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The People of the State of Illinois v. Ann M. Day

August 30, 2011

THE PEOPLE OF THE STATE OF ILLINOIS,
PLAINTIFF-APPELLEE,
v.
ANN M. DAY,
DEFENDANT-APPELLANT.



Appeal from the Circuit Court of Kane County. No. 05-CF-430 Honorable Timothy Q. Sheldon, Judge, Presiding.

The opinion of the court was delivered by: Presiding Justice Jorgensen

Modified upon denial of rehearing October 27, 2011

PRESIDING JUSTICE JORGENSEN delivered the judgment of the court, with opinion. Justices Burke and Birkett concurred in the judgment and opinion.

OPINION

¶ 1 Following a bench trial, defendant, Ann M. Day, was convicted of 10 counts of theft (720 ILCS 5/16-1(a)(1), (a)(2) (West 2004)) and 16 counts of forgery (720 ILCS 5/17-3(a)(1), (a)(2) (West 2004)). She was sentenced to 48 months' probation and 180 days in jail (with credit for 64 days served) and ordered to pay $137,937.27 in restitution (in $2,873 monthly installments) to Karen Tietz, her former law partner. The trial court denied defendant's motion to reconsider the sentence. Defendant appeals, arguing that: (1) the evidence was insufficient to sustain the four Class 1 felony theft convictions; (2) the evidence was insufficient to support the finding that she intended to permanently deprive her firm and Tietz of any wrongfully taken funds; (3) the restitution amount was not statutorily authorized and, therefore, is void; and (4) the trial court abused its discretion in ordering her to make monthly $2,837 restitution payments without considering her ability to pay. We affirm.

¶ 2 I. BACKGROUND

¶ 3 On November 1, 2005, defendant was charged with 12 counts of theft and 18 counts of forgery. Trial commenced on May 11, 2009. The State's theory of the case was that defendant and Tietz started a real estate law firm together and that, in the course of their practice (from March to November 2004), defendant stole $137,937.27 from the firm and Tietz. Defendant's defense was that she was entitled to some of the money, and she attempted to show that there was no evidence of each partner's rightful net share and, therefore, of how much was wrongfully taken. She argued that the evidence was unclear as to whether the partners had agreed that they would equally split firm proceeds or that 85% would go to defendant in the first year because she was the more experienced real estate attorney.

¶ 4 Tietz testified as follows. In late 2003, Tietz and defendant met through their church and defendant asked Tietz if she wanted to open a law practice with her. Tietz agreed, and, in December 2003, they opened Day & Tietz P.C., which was organized as a professional service corporation (see 805 ILCS 10/1 et seq. (West 2004)) in St. Charles. The partners discussed the division of profits and, according to Tietz, decided to equally split them; this was an oral agreement. Addressing a "Preliminary Firm Plan" that defendant created, Tietz explained that its purpose was to attempt to gain their church as a firm client; that is, it constituted merely a "sale pitch" to the church and not the partners' agreement as to how they would run the firm. Tietz explained that the plan was only two pages in length, was never filed with the Secretary of State, and was created merely as a marketing tool in an attempt to gain the partners' church as a firm client. However, a four-page version of the plan was also admitted at trial, and it referenced that, during 2004, defendant would receive 85% of the firm's net proceeds and Tietz would receive 15%. Neither the two-page nor the four-page document was signed.

¶ 5 Tietz further testified that defendant had an ongoing practice when they formed their firm but defendant desired more income. The partners decided that, as to defendant's existing clients, defendant would keep the proceeds from the legal work she was performing for them. There were about five such clients. Tietz testified that the last of these business relationships, which pertained to real estate transactions such as closings, would have ended by February or March 2004 given the nature of the transactions.

¶ 6 Within six months of forming the firm, Tietz and defendant were "busy" representing clients in buying or selling real estate. Generally, if they represented a buyer, the buyer would directly pay the firm. When they represented a seller, the firm's fees came from the title company. The firm placed the fees into its business operating account, which was held at Benchmark Bank. They also held there a client trust account to hold client money to which the firm was not entitled. The trust account held, for example, earnest money that a buyer posted; the firm would present a check for that money to the title company at closing. Tietz explained that there would be no reason for a firm attorney to write a check to herself out of the trust account (or the business operating account) for an earnest money reimbursement.

¶ 7 When the firm was first formed, defendant and Tietz did not receive any compensation for their services. However, in March 2004, defendant informed Tietz that defendant's husband was no longer working and had heart problems and that defendant now needed income. The partners agreed that defendant could draw a paycheck (through Paychex, a payroll service). Later, in about May or June, Tietz also began receiving a paycheck from the firm. When defendant began receiving paychecks from the firm, there were sufficient funds in the firm's account to pay her. At this time, Tietz attended real estate closings. When she received a check from the title company, she gave it to defendant to deposit into the business operating account. In the beginning, defendant did so.

¶ 8 On May 5, 2004, the firm hired a paralegal secretary, Mary Watts. She received a paycheck through Paychex. Watts prepared closing documents, paid the firm's bills, and created files. Before Watts was hired, defendant wrote checks for the firm. The business operating account was set up so that either partner was an authorized signer on the account; that is, two signatures were not required on the firm's checks. During this time, Tietz did not review the firm's bank statements.

¶ 9 In October or November 2004, Tietz became concerned about the firm's finances because she discovered that a check purportedly issued to a plumber was not submitted to the firm's landlord for reimbursement. Defendant told Tietz not to worry about it. Tietz remained concerned because the firm's account balance was low. Also, she was unable to find a plumbing company with the name specified in the checkbook register; the handwriting in the register was defendant's writing. The actual check (No. 1215), Tietz discovered, was not made out to a plumbing company, but was made out to defendant, in the amount of $1,250, and the check was signed by defendant. The day on which she discovered the actual check was the last day the partners operated the firm together. Over the weekend that followed, Tietz approached the police and made her initial complaint.

¶ 10 Tietz subsequently reviewed the firm's financial records. Addressing one general category of the over 120 exhibits admitted into evidence, Tietz testified that each exhibit consisted of a check, from a firm client (a buyer) or a title company, that purported to contain fees due to the firm for work it had performed. Further, each such exhibit included a deposit slip and a bank statement from defendant's personal business account at Old Second Bank reflecting that the funds were deposited into defendant's account and not into the firm's account. However, with respect to nine of these exhibits, which consisted of checks from title companies, Tietz testified that those checks likely belonged to defendant because they were issued in January and February 2004, when defendant was likely still working on her pre-existing client files. Tietz could specify neither defendant's pre-existing clients nor how much income was due defendant for the work she performed for these clients.

¶ 11 As to certain other exhibits (Nos. 31, 102, and 104 through 108), Tietz testified that the checks were made payable to the firm and that they contained both defendant's and, purportedly, Tietz's endorsements. There were also corresponding deposit slips and bank statements reflecting that the funds in these checks were deposited into defendant's personal business account at Old Second Bank. Tietz denied signing these checks over to defendant and testified that Tietz's endorsements on these checks were in defendant's handwriting.

¶ 12 Exhibit No. 64, a $1,500 check payable to Dorothy Sokolowski, a firm client, contained Sokolowski's endorsement on the back; underneath Sokolowski's endorsement was defendant's endorsement. The parties stipulated that, if called, Sokolowski would testify that she did not endorse the check. The exhibit also contained a deposit slip and a bank statement that reflected that the check was deposited into defendant's account. The check was drawn from the firm's business operating account. Tietz testified that, if any monies were due this client, they would have come out of the firm's trust account. The firm's practice was not to issue client monies out of its business operating account.

¶ 13 The second general category of exhibits admitted at trial consisted of checks that were generally payable to defendant and written out of either the firm's operating account or its trust account. A corresponding check ledger entry was attached, showing a discrepancy between each check and the ledger entry. Tietz further identified several checks that defendant wrote to herself out of the operating account, for an "escrow payment" or "earnest money reimbursement." Tietz explained that the firm did not hold client earnest money in the operating account and did not advance money from their own personal funds for these purposes.

¶ 14 Addressing exhibit No. 45, a $3,500 check defendant wrote to herself on June 12, 2004 (and deposited into her personal business account on June 14, 2004) from the firm's account, Tietz testified that this amount was in addition to the Paychex checks defendant was receiving and that she could not recall if the partners discussed whether defendant could take this draw. Tietz explained that the partners' agreement was that defendant could take only salary payments (via the Paychex checks), not draws. Tietz conceded that, at the time, the partners discussed that defendant's real estate taxes were overdue and that defendant needed assistance in paying them. Tietz could not recall if exhibit No. 45 represented a draw to pay the taxes, and she stated that another check was used to pay at least some of the taxes. Generally, Tietz was not concerned about the paychecks defendant was receiving, because she assumed that they would eventually "square up."

¶ 15 On cross-examination, Tietz testified that she did not review defendant's client list before they formed the firm. Tietz would take draws from the firm as money came into the firm. She believed there would be time to catch up to defendant's draws. Tietz's understanding was that, if any of defendant's pre-existing clients subsequently hired the firm to perform work, the partners would spilt the proceeds if the fees were for more than a nominal amount. Tietz conceded that "proceeds" refers to gross sales and is distinct from profits. Tietz testified that no clients lost money as a result of any funds defendant took from the firm's client trust account. According to Tietz, clients were paid because defendant used funds from the firm's business operating account to replenish the firm's client trust account.

¶ 16 Watts testified that she worked for the firm as a legal secretary and paralegal. She performed recordkeeping duties for the firm, including creating deposit slips and ensuring that deposits were made. When she received checks to deposit, Watts did not verify them with the title companies or reconcile them with the Housing and Urban Development statements from the closings. Thus, if, for example, four checks were issued and the attorney kept two, Watts would not have been aware that she was not given all checks to deposit into the firm's account.

ΒΆ 17 At some point, Benchmark Bank contacted Watts to notify her that the firm's client trust account had a $6,000 deficiency. Watts informed defendant of the problem, and defendant told her to transfer monies from the firm's business operating account to cover the deficiency. According to ...


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