Lindeen v. Converse

2016 MT 19N

• Court: Montana Supreme Court
• Decided: January 19, 2016
• Docket: 15-0342
• Status: Published

Opinion

January 19 2016

DA 15-0342 Case Number: DA 15-0342

IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 19N

MONICA J. LINDEEN, STATE AUDITOR and EX-OFFICIO, MONTANA SECURITIES COMMISSIONER,

Petitioner and Appellee,

v.

RICHARD CONVERSE d/b/a DC TAX SERVICE, INC.,

Respondents and Appellants.

APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADV 2015-117 Honorable Mike Menahan, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

Richard Converse, self-represented; Great Falls, Montana

For Appellee:

Brett W. O’Neil, Jennifer Lee Hudson, Office of the Commissioner of Securities and Insurance, Montana State Auditor; Helena, Montana

Submitted on Briefs: December 9, 2015 Decided: January 19, 2016

Filed:

__________________________________________ Clerk Justice Jim Rice delivered the Opinion of the Court.

¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating

Rules, this case is decided by memorandum opinion and shall not be cited and does not

serve as precedent. Its case title, cause number, and disposition shall be included in this

Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana

Reports.

¶2 Richard Converse appeals from the District Court’s order enjoining him from

transacting securities business in Montana with respect to several foreign currencies.

Converse had engaged in numerous securities transactions regarding the Iraqi Dinar,

which he sold as investments with an unusually high rate of return. Instead of investors

actually taking possession of the currency, Converse informed investors they would need

to utilize Victorious Financial Bank to purchase and sell their investments. A

Commissioner of Securities and Insurance (CSI) investigation subsequently revealed that

Victorious Financial Bank was fictitious. The District Court permanently enjoined

Converse from transacting securities business in Montana, concluding Converse had

defrauded or deceived investors by telling investors they would need to utilize the

fictitious Victorious Financial Bank to cash in their dinars, when he promised unusually

high rates of return on dinar investments, and when he promised unusually high rates of

return on promissory notes.

¶3 Converse makes five arguments on appeal. First, Converse argues the

Commissioner lacked standing because the Commissioner did not post a bond or provide

2 a copy of the Commissioner’s oaths and qualifications. Section 30-10-305(1)(b), MCA,

provides that the Commissioner may “bring an action in any court of competent

jurisdiction to enjoin any acts or practices and to enforce compliance with [the Securities

Act]” and “may not be required to post a bond.” We are unaware of any authority that

requires the Commissioner to provide the District Court with a copy of the

Commissioner’s oaths and qualifications before filing an injunction, and Converse has

cited to none. The absence of a bond and the Commissioner’s oaths therefore did not

deprive the Commissioner of standing.

¶4 Converse next argues the District Court lacked jurisdiction to issue the injunction.

District courts have original jurisdiction over “all civil matters and cases at law and in

equity.” Mont. Const. art. VII, § 4(1). The District Court therefore had subject matter

jurisdiction.

¶5 Converse then argues the District Court erred in allowing witnesses to testify

against him. The nature of the error is unclear as is the specific witness to whom

Converse refers. Only two witnesses testified against Converse: Joyce Bowman and

Deputy Securities Commissioner Lynne Egan. Given Converse’s citation to Bonamarte

v. Bonamarte, 263 Mont. 170, 866 P.2d 1132 (1994), it appears Converse objects to

Bowman testifying via Vision Net. In Bonamarte, this Court held telephonic testimony

improperly deprived the respondent from a meaningful opportunity to confront and cross-

examine the witness. Bonamarte, 263 Mont. at 174, 866 P.2d at 1134. However, in City

of Missoula v. Duane, 2015 MT 232, 380 Mont. 290, 355 P.3d 729, we distinguished

3 Bonamarte, holding video technology alleviated the concerns present in Bonamarte

because video technology allowed the fact finder “to observe and hear the testimony of

the witness firsthand.” City of Missoula, ¶¶ 19-20. The District Court therefore did not

err in allowing Bowman to testify via Vision Net.

¶6 Converse’s fourth argument is that the District Court denied his right to appeal.

This is apparently related to Converse’s objection to the video testimony, wherein

Converse requested the District Court halt the hearing and issue a written denial of the

objection. The District Court explained Converse’s objection was preserved regardless of

whether the denial was oral or written. It is clear Converse’s right to appeal was not

denied by the District Court’s refusal to issue a written order, given that we accepted

review of the video testimony issue above.

¶7 Converse’s final argument is that the District Court erred when it allowed Deputy

Securities Commissioner Lynne Egan to testify. Although Converse appeared to make a

general objection to Egan’s testimony, it was clarified that Converse was actually

renewing a motion to continue the hearing and not objecting to the testimony on any

evidentiary grounds. We therefore decline to review Converse’s evidentiary argument

because it is being raised for the first time on appeal. Schuff v. A.T. Klemens & Son, 2000

MT 357, ¶ 53, 303 Mont. 274, 16 P.3d 1002.

¶8 We have determined to decide this case pursuant to Section 1, Paragraph 3(c) of

our Internal Operating Rules, which provides for unpublished opinions. This appeal

4 presents no constitutional issues, no issues of first impression, and does not establish new

precedent or modify existing precedent.

¶9 Affirmed.

/S/ JIM RICE

We concur:

/S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER