Submitted on Briefs: September 4, 2013
District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC-10-371 Honorable Karen S. Townsend, Presiding Judge
For Appellant: Robin A. Meguire, Meguirelaw.com; Great Falls, Montana
For Appellee: Timothy C. Fox, Montana Attorney General; Katie F. Schulz, Assistant Attorney General; Helena, Montana
Fred R. Van Valkenburg, Missoula County Attorney; Missoula, Montana
Jesse Laslovich, Special Assistant Attorney General; Montana State Auditor's Office; Helena, Montana
LAURIE McKINNON, Judge
¶1 The State of Montana charged Terry Duane Parks in the Fourth Judicial District Court, Missoula County, with three counts of omitting material facts relating to his offer and sale of a security, in violation of § 30-10-301(1)(b), MCA. The jury found Parks guilty on all three counts. Parks now appeals.
¶2 We address the following issue on appeal: Whether § 46-11-410, MCA, precludes Parks' convictions on two of the three counts with which he was charged. We answer this question in the affirmative and, therefore, remand this case to the District Court with instructions as specified below. Parks raises two other issues on appeal; however, we do not address those issues for the reasons explained below.
¶3 The evidence presented at trial reflected the following facts. In 2007, Parks was involved in various rebuilding projects in the Gulf Coast area after Hurricane Katrina. Parks testified that banks were not lending in that area due to uncertainty, and so private funds were being sought for loans secured by real estate. To that end, Parks placed an advertisement in the Missoulian soliciting funds to facilitate the rebuilding projects. The advertisement appeared on March 30, 2007, in the Classified section of the Missoulian under the heading "Investments." It stated:
24% well-secured fixed
1 yr. yield w/ Go Zone
trusts. Help rebuild
booming Gulf Coasts.
Terry, [phone number]
Parks explained at trial that "Go Zone" refers to Gulf Opportunity Zone.
¶4 Rece Cobeen, a gentleman from Plains, Montana, noticed the advertisement. He testified that what drew his attention was the 24 percent rate of return, the fact that it was "well-secured, " and "it sounded like it would be . . . a good moneymaking opportunity." Cobeen contacted Parks at the listed phone number. During their initial conversation, Parks explained that the one-year yield referenced in the advertisement involved "very large loans" secured by "multi-million dollar properties." Cobeen did not have sufficient funds for these large loans, but was willing to invest smaller amounts. Parks testified that he told Cobeen "any smaller amounts of money would be used for . . . general business purposes . . . . It would probably be diversified over several projects."
¶5 Cobeen asked Parks whether he had any references. Parks provided the name of an individual, Patrick Rummel, in Plains. Cobeen spoke with Rummel a few days later, received a "solid" reference regarding Parks, and then called Parks a second time. In this second conversation, Cobeen indicated that he wanted to invest $10, 000. Parks reiterated that the one-year loans referenced in the advertisement were not available to Cobeen. He told Cobeen that the smaller, $10, 000 loan would be at an annual rate of 24 percent, but on a five-year term. Parks asked Cobeen to wire the money to a bank in Missoula; however, Cobeen preferred to send a cashier's check. Parks told Cobeen to make the check out to "Tower Trust Two." Parks was the trustee of Tower Trust Two.
¶6 Cobeen sent Parks a cashier's check for $10, 000 dated April 19, 2007. In return, Parks sent Cobeen a document titled "Business Purpose Note, " which stated:
On this date, for an [sic] consideration of a private business purpose loan, the undersigned MAKER, Tower Trust Two, a Nevada private trust, [mailing address], promises to pay to Rece Cobeen, [mailing address], or order, PAYEE, principal in the amount of TEN THOUSAND DOLLARS ($10, 000.00), plus accrued interest to the date of payment.
This note shall bear interest at the rate of TWENTY-FOUR PERCENT PER ANNUM (24%), compounded annually. Interest shall accrue and compound until paid with the principal due.
This note shall be due and payable in full, including all interest accrued, on April 16, 2012. It may be paid in part or in full before its due date without penalty.
If any action shall be required under law to collect this note, the MAKER agrees to pay all reasonable costs associated with said collection action, ...