Court Opinion

ID: 4909191
Source: CourtListenerOpinion
Date Created: 2021-09-08 16:25:29.254817+00
Date Added: 2024-06-11T08:13:19.354201
License: Public Domain

09/08/2021
             IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
                              AT NASHVILLE
                           August 10, 2021 Session

               STATE OF TENNESSEE v. STEPHEN C. WALLICK

                  Appeal from the Circuit Court for Dickson County
                   No. 2016-CR-504 Suzanne Lockert-Mash, Judge
                      ___________________________________

                           No. M2020-01121-CCA-R3-CD
                       ___________________________________

A Dickson County jury convicted the defendant, Stephen C. Wallick, for the Class B felony
of theft of property valued over $60,000 but less than $250,000. The trial court imposed a
sentence of eight years in the Tennessee Department of Correction, suspended to
supervised probation, and ordered the defendant pay $60,000 in restitution. The defendant
filed this timely appeal, challenging the evidence supporting his conviction. Following our
review, we affirm the judgment of the trial court.

  Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

J. ROSS DYER, J., delivered the opinion of the court, in which JAMES CURWOOD WITT, JR.
and CAMILLE R. MCMULLEN, JJ., joined.

Jerred Creasy (at trial), Charlotte, Tennessee, and Michael J. Flanagan (on appeal),
Nashville, Tennessee, for the appellant, Stephen C. Wallick.

Herbert H. Slatery III, Attorney General and Reporter; Sophia S. Lee, Senior Assistant
Attorney General; Ray Crouch, District Attorney General; and Carey J. Thompson and
Jennifer Stribling, Assistant District Attorneys General, for the appellee, State of
Tennessee.

                                       OPINION

                            Procedural and Factual History

       The theft at issue stems from the contractual relationship between the defendant,
Stephen C. Wallick, and the victim, Blankenship CPA Group, PLLC (“the Firm”). At trial,
the State presented testimony from several of the Firm’s employees who detailed the
relationship between the parties and their discovery of the defendant’s theft. A summary
of their testimony follows.

        In March 2012, the defendant was an accountant in Dickson County and maintained
an established book of business. The defendant decided to sell his accounting practice and
entered into negotiations with the Firm. The negotiations continued for several months
and resulted in an asset purchase and employment agreement. As applicable to this appeal,
the terms of the agreement established that the Firm was to pay the defendant $158,000
over a period of three years for the defendant’s assets, or client list, and for his work
production, or net billings, at an established rate. Though the agreement was never signed,
the defendant agreed to the terms in an email to CJ Blankenship, the Firm’s managing
partner, and the parties operated under the terms of the agreement for the next three years.
During this period, the defendant received over $200,000 in compensation and $158,000
for the purchase of his practice.

       Approximately one year into the agreement, however, “performance issues” arose
between the defendant and the Firm. The issues culminated in the defendant’s resignation
on November 30, 2015. In his resignation letter, the defendant asserted that he was not
contractually obligated to the Firm, stating: “I have never been provided a contract or
signed anything that contractually binds me to continue. The terms negotiated have never
been fulfilled and at this point I have significant doubts that they will ever be honored.”

        When the defendant resigned, the Firm had just over $60,000 in outstanding
accounts receivable for work performed by the defendant. According to Mike Walters, the
managing director of the Firm’s Dickson office, the Firm paid the defendant for the work
he completed for these clients. The Firm, therefore, began contacting the clients in an
effort to collect the outstanding balances and discovered the clients had “either already paid
their bill or bartered away the bill” with the defendant.

       This discovery led to an investigation conducted by John Ethridge, a criminal
investigator for the District Attorney’s Office for the 23rd Judicial District. On March 9,
2016, Mr. Ethridge executed a search warrant at the defendant’s office and seized
“computers, external drives and an assortment of documentation.” The seized items were
forensically examined by Regional Organized Crime Information Center (ROCIC), “a
private organization that receives funds from the federal government to aid in crime
protection and investigation.” The forensic examination revealed that the defendant
downloaded client data files from the Firm’s server and made unauthorized copies of the
information. In addition, the defendant extracted a “client list” from the Firm’s tax
software upon which he made notations “indicat[ing] what was potentially collected from
those clients.” Mr. Ethridge also subpoenaed the defendant’s records from First Federal

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Bank which showed numerous cancelled checks that had been deposited into the
defendant’s account and that an escrow account existed, though the account was empty.

        Mr. Walters reviewed the defendant’s subpoenaed bank records and determined
“that there were payments that were for clients that [the Firm] had purchased and [the Firm]
had billed, and they did not pay [the Firm], but they paid [the defendant].” Mr. Walters
found cancelled checks “for a substantial portion” of the accounts receivable which had
been deposited into the defendant’s bank accounts. He stated some of the checks “were
actually made out to Blankenship CPA Group” and some were made out to the defendant.
Mr. Walters compiled a spreadsheet which summarized the defendant’s bank records,
pertinent invoices, accounts receivable ledgers, and cancelled checks. Mr. Walters also
created a worksheet documenting the invoices issued by the Firm to the clients at issue, if
the invoices had been paid, how the invoices had been paid, and who collected the
payments. Mr. Walters’ spreadsheets and the defendant’s “client list” were entered into
evidence.

        From the spreadsheet, Mr. Walters identified specific examples of clients who did
not pay the Firm for their issued invoices, including: Underdawg Construction, U.S.
Plumbing/Donna Story, Maynard Construction, Kingston, Inc., the Estate of Rosalee
Lieberman, Martin Sir, Bodie Youngkin, and John Pruitt. Mr. Walters also identified the
“client list” which “was where [the defendant] was keeping track of the payments that were
made to him by his clients.” Though the defendant claimed he deposited the collected
money into an escrow account, Mr. Walters stated the defendant did not actually do so as
the account was actually overdrawn by $12.50.

        After reconciling the defendant’s “client list” with the Firm’s invoices and accounts
receivable, Mr. Walters concluded the defendant collected $62,417.90 in accounts
receivable that belonged to the Firm. According to Mr. Walters, the defendant collected
payments totaling $12,885, and arranged for payments or bartered services for an
additional $49,532.90. Jonathan Blankenship worked in collections for the Firm and
provided an example of the defendant’s bartering, stating a client informed him that “they
had exchanged [accounting services] work for brick work on [the defendant’s] house.”
Trudi Hayes, an administrative assistant, prepared bills on behalf of the defendant and
testified that he asked her to remove invoices from the books that had already been issued
to clients. Ms. Hayes explained, “There was one instance where there were two clients
that [the defendant] had, that he told me he had bartered with them to do sewer line
fieldwork at his house.” The defendant told Ms. Hayes “to give him the invoices and he
would pay it, because he had told them he would swap out the work or barter it, whatever.”
The defendant “eventually asked [Ms. Hayes] to write those balances off,” but she did not
do so. According to Ms. Hayes, the defendant never paid the invoices.

                                            -3-
        After resigning, the defendant made several complaints to his former colleagues
regarding the Firm’s attempt to collect the accounts receivable. The defendant called
Jonathan Blankenship numerous times “and told [Jonathan] to stop talking to these people,
because they’re his clients.” In an email sent by the defendant to CJ Blankenship on
December 17, 2015, the defendant stated he prepared for “14 months to get ahead of this
situation. I understand you are attempting to collect the [accounts receivable]. There are
a few still out there that I have not contacted but I have 58K in payments, promises, or
terms.” In a text message sent on January 25, 2016, to Chris Griffin, a tax partner for the
Firm, the defendant stated: “Chris, a call made by an unknown is prompting clients to call
me. I have clients annoyed at Blankenship. I’ve collected almost $52,000; the majority
are on post-dated.” Though the defendant believed the accounts receivable were his to
collect, Mr. Griffin stated the accounts receivable belonged to the Firm.

       The State also presented testimony from three clients who paid the defendant
directly for accounting services he performed prior to his resignation, including Timothy
Rampaul, Laurel Joslin, and Donna Story. During Ms. Story’s testimony, confusion arose
as to whether she bartered with the defendant because after the defendant resigned, Ms.
Story told one of the Firm’s employees that she exchanged septic work for the defendant’s
accounting services. During trial, however, Ms. Story testified that while she did perform
over $2000 worth of septic work for the defendant and he performed accounting services
for her, she paid the defendant directly for his services and did not “trade[] septic work.”

       The State then rested its case-in-chief, and the defendant moved for a judgment of
acquittal. The trial court denied the motion after which the defendant presented testimony
from Clayton Cooper, a certified fraud examiner and retired federal investigator for the
Department of the Treasury. Mr. Cooper testified as an expert, stating he reviewed
voluminous financial records and determined the Firm underpaid the defendant for the
purchase of his assets and work production. In reaching his conclusions, Mr. Cooper used
several alternative calculation methods based upon his understanding that the Firm did not
make pro rata adjustments to its invoices. However, Mr. Cooper acknowledged that the
Firm paid the defendant $158,000 for his assets over a three-year period. Mr. Cooper’s
report was entered into evidence.

        The defendant also testified, stating he has practiced as an accountant for twenty-
one years and in August 2012, entered into an asset purchase and employment agreement
with the Firm. However, a formal agreement was never signed by either party, and as a
result, in 2013, the defendant still did not know the terms of the agreement. The defendant
believed he would be paid “40 percent of the cash collections for the purchase side” and
“50 percent for cash collections on the salary side.” The defendant stated, “So, basically,
I should have gotten 90 percent of the cash during the time they were buying my practice.”

                                           -4-
        The defendant grew frustrated because “the numbers never seemed right,” so he
attempted to meet with CJ Blankenship “to finish my agreement and settle up.” According
to the defendant, however, the agreement was never finalized, and because he was not
satisfied with the arrangement, the defendant sought legal counsel in 2014. The defendant
felt he had “made a huge mistake and [the Firm was] trying to steal my practice.” The
defendant sought the advice of counsel about how to “get out of this mess” but continued
working for the Firm until his resignation on November 30, 2015.

       Upon resigning, the defendant believed the Firm owed him approximately
$172,000. The defendant also asserted that he “never sold my clients, because we never
finalized the contract.” Because the defendant did not believe he and the Firm finalized
the agreement, the defendant testified, “I honestly believe that I’m either a co-owner at
50-50, or I own 100 percent of my clients, based on what the Williamson County Court
rules.”1 Furthermore, the defendant explained he was not a salaried employee but “was
more like a contract employee,” and, according to the defendant, the Firm collected
approximately $433,000 from his work product though he was only paid $363,255.60. The
defendant stated, “[b]ased on my numbers, they made $75,000 for doing absolutely
nothing.”

       The defendant admitted that after he resigned, he collected approximately $28,000
in accounts receivable from his clients in November and December 2015. The defendant
explained: “It was my intent to collect that to protect that money. And I believe that I’m
owed much more than the amount that I was trying to protect.” Though the defendant
disputed collecting over $60,000 in accounts receivable and provided explanations for
some of the payments at issue, he admitted to generating “an accounts receivable report,”
or the “client list,” which reflected the outstanding accounts receivable he had at the time.
Based on the report, the defendant “had promises on 58-grand” and deposited checks
totaling $28,031.20 as reflected on the “client list.” The defendant, however, stated not all
of those deposits were related to outstanding accounts receivable and disputed some of the
deposited checks as presented by the State, including checks issued by: Kim and Fayetta
Wilcox, Martin and Anna Sir, Donald and Kelly Dillingham, Numatix, Inc., Dillingham
Trucking, Inc., Kyle J. Gross, Lee E. Witherow, Sir & Smith, PLLC, White Bluff
Imagination Station, Joann Jackowski, Side-by-Side/Charles and Jackie Franklin, and
Perfect Pig, Inc.

       During cross-examination, the defendant explained he has a work history in fraud
and experience working with accounts receivable. The defendant stated during their three-
year relationship, the Firm paid him $158,000 for the purchase of his assets and paid him

       1
           At the time of trial, a civil case between the parties was pending in Williamson County.
                                                    -5-
a salary of $204,833. The defendant, however, maintained he did not have an agreement
with the Firm according to advice he received from various attorneys.

        In regards to the spreadsheets produced by Mr. Walters, the defendant
acknowledged that he “[c]ollected – had promises to collect, or had terms” for the invoices
listed. However, the defendant denied collecting $60,000, stating he only collected about
$28,000. The defendant again asserted that the Firm did not fully pay him for his assets,
and as a result, the Firm did not own the accounts receivable upon which he collected.
Instead, the defendant suggested the Firm paid him for “[m]aybe renting” his clients and
that the Firm still owes him $172,000 “[b]ased on cash collections.” The defendant
acknowledged that he had planned to resign and take his clients with him for about fourteen
months prior to doing so.

       Regarding the accounts receivable at issue in this case, the defendant stated, “I
collected money, yes, to protect it, sir.” The defendant claimed he put the collected money
into an escrow account at First Federal Bank which is now closed. The defendant testified
that he is “owed significantly more on every option and scenario than what was in there.”
The defendant admitted that he “took money” but stated, “[w]ho owns that money is still
to be determined.”

        After the defense rested, the jury returned a guilty verdict for theft of property
valued over $60,000 but less than $250,000, a Class B felony. At the subsequent
sentencing hearing, the trial court found the defendant to be a Range I, standard offender
and imposed a sentence of 8 years suspended to supervised probation. The trial court
ordered the defendant to pay restitution in the amount of $60,000 based upon the proof
presented at trial and to complete 100 hours of public service. The trial court also
prohibited the defendant from contacting “any principal, employee, staff member, or
family member of a principal or employee of Blankenship CPA Group.” The defendant
filed a motion for a new trial which was denied by the trial court, and this timely appeal
followed.

                                               Analysis

       The defendant argues the evidence is insufficient to support his theft conviction
because nothing in the record demonstrates the theft amounted to $60,000 or more.2 The
State disagrees. When the sufficiency of the evidence is challenged, the relevant question
of the reviewing court is “whether, after viewing the evidence in the light most favorable

        2
          While there was extensive testimony by the defendant concerning the purchase agreement or lack
thereof, when asked if that was an issue on appeal during oral argument, the defendant informed this Court
it was not. Rather, the only issue before this Court was the amount of the taking.
                                                  -6-
to the prosecution, any rational trier of fact could have found the essential elements of the
crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979); see
also Tenn. R. App. P. 13(e) (“Findings of guilt in criminal actions whether by the trial court
or jury shall be set aside if the evidence is insufficient to support the findings by the trier
of fact of guilt beyond a reasonable doubt.”); State v. Evans, 838 S.W.2d 185, 190-92
(Tenn. 1992); State v. Anderson, 835 S.W.2d 600, 604 (Tenn. Crim. App. 1992). All
questions involving the credibility of witnesses, the weight and value to be given the
evidence, and all factual issues are resolved by the trier of fact. See State v. Pappas, 754
S.W.2d 620, 623 (Tenn. Crim. App. 1987). “A guilty verdict by the jury, approved by the
trial judge, accredits the testimony of the witnesses for the State and resolves all conflicts
in favor of the theory of the State.” State v. Grace, 493 S.W.2d 474, 476 (Tenn. 1973).
Our Supreme Court has stated the rationale for this rule:

       This well-settled rule rests on a sound foundation. The trial judge and the
       jury see the witnesses face to face, hear their testimony and observe their
       demeanor on the stand. Thus the trial judge and jury are the primary
       instrumentality of justice to determine the weight and credibility to be given
       to the testimony of witnesses. In the trial forum alone is there human
       atmosphere and the totality of the evidence cannot be reproduced with a
       written record in this Court.

Bolin v. State, 405 S.W.2d 768, 771 (Tenn. 1966) (citing Carroll v. State, 370 S.W.2d 523
(1963)). “A jury conviction removes the presumption of innocence with which a defendant
is initially cloaked and replaces it with one of guilt, so that on appeal a convicted defendant
has the burden of demonstrating that the evidence is insufficient.” State v. Tuggle, 639
S.W.2d 913, 914 (Tenn. 1982).

       Guilt may be found beyond a reasonable doubt where there is direct evidence,
circumstantial evidence, or a combination of the two. State v. Matthews, 805 S.W.2d 776,
779 (Tenn. Crim. App. 1990) (citing State v. Brown, 551 S.W.2d 329, 331 (Tenn.
1977); Farmer v. State, 343 S.W.2d 895, 897 (Tenn. 1961)). The standard of review
for sufficiency of the evidence “‘is the same whether the conviction is based upon direct
or circumstantial evidence.’” State v. Dorantes, 331 S.W.3d 370, 379 (Tenn. 2011)
(quoting State v. Hanson, 279 S.W.3d 265, 275 (Tenn. 2009)). The jury as the trier of fact
must evaluate the credibility of the witnesses, determine the weight given to witnesses’
testimony, and reconcile all conflicts in the evidence. State v. Campbell, 245 S.W.3d 331,
335 (Tenn. 2008) (citing Byrge v. State, 575 S.W.2d 292, 295 (Tenn. Crim. App. 1978)).
Moreover, the jury determines the weight to be given to circumstantial evidence and the
inferences to be drawn from this evidence, and the extent to which the circumstances are
consistent with guilt and inconsistent with innocence are questions primarily for the
jury. Dorantes, 331 S.W.3d at 379 (citing State v. Rice, 184 S.W.3d 646, 662 (Tenn.
                                             -7-
2006)). This Court, when considering the sufficiency of the evidence, shall not reweigh
the evidence or substitute its inferences for those drawn by the trier of fact. Id.

       “A person commits theft of property if, with intent to deprive the owner of property,
the person knowingly obtains or exercises control over the property without the owner’s
effective consent.” Tenn. Code Ann. § 39-14-103(a). “Our supreme court has noted that
although the statute defining theft does not contain ‘an element regarding the value of the
property stolen,’ the property’s value should be included in the indictment, and its value
‘must be determined in order to establish the grade of the theft offense.’” State v. Moats,
No. E2019-02244-CCA-R3-CD, 2020 WL 6392483, at *3 (Tenn. Crim. App. Nov. 2,
2020), appeal denied (Mar. 17, 2021) (quoting State v. Jones, 589 S.W.3d 747, 756 (Tenn.
2019) (internal citations omitted)). “Whenever a determination of value is necessary to
assess the class of an offense in this code or the level of punishment, the determination of
value shall be made by the trier of fact beyond a reasonable doubt.” Tenn. Code Ann. §
39-11-115. Theft of property valued at $60,000 or more but less than $250,000 is a Class
B felony. Tenn. Code Ann. § 39-14-105(a)(5).

         Here, the presentment alleged the defendant stole $60,765.453 from the Firm. At
trial, the State presented proof showing the defendant entered into an asset purchase and
employment agreement with the Firm in 2012. The terms of the agreement provided, in
part, that the Firm pay the defendant $158,000 for the purchase of his clients and
compensate the defendant for his work production. For the next three years, the parties
operated under these terms until the relationship between the defendant and the Firm
soured, resulting in the defendant’s resignation on November 30, 2015. When the
defendant resigned, the Firm had approximately $60,000 in outstanding accounts
receivable for work performed by the defendant. In an effort to collect the balances, the
Firm discovered the defendant was collecting, “in payments, promises, or terms,” the
outstanding accounts receivable by instructing clients to pay him directly, in cash or
bartered services, for the accounting work he performed while employed by the Firm.

       A forensic examination of the defendant’s computers revealed that he downloaded
the Firm’s client files without permission and created a “client list” documenting his theft.
In a spreadsheet, which was entered into evidence, Mr. Walters reconciled the defendant’s

        3
            The defendant takes issue with the presentment, noting it alleged two different amounts for the
theft, “six thousand seven hundred sixty-five dollars and forty cents” and “$60,765.45,” and suggesting
“that it is common knowledge that a bank would not cash a check where the amounts are different and
would, in fact, give priority to the written word.” The defendant also asserts the presentment did not list
the correct theft statute, and as a result, “allege[d] [he] violated a statute that does not even exist.” However,
it is clear from the record these were merely clerical errors. Both during trial and at sentencing, all of the
parties operated under the correct theft statute and valued the amount of the theft at more than $60,000 but
less than $250,000.
                                                      -8-
“client list” with the Firm’s invoices and accounts receivable and testified that the amount
stolen by the defendant totaled $62,417.90. The defendant testified that he “[c]ollected –
had promises to collect, or had terms” for the client invoices listed on the spreadsheet. The
defendant’s bank records showed numerous cancelled checks from clients totaling $12,885
that were deposited into his personal bank accounts, and the defendant admitted to
collecting approximately $28,000 from the clients. Mr. Rampual, Ms. Story, and Ms.
Joslin testified that they paid the defendant directly for the accounting work he performed
on their behalf.

        From these facts, a rational trier of fact could have found the defendant guilty of
theft of property valued over $60,000 but less than $250,000 as the record makes clear the
defendant intended to deprive the Firm of the outstanding accounts receivable and
exercised control over the same. As noted, the defendant admitted to taking funds and
compiling a “client list” documenting the monies or services he collected from the clients
for the work he performed while employed by the Firm. The State provided testimony
from numerous of the Firm’s employees who detailed the manner in which the defendant
stole approximately $62,417.90. Though the defendant disputed the amount of the theft
alleged by the State and testified that he believed the outstanding accounts receivable were
his property, the jury, as the trier of fact, is entrusted with determining the value of the
theft, the weight of the evidence, and evaluating the credibility of witnesses, and, based on
the verdict, the jury reconciled the conflicting proof in favor of the State. Tenn. Code Ann.
§ 39-11-115; Campbell, 245 S.W.3d at 335; Dorantes, 331 S.W.3d at 379. This Court will
not reweigh the evidence. Dorantes, 331 S.W.3d at 379. Accordingly, the evidence was
sufficient for a jury to convict the defendant of theft of property valued over $60,000 but
less than $250,000.

        The defendant also suggests the trial court’s imposition of $60,000 in restitution
demonstrates that the court “failed to find the amount of the theft was $60,765.45,” as
alleged in the presentment. The State asserts the amount “was based on the [Firm’s] loss
which comes from the jury’s verdict” and “the trial court’s decision to impose restitution
less than the amount found by the jury does not militate or undermine the jury’s verdict,”
and we agree. As explained above, the State identified over $60,000 in accounts receivable
stolen by the defendant. At both trial and on appeal, the defendant admitted to taking the
funds in an effort to protect himself and because he felt he was entitled to them. At the
sentencing hearing, Mr. Griffin testified the Firm filed an insurance claim for the stolen
funds and received an insurance payment of $55,000. Based upon this testimony, the trial
court acknowledged a subrogation claim existed on behalf of the insurance company but
ordered the defendant to pay restitution directly to the Firm. In determining the amount of
restitution to be paid, the court stated it did not factor the insurance proceeds into its
decision and instead, imposed $60,000 in restitution based upon the evidence presented at

                                            -9-
trial, noting “the amount that was taken was $60,000.” Thus, we are not persuaded by the
defendant’s argument, and he is not entitled to relief.

                                       Conclusion

        Based upon the foregoing authorities and reasoning, the judgment of the trial court
is affirmed.

                                             ____________________________________
                                             J. ROSS DYER, JUDGE

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