Court Opinion

ID: 2756593
Source: CourtListenerOpinion
Date Created: 2014-12-02 19:02:22.631041+00
Date Added: 2024-06-11T11:26:52.005066
License: Public Domain

NOTICE: NOT FOR PUBLICATION.
   UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
          LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

                                    IN THE
             ARIZONA COURT OF APPEALS
                                DIVISION ONE

                   BENJAMIN JAMES MCRAE, Petitioner

                                        v.

             THE HONORABLE TERESA A. SANDERS,
              Judge of the SUPERIOR COURT OF THE
        STATE OF ARIZONA, in and for the County of Maricopa,
                          Respondent Judge,

       STATE OF ARIZONA, ex rel. WILLIAM MONTGOMERY,
                   Maricopa County Attorney,
                      Real Party in Interest.

                             No. 1 CA-SA 14-0205
                              FILED 12-02-2014

 Petition for Special Action from the Superior Court in Maricopa County
                          No. CR2014-001532-001
                 The Honorable Teresa A. Sanders, Judge

             JURISDICTION ACCEPTED; RELIEF DENIED

                                   COUNSEL

William Foreman, P.C., Scottsdale
By William Foreman
Counsel for Petitioner

Maricopa County Attorney’s Office, Phoenix
By E. Catherine Leisch
Counsel for Real Party in Interest
                    McRAE v. HON. SANDERS/STATE
                         Decision of the Court

                           DECISION ORDER

Judge Michael J. Brown delivered the decision of the Court, in which
Presiding Judge Peter B. Swann and Judge Kenton D. Jones joined.

B R O W N, Judge:

¶1             In this special action, Benjamin James McRae challenges the
superior court’s denial of his motion to remand the indictment for a new
determination of probable cause. For the reasons that follow, we accept
jurisdiction, but deny relief.

                             BACKGROUND

¶2            In April 2014, a grand jury convened to consider evidence
regarding the State’s allegations that McRae committed one count of
fraudulent schemes and artifices, one count of theft, and one count of false
reporting to a law enforcement agency. The State presented testimony that
McRae incurred credit card (“American Express”) charges at an adult
entertainment establishment (“Dream Palace”), then several weeks later,
reported to law enforcement that the credit card had been stolen and the
charges were incurred by someone else.

¶3             Guy Milanovits, a detective with Scottsdale Police
Department’s Financial Crimes Unit, testified and responded to the
prosecutor’s questions by explaining that he did not investigate the case,
but had reviewed the reports prepared by the investigating officers. Based
on his review of the reports, Detective Milanovits testified that on the
evening of July 17, 2013, someone used a credit card in the name of
Benjamin James McRae to purchase “drinks and entertainment from young
women” at Dream Palace. Detective Milanovits stated that the credit card
charges incurred that evening totaled over $24,000. He further reported
that the credit card company paid the bill, but McCrae did not pay the credit
card company.

¶4            On August 20, 2013, McRae reported to police that his credit
card had been stolen and misused by another person. Police officers who
investigated the claimed theft discovered video recordings and fingerprints
on receipts taken by Dream Palace management that demonstrated McRae
was the individual who incurred the charges on the credit card.

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                   McRAE v. HON. SANDERS/STATE
                        Decision of the Court

¶5            Following his responses to the prosecutor’s questions,
Detective Milanovits responded to juror questions. One juror questioned
the nature of the services rendered and the detective responded, “alcohol
and entertainment.” Another juror inquired regarding the credit limit on
the card and the detective affirmed that the credit card had a credit limit of
$25,000 or greater. The grand jury returned a true bill charging McRae with
one count of fraudulent schemes and artifices, one count of theft, and one
count of false reporting to a law enforcement agency.

¶6           McCrae subsequently filed a motion for remand to the grand
jury for a new probable cause determination. He argued he had been
denied a substantial procedural right and fundamental fairness “by the
admission of patently false factual testimony.” After considering the
parties’ memoranda and hearing oral argument, the superior court denied
McRae’s motion, finding that the inaccurate information presented by the
State “would not have deterred the grand jury from finding probable
cause” and that McRae was not denied a “substantial procedural right.”
McRae then filed this petition for special action.

                               DISCUSSION

¶7             McRae argues the superior court erred by denying his motion
to remand because the testifying officer presented misleading testimony
and the State failed to present exculpatory evidence. “A challenge to the
denial of a motion for remand generally must be made by special action
before trial, and is not reviewable on direct appeal.” Francis v. Sanders, 222
Ariz. 423, 426, ¶ 9, 215 P.3d 397, 400 (App. 2009). In the exercise of our
discretion, we accept special action jurisdiction.

¶8            “The function of the grand jury is to investigate whether there
is probable cause to believe that a crime was committed and whether the
person under investigation committed the crime.” State v. Superior Court
(Smith), 186 Ariz. 143, 144, 920 P.2d 23, 24 (App. 1996). In a grand jury
proceeding, the prosecutor is charged with fairly and impartially
presenting the evidence. Francis, 222 Ariz. at 426-27, ¶ 12, 215 P.3d at 400-
01. “The prosecutor need not provide all exculpatory evidence to the grand
jury, but must present ‘clearly exculpatory’ evidence.” Id. “Clearly
exculpatory evidence is evidence of such weight that it would deter the
grand jury from finding the existence of probable cause.” State v. Superior
Court (Mauro), 139 Ariz. 422, 425, 678 P.2d 1386, 1389 (1984).

¶9            “Remand of an indictment is appropriate only when the
defendant is denied a substantial procedural right.” Smith, 186 Ariz. at 144,

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                    McRAE v. HON. SANDERS/STATE
                         Decision of the Court

920 P.2d at 24. A defendant is denied a substantial procedural right when
false evidence presented to the grand jury is the basis for the probable cause
finding; however, remand is not appropriate when incorrect information is
presented but it is immaterial to the indictment. Nelson v. Roylston, 137 Ariz.
272, 276, 669 P.2d 1349, 1353 (App. 1983); State v. Jacobson, 22 Ariz. App. 128,
130, 524 P.2d 962, 964 (1974). “A statement is material if it could have
affected the course or outcome of a proceeding.” State v. Moody, 208 Ariz.
424, 440, ¶ 35, 94 P.3d 1119, 1135 (2004) (citations omitted). We review a
superior court’s denial of a motion to remand an indictment for an abuse of
discretion. Francis, 222 Ariz. at 426, ¶ 10, 215 P.3d at 400.

¶10           McRae contends that Detective Milanovits presented false
testimony by stating that (1) McRae purchased alcohol, when in fact Dream
Palace does not possess a liquor license and management denies that it
serves alcohol to patrons; (2) the American Express card had a credit limit
of $25,000 or greater when in reality the credit limit on the card was $5000;
and (3) the amount at issue was over $24,000 when in fact the only amount
at issue on the American Express card was a chargeback for $4,325.01.1
McRae also asserts the State violated its duty to present exculpatory
evidence by failing to inform the jury that Dream Palace received full
payment for the charges incurred on the Wells Fargo credit cards and that
Dream Palace has a “Full Recourse Agreement” with American Express
that requires Dream Palace to accept a chargeback should a cardholder
withdraw consent to a previously authorized purchase.

¶11           To determine whether any of these alleged inaccuracies or
omissions is material, we look to the elements of the crimes charged. The
elements of fraudulent schemes and artifices are that a person, pursuant to
a scheme or artifice to defraud, knowingly obtains any benefit by means of
false or fraudulent pretenses, representations, promises or material
omissions. Arizona Revised Statutes (“A.R.S.”) section 13-2310(A). The
elements of theft are that a person knowingly obtains services or property
of another (with a value of $4000 or more but less than $25,000) by means
of any material misrepresentation with intent to deprive the other person
of such property or services. A.R.S. § 13-1802(A)(3). Finally, the elements
for false reporting to a law enforcement agency are knowingly making a

1       It is undisputed that two Wells Fargo-issued credit cards, one in
McRae’s name and the other in the name of his mother, were also used at
Dream Palace on the evening of July 17, 2013 and the combined charges on
all three credit cards exceeded $25,000. Nonetheless, no evidence relating
to the Wells Fargo cards was presented to the grand jury.

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                    McRAE v. HON. SANDERS/STATE
                         Decision of the Court

false report or knowingly misrepresenting a fact for the purpose of
misleading a peace officer. A.R.S. § 13-2907.01(A).

¶12            As argued by the State, none of the elements of these offenses
relates to the alleged inaccuracies in the evidence presented to the grand
jury. It is immaterial whether McRae purchased alcoholic or non-alcoholic
beverages. It is also immaterial whether the credit limit on the American
Express credit card was $5000 or $25,000. Although the value of the
property or services obtained by misrepresentation is relevant to the theft
charge, McRae was charged only with a class three felony, and the actual
amount of property and services at issue on the American Express card,
$4,325.01, fell within the statutory range for that charge. Likewise, none of
the alleged omissions are material to the charges. No evidence of the Wells
Fargo credit card charges was presented to the grand jury, so exculpatory
evidence regarding their payment was irrelevant. Additionally, that
American Express entered a contract limiting its liability exposure to Dream
Palace does not serve to exculpate McRae, but rather it merely defines the
relationship of those parties.

¶13           Contrary to McRae’s report that his credit cards were stolen
and other individuals used them to incur charges at Dream Palace, the
material evidence presented by the State reflects that both video
surveillance and receipt fingerprints demonstrate McRae was the
individual who incurred the charges. Because substantial evidence
supports the finding of probable cause, none of the alleged inaccurate
statements or omissions could reasonably have affected the grand jury’s
determination of probable cause and therefore McRae was not denied a
substantial procedural right. See Black v. Coker, 226 Ariz. 335, 340, ¶ 16, 247
P.3d 1005, 1010 (App. 2011) (applying harmless error analysis to the issue
of presentation of inaccurate information to a grand jury); Maretick v. Jarrett,
204 Ariz. 194, 198-99, ¶ 15, 62 P.3d 120, 124-25 (2003) (same).

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                  McRAE v. HON. SANDERS/STATE
                       Decision of the Court

                            CONCLUSION

¶14           Based on the foregoing, the superior court did not abuse its
discretion in denying McRae’s motion to remand. We therefore deny the
relief requested in this special action.

                                :gsh

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