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State v. Candelaria

Court of Appeals of New Mexico

April 1, 2019

STATE OF NEW MEXICO, Plaintiff-Appellee,
KARL CANDELARIA, Defendant-Appellant, and STATE OF NEW MEXICO, Plaintiff-Appellee,
NORA CHEE, Defendant-Appellant.

          APPEALS FROM THE DISTRICT COURT OF BERNALILLO COUNTY Christina P. Argyres, District Judge.

          Hector H. Balderas, Attorney General Anita Carlson, Assistant Attorney General Santa Fe, NM for Appellee

          Bennett J. Baur, Chief Public Defender J.K. Theodosia Johnson, Assistant Appellate Defender Santa Fe, NM for Appellant Karl Candelaria.

          Jonathan Tsosie Denver, CO Ben A. Ortega Albuquerque, NM for Appellant Nora Chee.



         {¶1} Defendants Nora Chee and Karl Candelaria each appeal from separate judgments and sentences following a jury verdict finding them both guilty of fraud, forgery, and conspiracy to commit fraud, and Defendant Chee guilty of embezzlement, arising from a scheme in which they stole over $200, 000 from the franchisor of Defendant Chee's business by writing unauthorized checks to themselves. Because the two cases arise from the same facts, and Defendants raise similar claims, we consolidate these cases for decision. See Rule 12-317(B) NMRA.

         {¶2} Defendants make the following claims on appeal: (1) that the evidence was insufficient to support their convictions for forgery, because the checks and signature stamp that they used to carry out their scheme were authentic, even though their use of those items was unauthorized; (2) that the district court erred in denying their motions to dismiss the charges against them on speedy trial grounds on the stated basis that the motions were filed after the deadline for filing pretrial motions in the district court's scheduling order; (3) that the district court erred when it allowed late-disclosed evidence to be used at trial and did not grant a continuance to allow Defendants to further investigate it; (4) that the district court erred when it allowed a substitute witness to testify as a records custodian; and (5) that the district court erred in allowing a variety of unfairly prejudicial evidence to be admitted at trial. Defendant Candelaria also challenges his two convictions for fraud, arguing that they violate his right to be free from double jeopardy. We agree that Defendant Candelaria's two fraud convictions violate the prohibition on double jeopardy, and remand to the district court with instructions that one of the convictions be vacated. We affirm the district court's judgments and sentences in all other respects.


         {¶3} Defendant Chee owned a business called Care Connections, which was a franchise of Around the Clock Healthcare Services (ATC), a medical staffing company based in New York. Care Connections, as a franchisee of ATC, provided Registered Nurses (RNs), Licensed Practical Nurses (LPNs), and various other healthcare workers to healthcare facilities in need of temporary staff. Ms. Chee was also an RN. Chee's boyfriend, Defendant Candelaria, was an employee of Care Connections, where he performed administrative tasks. He was not an RN, nor was he an employee of ATC.

         {¶4}ATC offered a program called the "daily pay program" or "quick pay program," which allowed RNs to submit a timesheet verifying the work that they had done for a healthcare facility, and be paid by ATC that same day rather than having to wait until the end of the next pay period. ATC provided its franchisees, including Defendant Chee's franchise, with check stock and the signature stamp of ATC's Chief Financial Officer, David Kimbell, to facilitate the quick pay program. ATC placed firm restrictions on Defendant Chee's ability to use the signature stamp and check stock: she was authorized to issue checks only to RNs, for amounts of $500 or less, with a limit of one check per person per day. As a principal of the franchise, Defendant Chee was not authorized to issue quick pay checks to herself, even for services she rendered as an RN. Defendant Candelaria was not entitled to receive quick pay checks, because he was not an RN, and thus could not have provided any services that would have entitled him to receive a quick pay check.

         {¶5} Mr. Kimbell and David Savitsky, the Chief Executive Officer of ATC, discovered in 2009 that Care Connections had issued a number of quick pay checks to Defendants Chee and Candelaria in 2008 and 2009, in amounts totaling over $200, 000. No documentation established that Defendants performed any work to justify the issuance of those checks. The checks were deposited into two different bank accounts that Defendant Chee had opened, and the money was often quickly withdrawn. Defendant Chee was the only person authorized to make withdrawals from those accounts. During the relevant time period, Defendant Chee also wrote checks for large amounts of money from those accounts to Defendant Candelaria.

         {¶6} Both Defendants were arrested on June 3, 2011, and charged with multiple counts of forgery ($2500 or less), contrary to NMSA 1978, Section 30-16-10(A), (B) (2006); conspiracy to commit forgery, contrary to Section 30-16-10(A), (B) and NMSA 1978, Section 30-28-2 (1979); and fraud (between $2, 500 and $20, 000), contrary to NMSA 1978, Section 30-16-6 (2006); plus one count of conspiracy to commit fraud (between $2, 500 and $20, 000), contrary to Section 30-16-6 and Section 30-28-2. The State also charged Defendant Chee with multiple counts of embezzlement, contrary to NMSA 1978, Section 30-16-8 (2007), and Defendant Candelaria with one count of fraud (over $20, 000), contrary to Section 30-16-6. The district court consolidated Defendants' cases for trial, and Defendant Chee was convicted of twenty-two counts of forgery, one count of embezzlement, one count of fraud, and one count of conspiracy to commit fraud. Defendant Candelaria was convicted often counts of forgery, two counts of fraud, and one count of conspiracy to commit fraud.


         I. Substantial Evidence Supported Defendants' Forgery Convictions

         {¶7} Defendants claim that substantial evidence did not support their forgery convictions. Specifically, Defendants contend that their conduct did not constitute the crime of forgery because the quick pay checks and signature stamp used in the scheme were genuine, and Defendant Chee endorsed the checks with her own genuine signature. We disagree.

         {¶8} "Although framed as a challenge to the sufficiency of the evidence, Defendants'] argument requires us to engage in statutory interpretation to determine whether the facts of this case, when viewed in the light most favorable to the verdict, are legally sufficient to sustain" their convictions for forgery, and we therefore apply I de novo review. See State v. Barragan, 2001-NMCA-086, ¶ 24, 131 N.M. 281, 34 P.3d 1157, overruled on other grounds by State v. Tollardo, 2012-NMSC-008, ¶ 37 n.6, 275P.3dllO.

         {¶9} "Forgery consists of falsely ... making or altering any signature to, or any part of, any writing purporting to have any legal efficacy with intent to injure or defraud; or knowingly issuing or transferring a forged writing with intent to injure or defraud[.]" Section 30-16-10(A)(1). "Forgery has been defined as a crime aimed primarily at safeguarding confidence in the genuineness of documents relied upon in commercial and business activity." State v. Baca, 1997-NMSC-018, ¶ 5, 123 N.M. 124, 934 P.2d 1053. Forgery "requires a lie," but "it must be a lie about the document itself: the lie must relate to the genuineness of the document." Id. Indeed, as Defendants correctly observe, New Mexico case law interpreting our forgery statute has long recognized a distinction between a document "which is not genuine" (which can form the basis of a forgery conviction), and a genuine document "the contents or allegations of which are false" (which cannot). Territory v. Gutierrez, 1906-NMSC-003, ¶ 5, 13 N.M. 312, 84 P. 525. The Supreme Court of the United States has also recognized the same historic distinction in the law of forgery. See Gilbert v. United States, 370 U.S. 650, 658 (1962) ("Where the 'falsity lies in the representation of facts, not in the genuineness of execution,' it is not forgery."); see also Moskal v. United States, 498 U.S. 103, 119 (1990) (Scalia, J., dissenting) ("A forged memorandum is 'falsely made'; a memorandum that contains erroneous information is simply 'false.' ").

         {¶10} Attempting to seize upon that distinction, Defendants argue that the checks at issue in this case merely "told lies" by, in effect, falsely representing that Defendants were entitled to deposit the checks, but "were not lies in and of themselves" because both the checks and the signature stamp were genuine. In response, the State, while not disputing that the checks and the signature stamp were genuine, argues instead that Defendants' use of them beyond ATC's authorization to do so constitutes forgery.

         {¶11} We conclude that the jury could properly find that Defendants committed forgery. Although the checks themselves and the signature stamp were genuine, our appellate courts have long held that a defendant may commit forgery by signing another person's name without authority and, conversely, that signing another's name with authorization is not forgery. See State v. Smith, 1927-NMSC-012, ¶ 7, 32 N.M. 191, 252 P. 1003 (holding that an indictment's allegation that the defendant committed forgery by "falsely" signing another's name sufficiently alleged that the defendant signed the name without authority to do so); State v. Lopez, 1969-NMCA-115, ¶¶ 13-16, 81 N.M. 107, 464 P.2d 23 (concluding that the defendant was properly convicted of forgery for attempting to cash a check made out to another person and endorsing that person's name without authorization), overruled on other grounds by State v. Ruffins, 1990-NMSC-035, ¶ 17, 109 N.M. 668, 789 P.2d 616; State v. Saavedra, 1979-NMCA-096, ¶¶ 10-12, 93 N.M. 242, 599 P.2d 395 (holding that the defendant was properly convicted of forgery for signing account holder's name to stolen checks); cf. Clark v. State, 1991-NMSC-079, ¶ 12, 112 N.M. 485, 816 P.2d 1107 ("It is clear, we think, that 'wherever authority is given to sign the name of another to a writing, there can be no forgery.'" (quoting 36 Am. Jur. 2d Forgery § 9 (1968))).

         {¶12} In sum, whether a defendant signs another's name by hand, or uses a signature stamp, his or her actions tell a lie about the document itself-that it has been made with the approval of the apparent signer, and is therefore genuine-and does not merely tell a lie about a fact or facts stated in the document. We therefore conclude that Defendants' use of a signature stamp and the checks outside the scope of their authorization to do so were acts which, when combined with the required intent to injure or defraud, constituted forgery.

         {¶13} Defendants rely on several cases in support of their contrary position, but all of them are distinguishable. See State v. Carbajal, 2002-NMSC-019, 132 N.M. 326, 48 P.3d 64; Gutierrez, 1906-NMSC-003; andState v. Leong, 2017-NMCA-070, 404 P.3d 9, cert, denied, 2017-NMCERT-__(No. S-l-SC-36576, Aug. 18, 2017). Each of the cited cases held only that a defendant's act of signing his own name does not support a forgery conviction. See Carbajal, 2002-NMSC-019, ¶¶ 18-19 (stating that the defendant did not commit forgery by signing his own name to another person's traveler's check); Gutierrez, 1906-NMSC-003, ¶¶ 1, 4, 9 (holding that a notary public could not be guilty of forgery for signing his own name to a certificate of acknowledgement that contained false statements); Leong, 2017-NMCA-070, ¶ 16 (reversing the defendant's conviction for forgery based upon the act of signing his own name to an affidavit of residency that contained a false statement).

         {¶14} Defendant Candelaria's reliance on United States v. Hunt, 456 F.3d 1255 (10th Cir. 2006), is similarly misplaced. In that case, the defendant had check-writing authority for his employer, but exceeded that authority by personally signing checks totaling over $2 million to false payees that he controlled, and then using the money for his own purposes. Id. at 1256-57. The Tenth Circuit held that this misconduct did not constitute forgery because the defendant "signed each of the 65 checks using his own true name," and thus the checks "were genuinely executed, not 'falsely made,' because they do not purport to be anything other than checks written by an... agent [of the defendant's employer]." Id. at 1263. In explaining its decision, the Tenth Circuit said that "common-law forgery cases consistently use the word 'genuine' to refer to genuineness of execution or authorship, not authority to act as an agent for another[, ]" id. at 1267, and Defendant Candelaria concludes from this statement that his (and Defendant Chee's) lack of authority to sign the checks with Mr. Kimbell's signature stamp did not constitute forgery. But Hunt is unavailing because the defendant in that case signed his own name, and thus his execution of the checks was genuine in the sense that he was the true signer, albeit one acting beyond the authority that his employer gave to him. Here, by contrast, Defendants used another person's signature stamp to sign the checks without authority to do so, conduct which constitutes forgery under New Mexico law. The Tenth Circuit itself has recognized that an agent commits forgery if he or she signs the principal's name without authority to do so. See Selvidge v. United States, 290 F.2d 894, 895 (10th Cir. 1961) (holding that the defendant, who, without authority, endorsed her employer's checks "as the agent of her named principal" did not commit forgery, but observing that if she had signed the name of her principal without authority to do so, "the crime of forgery would have been complete").

         {¶15} Defendant Candelaria also relies on language in Hunt indicating that because banks are generally liable if they pay on a forged check, and are rarely aware of private limitations on an agent's authority, "[h]olding banks liable in cases of forgery would make no sense ... if any check signed by an agent without actual authority qualified as 'forged.'" 456 F.3d at 1262. Again, Defendant Candelaria's reliance on Hunt is unavailing. First, we reject any argument that Defendants should escape punishment for their wrongful conduct merely because a third party may ultimately be responsible for satisfying the victim's financial loss resulting from that wrongful conduct. Moreover, the quoted language appears in the portion of the Hunt opinion in which the Tenth Circuit was discussing the early development of the common-law crime of forgery, and is difficult to reconcile with the present-day reality that banks are not automatically liable for paying out on forged checks. Under New Mexico's version of the Uniform Commercial Code, a bank's customers have a duty to examine their statements and promptly notify the bank of any unauthorized payments. See NMSA 1978, § 55-4-406(c) (1992). A customer's failure to do so constitutes a defense to a claim that the bank improperly paid on a forged check. See § 55-4-406(d), (e) (stating that a customer who does not exercise reasonable promptness in examining statements for unauthorized payments may be precluded from recovering from the bank).

         {¶16}Finally, contrary to Defendant Chee's assertion, State v. Deutsch, 1985-NMCA-123, 103 N.M. 752, 713 P.2d 1008, does not advance her cause. Chee relies on Deutsch's statement that where an agent with a "general power" to act for his principal endorses his principal's name, that is not forgery because the endorsement is fully effective, see id. ¶ 53, and argues that she did not commit forgery because she had authority to act for ATC. Careful analysis reveals that the language in Deutsch that Chee now relies on was non-binding dicta. The defendant in Deutsch was not an agent who had a general power to sign for his principal, but endorsed and cashed checks belonging to a company that he once fully controlled but had since been placed in trusteeship. Id. ¶¶ 2-8. He was convicted on multiple counts of forgery, and this Court reversed the forgery convictions that were based on checks on which the defendant had signed his own name, but upheld the forgery convictions relating to checks on which the defendant falsely signed the trustee's name. Id. ¶¶ 48, 54-56. Quite simply, Deutsch did not hold that a defendant's act of signing another person's name without authorization cannot support a forgery conviction.

         II. The District Court Did Not Err in Denying Defendants' Speedy Trial Motions as Untimely Filed

         {¶17} Defendants claim that the district court erred by summarily denying their speedy trial motions on the ground that they were filed after the deadline for pretrial motions set forth ...

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