State v. Keyes

2008 WI 54, 750 N.W.2d 30, 309 Wis. 2d 516, 2008 Wisc. LEXIS 304
CourtWisconsin Supreme Court
DecidedJune 3, 2008
Docket2004AP1104-CR, 2004AP1105-CR
StatusPublished
Cited by6 cases

This text of 2008 WI 54 (State v. Keyes) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Keyes, 2008 WI 54, 750 N.W.2d 30, 309 Wis. 2d 516, 2008 Wisc. LEXIS 304 (Wis. 2008).

Opinion

ANN WALSH BRADLEY, J.

¶ 1. The petitioners, Angela and Matthew Keyes, seek review of a published court of appeals decision affirming a circuit court order denying a motion to dismiss their bindover and information. 1 The Keyes were each charged with felony theft by contractor, party to a crime, in violation of Wis. Stat. §§ 779.02(5) and 943.20(l)(b) (1999-2000). 2 The charges stemmed from payments they received on a *520 house construction project for which they were prime contractors.

¶ 2. The Keyes maintain that the court of appeals erred when it concluded that the circuit court properly found probable cause to believe that the Keyes violated the theft by contractor statute, Wis. Stat. § 779.02(5). They assert that payments made to Angela Keyes were for her legitimate claims as a subcontractor and that the payments were not "used for any other purpose." They further contend that the State failed to present sufficient evidence to support the bindover as to whether there were unpaid claims to subcontractors due at the time Angela received the payments.

¶ 3. Based upon the language of § 779.02(5) and its purpose, we agree with the court of appeals that the circuit court's finding of probable cause was based on a proper interpretation of the statute. However, we disagree with the court of appeals to the extent that its decision implies that contractors or subcontractors may not receive profit on a project until the project ends. We further conclude that the State presented sufficient evidence at the preliminary hearing to support the bindover. Accordingly, we affirm the decision of the court of appeals.

I

¶ 4. The defendants were each charged with felony violation of the theft by contractor statute, Wis. *521 Stat. § 779.02(5). The criminal complaints alleged that the defendants were trustees over moneys paid for improvements on land and "intentionally retain[ed] possession of such money without the owner's consent, contrary to [their] authority, and with intent to convert to [their] own use . . . ."

¶ 5. In December 2001, James and Rose Wettstein entered into a contract to build a home with general contractors Angela and Matthew Keyes, who were doing business as Keyes to Design, Inc. The parties agreed to a contract price of $2500 for pre-construction services and $37,500 for construction services plus the cost of the work. In addition, the contract provided that Matthew Keyes would receive $50 per hour for labor. The first estimate of construction cost was $467,723. A series of change orders increased the estimate to $492,204. The parties signed a notice to proceed in March 2002.

¶ 6. The project was financed through a bank construction loan administered by The Title Company. The money was to be paid in a series of draws. Between June 4, 2002, and November 19, 2002, the Keyes took seven draws from the Wettsteins' loan account, totaling $417,647. Lien releases filed by subcontractors indicated that $219,155.43 had been paid to subcontractors. In August 2002, while the home was being constructed, the Wettsteins became suspicious when they learned that some subcontractors on the project were not being paid and that Angela Keyes was doing some of the contracting work herself.

¶ 7. Ultimately, The Title Company denied the Keyes' request for an eighth draw. In addition, the Wettsteins asked Linda Jones, a certified public accountant, to investigate project finances. Based on Jones's investigation, the Wettsteins filed a complaint with the *522 Onalaska Police Department. A criminal complaint against the Keyes for felony theft by contractor pursuant to Wis. Stat. §§ 779.02 and 943.20 followed in January 2003.

¶ 8. According to the criminal complaint, the investigator reviewed paperwork provided by Jones showing that Angela Keyes had paid herself $75,000 for materials, with approximately $35,000 of that amount unaccounted for. The investigator was also informed that Matthew Keyes took out a contractor fee of $35,875 at one time, and when James Wettstein inquired about the entire amount being withdrawn at once, Matthew stated, "[y]ou bet. I took it all out when I thought you were going to pull the plug."

¶ 9. The criminal complaint also described billing discrepancies. Based on her log of time she spent at the house, Rose Wettstein told the investigator that Matthew Keyes billed 9.5 hours of work for days she knew he was not at the house. Further, the complaint recounted Jones's explanation to the investigator that she traced money from the Wettsteins' construction account and found it being used for purposes other than the Wettstein project. Those uses included making payments on other jobs, paying off loans not related to the Wettstein project, and making payments into personal accounts. The criminal complaint stated that Jones had determined that money had been:

used for other purposes such as paying other jobs, payments to Coulee State Bank for loan payments, cash in the amount of $17,286.48 and deposits into their personal accounts in the amount of $31,018.58, including a $3,000 check to Dahl Ford.. .. there were obvious payments being made from the Wettstein draws that should have been going towards the house being turned into cashier's checks and being used for other purposes.

*523 ¶ 10. The State presented two witnesses at the preliminary hearing, James Wettstein and Linda Jones. The Keyes presented none. James Wettstein testified regarding the building contract, the construction loan, and project budgets. He stated that he had agreed to a budget that included estimated costs for various aspects of the project, including materials. He further testified that he had consulted with both Angela and Matthew Keyes regarding proposals for the provision of materials, and that the parties had agreed to several change orders that revised the original budget. Specifically, James Wettstein agreed that he had discussed with Angela Keyes what type of carpeting, cabinets, tile, and countertops to purchase.

¶ 11. Jones's testimony was based on her examination of documents relating to the project, including draw requests, checks, lien waivers, and invoices, as well as documents from the Keyes, including bank records obtained by subpoena. She testified that as of December 2002, the Keyes had received approximately $417,000 in draws from the construction account. Of that money, Jones testified that the Keyes made payments of approximately $317,000 to subcontractors and suppliers from the draws. The remaining money, approximately $100,000, was used for a variety of purposes, including loan payments and general business expenses:

[T]here was some $8,000.00 made — payments on loans to Coulee State Bank. There was a $3,000.00 check that was written out to Dahl Ford. There was some other — 60 some thousand dollars that was paid for just general business expenses like telephone or utilities. They paid themselves rent....

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Bluebook (online)
2008 WI 54, 750 N.W.2d 30, 309 Wis. 2d 516, 2008 Wisc. LEXIS 304, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-keyes-wis-2008.