THIS OPINION HAS NO
PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY
PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
The State, Respondent,
v.
Russell Campbell, Jr., Appellant.
Appeal From Richland County
G. Thomas Cooper, Jr., Circuit Court
Judge
Unpublished Opinion No. 2011-UP-059
Submitted December 1, 2010 Filed
February 15, 2011
AFFIRMED
William T. Toal, of Columbia, for Appellant.
Attorney General Alan Wilson, Chief Deputy Attorney General John
W. McIntosh, Assistant Deputy Attorney General Salley W. Elliott, and Assistant
Attorney General Deborah R.J. Shupe, Office of the Attorney General, of
Columbia, for Respondent.
PER CURIAM: Russell Campbell, Jr. appeals from the trial court's
denial of his motion for
judgment notwithstanding the verdict, a new trial, and sentence
reconsideration. Campbell argues the trial court erred in: (1) allowing the
admission of expert opinion testimony; (2) not
dismissing the indictment for
obtaining money or other property; (3) not charging the incontestability
insurance statute; and (4) not directing a verdict for Campbell. We affirm.[1]
FACTS
The
Richland County Grand Jury indicted Campbell for obtaining property by false
pretenses and making a false statement or misrepresentation. The indictments
alleged Campbell provided false information on an application for life
insurance for Russell Campbell, Sr., Campbell's father (Father), with the
intent to defraud Auto-Owners Life Insurance Company (Auto-Owners). The State
asserted Campbell signed the applications. Father lived two years and eight
months after the issuance of the policy, and upon his death, Campbell received
$50,159.74.
Prior
to trial, Campbell moved to quash the indictment alleging he obtained property
by false pretenses on the ground that a life insurance policy is not money,
valuable security, chattel, or real or personal property. The State asserted
Campbell not only obtained the policy and collected the proceeds after Father's
death, but the policy itself was a valuable security because other companies
purchase life insurance policies before the death of the insured. The court
denied Campbell's motion, finding the broad statutory language encompassed the
right to receive benefits from a life insurance policy. At the conclusion of
the State's case, Campbell moved for a directed verdict on both charges,
arguing (1) there was no evidence the Auto-Owners' policy had any cash value at
the time the company issued the policy; (2) the State could not rely on the
fact that Campbell received the policy proceeds because the policy was
incontestable under state law; and (3) the policy's effective date preceded the
application date, thus Auto-Owners did not rely on it to issue the policy. The
court denied the motion, finding the evidence went beyond mere conjecture or
suspicion, and there was evidence that reasonably tended to prove Campbell's
guilt.
After
a three-day trial, the jury found Campbell guilty of both charges. The court
sentenced Campbell to three years imprisonment and ordered him to pay
$50,159.74 in restitution for the charge of making a false statement or
misrepresentation, and ten years imprisonment, suspended on the service of
three years with five years' probation for the charge of obtaining property by
false pretenses. Campbell
filed a motion for judgment notwithstanding the verdict, a new trial, and
sentence reconsideration. The court denied Campbell's motion. This appeal
followed.
Standard
of Review
In criminal cases, the appellate court
sits to review errors of law only and is bound by the trial court's factual
findings unless they are clearly erroneous. State v. Wilson, 345 S.C.
1, 5-6, 545 S.E.2d 827, 829 (2001). Thus, on review, the appellate court is limited
to determining whether the trial judge abused his discretion. Id. An
abuse of discretion occurs when the court's decision is unsupported by the
evidence or controlled by an error of law. State v. Garrett, 350 S.C.
613, 619, 567 S.E.2d 523, 526 (Ct. App. 2002).
LAW/ANALYSIS
I. Expert Opinion
Campbell
argues the trial court erred in allowing expert opinion testimony by the investigating officer
because it was hearsay. We disagree.
Joe Jordan, an officer with the State Law Enforcement Division,
testified he learned in his investigation that the insurance companies would
not have issued the policies if they had known Father's true medical
condition. He also testified he sent copies of the application to the
handwriting analysis unit and learned the signature on the application belonged
to Campbell. Campbell objected on the ground of hearsay. However, the court
held matters learned in the course of an investigation were admissible.
Rule 801(c), SCRE, defines hearsay as "a statement, other
than one made by the declarant while testifying at the trial or hearing,
offered in evidence to prove the truth of the matter asserted." See State v. Vick, 384 S.C. 189, 199, 682 S.E.2d 275, 280 (Ct. App. 2009) (stating
the "rule against hearsay prohibits the admission of evidence of an out of
court statement by someone other than the person testifying[,] which is used to
prove the truth of the matter asserted"); but see State v. Thompson,
352 S.C. 552, 558, 575 S.E.2d 77, 81 (Ct. App. 2003) (holding an out of court
statement is not hearsay if it is offered for the limited purpose of explaining
why a government investigation was undertaken).
Assuming without deciding that Jordan's testimony was hearsay, "the
improper admission of hearsay testimony constitutes reversible error only when
the admission causes prejudice." Vick, 384 S.C. at 199, 682 S.E.2d
at 280. "Error is harmless when it could not reasonably have affected the
result of the trial." Id. "[T]he admission of improper
hearsay evidence is harmless where the evidence is merely cumulative to other
evidence." Id. at 199-200, 682 S.E.2d at 280.
Scott
Brown, assistant manager at Auto-Owners, testified
that Auto-Owners issues a policy if all the medical questions on the
application are answered "no," and denies the application if any of
the answers are "yes." A forensic handwriting expert also testified he examined the
signature on the Auto-Owners application and determined Campbell "probably"
signed Father's name as the proposed insured. Therefore, we find Jordan's
testimony was merely cumulative to the other evidence presented at trial, and
any error in allowing the admission of Jordan's testimony was harmless.
II. Indictment
Campbell
argues the court erred in not dismissing the indictment for obtaining money or other property because a
life insurance policy is not property.
We disagree.
The indictment
reads: "Campbell, Jr. did in Richland County on or about July 11, 2002,
with intent to cheat and defraud the victim, Auto-Owners Life Insurance
Company, obtain a life insurance policy on his father, Russell Campbell, Sr.,
valued at more than five thousand dollars ($5,000.00), by means of false
pretenses and false representations. This is in direct violation of §
16-13-240 of the South Carolina Code of Laws (1976), as amended." Section
16-13-240 of the South Carolina Code makes it a crime for any person to obtain
from another person by false pretense or representation "any chattel,
money, valuable security, or other property, real or personal, with intent to
cheat and defraud a person of that property." S.C. Code Ann. § 16-13-240
(2003).
At
trial, Campbell moved to dismiss the indictment for obtaining property by false
pretenses on the ground that a life insurance policy is a chose in action, not
real or personal property. The State argued Campbell received the policy and
the money from the policy, and the policy itself was a valuable security
because other companies purchase life insurance policies before the death of
the insured. The court denied Campbell's motion, finding the broad definition
of property includes the right to receive insurance benefits.
In
support of his argument that choses in action are not considered property,
Campbell cites to Brown v. Brown, 279 S.C. 116, 302 S.E.2d 860 (1983), and Tiffault v. Tiffault, 303 S.C. 391, 401 S.E.2d 157 (1991). In Tiffault,
the court overruled Brown and held that vested military retirement
benefits constitute property, which is subject to equitable distribution. 303
S.C. at 392, 401 S.E.2d at 158. Further, in Ball v. Ball, 312 S.C. 31,
33-34, 430 S.E.2d 533, 534-35 (Ct. App. 1993), this court, in determining that nonvested
pension rights are marital property, held South Carolina courts construe the
term "property" very broadly, and it "is a general term that is
used to designate a right of ownership and it includes every subject of
whatever nature upon which the right of ownership can legally attach, including
choses in action." Thus, our courts have determined choses in action are
property, and we find the court did not err in denying Campbell's motion to
dismiss the indictment for obtaining property by false pretenses.
III. Insurance Application
Campbell
argues the court erred in failing to direct a verdict because the insurance company issued the policy
prior to the date of the alleged fraudulent application, and thus, the
application could not form the basis for the fraudulent intent to receive a
policy. We disagree.
The trial court is concerned with the existence or nonexistence of
evidence, not its weight, when ruling on a motion for a directed verdict. State
v. Brannon, 388 S.C. 498, 501, 697 S.E.2d 593, 595 (2010). The defendant
is entitled to a directed verdict if the State fails to produce evidence of the
offense charged. Id. "When reviewing a denial of a directed
verdict, this court views the evidence and all reasonable inferences in the
light most favorable to the nonmoving party." Id.
Campbell
asserts the application for insurance was dated July 11, 2002, yet the policy was issued on June 28, 2002. Therefore, Campbell maintains the application, dated
after the insurance company issued the policy, could not have affected the
company's decision to issue the policy.
Campbell
contacted an insurance agent on June 28, 2002, to purchase a life insurance
policy on Father. Campbell sought to purchase a term life insurance policy,
but the agent mistakenly sent him an application for whole life insurance.
Brown testified the company received the application for whole life insurance
from Campbell via facsimile on June 28, 2002, and the original document with
the premium payment on July 8, 2002. Campbell submitted an amended application
on July 11, 2002, for a five-year term policy for $50,000. Auto-Owners
processed the five-year term policy naming Campbell as the beneficiary on July
15, 2002, with an effective date of June 28, 2002. The company backdated the
policy because Campbell had submitted the premium payment with the June 28,
2002 application. Campbell testified he supplied the information for the June
28, 2002 application, and the July 11, 2002 application contained the same
information.
In
both applications, Campbell indicated Father had no medical conditions, when
Father had significant health issues, including cardiovascular disease and
breathing difficulties, had suffered a stroke, and required assistance to do
routine activities, such as dressing himself, eating, bathing, using the
bathroom, and moving around.[2]
Father was also a smoker, and the applications indicated he was not. A nursing
home admitted Father on July 5, 2002, due to his deteriorating medical
condition, and Campbell signed the admission documents because Father was
physically and mentally unable to participate in the admission process.[3]
Brown testified that Auto-Owners issues a policy if all the medical questions
on the application are answered "no," and denies the application if
any of the answers are "yes."
Therefore,
sufficient evidence exists from which the jury could find the insurance company
based the June 28, 2002 insurance policy on the July 11, 2002 application, and we
find the court did not err in denying Campbell's motion for directed verdict.
IV. Incontestable Insurance Statute
Campbell
argues the court erred in not
charging the jury on the incontestability insurance statute because it directly
affects whether his receipt of money was undeserved.[4] We disagree.
The
trial court's duty is to give a requested instruction that correctly states the
law applicable to the issues and is supported by the evidence. State v.
Dickey, 380 S.C. 384, 395, 669 S.E.2d 917, 923 (Ct. App. 2008). The court's
refusal to give a requested jury charge must be both erroneous and prejudicial
to the defendant to warrant reversal. Id. The failure to give one side's
requested instructions is not prejudicial if the instructions given to the jury
afford the proper test for determining the issues. Id.
In Blackwell
v. United Insurance Co. of America, our supreme court stated an
incontestable clause "means only this, that within the limits of the
coverage the policy shall stand, unaffected by any defense that it was invalid
from its inception, or thereafter became invalid by reason of a condition
broken." 231 S.C. 535, 538-39, 99 S.E.2d 414, 416 (1957) (quoting Metropolitan
Life Ins. Co. v. Conway, 169 N.E. 642, 642 (N.Y. 1930)). In Livingston
v. Mutual Beneficial Life Insurance Co., our supreme court explained the
effect of the incontestable clause:
The
"incontestable clause" relates to the validity of the contract of
insurance. It does not affect the construction of the terms of the contract. .
. . The incontestable clause "controls all matters which would have the
effect of defeating or destroying the contract of life insurance, such as those
relating to the cause of death or the habits of the insured, although it will
not control matters which affect the remedy merely."
173 S.C. 87, 88, 174 S.E.
900, 901 (1934) (citation omitted).
At
trial, Campbell requested a jury charge on the incontestable statute, but the
court denied the request, finding the incontestability was between the insured
and the carrier and the court should not charge a civil statute in a criminal
matter. Campbell asserts that under the incontestable insurance statute, even
if some of his answers on the application were false, Auto-Owners must pay
Campbell the policy proceeds because Father lived two years after he signed the
application.
The
State charged Campbell with making a false statement or misrepresentation in
violation of section 38-55-540 of the South Carolina Code, which is a criminal
statute found in the Omnibus Insurance Fraud and Reporting Immunity Act. S.C.
Code Ann. § 38-55-510 to 590 (2002 & Supp. 2010). Section 38-55-520
provides the purpose of the Act "is to confront aggressively the problem
of insurance fraud in South Carolina[,] . . . to prescribe penalties for
insurance fraud[, and] . . . to establish a division within the Office of the
Attorney General to prosecute insurance fraud . . . ." S.C. Code Ann. §
38-55-520 (2002). The Act does not provide any time limitations on criminal
actions for insurance fraud.
In
contrast, the incontestability clause is between the insured and the carrier,
and is a civil statute. The issue in this case is not whether the insurance
company paid the policy, but is whether Campbell provided false information to
obtain the policy in the first place. If the court applied the
incontestability clause to a case for insurance fraud, it would inject civil
law into a criminal proceeding. It also would allow an insured to make a false
statement on an insurance application with no consequence if the insured lives
more than two years after an insurance company issues a policy, which is
contradictory to the intent of the Omnibus Insurance Fraud and Reporting
Immunity Act. Therefore, we find the court did not err in denying Campbell's
request to charge the jury on the incontestable statute.
V. Value
of Life Insurance Policy
Campbell
argues the court erred in not
directing a verdict for Campbell because the policy had no cash value at the
time Auto-Owners issued it, and the policy's value is measured at the time of
receipt. We disagree.
The trial court is concerned with the existence or nonexistence of
evidence, not its weight, when ruling on a motion for a directed verdict. Brannon,
388 S.C. at 501, 697 S.E.2d at 595. The defendant is entitled to a directed
verdict if the State fails to produce evidence of the offense charged. Id.
"When reviewing a denial of a directed verdict, this court views the
evidence and all reasonable inferences in the light most favorable to the
nonmoving party." Id.
Campbell
argues the indictments allege the wrongful act was the filling out of the
application and the receipt of the policy; however, he asserts there is no
evidence the policy had any value at that time. Campbell maintains the only
evidence of value is that two years and eight months after the time alleged in
the indictment, when Father passed away, the insurance company paid the policy
proceeds. He asserts that neither indictment alleges his receipt of the policy
money was wrongful. Therefore, Campbell argues the court should have granted
his motion for directed verdict.
Denise
Miller, the owner of a viatical and life settlement provider, testified her
company purchased life insurance policies for a percentage of the death
benefit, and in 2005, a broker brought her six policies on Father to consider
purchasing. Miller's company obtained Father's medical records and got an
independent opinion that Father's life expectancy was only three months. Therefore,
Miller advised the broker that it would not be in the family's best interest to
sell the policies, but the broker said Campbell wanted to sell them anyway.
Campbell completed the purchase contract and returned it to Miller with the
original policies and applications. Miller's company then initiated an
investigation and discovered significant inconsistencies in Father's medical
condition and the applications. When Miller contacted Campbell about the
inconsistencies, he stated they had completed the applications "to the
best of their abilities." Campbell also told her it was beyond the
two-year suicide and contestable periods, so the insurance companies would
still pay the policy proceeds. Miller told Campbell she was unwilling to
complete the purchase, and she notified the appropriate authorities of the
potential fraud.
Therefore,
sufficient evidence exists from which a jury could find the Auto-Owners policy
had value from the date the company issued the policy, and we find the court
did not err in denying Campbell's motion for directed verdict.
CONCLUSION
Accordingly, the trial
court's order is
AFFIRMED.
FEW, C.J., SHORT and WILLIAMS, JJ., concur.
[1] We decide this case without oral argument pursuant to Rule 215, SCACR.
[2] The insurance agent testified Campbell told her
Father was still working in the landscaping business, and he lived in
Columbia. Campbell never mentioned Father was ill or living in a nursing home
in McCormick County. She also testified she had no knowledge anyone other than
Father signed the applications.
[3] The admission nurse testified that Campbell was very
knowledgeable about Father's condition and his needs.
[4] In his brief, Campbell cites to section 38-63-200 of
the South Carolina Code; however, this section does not exist. Thus, we assume
he meant to cite section 38-63-220(d), which mandates that insurance policies
must contain "a provision that the policy . . . [is] incontestable as to
the truth of the application for insurance and to the representations of the
insured individual after they have been in force during the lifetime of the
insured for a period of two years from their date of issue." S.C. Code
Ann. § 38-63-220(d) (2002).