Court Opinion

ID: 4286140
Source: CourtListenerOpinion
Date Created: 2018-06-20 09:12:39.6654+00
Date Added: 2024-06-11T14:08:53.305182
License: Public Domain

STATE OF MICHIGAN

                          COURT OF APPEALS

PEOPLE OF THE STATE OF MICHIGAN,                                  UNPUBLISHED
                                                                  June 19, 2018
              Plaintiff-Appellee,

v                                                                 No. 337645
                                                                  Berrien Circuit Court
TIMOTHY LEE GRAY,                                                 LC No. 2016-015358-FH

              Defendant-Appellant.

Before: MURRAY, C.J., and HOEKSTRA and GADOLA, JJ.

PER CURIAM.

       Defendant appeals as of right his jury conviction of embezzling $50,000 or more, but less
than $100,000, MCL 750.174(6), from Southwestern Michigan Community Ambulance Service
(Southwestern) while serving as its executive director. The trial court sentenced defendant to
180 days in jail and 5 years’ probation. We affirm.

                                          I. FACTS

        Southwestern is an ambulance service that provides emergency response services to eight
municipalities in Southwest Michigan; six of the municipalities own the service while two
municipalities contract for service. Defendant began his employment with Southwestern in 1984
as an emergency medical technician. He was thereafter employed in various capacities at
Southwestern and was promoted to the position of executive director in 2008. Although
Southwestern is governed by a board of trustees, the executive director is responsible for
overseeing all aspects of Southwestern, both operational and financial, while making monthly
financial reports to the board of trustees.

        In June 2014, defendant resigned from Southwestern and James Scribner was appointed
as the new executive director. After assuming the position, Scribner began to evaluate
Southwestern’s finances and discovered what appeared to be unjustified payments to defendant
from Southwestern over the preceding several years. Scribner reported his findings to the board
of trustees, which authorized an audit. The audit was performed by David Marshall, a certified
public accountant and certified fraud examiner. Marshall concluded that from 2009 to 2014
defendant had been improperly compensated in five areas, being excessive paid time off
compensation, unwarranted holiday pay, unwarranted dental reimbursement, unwarranted vision
reimbursement, and unwarranted salary during a period of absence. Marshall’s findings were
turned over to the Michigan State Police, and the prosecutor thereafter charged defendant with
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embezzlement. After a ten day jury trial, the jury found defendant guilty of embezzlement in
violation of MCL 750.174(6). The trial court thereafter denied defendant’s motion for new trial
in which defendant argued that the verdict was against the great weight of the evidence.

                                         II. ANALYSIS

                           A. SUFFICIENCY OF THE EVIDENCE

        On appeal, defendant first contends that the evidence was insufficient to support the
jury’s verdict. We disagree. This Court reviews a challenge to the sufficiency of the evidence
de novo, People v Bailey, 310 Mich. App. 703, 713; 873 NW2d 855 (2015), and examines the
evidence in the light most favorable to the prosecution to determine whether “a rational trier of
fact could have found that the essential elements of the crime were proved beyond a reasonable
doubt.” People v Roper, 286 Mich. App. 77, 83; 777 NW2d 483 (2009). In so doing, we resolve
all conflicts in the evidence in favor of the prosecution. People v Wilkens, 267 Mich. App. 728,
738; 705 NW2d 728 (2005). Further, we do not interfere with the trier of fact’s determinations
regarding the credibility of the witnesses or the weight to be given the evidence. People v
Stevens, 306 Mich. App. 620, 628; 858 NW2d 98 (2014).

       In this case, defendant was charged with embezzlement in violation of MCL 750.174,
which provides, in relevant part:

       (1) A person who as the agent, servant, or employee of another person,
       governmental entity within this state, or other legal entity or who as the trustee,
       bailee, or custodian of the property of another person, governmental entity within
       this state, or other legal entity fraudulently disposes of or converts to his or her
       own use, or takes or secretes with the intent to convert to his or her own use
       without the consent of his or her principal, any money or other personal property
       of his or her principal that has come to the person’s possession or that is under his
       or her charge or control by virtue of his or her being an agent, servant, employee,
       trustee, bailee, or custodian, is guilty of embezzlement.

                                             ***

       (6) If the money or personal property embezzled has a value of $50,000.00 or
       more but less than $100,000.00, the person is guilty of a felony punishable by
       imprisonment for not more than 15 years or a fine of not more than $25,000.00 or
       3 times the value of the money or property embezzled, whichever is greater, or
       both imprisonment and a fine.

       This Court has articulated the elements of embezzlement as follows:

       (1) the money in question must belong to the principal, (2) the defendant must
       have a relationship of trust with the principal as an agent or employee, (3) the
       money must come into the defendant’s possession because of the relationship of
       trust, (4) the defendant dishonestly disposed of or converted the money to his own
       use or secreted the money, (5) the act must be without the consent of the
       principal, and (6) at the time of conversion, the defendant intended to defraud or

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       cheat the principal. [People v Lueth, 253 Mich. App. 670, 683; 660 NW2d 322
       (2003).]

        Thus, to establish the elements of this offense in this case the prosecution was required to
prove that the money at issue belonged to Southwestern, that defendant had a relationship of trust
with Southwestern as an agent or employee, that the money came into defendant’s possession
because of the relationship of trust, that defendant dishonestly disposed of or converted the
money to his own use, that he did so without the consent of Southwestern, that he intended to
defraud or cheat Southwestern, and that the amount wrongfully taken was at least $50,000. MCL
750.174(6). At trial, it was undisputed that Southwestern owned the money in question, that it
employed defendant as its executive director during the period at issue, that his position was one
of trust, and that defendant used his position of trust to cause Southwestern to disburse the
money to him. The only issues at trial were whether defendant dishonestly converted the money
to his own use and in what amount, whether Southwestern consented to the disbursements, and
whether at the time of the conversion defendant intended to defraud or cheat Southwestern.

        With regard to excessive paid time off compensation, the prosecution presented evidence
that Southwestern had a vacation time and sick time sell-back policy that allowed an employee to
sell unused accrued vacation and sick time back to Southwestern at the employee’s hourly pay
rate. The sell-backs were to be processed through the payroll system with the appropriate
deductions.     Defendant, as the executive director, was responsible for administering
Southwestern’s employee vacation time and sick time sell-backs, and was so familiar with the
process that he trained his administrative assistants on the proper method for processing vacation
and sick time sell-backs through the payroll system.

        The prosecution presented evidence that defendant used the vacation and sick time sell-
back procedure to pay himself compensation far beyond the vacation and sick hours that he
actually accrued. In May 2009, defendant entered into an agreement with the board of trustees
for Southwestern that settled an earlier dispute about the amount of vacation and sick time that
he previously had accrued. In accordance with that agreement, Southwestern agreed to pay
defendant for 1620.75 vacation and sick hours previously and currently accrued. Thereafter,
defendant accrued 350 additional hours for the contract term beginning April 2010 and 450 hours
for each additional contract term, beginning April 2011, April 2012, April 2013, and April 2014.
Accordingly, the evidence established that defendant had 3770.75 total hours of vacation and
sick time (including that from the May 2009 agreement) from May 2009 through his resignation
in June 2014.

        But according to the testimony and documentary evidence, defendant caused
Southwestern to pay him for vacation and sick time far exceeding the 3770.75 accrued. During
that time period, defendant caused Southwestern to pay him, either through direct deposit or
payroll check, for 1520.75 hours in 2009-2010, for 745 hours in 2010-2011, for 401.22 hours in
2011-2012, for 1140 hours in 2012-2013, for 350 hours in 2013-2014, and for 400 hours in the
final weeks of his employment in 2014. In addition, the prosecution showed that defendant
caused Southwestern to issue two checks to him outside of the payroll system for vacation sell-
backs that equaled approximately another 250 hours of vacation time. In total, defendant caused
Southwestern to pay him for more than 4800 hours of vacation and sick time during a period
when he accrued only 3770.75 hours. In other words, the prosecution introduced testimony and

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documentary evidence that defendant used his position as the executive director to cause
Southwestern to pay him for more than 1000 hours of vacation and sick time that he had not
accrued in the amount of approximately $28,000.

        When considering the sufficiency of the evidence, we consider the inferences that can be
fairly drawn from the evidence. People v Hardiman, 466 Mich. 417, 428; 646 NW2d 158 (2002).
Further, it is for the fact-finder alone to “determine what inferences may be fairly drawn from the
evidence and determine the weight to be accorded those inferences.” Id. Additionally, “because
it can be difficult to prove a defendant’s state of mind on issues such as knowledge and intent,
minimal circumstantial evidence will suffice to establish the defendant’s state of mind, which
can be inferred from all the evidence presented.” People v Kanaan, 278 Mich. App. 594, 622; 751
NW2d 57 (2008).

        The scope of the excess compensation involved here—more than 1000 hours of
additional vacation and sick time over a span of five contract years—strongly suggests that the
additional sell-backs were not accidental. Further, the evidence demonstrated that defendant
caused some of the sell-backs to occur through direct deposit during regular pay periods, but
caused Southwestern to issue payroll checks on other occasions, and also caused Southwestern to
issue him two checks outside the payroll system. Because the checks only needed the signatures
of two board members, there was no evidence that the board as a whole was aware of the total
amount of additional compensation from the sell-backs. From this evidence, a reasonable jury
could infer that defendant knew that he was not entitled to the compensation, that he structured
the payments in a manner that would avoid detection, and that he did so because he intended to
defraud Southwestern of the money. See id.; see also People v Hawkins, 245 Mich. App. 439,
458; 628 NW2d 105 (2001) (“A factfinder can infer a defendant’s intent from his words or from
the act, means, or the manner employed to commit the offense.”).

        In addition to presenting evidence that defendant caused Southwestern to pay him for
more vacation and sick time than he accrued by using the sell-back procedure, the prosecution
also presented evidence that defendant took his regular salary during periods when he was
actually absent due to vacation or illness. That is, defendant sold back his vacation and sick
time, then nonetheless took vacation and sick days while receiving his regular compensation.
The prosecution presented evidence in the form of e-mails in which defendant informed others
that he was on vacation or out sick during certain periods, but did not take vacation or sick time
for those periods. The evidence permitted an inference that defendant used or should have used
more than 600 hours of his vacation or sick pay to cover his absences rather than selling the
vacation and sick time back to Southwestern. Using defendant’s lowest hourly rate, and
excluding the additional benefits paid by Southwestern for the hours that should not have been
available for sale, the additional hours conservatively represented more than $16,000 in unearned
compensation. Marshall, the forensic examiner, testified that, using defendant’s hourly rate for
the relevant time period and including social security and other benefits, the actual value of the
unearned sell-backs and undeclared vacation and sick days equaled $44,000 ($28,000 plus
$16,000), but amounted to $58,000 in actual value. Consequently, the prosecution presented
sufficient evidence to establish that defendant embezzled at least $50,000 from Southwestern
through his misuse of the vacation and sick time sell-back policy.

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        On appeal, defendant argues that Marshall’s testimony about the vacation and sick time
sell-backs did not establish the elements of embezzlement because Marshall’s assumptions were
flawed. Specifically, defendant maintains that the May 2009 agreement setting his starting
vacation and sick pay did not include the 300 hours that were provided in his employment
agreement covering his employment from May 2009 to May 2010, and that Marshall thus
understated defendant’s vacation and sick time by 300 hours.

        The May 2009 agreement setting the total vacation and sick time that defendant had
accrued was dated May 18, which was several days after defendant and the board executed his
first employment agreement as director. There was evidence that the purpose of the agreement
was to settle defendant’s claim that the previous director had improperly docked his hours and
provided an initial total and a final total. The final total was 300 hours higher than the first total,
which appeared to correspond to the amount of hours that the parties agreed defendant would
accrue under his new contract. Although defendant maintained that the 300 hours represented
the hours that he accrued during his first year as director, which was not governed by an
employment agreement, the language and timing of the agreement suggests that it represented
the totals available to defendant as of the signing of his new employment agreement. In
reviewing the sufficiency of the evidence, this Court must view the evidence in the light most
favorable to the prosecution. See People v Wolfe, 440 Mich. 508, 514-515; 489 NW2d 748
(1992), amended 441 Mich. 1201 (1992). Because a reasonable jury could find that the total
stated in the May 2009 agreement represented the total number of hours available to defendant at
the start of his employment for the 2009 to 2010 employment period, it could find that Marshall
did not understate the hours available to defendant.1

        Defendant also maintains that Marshall erred by subtracting vacation and sick hours for
time that he was away from the office because the evidence showed that he was a workaholic
and actually worked more than the average of 50 hours per week required under the majority of
his employment agreements. In other words, defendant’s theory is that he usually worked more
than the 50 hours per week he was contractually obligated to work and was therefore entitled to
work less in other weeks without taking vacation time. A reasonable jury, however, could find
that the agreements provided for an average of 50 hours each week with the understanding that
defendant would nevertheless work every ordinary business day and was required to use vacation
or sick time to cover those times when he did not report to work. The jury could find that
defendant was periodically absent from work as demonstrated by the relevant e-mails and from
that conclude that he deliberately chose to draw his full salary on days when the contractual
expectation was that he must use vacation or sick time when absent.

       Defendant’s argument that there was insufficient evidence to support his conviction
because he demonstrated that his vacation and sick pay sell-backs were approved is similarly

1
 Notably, even if one were to add 300 hours to defendant’s starting accrued vacation and sick
hours and were to assume that he had no obligation to use any sick or vacation time other than
what he actually reported, defendant still caused Southwestern Ambulance to pay him for
hundreds more hours of vacation and sick time than he had available during the period at issue.

                                                 -5-
misplaced. Two members of the board, William Weimer, Sr., and William Marx, testified at trial
that they both signed checks to defendant that were identified as being for vacation or sick time
sell-backs. However, there was no evidence that either board member had been informed that
the checks represented compensation for hours beyond those that defendant had accrued. Marx
stated that he assumed that the check had already been “vetted” by the chairman and that it was
appropriate to approve it. Weimer, who was the chairman throughout much of the time at issue,
testified that he took defendant’s word that he was entitled to the vacation time sell-backs when
authorizing the payments. When viewed in the light most favorable to the prosecution, a
reasonable jury could infer that the individual board members or the board as a whole were not
actually or impliedly authorizing defendant to sell more vacation or sick time than he was
entitled to have under the employment agreements.

        The prosecution also presented evidence that defendant wrongfully obtained
compensation from Southwestern in the form of holiday pay and dental and vision
reimbursements. The evidence showed that defendant took compensation—characterized as
holiday or other pay—that had not been authorized by the board and that was inconsistent with
the treatment of holiday pay for a salaried worker. There was also evidence that defendant took
vision reimbursements and dental reimbursements in excess of the limits. Marshall conceded
that after his review of the evidence, he discovered information that required him to adjust his
determinations about defendant’s holiday compensation and vision reimbursements.
Nevertheless, defendant’s evidence tending to suggest that he misappropriated less than Marshall
stated or did not misappropriate holiday pay or vision or dental reimbursements at all, was a
matter of the weight and credibility of the evidence, not its sufficiency. See Wolfe, 440 Mich. at
514-515.

        We also reject defendant’s contention that the prosecution’s proofs were insufficient
because the prosecution introduced into evidence unsigned board minutes as opposed to signed
board minutes. Defendant maintained at trial that the minutes were not official because they
were unsigned and the signed minutes sometimes had alterations that the board made after he
submitted the proposed minutes at the next board meeting that would vindicate him by showing
approval of additional compensation. But to accept defendant’s view of the evidence, the jury
would have to find that defendant always inadvertently left out of the draft minutes the board’s
approval of his extra compensation only to have it later added to the signed minutes. Further,
Marx testified that he did not recall the board approving the holiday bonuses paid to defendant in
2010, 2011, 2012, or 2013, and would be surprised to hear that these bonuses were added to
payroll. A reasonable jury therefore could conclude that the minutes prepared by defendant and
submitted by defendant for approval would have included important details such as the approval
of extra compensation for the director. The unsigned minutes, when viewed in the light most
favorable to the prosecution and considering the evidence as a whole, were evidence that the
board had not approved any extra compensation for defendant beyond that identified in his
employment agreements.

       The prosecution also presented evidence that defendant received unwarranted
compensation during an absence when he also received disability compensation. In the months
leading up to his resignation in June 2014, defendant underwent two elbow surgeries and
therefore did not work. The testimony of administrative assistant Laurie Percy established that
during these months defendant rarely was in the office and only came to the office briefly to pick

                                               -6-
up messages. During this time, defendant continued to receive his full salary, collecting
$25,279.09 in salary during that period, which had a total value of $29,740.85, but also applied
for and received disability compensation. Defendant represented to the insurer that he was not
working and did not have any sick time available, and told Percy to inform the insurer that he did
not have any sick time available to cover the period of his disability. Although there was
conflicting testimony regarding whether defendant could receive disability benefits while still
receiving his full salary, Marx, a member of the board of trustees, testified that he was surprised
to learn that defendant was being paid his full salary during those months. A reasonable jury
could find from this evidence that defendant did not earn his salary during this time, knew that he
was not entitled to his salary, and deliberately, dishonestly, and with the intent to defraud,
continued to collect it.

        Defense counsel fully explored the assumptions and limits of Marshall’s audit in his
cross-examination at trial. To the extent that Marshall’s testimony relied on assumptions about
the applicable agreements and policies, any suggested flaws were a matter of the weight and
credibility to be afforded his testimony, which was for the jury alone to determine. See People v
Lemmon, 456 Mich. 625, 646-647; 576 NW2d 129 (1998) (when the question is one of credibility
posed by diametrically opposed versions of the events in question, courts must leave the test of
credibility with the trier of fact). The prosecution thus presented sufficient evidence to establish
that defendant dishonestly converted more than $50,000 of Southwestern’s money to his own
use, without the consent of Southwestern, and with the intent to defraud Southwestern.

                           B. GREAT WEIGHT OF THE EVIDENCE

        Defendant next contends that, even if the evidence is minimally sufficient to support the
jury’s verdict, the flaws in the evidence show that the jury’s verdict was contrary to the great
weight of the evidence. We disagree. Before the trial court, defendant moved for a new trial2 on
the basis that the verdict was against the great weight of the evidence, and the trial court denied
defendant’s motion. We review a trial court’s decision on a motion for new trial brought on the
basis that the verdict was against the great weight of the evidence for an abuse of discretion,
People v Lacalamita, 286 Mich. App. 467, 469; 780 NW2d 311 (2009). An abuse of discretion
occurs when a trial court chooses an outcome outside the range of reasonable and principled
outcomes. People v Babcock, 469 Mich. 247, 269; 666 NW2d 231 (2003).

       A verdict is against the great weight of the evidence when “the evidence preponderates so
heavily against the verdict that it would be a miscarriage of justice to permit the verdict to
stand.” Lacalamita, 286 Mich. App. at 469. Conflicting testimony is an insufficient ground for
granting a new trial, People v Lemmon, 456 Mich. 625, 647; 576 NW2d 129 (1998), and

2
  MCL 770.1 provides that “[t]he judge of a court in which the trial of an offense is held may
grant a new trial to the defendant, for any cause for which by law a new trial may be granted, or
when it appears to the court that justice has not been done, and on the terms or conditions as the
court directs.” MCR 6.431(B) provides, in relevant part, that “[o]n the defendant’s motion, the
court may order a new trial on any ground that would support appellate reversal of the conviction
or because it believes that the verdict has resulted in a miscarriage of justice.”

                                                -7-
generally the resolution of issues of credibility are exclusively the province of the jury. People v
DeLisle, 202 Mich. App. 658, 662; 509 NW2d 885 (1993). As this Court has stated, when
considering a challenge to the great weight of the evidence, we do not “sit as the 13th juror and
reassess the evidence.” People v Bosca, 310 Mich. App. 1, 13; 871 NW2d 307 (2015) (quotation
marks and citation omitted). In sum, the existence of flaws in the evidence does not permit a
trial court to set aside that evidence, and conflicts in the evidence or questions as to the
credibility of witnesses are not sufficient grounds to grant a new trial unless the testimony or
evidence contradicts undisputable physical facts or laws or is so patently incredible or inherently
implausible that no reasonable juror could believe it. Lemmon, 456 Mich. 643-644.

         In this case, the trial court, citing the above standard, denied defendant’s motion for new
trial, concluding that the jury verdict was not against the great weight of the evidence. In its
order denying the motion, the trial court observed:

       [T]he Court notes that while Defendant’s brief is heavily focused on the testimony
       of Mr. Marshall that testimony accounted only for a part of the People’s case.
       The jury in this case listened to twelve other witnesses over a ten day period, one
       of which was the Defendant himself.

               Defendant asserts poor accounting and record keeping practices are to be
       blamed for any financial mistakes or misunderstandings rather than an intent on
       his part to defraud or cheat [Southwestern]. Much is conveyed through first hand
       observation of a witness that may not be gained by reading the written word.
       Direct observation of a witness’s demeanor as well as speech inflections go a long
       way in juror determination of the credibility of a witness. The authenticity of a
       witness’s testimony may be deduced upon consideration of the totality of that
       person’s courtroom presentation.

               Defendant’s credibility could reasonably be perceived as strained during
       the course of this trial at several junctures, including his claim of working 60-70
       hours within a four day period averaging 13.75 hour work days immediately upon
       his return from a two and a half week long vacation in Italy from July 28 through
       August 31, 2013, as explanation for claiming the use of only 100 hours (2 week
       average pay period) covering that time. Defendant further claimed only 50 hours
       of vacation time for an April 9 through 22, 2014 vacation (including 9 days where
       he was out of the country).

               Defendant’s testimony regarding his “sell back” vacation/sick time to
       [Southwestern] could also give pause to a reasonable trier of fact. . . . Defendant
       indicated he disputed some of the 1,520.75 hours (over 30 weeks) calculated as
       “sell back” by Defendant to [Southwestern] totaling $42,398.51 income in
       addition to salary received by Defendant. The Union Labor Agreement Act (EX
       3) indicates that vacation sell back was to be at the employee’s regular hourly rate
       and included in the next regularly scheduled payroll with no separate checks
       being issued. . . . [Southwestern’s] records show, however, Defendant received
       several individual checks for his vacation sell back. Between April 30, 2012 and
       October 15, 2012, Defendant sold back vacation time to [Southwestern] under

                                                -8-
       seven separate entries totaling $18,658.38. Exhibits 5 and 7 show each of these
       seven entries to be an individual check payable to Defendant. Calculating a 50
       hour work week the sellback benefit to defendant was approximately $51.82 per
       hour at a time when Defendant’s annual salary was $79,979 (approximately
       $30.76/hour for a 2600 hour work year). . . .

                The Jury in this case was not merely reviewing a forensic accounting and
       passing judgment on the assessments made by Marshall. The Jury was assessing
       the testimony and credibility of many of the main players in this case, including
       Defendant himself. At the conclusion of a two week long trial, it took them only
       a little over two hours to agree on defendant’s guilt. This Court finds the decision
       of the jury was not against the great weight of the evidence.

       We agree with the conclusion and the reasoning of the trial court. Here, the prosecutor
presented evidence that defendant engaged in a pattern of paying himself unauthorized
compensation over a period of years and in a variety of ways. Although defendant presented
evidence suggesting that the extent of the purported overpayments had been misstated and were
in some instances the result of negligence rather than deliberate wrongful conduct, the jury could
reasonably find from the evidence that defendant deliberately and dishonestly caused
Southwestern to pay him unauthorized compensation in excess of $50,000 during the period at
issue and that he did so with the intent to defraud Southwestern. Defendant points to alleged
errors in Marshall’s calculations, but the forensic accounting conducted by Marshall
demonstrating numerous overpayments to defendant and the implausibility of defendant’s
explanations strongly suggested that defendant manipulated his position to obtain unauthorized
compensation. To the extent that there were discrepancies in the evidence presented, the
evidence was such that different minds might naturally come to different conclusions and
therefore did not warrant the trial court disturbing the jury’s resolution of the factual dispute.
See Lemmon, 456 Mich. at 644.

       We therefore conclude that the trial court did not abuse its discretion in denying
defendant’s motion for new trial premised on the contention that the verdict was against the great
weight of the evidence. See Roper, 286 Mich. App. at 84.

       Affirmed.

                                                            /s/ Christopher M. Murray
                                                            /s/ Joel P. Hoekstra
                                                            /s/ Michael F. Gadola

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