Court Opinion

ID: 3125185
Source: CourtListenerOpinion
Date Created: 2015-10-16 15:04:47.352649+00
Date Added: 2024-06-11T09:16:25.278396
License: Public Domain

MEMORANDUM OPINION
                                          No. 04-10-00924-CR

                                        Larry Eugene BERRY,
                                               Appellant

                                                  v.

                                         The STATE of Texas,
                                               Appellee

                     From the 175th Judicial District Court, Bexar County, Texas
                                   Trial Court No. 2008-CR-3461
                            Honorable Mary D. Roman, Judge Presiding

Opinion by:       Phylis J. Speedlin, Justice

Sitting:          Karen Angelini, Justice
                  Phylis J. Speedlin, Justice
                  Rebecca Simmons, Justice

Delivered and Filed: May 9, 2012

AFFIRMED IN PART; REVERSED AND REMANDED IN PART

           Larry Berry appeals his convictions for misapplication of fiduciary property and theft,

challenging the legal sufficiency of the evidence and the amount of restitution ordered. We

affirm Berry’s convictions, but reverse the portion of the judgment ordering restitution and

remand to the trial court for recalculation of the appropriate amount of restitution.
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                                          BACKGROUND

       During 2004 and 2005, Larry Berry ran a franchise of Budget Blinds in San Antonio,

Texas. Berry independently owned and operated the franchise, while the corporate office in

California provided sales, marketing, and technical support.       Berry’s business consisted of

measuring for, ordering, and installing window blinds and shutters for homes and businesses in

the San Antonio area. In late 2004, several customer complaints arose about Berry’s business,

with customers stating that Berry had taken their order and payment for blinds and/or shutters,

but never delivered the blinds and/or shutters and could not be reached at the store or by

telephone; the customer complaints increased during 2005. The Budget Blinds’ corporate office

terminated Berry’s franchise in 2005, and eventually repaid some of Berry’s customers for their

undelivered orders. After his franchise was terminated, Berry continued operating his business

under a new name, Blinds Depot. Berry continued taking orders and payment from customers,

but did not deliver the window treatments that were ordered. Several customers reported the

matter to the police, and a news story on Berry was aired as part of the “Troubleshooters” series

on a local television network. The police investigation led to Berry’s indictment on one count of

aggregated misapplication of fiduciary property valued at least at $20,000 but less than

$100,000, and one count of aggregated theft of lawful United States currency valued at least at

$20,000 but less than $100,000; both counts involved the same forty-one victims. See TEX.

PENAL CODE ANN. §§ 31.03(a), (e)(5), 32.45(b), (c)(5) (West Supp. 2011 & 2011); see id. at

§ 31.09 (West 2011) (permitting aggregation of amounts obtained pursuant to one scheme or

continuing course of criminal conduct).

       At the jury trial, thirty-two of the forty-one alleged victims testified they entered into an

agreement with Berry to order and install blinds and/or shutters for their homes or businesses,

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paid Berry at least 75%, in some cases 100%, of the purchase price by either cash or check, but

did not receive their blinds and/or shutters. 1 The victims also testified that after Berry took their

order and received payment, he did not return or answer their repeated phone calls and could not

be found at the store. The jury found Berry guilty on both counts, misapplication of fiduciary

property and theft. On November 30, 2010, Berry was sentenced to ten years’ imprisonment on

each count, to run concurrently, and was ordered to pay total restitution of $78,733.44 to the 32

victims listed on an attachment to the judgment. Berry now appeals.

                                                      ANALYSIS

           On appeal, Berry’s first two issues challenge the legal sufficiency of the evidence to

support his convictions, his third and fourth issues assert his convictions should be overturned

due to his bankruptcy discharge, and his fifth issue contends the restitution order should be

reformed because some victims were made whole by the Budget Blinds parent company or had

their claims discharged in bankruptcy.

Legal Sufficiency

           In reviewing the legal sufficiency of the evidence, we determine whether, viewing all the

evidence in the light most favorable to the verdict, any rational trier of fact could have found the

essential elements of the offense beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307,

319 (1979); Brooks v. State, 323 S.W.3d 893, 899 (Tex. Crim. App. 2010). The standard applies

equally to both direct and circumstantial evidence. King v. State, 29 S.W.3d 556, 565 (Tex.

Crim. App. 2000). In conducting a legal sufficiency review, we defer to the jury’s assessment of

the credibility of the witnesses and the weight to be given to their testimony. Brooks, 323
S.W.3d at 899.

1
    Some customers received partial delivery of blinds.

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       Misapplication of Fiduciary Property

       In his first issue, Berry challenges the legal sufficiency of the evidence to support his

conviction for misapplication of fiduciary property.        A person commits the offense of

misapplication of fiduciary property by intentionally, knowingly, or recklessly misapplying

property he holds as a fiduciary in a manner that involves substantial risk of loss to the owner of

the property. TEX. PENAL CODE ANN. § 32.45(b). Count One alleged, with respect to each

individual victim, that Berry did

       intentionally, knowingly, and/or recklessly misapply property, namely: lawful
       currency of the United States of America, having a value of . . . [dollar amounts
       varied per victim], that the defendant held as a fiduciary or as a person acting in a
       fiduciary capacity, contrary to AN AGREEMENT UNDER WHICH THE
       DEFENDANT HELD THE PROPERTY, and in a manner that involved a
       substantial risk of loss of the property to . . . the owner of said property . . . by
       failing to perform as specified in the agreement and/or by applying the property
       for purposes not related to the agreement with the owner.

Berry argues his conviction for misapplication of fiduciary property must be overturned because

there is no evidence that (i) he was a fiduciary with respect to his customers’ funds, or (ii) he

misapplied any customer’s funds.

       Section 32.45(a)(1) defines a “fiduciary,” in relevant part, as any person acting in a

fiduciary capacity; the term “fiduciary capacity” is not defined.       TEX. PENAL CODE ANN.

§ 32.45(a)(1)(C) (West 2011). In interpreting the meaning of an undefined statutory term, we

apply the plain and ordinary meaning of the words, reading them in context and construing them

in accordance with the rules of grammar and common usage. Gonzalez v. State, 954 S.W.2d 98,

103 (Tex. App.—San Antonio 1997, no pet.); TEX. GOV’T CODE ANN. § 311.011(a) (West 2005).

The plain and common meaning of the term “fiduciary” is “‘holding, held, or founded in trust or

confidence.’” Gonzalez, 954 S.W.2d at 103 (quoting WEBSTER’S THIRD NEW INTERNATIONAL

DICTIONARY 845 (1981)). Thus, a fiduciary is a person who has a duty, created by his own

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undertaking, to act primarily for another person’s benefit in matters connected with such

undertaking. Id. (citing BLACK’S LAW DICTIONARY 625 (6th ed. 1990)); Talamantez v. State,

790 S.W.2d 33, 35 (Tex. App.—San Antonio 1990, pet. ref’d) (“fiduciary is one in whom

another has justifiably reposed confidence to act in a certain manner”). A person receives money

in a fiduciary capacity “‘when the business which he transacts, or the money or property which

he handles, is not his or for his own benefit, but for the benefit of another person as to whom he

stands in a relation implying and necessitating great confidence and trust on the one part and a

high degree of good faith on the other part.’” Gonzalez, 954 S.W.2d at 103 (quoting BLACK’S

LAW DICTIONARY 625 (6th ed. 1990)). Within section 32.45, “misapply” means to deal with

property contrary to an agreement under which the fiduciary holds the property. TEX. PENAL

CODE ANN. § 32.45(a)(2)(A) (West 2011). The agreement need only be an understanding or

arrangement as to a particular course of action; the agreement need not be written. Bynum v.

State, 767 S.W.2d 769, 774-75 (Tex. Crim. App. 1989); Gonzalez, 954 S.W.2d at 104.

       Here, each of the thirty-two victims testified that they had an agreement with Berry to

order and deliver the blinds and/or shutters they chose, and that the money they paid Berry up

front was for the specific purpose of ordering their window treatments, not for his own use or

benefit. Thus, the evidence shows Berry was clearly acting as a fiduciary when he accepted his

customers’ money for the particular purpose of ordering their blinds and/or shutters, and

pursuant to an agreement that the money was to be used for the benefit of the customers, not for

Berry’s own benefit. His customers trusted Berry to perform in accordance with their agreement,

and Berry was aware of the trust they reposed in him; therefore, Berry was required to act in a

fiduciary capacity with respect to his customers’ funds. See Talamantez, 790 S.W.2d at 35-36

(insurance agent who accepted money to purchase automobile insurance acted in a fiduciary

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capacity). The evidence showing that Berry dealt with his customers’ money contrary to their

agreement, and thus “misapplied” the money, consisted of the following: (1) the thirty-two

customers’ testimony that Berry never delivered their blinds and/or shutters (except for the three

partial deliveries), avoided their calls, and never refunded their money; (2) the police

investigator’s testimony that Berry’s bank records showed that he generally deposited customers’

checks into his business account and then promptly transferred them to his personal account;

Berry deposited an $8,000 check from Chris Elder for shutters into his business account, but

transferred it into his personal account and used the money to pay for a new home he bought on

Roan Bluff; Berry’s business account had a negative balance in February and March 2005 before

the bank closed the account; after March 2005, Berry no longer deposited customers’ checks into

the business account, but began cashing the checks at the customers’ banks; and (3) the

testimony of one customer, Chris Elder, who stated that Berry’s mother danced around the store

and exclaimed, “Woohoo, I’m going shopping” when Elder delivered the check for $8,000 to

pay for her shutters, giving her the impression that her money was not going to go to her shutters.

The jury was entitled to weigh and assess the credibility of all the evidence, and to draw

reasonable inferences from the basic facts to the ultimate facts. Williams v. State, 235 S.W.3d
742, 750 (Tex. Crim. App. 2007). There is legally sufficient evidence that Berry accepted his

customers’ money in a fiduciary capacity and dealt with the money in a manner contrary to his

agreement with the customers, failing to deliver the blinds and/or shutters and transferring the

payments to his personal account and using the money for his own benefit, thereby violating

section 32.45(b). See Talamantez, 790 S.W.2d at 37; Bynum, 767 S.W.2d at 777 (evidence was

legally sufficient to support finding that defendant misapplied property contrary to agreement

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when he cashed and failed to account for checks given to citizen’s committee for purpose of

supporting bond election).

       Theft

       Berry was also convicted of theft in Count II, based on the allegation that he unlawfully

appropriated the property he held as a fiduciary, i.e., the customers’ money, for his own benefit.

See Talamantez, 790 S.W.2d at 37 (discussing the difference between the offenses of

misapplication of fiduciary property, which requires the defendant be in a position of trust and

act contrary to the parties’ agreement, and theft which requires that the defendant appropriate

property for his own use). In his second issue on appeal, Berry argues his conviction for theft

must be reversed because there is no evidence of deception, i.e., that he had the intent to deceive

or deprive his customers of their money at the time of the transaction.         Berry asserts the

customers gave him their money with effective consent and their claims for nonperformance

were merely a contractual dispute instead of a matter of theft. Count Two of the indictment

charged Berry with committing theft from each victim, alleging that Berry

       with intent to deprive the owner . . . of property, namely: lawful currency of the
       United States of America, did unlawfully, without the effective consent of the
       owner, appropriate the property by acquiring or otherwise exercising control over
       the property, which had a value of [dollar amounts varied per victim] . . . ,
       namely, a check dated [dates varied per victim] . . . payable to Budget
       Blinds/Larry Berry . . .

       Section 31.03 of the Penal Code provides that a person commits the offense of theft if he

“unlawfully appropriates property with intent to deprive the owner of property;” appropriation is

unlawful when it is without the owner’s effective consent. TEX. PENAL CODE ANN. § 31.03(a),

(b)(1) (West Supp. 2011); McClain v. State, 687 S.W.2d 350, 353 n.7 (Tex. Crim. App. 1985) (to

“appropriate” means any exercise of control over the property in question); see Ehrhardt v. State,

334 S.W.3d 849, 852 (Tex. App.—Texarkana 2011, pet. ref’d) (listing elements of theft).

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Consent is not effective when it is induced by deception. TEX. PENAL CODE ANN. § 31.01(3)

(West Supp. 2011); Ehrhardt, 334 S.W.3d at 853 (to “induce” means “to bring about, produce,

or cause”). One means of deception is “promising performance that is likely to affect the

judgment of another in the transaction and that the actor does not intend to perform or knows

will not be performed; the mere failure to perform, without other evidence of the actor’s intent or

knowledge, is not sufficient proof that the actor did not intend to perform or knew the promise

would not be performed at the time the property was taken. TEX. PENAL CODE ANN. § 31.01(1)

(E) (West Supp. 2011); Wirth v. State, No. PD-1054-11, 2012 WL 931978, at *3 (Tex. Crim.

App. March 21, 2012). Theft in connection with a contract requires proof that appropriation of

the property was a result of false pretext or fraud, not merely that the defendant failed to return

the property after failing to perform. Wirth, 2012 WL 931978, at *3; Ehrhardt, 334 S.W.3d at

853-54; Jacobs v. State, 230 S.W.3d 225, 229 (Tex. App.—Houston [14th Dist.] 2006, no pet.).

In reviewing sufficiency of the evidence of this type of theft, the appellate court considers the

events before, during, and after commission of the offense, as well as the defendant’s actions

which show an understanding and common design to commit the offense. Wirth, 2012 WL
931978, at *3; Guevara v. State, 152 S.W.3d 45, 49 (Tex. Crim. App. 2004).

           Berry argues there is no evidence he had the intent to deceive his customers when he

accepted their money, i.e., he claims there was no false pretext and he intended to perform the

contracts. He points to the evidence that all the customers voluntarily paid him in advance for

their blind and shutter orders, and some received partial delivery of their orders, while most of

the others were eventually repaid by the Budget Blinds parent corporation. 2 Berry asserts there

is no evidence of deception on his part, or of a scheme to defraud, and excuses his conduct as

“bad business practices” and “unfortunately typical of the economic times of the last ten years.”
2
    The trial testimony was that 18 of the 32 victims who testified were repaid by Budget Blinds corporation.

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Berry asserts his case is similar to Phillips v. State, 640 S.W.2d 293 (Tex. Crim. App. 1982), in

which the court held the defendant’s failure to perform a contract to build a home addition was

insufficient to support his conviction for theft of the down payment. Phillips is distinguishable,

however, because the holding was based on the absence of any evidence of deception by false

impression of law or fact; it was a mere failure to perform. Id. at 294.

       Here, by contrast, there is evidence in the record that supports a finding that it was more

than just a simple failure to perform the contracts. There is sufficient evidence to support a

reasonable inference that Berry promised performance of the contracts for window treatments in

order to induce the customers’ advance payment for the product, when he did not intend to

perform or knew he would not be able to perform the contracts. There was evidence that Berry

offered a discount to induce customers to pay by check or cash instead of by credit card. Many

of the checks were made payable to “Larry Berry” alone, while the others were made payable to

“Larry Berry/Budget Blinds” or “Larry Berry/Blinds Depot.” Berry consistently demanded

payment in advance for the orders – at least a 75% deposit, and in many cases 100% advance

payment. In addition, Lisa Masterson with Timber Blinds Manufacturer testified that Berry had

had an account with them since 2001, but it was closed in November 2004 due to nonpayment; at

the time, Berry owed $46,000 to Timber Blinds, which amount was ultimately charged off.

Masterson testified that, as of November 2004, Berry would have known that any orders he

placed with Timber Blinds would not be filled. The evidence showed that before November

2004, Berry took a total of $16,640 from four of the thirty-two victims who testified (Chris

Elder: $8,000; Beth Ann Enriquez: $6,200; Maria Vogt: $1,540; Yong Pak: $900). Therefore,

Berry had knowledge that the customer orders he took after November 2004 would not be filled

by Timber Blinds.

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       Only three of the thirty-two victims in this case received any window treatments at all

from Berry – only partial deliveries of their orders; the other parts of their orders were never

delivered by Berry. Every customer testified that once Berry received their payment, he became

very difficult, if not impossible, to reach; he was not present in the store and would not return

repeated phone calls. One customer even tried to contact Berry to change the color of her blinds,

but could not reach him. None of the thirty-two customers received a refund from Berry, despite

requests for refunds; instead, Berry blamed the delivery delays on manufacturing problems and

the high humidity in Houston which delayed painting. Kristina Benca testified that when she

investigated the status of her order with the manufacturer, she was informed that no order existed

under her name or Berry’s name. As noted, supra, Chris Elder testified Berry’s mother indicated

she was going shopping with Elder’s $8,000 check for her wood shutters order. Berry’s bank

records showed that he did indeed use Elder’s $8,000 check to pay for the purchase of a new

home for himself.

       While the customers voluntarily paid between 75% and 100% of the purchase price to

Berry in advance, their payment was induced by and made in exchange for Berry’s promise to

order and deliver their blinds and/or shutters in accordance with their agreement; thus, their

consent in handing over their money was not effective because they were induced by Berry’s

deception, i.e., his intent to deprive them of their money without performance of the contract.

While some of Berry’s practices, such as offering a discount for payment by cash or check, are

not by themselves evidence of an intent to deceive, and are in fact common business practices,

when viewed together with the other evidence of Berry’s complete failure to perform on twenty-

nine of the thirty-two contracts, his demands for payment up front, his excuses and avoidance of

the customer once they paid for the order, his refusals to refund any payments, his bank records

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showing he promptly transferred the payments to his personal account and used at least one

payment for his own home purchase, and the large number of victims, all tend to support the

jury’s finding that Berry intended to deceive the victims at the time he took their money. See

Wirth, 2012 WL 931978, at *3 (noting that, while the circumstantial evidence in that case “could

merely be [a] symptom[] of a ‘previously successful business [falling] off’ and ‘scramb[ling] for

money from … any available source,’” the jury made a rational inference from the evidence that

the defendant never intended to perform on the contracts and thus committed theft, and it was not

the role of the appellate court to substitute its view of the evidence).

       Accordingly, we overrule Berry’s first two issues challenging the legal sufficiency of the

evidence to support his convictions on Counts I and II of the indictment.

Bankruptcy Discharge as Defense & Restitution

       In his third and fourth issues, Berry asserts the bankruptcy court’s discharge of his debts

to customers who filed a proof of claim, and the absence of a fraud finding by the bankruptcy

court, renders the evidence legally insufficient to support his theft conviction, and operates to

collaterally estop his criminal prosecutions. In his fifth issue, Berry contends the restitution

order should be reformed to reflect that some victims were repaid by the Budget Blinds

corporation, and some who filed proofs of claim which were discharged in his bankruptcy

proceeding; he contends other victims who failed to participate in his bankruptcy proceeding

have “waived” their right to restitution.

       In his brief, Berry cites to no authority holding that a discharge in bankruptcy collaterally

estops or operates as a defense to a criminal prosecution, or bars a restitution order. In fact, the

Court of Criminal Appeals has held to the contrary. In Cabla v. State, 6 S.W.3d 543, 549 (Tex.

Crim. App. 1999), cert. denied, 529 U.S. 1092 (2000), the court held that a trial court could order

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a defendant to pay restitution to his theft victims even though the sums had previously been

discharged as debts in the defendant’s federal bankruptcy proceeding. Berry acknowledges

Cabla, but tries to distinguish it, arguing Berry’s case is different because his victims’ claims

were repaid by the Budget Blinds corporation, and his bankruptcy petition was filed before he

was convicted of the criminal offenses. 3 Berry also asserts the court’s reasoning in Cabla is

flawed, and urges us not to follow it. First, we are bound by the Court of Criminal Appeals

holding in Cabla; secondly, we agree with its reasoning. The court based its holding on the

“pervasive differences between the goals of the criminal justice system and the bankruptcy

system,” noting that a goal of restitution is punishment while the goal of bankruptcy is to permit

an “honest and unfortunate debtor” to “begin his financial life anew.” Id. at 545-48 (quoting

Kelly v. Robinson, 479 U.S. 36, 46 (1986)). “As punishment, restitution attempts to redress the

wrongs for which a defendant has been charged and convicted in court.” Id. at 546 (citing

Martin v. State, 874 S.W.2d 674, 678 (Tex. Crim. App. 1994)). Thus, a discharge in a civil

bankruptcy proceeding has no effect on a criminal proceeding; its only effect is to extinguish the

defendant’s liability on any civil claim arising out of the debt. 4 Id. at 548-49 (that defendant’s

victims were named as creditors and bankruptcy court discharged defendant’s debts prior to

conviction had no impact on trial court’s restitution order); see United States v. Carson, 669 F.2d
216, 217 (5th Cir. 1982); United States v. Pepper, 51 F.3d 469, 473 (5th Cir. 1995).

3
 We may not consider the documents attached to Berry’s brief, consisting of a printout with information about his
bankruptcy case, because they were not presented to the trial court and are not part of the appellate record. TEX. R.
APP. P. 34.1; Ramirez v. State, 104 S.W.3d 549, 550-51 n.9 (Tex. Crim. App. 2003); Farris v. State, 712 S.W.2d
512, 515-16 (Tex. Crim. App. 1986).
4
  The Bankruptcy Code expressly states that the filing of a bankruptcy petition does not stay commencement or
continuation of a criminal action against the debtor. 11 U.S.C. § 362(b)(1) (2010); see Smith v. Millsap, 702 S.W.2d
741, 743 n.2 (Tex. App.—San Antonio 1985, no writ) (acknowledging section 362(b)(1)).

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           As to Berry’s complaint concerning the amount of restitution ordered, we agree that

because the record shows that more than half of the thirty-two testifying victims were made

whole either by partial delivery of their orders or by repayment by the Budget Blinds

corporation, the amount of restitution must be reduced. 5 See Cabla, 6 S.W.3d at 545 (restitution

is intended to adequately compensate the victim of the offense in the course of punishing the

criminal offender); see also Campbell v. State, 5 S.W.3d 693, 696 (Tex. Crim. App. 1999)

(amount of restitution must be just and must have a factual basis within the loss of the victim);

Cartwright v. State, 605 S.W.2d 287, 289 (Tex. Crim. App. 1980). Because there is no evidence

to support the amounts of restitution ordered paid to those victims who have already been

compensated for their loss resulting from Berry’s offenses, the trial court abused its discretion by

including those amounts in its restitution order for $78,733.44. See Gonzalez, 954 S.W.2d at

104-105. Therefore, we reverse the portion of the judgment ordering restitution, and remand to

the trial court for recalculation of the appropriate amount of restitution. 6

                                                      CONCLUSION

           Based on the foregoing reasons, we affirm Berry’s convictions but reverse the portion of

the judgment ordering restitution in the amount of $78,733.44, and remand to the trial court for

recalculation of the appropriate amount of restitution.

                                                               Phylis J. Speedlin, Justice

DO NOT PUBLISH

5
    The State did not address this portion of Berry’s argument in its brief.
6
 Due to discrepancies between the record and the judgment as to the particular amounts lost by each victim, we are
unable to calculate the appropriate amount of restitution and reform the judgment. See TEX. R. APP. P. 43.3.

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