State of Utah v. Gerald Steven Wallace

1 A Ponzi scheme is a “fraudulent investment scheme in which
money contributed by later investors generates artificially high
(continued...)
2006 UT 86
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
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State of Utah, No. 20051115
Plaintiff and Respondent,
v.
F I L E D
Gerald Steven Wallace,
Defendant and Petitioner. December 19, 2006
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Third District, Salt Lake
The Honorable Deno G. Himonas
No. 021910910
Attorneys: Mark L. Shurtleff, Att’y Gen., Matthew D. Bates,
Charlene Barlow, Asst. Att’ys Gen., Salt Lake City,
for plaintiff
John P. Pace, Salt Lake City, for defendant
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On Certiorari to the Utah Court of Appeals
WILKINS, Associate Chief Justice:
¶1 The defendant in this case was placed on twelve years
of probation for six felony convictions related to his
participation in a fraudulent investment scheme. He argues that
Utah Code section 77-18-1(10)(a)(i) imposes a three-year
limitation on his probation and that a twelve-year term of
probation therefore constitutes an illegal sentence. We find no
such limitation in that provision or elsewhere in the Utah Code
and therefore affirm.
BACKGROUND
¶2 The defendant, Gerald Steven Wallace, participated in a
Ponzi scheme1 that defrauded several homeowners of more than half

1(...continued)
dividends for the original investors, whose example attracts even
larger investments.” Black’s Law Dictionary 1180 (7th ed. 1999).
No. 20051115 2
a million dollars from the equity in their homes. He was
convicted of selling an unregistered security, selling a security
without a license, engaging in a pattern of unlawful activity,
and three counts of securities fraud. The trial court sentenced
him to four 1-to-15-year prison terms and two 0-to-5-year terms
to run consecutively, potentially placing him in prison for the
rest of his life. The court then suspended the prison terms and
imposed 144 months (12 years) of probation.
¶3 The trial court explained that it was setting an
extended period of probation specifically for the purpose of
giving Wallace “as long an opportunity as possible to make
restitution payments.” The court imposed no fine but made
Wallace jointly and severally liable with the other scheme
participants for $626,000 in restitution. Recognizing the
unlikelihood of Wallace ever being able to pay off the entire
amount, the court ordered that a restitution plan be drawn up
that would take into account both the severity of the charges and
his ability to pay. As with any probationer, Wallace was
required to review and sign his probation agreement,
acknowledging the terms of his probation. His alternative would
have been to decline the terms and serve his sentence in prison.
¶4 Wallace appealed to the Utah Court of Appeals,
challenging both the sufficiency of the evidence supporting his
convictions and the legality of the twelve-year term of his
probation. State v. Wallace, 2005 UT App 434, ¶¶ 7-9, 124 P.3d
259. The court of appeals affirmed on both issues, holding that
although section 77-18-1(10)(a)(i) of the Utah Code states that a
court “may” terminate probation at thirty-six months, nothing in
the code requires it to limit probation to that amount of time.
Id. ¶ 18. We granted certiorari on two issues: whether section
77-18-1 (10)(a)(i) creates a thirty-six-month limitation for a
term of probation as to any felony conviction; and whether terms
of probation for multiple convictions may be imposed
consecutively. Because we conclude that the Legislature has not
limited terms of probation to any particular time period, we need
not and do not reach the second issue.
ANALYSIS
¶5 On certiorari, we review the decision of the court of
appeals, not that of the trial court. State v. Billsie, 2006 UT
13, ¶ 6, 131 P.3d 239. Because the issues before us primarily

3 No. 20051115
present questions of statutory interpretation, which are
questions of law, we review for correctness. State v. Barrett,
2005 UT 88, ¶ 14, 127 P.3d 682.
¶6 Before the court of appeals, Wallace challenged the
legality of his twelve-year probationary term. He argued there,
and here, that section 77-18-1(10)(a)(i) of the Utah Code of
Criminal Procedure limits probation to a maximum of thirty-six
months for one or more felony convictions and that his 144-month
probation therefore constitutes an illegal sentence under Utah
law. The State countered that the statute imposes no such
limitation and that, even if it did, the Utah Criminal Code
allows for consecutive terms of probation for multiple
convictions. Under the latter theory, Wallace would be serving
six consecutive two-year terms of probation, one for each of his
six felony convictions. In this instance, however, the trial
court entered an order for one 144-month term of probation, not
six consecutive terms.
¶7 Under the Utah Criminal Code, “a court may sentence a
person convicted of an offense . . . to probation unless
otherwise specifically provided by law.” Utah Code Ann. § 76-3-
201(2), (2)(c) (2003). Wallace argues that one such specifically
provided limitation is found in section 77-18-1(10)(a)(i), which
states, “Probation may be terminated at any time at the
discretion of the court or upon completion without violation of
36 months probation in felony or class A misdemeanor cases, or 12
months in cases of class B or C misdemeanors or infractions.”
¶8 Wallace urges us to interpret this provision as placing
a three-year statutory limit on probation for felony convictions.
Essentially, he argues that the provision should be read to say,
“Probation may be terminated at any time at the discretion of the
court, but shall be terminated upon completion without violation
of 36 months probation . . . .” The court of appeals, on the
other hand, concluded that the phrase “may be terminated” applies
to both “at any time” and “upon completion . . . of 36 months.”
See Wallace, 2005 UT App 434, ¶ 18. This reading, Wallace
suggests, renders half the provision superfluous. He argues that
the word “or” operates to disjoin the “upon completion” clause
from the initial verb phrase, “may be terminated.” Consequently,
he proposes that we should read into the statute an implied
“shall” to supply the missing verb and to avoid the superfluity.
¶9 When interpreting a statute, we must generally presume
the legislature used each term thoughtfully. We therefore strive
to give appropriate meaning to each term and to avoid an
interpretation that renders portions of the statute superfluous
or inoperative. See, e.g., State v. Tooele County, 2002 UT 8,

2 Burns v. Boyden, 2006 UT 14, ¶ 16, 133 P.3d 370; see also
Arredondo v. Avis Rent A Car Sys., Inc., 2001 UT 29, ¶ 12, 24
P.3d 928 (refusing to infer “substantive terms” into the text of
a statute if they are “not already there”).
3 Utah Code Ann. § 77-18-1(7)(a) (Supp. 1987) (amended 1989)
(emphasis added) (current version at Utah Code Ann. § 77-18-
10(a)(i)).
No. 20051115 4
¶ 10, 44 P.3d 680. That approach can be reasonably applied,
however, only to statutes in which the plain language, or the
language and legislative history combined, reasonably accommodates
such a reading. In rare cases, where the statutory language
supports no such reconciliatory interpretation, we “decline to
insert . . . a substantive [term] by judicial fiat.”2 Our task
is to interpret the words used by the legislature, not to correct
or revise them. When the words are clear, however incongruous
they may appear in policy application, we will interpret them as
written, leaving to the legislature the task of making
corrections when warranted.
¶10 In this case, adopting Wallace’s interpretation would
require us to insert the term “shall” into the statute. We
decline to do so for two reasons. First, the statute employs the
permissive term “may” in contrast to the compulsory term “shall.”
Second, in the relevant provision’s most recent amendment, the
Utah Legislature specifically removed the term “shall” from the
former version and replaced it with “may.”
¶11 Prior to 1989, the statute read, “Upon completion
without violation of 18 months’ probation in felony or class A
misdemeanor cases, or six months in class B misdemeanor cases,
the probation period shall be terminated, unless earlier
terminated by the court.”3 We held in State v. Green that this
former language created a “strong mandate” requiring that
probation terminate at the prescribed time absent violation. 757
P.2d 462,464 (Utah 1988). In its next legislative session,
however, the Legislature modified the statute to its current
form, substituting “may” for “shall.” See Probation Amendments,
ch. 226, § 1, 1989 Utah Laws 690. We are not at liberty to
change it back.
¶12 Wallace argues that the Legislature intended only to
extend the prescribed time periods, leaving the mandated
limitations otherwise intact. Had that been the Legislature’s
intent, however, it easily could have said so by simply
increasing the specified time periods. Instead, it replaced

5 No. 20051115
“shall” with “may,” and in the absence of any clear legislative
indication to the contrary, we take the Legislature at its word.
¶13 As a consequence, we read the statute as it is written:
a court may terminate probation for a felony at thirty-six
months, or it may terminate probation at any other time. See
Utah Code Ann. § 77-18-10(a)(i). Admittedly, when read in this
fashion, the provision regarding 36 months is nearly meaningless,
since the court may terminate probation “at any time.” However,
we find the defect to be irremediable without inserting
meaningful terms that simply are not there. As a result, the
provision does not impose any limitation on the length of
probationary term that a court may impose.
¶14 In addition, we find no other provision that limits the
term of probation and therefore conclude that our law currently
provides no statutory limitation on the length of probation a
trial court may impose.
¶15 In this case, the trial court acted pursuant to its
authority under chapter 18 of the Utah Code of Criminal
Procedure, providing that on “conviction of any crime or offense,
the court may, after imposing sentence, suspend the execution of
the sentence and place the defendant on probation.” Utah Code
Ann. § 77-18-1(2)(a). Here, the trial court suspended Wallace’s
six consecutive prison terms and imposed twelve years of
probation in lieu of prison. The trial court acted within its
discretion in doing so, and the court of appeals was correct in
affirming that action.
CONCLUSION
¶16 The Utah Code authorizes a court to impose probation as
a sentencing alternative, but nowhere does it provide a
limitation on the length of probation a court may set. Despite
Wallace’s entreaty that we interpret section 77-18-1(10)(a)(i) as
creating such a limitation, we will not because we cannot do so
without inserting terms that are not there and that the
Legislature explicitly removed by amendment. We therefore hold
that the Utah Code imposes no statutory time limitation on
probation and that Wallace’s twelve-year probation does not
constitute an illegal sentence. Affirmed.
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¶17 Chief Justice Durham, Justice Durrant, Justice Parrish,
and Justice Nehring concur in Associate Chief Justice Wilkins’
opinion.