People v. Bartlett
State: Illinois
Court: 2nd District Appellate
Docket No: 2-97-0002
Case Date: 01/27/1998
No. 2--97--0002
________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
________________________________________________________________
THE PEOPLE OF THE STATE OF ) Appeal from the Circuit Court
ILLINOIS, ) of Du Page County.
)
Plaintiff-Appellant, )
) No. 96--CF--401
v. )
)
DAVID K. BARTLETT, ) Honorable
) Ann Brackley Jorgensen,
Defendant-Appellee. ) Judge, Presiding.
________________________________________________________________
JUSTICE RATHJE delivered the opinion of the court:
The State appeals the circuit court's order dismissing four
counts of a six-count indictment against defendant, David Bartlett.
The indictment charged defendant with violating the Illinois
Securities Law of 1953 (815 ILCS 5/1 et seq. (West 1994)) (the
Act). On appeal, the State contends that the court erred in (1)
dismissing counts I and II on the ground that the indictment failed
to allege specifically that anyone relied on the allegedly false
statements; and (2) dismissing counts III and IV on the ground that
the indictment failed to allege that the "statement" defendant
circulated was one required by the Act. We reverse and remand.
All six counts of the indictment relate to defendant's alleged
promotion of a pyramid scheme. Counts I and II allege that
defendant knowingly engaged in a course of business in connection
with the sale of securities that tended to work a fraud and deceit
upon buyers. Specifically, they allege that defendant solicited
investors to purchase "investment contracts" for $2,000. Defendant
represented that the investors would receive a return of $16,000;
that the scheme was legal; and that there was no risk to investors.
The indictment alleges that defendant knew that each of these
statements was untrue, given that the investment contract was in
fact an illegal pyramid scheme. See 815 ILCS 5/12(F) (West 1994).
Counts III and IV allege that defendant "circulated a
statement purported to be 'rules' for the participation in an
illegal pyramid scheme having reasonable grounds to know that
certain material representations contained therein were false and
untrue." See 815 ILCS 5/12(H) (West 1994). Counts V and VI, which
are not at issue in this appeal, charge defendant with promoting an
illegal pyramid sales scheme (720 ILCS 5/17 7(B) (West 1994)).
The court dismissed counts I and II on the ground that they
failed to allege that anyone in fact relied on the allegedly false
statements. The court also dismissed counts III and IV, alleging
that defendant circulated a statement containing false representa-
tions because they failed to allege that the "statement" was one
that the Act required.
We note that defendant has not filed a brief in this court.
However, we will consider the merits of the appeal under the
standard set forth in First Capitol Mortgage Corp. v. Talandis
Construction Corp., 63 Ill. 2d 128 (1976).
The State first contends that the court erroneously dismissed
counts I and II. The State concedes that it is required to allege
and prove reliance, but contends that the element of reliance is
inherent in the allegation that defendant's conduct "tended to work
a fraud and deceit."
When a charging instrument is attacked in a pretrial motion,
it will be found sufficient if it states the name of the offense
and the relevant statutory provision, the nature and elements of
the offense, the date and county where the offense occurred, and
the name of the accused. 725 ILCS 5/111 3(a) (West 1994); People
v. Meyers, 158 Ill. 2d 46, 51 (1994). An instrument that charges
an offense in the language of the statute is sufficient when the
words of the statute sufficiently define the offense so that the
accused is apprised with reasonable certainty of the precise
offense with which he or she is charged. Meyers, 158 Ill. 2d at
51-52.
Section 12(F) of the Act, on which counts I and II are based,
provides:
"It shall be a violation of the provisions of this Act
for any person *** [t]o engage in any transaction, practice or
course of business in connection with the sale or purchase of
securities which works or tends to work a fraud or deceit upon
the purchaser or seller thereof." 815 ILCS 5/12(F) (West
1994).
The indictment tracks the language of the statute and adds
specific factual allegations about the transactions. The statute
does not specifically require that anyone have relied on any false
statements. However, we agree with the State that the concept of
reliance is inherent in the requirement that the transaction "works
or tends to work a fraud or deceit."
In interpreting a statute, courts must give the language its
plain and ordinary meaning. A term of well-known legal
significance is presumed to have that meaning in a statute.
Advincula v. United Blood Services, 176 Ill. 2d 1, 17 (1996). The
word "fraud" has an accepted legal definition. To state a cause of
action for fraud, a party must establish, inter alia, that a person
made a false statement of material fact and that the aggrieved
party justifiably relied on the truth of the statement. See, e.g.,
Barille v. Sears Roebuck & Co., 289 Ill. App. 3d 171, 176 (1997).
By using the word "fraud" in the statute, the legislature
presumably intended to incorporate the element of reliance. Thus,
the indictment did not have to allege separately this element. The
trial court erred in dismissing counts I and II on this ground.
The State next contends that the court erred in dismissing
counts III and IV. Those counts were brought pursuant to section
12(H), which provides:
"It shall be a violation of the provisions of this Act
for any person *** [t]o sign or circulate any statement,
prospectus, or other paper or document required by any
provision of this Act knowing or having reasonable grounds to
know any material representation therein contained to be false
or untrue." 815 ILCS 5/12(H) (West 1994).
Defendant argued, and the trial court agreed, that the phrase
"required by any provision of this Act" modifies the words
"statement," "prospectus," "paper," and "document." Because the
indictment failed to allege that the "statement" defendant
circulated was one "required by any provision of this Act," it
failed to charge an offense under this section.
The State argues that the phrase "required by any provision of
this Act" modifies only the word immediately preceding it. Thus,
the statutory prohibition of false representations applies to four
things: statements, prospectuses, "other papers," and "documents
required by this act." Under this construction, the indictment is
not required to allege that defendant's statement was one required
by the Act.
In construing a statute, a court must ascertain and give
effect to the legislature's intent in enacting the statute.
Collins v. Board of Trustees of Firemen's Annuity & Benefit Fund,
155 Ill. 2d 103, 110 (1993). The statutory language is usually the
best indication of the drafters' intent, and the language should be
given its plain, ordinary, and popularly understood meaning.
Collins, 155 Ill. 2d at 111. A statute must be read as a whole and
no word should be interpreted so as to be rendered meaningless.
Harris v. Manor Healthcare Corp., 111 Ill. 2d 350, 362-63 (1986).
The objective of the Act is to protect innocent persons who
may be induced to invest their money in speculative enterprises
over which they have little control, and the Act must be liberally
construed to better protect the public from deceit and fraud in the
sale of securities. Lucas v. Downtown Greenville Investors Limited
Partnership, 284 Ill. App. 3d 37, 49 (1996); Meihsner v. Runyon, 23
Ill. App. 2d 446, 456 (1960).
Interpreting the Act as the trial court did essentially
renders the word "statement" in paragraph H meaningless. Under
this construction, "statement" would not be any different from the
later reference to "other paper or document." We will not assume
that the legislature included the word "statement" in the statute
intending it to have no meaning. The State's interpretation, which
gives the word "statement" some meaning, is thus more reasonable.
The State's construction is also consistent with a broad
reading of the Act to effectuate its purpose of protecting the
public from unscrupulous securities dealers. Members of the public
are just as likely, if not more likely, to be deceived by
statements such as the one in question, advertising securities for
sale, as by statements required under the Act, which may not be
widely available to the public. We note that, in furtherance of
the goal of protecting the public, the Act permits the Secretary of
State to require that advertising material be filed with that
office. 815 ILCS 5/9 (West 1994). A broad reading of the statute
mandates that the prohibition against false statements apply to as
many types of documents as practicable.
Additionally, the "last antecedent" rule provides that
qualifying words or phrases are to be applied to the words or
phrases immediately preceding them and not as extending to or
including more remote words and phrases unless the intent of the
General Assembly clearly requires otherwise. Board of Education of
Rockford School District No. 205 v. Regional Board of School
Trustees of Boone & Winnebago Counties, 135 Ill. App. 3d 486, 492
(1985). Applying the last antecedent rule results in finding that
"required by this Act" applies only to "documents," or perhaps
"other papers and documents," but not "statements." As we have
determined that a broad reading of the statute best effectuates the
legislative purpose, the legislative intent does not require us to
apply the exception to the "last antecedent" rule in this case.
This, in turn, leads to the conclusion that the trial court
improperly dismissed counts III and IV.
The judgment of the circuit court of Du Page County is
reversed, and the cause is remanded for further proceedings.
Reversed and remanded.
GEIGER, P.J., and THOMAS, J., concur.
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