Grand Theft by a Contractor, Tough to Prove

construction.jpgHave you ever paid for a car repair, or home repair, only to find that it wasn’t done right? With folks living paycheck to paycheck, having to pay twice for a repair can be devastating. The question for today is one we’ve asked before–where is the line between a broken promise and a criminal act? The recent case of Frazier v. State gets us closer to answering that question. 114 So. 3d 461 (Fla. 2d DCA 2013).

Frazier was convicted of grand theft after he failed to remodel a duplex. Mohamed Nazir hired Frazier to remodel his duplex for $20,000, with $8,000 paid up front. Frazier received the down payment on October 21. He then submitted an application with the city for a building permit on October 22nd, and worked on the duplex on October 23rd, 24th, and 25th. Subsequently, the city denied a permit to continue working because Nazir’s duplex required more structural rehabbing to bring it up to code. To address this issue, a meeting was held in November between Frazier, Nazir, the city, and an architect. All parties agreed to have the architectural designer draw up some new plans for the duplex, and pursuant to that agreement Nazir gave Frazier an additional $2,000 to pay for the plans. Of this $2,000, Frazier paid the architect $500 down, but Frazier never picked up the completed plans from the architect and thus he owed the architect $1,500.

Do the above facts constitute a crime? Sure, anyone in Nazir’s spot would be pissed off that $10G was flushed down the drain–but does that make it criminal? Let’s start with the basics. The definition of theft is: “A person commits theft when he knowingly obtains the property of another person with the intent to permanently or temporarily deprive the other person of a right to the property” Fla. Statute 812.014(1)(a) (2008), and “obtaining property by fraud, willful misrepresentation of a future act, or false promise” is also considered theft, according to Florida Statute 812.012(3)(c). Id.

Timing is everything. In a grand theft case, the timing of concern is–when did Frazier decide he wasn’t going to keep his promise to rehab the duplex? If the State can prove that Frazier did not intend to rehab the home when he signed the agreement on October 21st–the state has proven grand theft. It’s all about intent at the time the agreement was entered into. The state’s burden in a contract case requires proof that Frazier “did not intend to perform the contract when he entered into it.” Id. [internal citations omitted]

The appeals court found Frazier’s case similar to Crawford v. State, 453 So.2d 1139 (Fla. 2d DCA 1984). Crawford was given $240 down to repair a roof. When Crawford showed up with his helper to start the job, the homeowner could see that he didn’t have the proper materials (only tar), so the homeowner fired him. Crawford promised to return the money but failed to do so, and wound up with a criminal theft conviction. The appeals court overturned the theft conviction, reasoning that “showing up with a helper the day after he received a down payment negated the criminal intent of theft”, further holding that “this appears to be a civil rather than a criminal issue.” Id.

Under the same reasoning as Crawford, the appeals court threw out Frazier’s grand theft conviction. The court recited the general proposition that “broken promises of performance do not establish the requisite criminal intent to prove grand theft where the breach of performance occurs subsequent to the claimed taking.” Id. The nonperformance of a construction contract requires evidence a felonious intent at the time the contract was entered into. It’s no fun getting ripped off by a contractor, but that’s what we have civil courts for–to fight over money.

Frazier may have benefited from a “good faith” defense to his grand theft charge. When citizens enter into contracts that involve spending money, if it can be shown that the money was spent in good faith (Frazier, for example, hired some helpers and paid an architect “some” money), said good faith will defeat any sort of criminal intent to steal. For more information on just such a defense, check out my article “Good Faith Can Defeat a Grand Theft Charge“.

As a side note, Florida statutes contain a procedure which automatically converts a civil contractor nonperformance issue into criminal fraud, via Section 489.126(3)(b)(3). This statute arms the prosecution with “intent to defraud” when the contractor fails to respond to a victim notification the victim to send a certified notification to the contractor, return receipt requested, informing the contractor that he has failed to perform any work for a 60 day period, and that work must recommence within 30 days of the mailing of the letter. If the contractor fails to recommence, the statute hands the prosecutors “intent to defraud” on a silver platter. In our case, had Nazir done this correctly (he mailed it to the wrong address), we wouldn’t be having this conversation–Frazier’s conviction would have been upheld.