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State v. Buttars

State v. Buttars, 2020 UT App 87 (Orme, J.)

Criminal

The defendant was CEO of a small tech company that eventually went under. He thereafter created a new tech company with a friend providing the same service. In both enterprises, the defendant sought small amounts of funding from multiple parties, promising the funds would be used for various business expenses and expansion. He and the friend used that funding to pay for personal bills, as well as to pay for business expenses. The State investigated the use of the enterprises’ investment funds. It subpoenaed to two banks—Chase and Frontier—but those subpoenas included a secrecy clause without seeking or obtaining a secrecy order from the district court. Furthermore, only Chase returned its records with the appropriate custodial affidavit certificates; Frontier’s had no certificates. The State charged the defendant with four counts of securities fraud, four counts of theft, and one count of engaging in a pattern of unlawful activity. Before trial, the State had an expert prepare summary reports and cover sheets containing notations and opinions on certain transactions. The defendant moved to suppress his bank records because they were inadmissible hearsay and violated his Fourth Amendment right to privacy. The court admitted everything, but at trial only the summaries and attached cover sheets were admitted to the jury. He was acquitted of all four theft charges and convicted of the rest. The defendant appealed. The Utah Court of Appeals reversed and remanded for a new trial, holding:

  • It was error to admit the Frontier bank records under the residual rule without a more compelling explanation for why the business records exception would not suffice. The business records rule applies over the residual rule, because it is the more specific rule dealing with bank records. The residual exception is only intended to be used when the records do not fit into a recognized exception.
  • Because the Frontier bank records were not admissible under the residual exception, neither were their summaries.Summaries of voluminous writings under Utah Rules of Evidence rule 1006 can only be admitted to prove the content of voluminous writings; expert opinion should not be a part of 1006 summaries because expert opinion is not a part of the content of the actual underlying records. The proponent of a summary must show that it is admissible, typically requiring admissibility under the business records exception to hearsay.
  • Entry of the Frontier bank records prejudiced the defendant. The State’s case hinged on the Frontier bank records. The majority of the evidentiary backing for the summaries and cover sheets came directly from the inadmissible Frontier records, and it is not reasonably likely that the defendant would have been convicted based on the Chase records alone, which did contain the required certificates. Contrary to the State’s claim on appeal, nothing in the record suggests that the State could have produced a witness to vouch for the Frontier records or a certificate as required by the rules.
  • Even if the secrecy provision was not included in the subpoenas to both banks, there is no evidence that the defendant could have successfully quashed them had he known about them. The secrecy language did not affect the validity of the subpoenas and the underlying search.
  • Cover sheets are not substance evidence under rule 1006.
  • An alternative ground for affirmance must be grounded in the district court’s findings. On appeal, an appellate court may not find new facts or reweigh the evidence in light of a new legal theory or alternate ground forwarded by the State. 

Read the full court opinion

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