Judge Ends Owl Lounge Theft Trial

By Camden Easterling
Enterprise Staff Writer

A District Court judge Thursday dismissed a case against a Livingston woman accused of embezzling from Livingston’s Owl Lounge.

“This is ridiculous,” Sixth Judicial District Court Judge Nels Swandal said after prosecutors rested their case against Melissa Jean Reed, 37. “The court’s adjourned, case dismissed.”

Swandal was responding to a motion by Reed’s attorney, Chuck Watson of Bozeman, to dismiss the case for insufficient evidence – a request often called a directed verdict. Watson made the motion after prosecutors rested their case.

Jurors – who were seated in the Park County courtroom Tuesday and expected to begin deliberations today – were informed of the dismissal and sent home.

Reed, who’s also known by her married last name of Evje, had faced felony charges of theft and money laundering. Prosecutors alleged Reed had made unauthorized credit card charges and unauthorized transactions using the Owl’s corporate bank account. Reed managed the bar from 2005 to 2008.

“I’m relieved this is over and I can move on,” Reed said Thursday.

The allegations made it hard for her to find work, although she has gone on to manage a catering contract in Bozeman, Reed said.

“I’ve had amazing support from all of the people who really matter,” Reed said.

When prosecutors filed charges in January 2009, they alleged Reed stole nearly $80,000 for purchases ranging from household items to plane tickets. But the amount alleged during trial was roughly $32,000.

“Frankly, at this point we can’t even determine what she’s accused of stealing,” Watson told Swandal when he requested the judge dismiss the case.
Swandal said he himself was confused.
“Now we’re down to $32,000,” he said, “and as the court, I’m not even sure how that happened.”

Park County Attorney Brett Linneweber said after the dismissal that prosecutors based the initial amount on information from the Owl owner, Maria Flanagan. But as prosecutors pursued the case and prepared for trial, they narrowed down the amount to about $32,000 because some of the alleged thefts would have been difficult to prove.

“Items from a store would have been harder to prove than say, using corporate money for vacations,” Linneweber gave as an example.

Linneweber worked on the case, but trial lawyers were Deputy County Attorney Kathleen Carrick and Barbara Harris, an assistant attorney general for the state. Harris assisted with the trial due to county prosecutors’ workload.

Flanagan, previously a close friend of Reed’s, bought the bar in 2005.

Jurors heard testimony from various witnesses, including Flanagan, about the business relationship Reed and Flanagan had. The two women had an agreement that Reed eventually would receive 50 percent ownership in the company after a period of years for having helped build the business.

Flanagan testified there were numerous transactions Reed made that were unauthorized and not for business purposes. Reed at that point wasn’t yet a partner and consequently wasn’t allowed to make such purchases, Flanagan testified.

Flanagan also testified that while she knew the Owl was in poor financial shape, she did not know Reed was making unauthorized claims and charges.

But Watson presented e-mails from between the two women and asked questions of witnesses that suggested Reed and Flanagan acted more as business partners than as employer-employee and that Flanagan was comfortable with that situation. Witnesses testified that Reed’s contributions to the business included making personal loans to keep it afloat and working long hours below minimum wage.

“She acted like an owner in every way,” Swandal said while issuing the dismissal, adding that based on information presented, he was led to believe that was the women’s intent.

From initial charges to trial, Reed and Watson contended that Flanagan was trying to edge Reed out of the business so she could sell the Owl without sharing the profits. They have also alleged that the Owl owes Reed for unpaid wages and other compensation.

“This case was about hurt feelings, not stolen money,” Watson said after the trial ended.

Prosecutors, though, maintain the case is one of theft rather than a soured partnership.

“I was surprised that it was granted,” Carrick said of the dismissal. “I think that the case was a valid case.”
Carrick said she is disappointed with the outcome.

“I respect the court and the court’s decision,” she said. “We are evaluating our options at this time.”

Watson said he and Reed will consider her options for pursuing legal action in civil court.

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