State v. McAnally

NOT DESIGNATED FOR PUBLICATION

No. 119,133

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

STATE OF KANSAS,
Appellee,

v.

CHERYL DENISE MCANALLY,
Appellant.

MEMORANDUM OPINION

Appeal from Johnson District Court; STEPHEN R. TATUM, pro tem, and JAMES CHARLES DROEGE,
judges. Opinion filed July 26, 2019. Affirmed in part, reversed in part, and remanded with directions.

Korey A. Kaul, of Kansas Appellate Defender Office, for appellant.

Jacob M. Gontesky, assistant district attorney, Stephen M. Howe, district attorney, and Derek
Schmidt, attorney general, for appellee.

Before LEBEN, P.J., MALONE and GARDNER, JJ.

LEBEN, J.: Cheryl McAnally appeals the district court's order that she pay
$789,282 in restitution. McAnally had pleaded guilty to one count of felony theft and
four counts of felony forgery for embezzling about $1 million from medical staff and
hospital bank accounts at Overland Park Regional Medical Center.

The restitution order came after a contested evidentiary hearing. The State first
documented the total losses of the medical staff and hospital at $972,273, an amount
McAnally didn't contest. The State's accounting witnesses then showed that McAnally
2
had repaid $22,542 by check. And there were $2,370 in cash deposits for which the
source couldn't be identified that the State agreed to credit to McAnally.

Some uncertainty arose, though, when a partial analysis of the different accounts
showed $158,079 more coming back into the accounts than the State's witnesses could
account for. Without looking at other accounts (from which the money had come), the
State's accounting witnesses couldn't determine the source of that amount of credits. The
district court decided to credit McAnally with the unexplained $158,079 amount as well.
The court subtracted these three sums—$22,542 and $2,370 and $158,079—from
$972,273 to arrive at the ordered restitution amount, $789,292.

But McAnally testified that she had repaid much more. She estimated that she had
returned $500,000, though she did not offer any documentation.

On appeal, she argues that she "testified unequivocally that she had repaid
approximately $500,000" and "[t]he State presented no evidence to contradict this
testimony." She contends that the district court had to accept her testimony: "Having
found that she had paid some money back, no reasonable judge would find that her
testimony that she had paid back more money was not credible."

A bold argument—but not a persuasive one. The district court didn't ignore
McAnally's testimony; the court found her testimony lacked credibility. That's no surprise
in the very case in which McAnally was found to have stolen about $1 million through
secret withdrawals over several years. And a court acting as fact-finder can take a
person's dishonest acts, like embezzlement and forgery, into account in determining that
person's credibility. See K.S.A. 60-421.

So we find nothing wrong with the district court's conclusion that it "[did] not
accept the defendant's testimony that she replaced a lot more money back into the
3
account" because "[t]here is just nothing to support that except for her testimony and the
Court does not accept that part of her testimony." The trial judge who hears the evidence
makes the credibility judgments, not the appellate judges who only review a transcript.
See State v. Woodring, 309 Kan. 379, 380, 435 P.3d 54 (2019).

We still must look at the evidence supporting the district court's decision to be sure
that it didn't abuse its discretion in setting the restitution amount. See State v. Martin, 308
Kan. 1343, 1349-50, 429 P.3d 986 (2018). The court would abuse its discretion if it
decided based on a legal or factual error or if its decision was so off the mark that no
reasonable person would agree with it. City of Leawood v. Puccinelli, 56 Kan. App. 2d
108, 118-19, 424 P.3d 560 (2018). We find no abuse of discretion here.

The State presented six witnesses at the restitution hearing:
 Roxanne Hollingsworth, a records custodian for Bank of America who
authenticated bank records;
 Shari Collier, former chief financial officer for Overland Park Regional Medical
Center and the person who discovered McAnally's embezzlement scheme;
 Kimberly Forbes Hatley, a certified public accountant and certified fraud examiner
for the Hospital Corporation of America;
 Fred Magerkurth, a financial advisor for Wells Fargo who had helped investigate
the accounts McAnally used;
 Candace Annette Bridges, a former financial detective with the Overland Park
Police Department who had investigated credit-card accounts McAnally had taken
out in the name of the medical staff; and
 Jason Novotny, a financial-crimes investigator for the Johnson County District
Attorney's office who did an overall review of the financial documents obtained by
others.

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Collectively, those witnesses documented $972,273 in losses, a figure McAnally
didn't challenge. She also agreed that she should receive credit for the $22,542 she had
repaid by check and $2,370 of cash deposits.

A large question arose, though, when Novotny testified that $158,079 was
deposited into hospital accounts through electronic transfers that Novotny didn't credit to
McAnally. Novotny explained that he was looking only for cash or checks that McAnally
would have sent; he assumed that the $158,079 represented payments of some kind from
a sweep account also held by the hospital or its medical staff. He said that these payments
came through an interbank transfer but that he didn't review the accounts from which the
funds came to determine the source. Novotny said that since "Mrs. McAnally doesn't
have access to the Federal Reserve . . . she would not have been able to make the
interbank transfer."

Even so, the district court decided to credit McAnally for the additional $158,079
too. That meant that she got credited for the $22,542 she clearly repaid, $2,370 in cash
deposits for which no source could be documented, and $158,079 that Novotny testified
McAnally had not repaid but the court deducted, anyway, given the uncertainty. The
State did not cross-appeal that $158,079 deduction.

In some respects, the State's decision not to contest that deduction on appeal, the
State's decision about how fully to develop the accounting records for the restitution
hearing, and the district court's decision to give McAnally the benefit of the doubt on the
questionable $158,079 sum reflect the practicalities of the case that the parties and the
district court understood. McAnally told the court at her sentencing hearing that she had
recently qualified for Social Security disability, so the chances seem remote that she
could repay either the $789,282 figure set by the court or the $947,361 figure the State
was seeking.

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Even after much work and hearing from six witnesses called by the State, some
questions remained, but it was a reasonable judgment call by the prosecutor not to spend
even more resources tracking down all the possibilities. The district court also made a
reasonable judgment call by converting any uncertainty into a reduction in the restitution
amount in McAnally's favor. The district court did not abuse its discretion in setting the
restitution amount.

There is one additional issue in this appeal. It arises in part because this is
McAnally's second appeal; we had considered a restitution order once before and had
ordered a new restitution hearing. See State v. McAnally, No. 111,196, 2015 WL
5311448 (Kan. App. 2015) (unpublished opinion). Shortly after our opinion in that first
appeal, McAnally moved to withdraw her guilty pleas. But the district court held it had
no jurisdiction to consider that motion because it wasn't part of what we'd sent back for
rehearing.

Both parties agree that the district court was wrong on that point. See State v.
Fritz, 299 Kan. 153, 155, 321 P.3d 763 (2014) (holding that a defendant may move to
withdraw a plea on remand for resentencing). But there is a question that will arise when
the district court hears the motion that the parties do disagree about.

When the motion to withdraw plea is made before sentencing, the defendant need
only show "good cause" to withdraw the plea. After sentencing, though, the defendant
must show that withdrawal is necessary "to correct manifest injustice." K.S.A. 2018
Supp. 22-3210(d)(2). In McAnally's case, though, the motion to withdraw plea was made
after her original sentencing hearing but before restitution was finally determined.
McAnally argues that the good-cause standard applies; the State argues that the manifest-
injustice standard applies.

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We note that the sentencing statute contemplates that restitution will be set "before
imposing sentence." K.S.A. 2018 Supp. 22-3424(d)(1). But in this case, like many others,
the court chose to handle the sentencing before finalizing the restitution amount. That too
is an understandable decision: the parties are often focused mainly on the potential prison
sentence, not the amount of restitution to be paid later. And the parties can try to agree on
the restitution amount after the stress of the sentencing hearing is behind them.

In Fritz, 299 Kan. at 157, the court faced a similar situation. The defendant had
moved to withdraw plea after his original sentencing but before a resentencing hearing
ordered by the appellate court. The district court determined that the motion didn't justify
setting aside the plea under either the good-cause or manifest-injustice standards, and the
Kansas Supreme Court agreed. Neither court determined which standard would apply
since it made no difference under the facts of that case.

Based on Fritz, we decline to determine which standard the district court should
apply. We simply note that to provide an adequate record should there be another appeal,
the district court should make explicit which standard it has applied unless it determines,
as the Fritz court did, that the result would be the same under either standard.

We affirm the district court's judgment as to the amount of restitution, reverse its
judgment dismissing the defendant's motion to withdraw plea, and remand for further
proceedings on the motion to withdraw plea.