendmentprivilege does not condone perjury. It grants a privilege to remain silent without risking contempt,but it 'doesnot endow the person who testified with a license to commitperjury.' Glicksteinv. United States, 222 U.S. 139, 142 (1911). The failure to provide a warning of the privilege, in addition to the oath to tell the truth, does not call for a different result. The contention is that warnings inform the witness of the availability of the privilege and thus eliminates the claimed dilemma of self-incrimination or perjury. Cf. Garner v. United States, 424 U.S. 648, 657-658 (1976). However, in United Statesv. Knox, 396 U.S. 77 (1969),the Court held that even the predicament of being forced to choose between incriminatory truth and falsehood,as opposed to refusing to answer, does not justify perjury. 

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## * " In Washington, the Court overruled a lower court's judgment granting amotion to suppressgrand jury testimony and quashing an indictmenton the ground that itwas based on evidence obtained in violation of Fifth Amendmentprivileges against self-incrimination. The Court held:

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## * But this Court has not decided that the grand jury setting presents coercive elements which compelwitnesses to incriminate themselves. Nor have we decided whether any FifthAmendment warningswhatever are constitutionally required for grand jurywitnesses; moreover,we have no occasion to decide these matters today, for even assuming that the grand jury setting exerts some pressures on witnesses generally or on thosewho may later be indicted, the comprehensive warnings respondentreceived in this case plainly satisfied any possible claim to warnings. Accordingly, respondent's grand jury testimonymay properly be used against him 

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## *." Further, in Washington, as in the instant case, the defendant argued that having to invoke the FifthAmendment before the grand jury placed him at a disadvantage in the eyes of the grand jury. This argument entirely overlooks the fact that the grand jury's historic role is as an investigativebody; it is not an arbiter of guilt or innocence. Moreover, it iswell settled that invocation of FifthAmendment privilege in a grand jury proceeding is not admissible in a criminal trial,where guilt or innocence is actually at stake. United Statesv. Wong, supra. The same holding and reasoning should, inmy opinion,be applied here. This is a case that inmy opinion should have been tried to a jury. They, not this Court, should have decided the fact question.

/Mr. Justice Daniel J. Shea commenting on the dissent: Sincewriting this opinion a dissent has been prepared and filed. I strongly support the right and the need for dissenting opinions,but it seems to be that it should be responsive to the facts and law of the case. This case does not concern itself in any form with the suppression of testimony before a grand jury, and therefore, the Wong

case and the Washington case cited, quoted and discussed in the dissent are simply not applicable. And, neither does the invocation of the Fifth Amendment, as in the Washington case, have anything to do with the facts or law of this case, except perhaps as a procedural and historical aside. It should be noted that the dissenter wrote the original majority opinion in this case dismissing 16 of the 18 counts, but ordering a trial on counts 9 and 10. In the original opinion, the factswere not applied to the law of perjury, and that is the reason for the originalmistake on counts 9 and 10. Specifically, the test of materiality was never applied to the facts of count 9. And, neither in count 9was the requirement of corroboration applied to the facts, i.e., the corroborating evidence must be admissible evidence and not hearsay as in this case, and the corroborating evidence must be independent of the direct evidence. In count 10 the direct evidence requirement forproof of perjury was not applied to the facts of count 10. The true test of the validity of this dissent, can, I believe, be summarized as follows: If the dissentwould reverse the district court, then onwhat counts and for what legal reasons? On these matters the dissent is silent.