Avoiding the Payment of Debts Does Not Amount to Grand Theft

Lisandra Gutierrez was convicted and sentenced for First Degree Grand Theft and Second Degree Grand Theft following a trial by jury. The prosecution presented evidence of her alleged fraudulent actions during a bankruptcy proceeding. Her lawyer appealed, arguing that admission of the evidence was an error as any fraudulent actions allegedly committed by Ms. Gutierrez during the bankruptcy were not relevant since her alleged actions were not similar to the charged Grand Theft offenses. The Court of Appeal agreed, reversed the convictions, and sent the case back to the Circuit Court for a new trial. See Gutierrez v. State, 2024 Fla. App. LEXIS 5573 (Fla. 4th DCA 2024).

During trial, the State called the bankruptcy trustee assigned to her bankruptcy case to testify. Ms. Gutierrez and the trustee had a recorded meeting. During the meeting, the trustee confronted her for failing to report in her bankruptcy that she had transferred ownership of her house to an entity in which she had an ownership interest. She explained that she transferred ownership of her house to avoid liens from creditors. Her lawyer objected to the admission of the recording at trial, stating that the acts described in the recording were dissimilar from the charged Grand Theft offenses. The judge admitted the recording into evidence despite defense objections.

Williams rule evidence is evidence of other conduct, which, pursuant to section 90.404(2)(a), Florida Statutes, is similar to the charged offense and is relevant to prove a material face in issue, such as motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake of accident.” Gutierrez at *2 (quoting Thompson v. State, 76 So. 3d 1050, 1053 (Fla. 1st DCA 2011). Williams rule evidence is “inadmissible when the evidence is relevant solely to prove bad character or a defendant’s propensity to commit a crime.” Id. Such evidence, even if not similar to the crime charged, may be admitted if relevant and probative of a material fact at issue. Id. at *3 (citing Jones v. State, 296 So. 3d 447 (Fla. 4th DCA 2020)).

Williams rule evidence is deemed prejudicial because it creates the risk that a conviction will be based on defendant’s bad character or propensity to commit crimes, rather than on proof that he or she committed the charged offense. Id. at *3 (citing cases). As a result, the improper admission of such evidence is presumably harmful error, especially when the prosecution relies on the improper evidence in its closing argument. Id. (citing Pastor v. State, 792 So. 2d 627, 630 (Fla. 4th DCA 2001)).

In order to prove grand theft, the prosecution must establish that the accused knowingly obtained or used, or attempted to obtain or use, the property of another with the intent to deprive that person of a right to the property or a benefit therefrom.

See Tinker v. State, 341 So. 3d 1136, 1145 (Fla. 4th DCA 2022). She must have had the specific intent to commit theft at the time of, or prior to, the taking. See Segal v. State, 98 So. 3d 739, 742 (Fla. 4th DCA 2012).

The prosecution argued that evidence of Ms. Gutierrez’s alleged fraudulent actions in the bankruptcy case was relevant and admissible to establish her intent, knowledge, and absence of mistake or accident in committing the Grand Theft offenses that were charged against her. The prosecution asserted that the act of shielding of her own home to avoid paying debts was similar to her alleged act of depriving the alleged victims of money or property, as charged. In addition, the prosecution argued that her statements under oath to a bankruptcy trustee were admissible as a “party admission” under Fla. Stat. § 90.803(18)(a).

The Court disagreed and explained that the fraud she allegedly committed during the bankruptcy proceedings appeared to be much more like a “fraudulent transfer” rather than the charged Grand Theft offenses.

See Fla. Stat. § 726.105(1)(a) (debtor commits fraudulent transfer if debtor transfers property “with actual intent to hinder, delay, or defraud any creditor of the debtor”). Such transfers are different from thefts as they involve transferring property to avoid paying a creditor, while thefts involve taking property. See Fla. Stat. § 812.014(1)(a), which provides that an admission may be introduced for the truth of the matter asserted if it is offered against a party, and it is the party’s own statement in his or her individual or representative capacity. However, to be introduced, the admission must also be relevant by “tending to prove or disprove a material fact.” See Fla. Stat. § 90.401. Ms. Gutierrez’s statements were not relevant to the charged offenses.

Improperly admitting Williams rule evidence is presumed to be harmful, and the panel found this to be especially true where the prosecution relied on her statements to the bankruptcy trustee in its closing argument, and the jury requested to hear the recording of the interview with the trustee during its deliberations, establishing the reasonable possibility that the jury not only considered the improper Williams rule evidence