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    2002 UT 121
    Patrick HOGLE; Salt Lake, Garfield & Western Railway Company, a Utah corporation; Ronald A. Johnson; J.W. Gallivan Children’s Trust; H. Mack Brown; Jeff Owen; and Claire A. Singleton, Plaintiffs and Appellants, v. ZINETICS MEDICAL, INC., a Utah corporation; and Medtronic, Inc., a Minnesota corporation, Defendants and Appellees. Zinetics Medical, Inc., Plaintiff and Appellee, v. Ayyoob Abbaszadeh, Kenneth Anderson, Richard Belliston, et al., Defendants and Appellants.
    No. 20000470.
    Supreme Court of Utah.
    Dec. 13, 2002.

      Robert A. Peterson, Rebecca S. Parr, Karen L. Martinez, Salt Lake City, for plaintiffs and Ayyoob Abbaszadeh.
    William Z. Pentelovitch, Alain M. Baudry, Minneapolis, MN, and Brent E. Johnson, James L. Barnett, Salt Lake City, for Zinet-ies and Medtronic.
   HOWE, Justice:

INTRODUCTION

¶ 1 Minority shareholders of Zinetics Medical, Inc., dissenting from the forced purchase of their shares by the parent corporation, Medtronic, Inc., appeal from the district court’s valuation of minority shares at less than 4.528 cents per share under Utah Code Ann. section 16-10a-1302. They contend that the court failed to consider all relevant factors and failed to explain the basis for its valuation.

BACKGROUND

¶ 2 Zinetics Medical, Inc., was first incorporated under another name in 1983. Despite several years of financial struggle, the company developed and brought to market a specialized catheter designed for use in diagnostic equipment manufactured by others. In 1991, Zinetics’ directors approved the sale of 81% of the company’s common stock shares to Synectics, a Swedish company, for $255,000. With access to Synectics’ worldwide distribution network and customer base, Zinetics began to prosper. Beginning in 1992, the company experienced steady revenue and profitability increases.

¶ 3 In 1996, Medtronic, Inc., acquired 100% of Synectics. Almost immediately disagreements arose between Medtronic and the Zinetics minority shareholders (the Minority) over the management and future direction of Zinetics. The Minority desired to expand the product line and develop Zinetics as a stand-alone company with an independent market. It was them perception that Medtronic preferred to keep Zinetics as a “captive” original equipment manufacturer bolstering Medtronic’s performance by supplying low cost catheters for Medtronic affiliates to incorporate into their products and then sell at a substantial markup.

¶ 4 Medtronic commenced attempts to buy out the Minority, first offering 1.75 cents per share. The Minority offered to buy out Med-tronic’s shares of Zinetics at the same price. Medtronic then offered 3.6 cents per share. The Minority refused this offer, believing that it did not reflect the true value of the company, and again offered to buy Medtronic’s shares at the same price. In October of 1997, the Minority offered to purchase 80% of Medtronic’s 81% interest, or approximately 60% of Zinetics stock, for $3,875,000 paid over time. This offer included an exclusive supply and distribution agreement, providing Medtronic with continued access to Zinetics products.

¶ 5 Medtronic representatives scheduled a meeting with the Minority’s representatives for January 23, 1998, ostensibly to finalize the terms of the stock purchase. However, on January 20, 1998, Medtronic presented an Agreement and Plan of Reorganization under which Medtronic would pay the Minority 4.528 cents per share and become 100% owner of Zinetics. The Minority made a final attempt to buy out Medtronic at ten cents per share in an offer including a non-exclusive supply and distribution agreement. Medtronic representatives rejected the offer purportedly because it lacked an exclusive supply agreement. Further negotiations proved unavailing, and Medtronic proceeded with a forced merger.

¶ 6 The Minority voted against the merger and exercised their dissenters’ rights under section 16-10a-1302 of the Revised Business Corporations Act, Utah Code Ann. §§ 16-10a-101 to -1705 (Supp.1995). Medtronic filed a petition for a determination of fair value under section 16-10a-1330. Both parties provided expert valuations. Neither party submitted evidence of asset value, but both submitted calculations using the market and the investment valuation methods. After weighting and averaging the results of the two methods, Medtronic’s expert, Merrill R. Norman, fixed a value of 1.97 cents per share. The Minority’s expert, Robert F. Reilly, determined the Zinetics stock to be worth 18 cents per share.

¶ 7 The Minority submitted evidence of Zinetics’ performance and argued that rather than continuing Zinetics’ current growth trends into the future, Norman’s projections inexplicably broke with and undercut the trends. Notably, although Zinetics’ total revenues had increased since 1993 at a compounded annual growth rate of 19.3%, Norman set the 1998 adjusted earnings that served as a basis for his forward projections at a figure 15% lower than the 1997 adjusted earnings. Furthermore, Zinetics’ performance during the period following the merger significantly outstripped Norman’s projections and exceeded even Reilly’s more optimistic figures.

¶ 8 Reilly relied on two sets of projections supplied by Zinetics’ president, Steve Davis. Reilly also prepared a third set of projections based on Davis’ deposition and on information from the previous projections. Respectively, these projections predicted total revenues of $4,153,000, $3,918,000, and $3,190,000 for the 1998 fiscal year.

¶ 9 The district court issued a sixteen-page memorandum decision discussing Zinetics’ structure and operations and the valuation methods used. After rejecting both parties’ bases for determining fair value of the shares and adopting the investment valuation technique of Medtronic’s expert, the district court concluded that “the fair value of Zinet-ics’ common stock is less than $ .04528 per share and that, accordingly, respondents have received fair value for their stock.” The Minority appeals and urges us to reject the district court’s valuation and remand for a new value determination by a “special master.”

ANALYSIS

¶ 10 In this appeal, we must determine whether the district court properly determined fair value as defined in Utah Code Ann. section 16-10a-1301(4) and interpreted in Oakridge Energy, Inc. v. Clifton, 937 P.2d 130 (Utah 1997). “[Wjhile the ultimate determination of fair value is a question of fact, the determination of whether a given fact or circumstance is relevant to fair value under [state law] is a question of law which we review de novo.” Swope v. Siegel-Roberb, Inc., 243 F.3d 486, 491 (8th Cir.), cert, denied, 534 U.S. 887, 122 S.Ct. 198, 151 L.Ed.2d 139 (2001).

I. DID THE DISTRICT COURT PROPERLY DETERMINE THE FAIR VALUE OF THE MINORITY’S SHARES UNDER UTAH’S DISSENTERS’ RIGHTS STATUTE?

¶ 11 The Utah dissenters’ rights statute provides in relevant part that “the corporation shall pay the amount the corporation estimates to be the fair value of the dissenter’s shares, plus interest to each dissenter” who meets the applicable requirements. Utah Code Ann. § 16-10a-1325(l) (1995). If the dissenter disagrees with the corporation’s estimate of value, the corporation is obligated to petition the court for valuation under section 16-10a-1330. The dissenter is then entitled to judgment for any amount “by which the court finds that the fair value of his shares, plus interest, exceeds the amount paid by the corporation.” Id. § 16-10a-1330(5)(a). Under the definition provided in section 16-10a~1301(4), “ ‘[flair value’ with respect to a dissenter’s shares, means the value of the shares immediately before the effectuation of the corporate action to which the dissenter objects, excluding any appreciation or depreciation in anticipation of the corporate action.”

12 Since 1991, Zinetics has been first a subsidiary of Synectics and later part of the Synectics package acquired by Med-tronic. The parties, however, provided the court considerable discussion and speculation on the value, future, and prospects of Zinet-ics as a stand-alone company. The district court found “that Zinetics’ intrinsic value would most likely be maximized as an affiliate of Synectics.” The court relied for this finding on the undisputed fact that Zinetics first became profitable after affiliating with Synectics and obtaining the benefit of the parent company’s “reliable market and effective distribution network.”

¶ 13 The object of dissenters’ rights legislation is to provide a dissenting minority with the fair value of the shares that they possess. See Utah Code Ann. § 16-10a-1301(4) (1995); Hunter v. Mitek Indus., Inc., 721 F.Supp. 1102, 1106-07 (E.D.Mo.1989) (“[T]he purpose of the appraisal statute is to award the dissenter the value of what he owned.”). In this case, the Minority actually owned shares in a subsidiary company, not in a stand-alone company. Therefore, the district court’s finding is a correct application of the statute.

¶ 14 This determination relates closely to the parties’ dispute over the relevance of the Minority’s offer to buy out Medtronic at ten cents per share. The Minority contends that the district court erred in giving no weight to that attempt. Medtronic counters that ten cents per share was a “sham offer” unsupported by evidence of feasible financing. The district court’s memorandum decision makes no mention of the issue. However, in all of the parties’ discussions, the fundamental premise of the purchase offer was that the erstwhile Minority would use its ownership control to recast Zinetics as a standalone catheter manufacturer. Therefore, what the Minority had to sell-minority shares in a subsidiary — and what it was attempting to buy-majority shares in a stand-alone company — were two significantly different items. Even investment bankers’ opinions on the feasibility of obtaining financing for the buyout would relate not to the value of the Minority’s shares in hand, but rather to the prospects and value of Zinetics as a standalone company. Any inference of the value of the one from the value of the other would be entirely speculative, and the district court was correct in eschewing the attempt.

¶ 15 The Minority complained further that Medtronic suppressed Zinetics’ value and opportunities by blocking development of new products and by refusing to foster the evolution of an independent market for Zi-netics’ shares. The minority additionally asserted that Medtronic had profited unfairly from excessive markups on Zinetics’ products. Medtronic presented counter evidence of sound business judgment regarding product development and fair payment for the catheters and argued that any failure to promote an independent market for Zinetics’ shares resulted from associated clerical burdens rather than from an attempt to suppress Zinetics. The district court found that “insufficient evidence exists to support a conclusion that decisions made by the Zinetics’ Board of Directors while controlled by Sy-nectics were improperly made with an eye toward repressing the value of Zinetics until the minority shareholders could be ‘squeezed out.’ ”

¶ 16 Evaluating conflicting testimony is the proper role of the finder of fact. When an appellant asserts that the evidence is insufficient to support the lower court’s findings of fact, “we do not weigh the evidence de novo.” In re Estate of Bartell, 776 P.2d 885, 886 (Utah 1989). Rather, we accord great deference to the lower court’s findings, “especially when they are based on an evaluation of conflicting live testimony.” Id. at 886. Moreover, “ ‘[t]o mount a successful challenge to the correctness of a trial court’s findings of fact, an appellant must first marshal all the evidence supporting the finding and then demonstrate that the evidence is legally insufficient to support the findings even viewing it in the light most favorable to the court below.’ ” Alta Indus. Ltd. v. Hurst, 846 P.2d 1282, 1284 (Utah 1993) (quoting Reid v. Mut. of Omaha Ins. Go., 776 P.2d 896, 899 (Utah 1989)). In the instant case, the record contains considerable evidence in support of the district court’s findings, which the Minority has failed to marshal. Therefore, we do not disturb the district court’s findings regarding the alleged suppression of Zinetics’ opportunities and value.

¶ 17 The Minority contends that the district court erred in failing to consider the unique value of their shares to Medtronic. Courts have made it clear, however, that “ ‘ “fair value” is not measured by any unique benefits that will accrue to the acquiring corporation, any more than the compensable value of property taken by eminent domain is measured by its special value to the condemnor.’ ” Oakridge Energy, 937 P.2d at 134 (quoting In re Valuation of Common Stock of Libby, McNeill & Libby, 406 A.2d 54, 62 (Me.1979)). Indeed,

[t]he appraisal proceeding is not at all concerned with the losses to the particular dissenting shareholders or with the benefits derived by the particular acquiring corporation in the merger, except as those losses and benefits would be reflected in the price that would be bargained out in a completely free market between any willing buyer and any willing seller in the absence of the merger.

Libby, 406 A.2d at 62. Therefore, the district court was correct in declining to attempt to attribute any special value of the Minority’s shares to Medtronic.

II. DID THE DISTRICT COURT ADEQUATELY CONSIDER THE OAK-RIDGE ENERGY VALUATION FACTORS?

¶ 18 This court noted in Oakridge Energy that the three most recognized and relevant elements of fair value for stock valuation purposes are asset value, market value, and investment value. 937 P.2d at 132. We held that “although ‘[a]U three components of “fan-value” may not influence the result in every valuation proceeding, yet all three should be considered.’ ” Id. at 135 (quoting Libby, 406 A.2d at 60).

¶ 19 In the instant case, neither party submitted evidence of asset value. Each party’s valuation expert submitted estimates of market value and of investment value, referred to by the parties here as “income value.” However, the court rejected both parties’ market valuations and the Minority’s investment valuation. Consequently, the court based its entire valuation on Medtronic’s determination of investment value. We examine the court’s approach for correctness, noting again that choice of valuation methods is a question of law. Swope, 243 F.3d at 491.

A. Asset Value

¶ 20 The district court had no evidence of asset value before it, and neither party contested the court’s disregard of this factor. As justification for ignoring asset value, the district court cited Hansen v. 75 Ranch Co., 288 Mont. 310, 957 P.2d 32, 42 (1998) (“[C]ourts have noted that unless the corporation is undergoing an actual liquidation, the liquidation method is not an appropriate method of valuing shares of a dissenting shareholder.”). Other courts have also emphasized that in the absence of actual liquidation a corporation must be valued as a going concern.

¶21 The Iowa Supreme Court, in Woodward v. Quigley, 257 Iowa 1077, 133 N.W.2d 38 (1965), stated that “[i]n this particular case we are not seriously handicapped by the absence of satisfactory evidence of net asset value. Here, as in most instances, investment value is of much greater importance.” Id. at 42; see also Cede & Co. v. Technicolor, Inc., 684 A.2d 289, 299 (Del.1996) (stating that an understatement of fair value may result from failure to value company as a going concern); Friedman v. Beway Realty Corp., 87 N.Y.2d 161, 638 N.Y.S.2d 399, 661 N.E.2d 972, 976 (1995) (stating that a determination of fair value of dissenters’ shares should be based on their worth in a going concern, not in liquidation); Elk Yam Mills v. 514 Shares of Common Stock, 742 S.W.2d 638, 642 (Tenn.Ct.App.1987) (noting that the overwhelming weight of authority approves valuation of the assets of the corporation as a going concern).

¶ 22 Minority shareholders owned stock in a going concern, and liquidation was not a prospect. Zinetics was primarily a manufacturing rather than a property-based corporation. Therefore, we conclude that Oakridge Energy did not require the district court to consider asset value where the parties had adduced none.

B. Market Value

¶ 23 Zinetics was listed on a non-NASDAQ over-the-counter stock exchange and had experienced some trading prior to the merger. However, Norman attacked the validity of the trades, and Reilly acknowledged that Zi-netics was too thinly traded for its own stock price to serve as a reliable indicator of market value. Therefore, the experts attempted to select companies comparable to Zinetics as -guidelines.

¶24 The district court noted that this “is a method which has not been recog-

nized as a valuation tool by our courts.” It added, however, that it did not “interpret Oakridge Energy to restrict a fair value analysis to the three methodologies approved in [that] decision.” We note that the selection of guideline companies was part of the determination of market value, which is one of the three primary valuation models. Oakridge Energy does not exclude reliable and rational methods for determining asset, market, or investment value that were not before the court in that case.

¶ 25 In the instant case, however, the district court observed that “[n]either expert could discover even one company which could reasonably be characterized as ‘comparable’ to Zinetics.” Medtronic’s expert, Norman, chose a mixture of companies in the medical device field, including several extremely large organizations very dissimilar to Zinetics, notably Abbott Laboratories, Baxter International, and United States Surgical. Using standard appraisal techniques, Norman calculated a multiplier based on the ratio of price to earnings for the guideline companies. Under his methodology, such a multiplier applied to actual earnings yields market value. However, Norman then applied a 42.76% downward adjustment in value to compensate for the differences between Zinetics and the guideline companies.

¶ 26 The district court remarked that, “[a]s noted by Mr. Reilly, authoritative sources in the field of valuation view adjustments in excess of 50% with considerable suspicion. And for good reason. The necessity of a 50% adjustment suggests that the subjects of the comparison are more different than alike.” Evidently concluding that the necessity for a 42.76% discount fell into the same category, the district court rejected Norman’s valuation as seriously flawed. We uphold the district court’s factual determination.

¶ 27 Reilly, the Minority’s expert, identified guideline companies through a computer search screening for catheter manufacturers similar to Zinetics in size and revenues that had brought a product to the production stage. Eleven companies met the criteria. None of these companies, however, had ever shown a net profit. Therefore, Reilly could not use the usual per share price over earnings ratio as the multiplier applied to earnings. Instead he resorted to market value of invested capital (MVIC) divided by revenues of each of the guideline companies (MVIC/revenue). Medtronic assailed this method and demonstrated to the district court’s satisfaction that the MVIC/revenue approach “yielded values which fluctuated inexplicably over time in a manner unrelated to the fundamental financial performance of the companies.”

¶ 28 The Minority failed to rebut Medtronic’s evidence, although provided an opportunity to do so by the district court. Moreover, the Minority has failed to marshal the evidence in favor of the district court’s finding and show the evidence to be insufficient. This omission augments our deference to the factual findings of the court below. See In re Estate of Bartell, 776 P.2d at 886.

¶ 29 The Minority attacks the district court’s finding that the values fluctuated “over time” as violating the section 16-10a-1301(4) requirement that stocks be valued immediately before the contested corporate action. This argument fails, however, because the district court did not consider the results from diverse dates to actually arrive at a value for Zinetics, but instead to test the consistency and reliability of the valuation method.

¶ 30 For example, Medtronic demonstrated that using the median MVIC/revenue ratio for the guideline companies for 1994 and applying it to Zinetics’ revenues for that same year yields a market value for Zinetics of $6.1 million in 1994 (based on Zinetics’ revenue of $1.5 million), while the same exercise yields a market value of nearly $36 million in 1995 when Zinetics revenue was just over $2 million. Nothing in the record supports a 600% increase in market value based on a 33% increase in revenue. The apparent increase is an artifact resulting from the fluctuation of the MVIC/revenue per share of the guideline companies, which was approximately four in 1993-1994 and close to eighteen in 1994-1995. Furthermore, the MVIC/revenue value varies inversely with revenue.

¶ 31 In the face of such evidence, the district court stated that it “[did] not believe that Mr. Reilly’s methodology produces values for Zinetics ... which would correspond to historical trends in the company’s performance measured by revenue or net income.” The court therefore concluded that “Mr. Reilly’s market approach, like Mr. Norman’s, should be substantially disregarded as unreliable.” We agree.

C. Investment Value

¶ 32 Having rejected both experts’ market valuation models, the district court was left with only the investment value model upon which to rely. In Oakridge Energy, although neither party had submitted evidence of investment value, we noted that “courts have traditionally favored investment value ... as the most important of the three elements.” 937 P.2d at 133 (citing Dudley v. Mealey, 147 F.2d 268, 270 (2d Cir.1945), superseded on other grounds by statute as stated in In re B & W Enterprises, Inc., 713 F.2d 534 (9th Cir.1983); Woodward, 133 N.W.2d at 41). The Libby court found investment value to be “a central component of fair value.” 406 A.2d at 66. We cited Libby in Oakridge Energy for the proposition that “ ‘[t]he assets of a company are of value chiefly because of their earning capacity.’ ” Oakridge Energy, 937 P.2d at 133 (quoting Libby, 406 A.2d at 66).

¶ 33 The income approach to value applies the discounting and capitalization methods to cash flows and net earnings, making a total of four components. Discounted cash flow calculations involve projections for a determined number of yearly or other future period cash flows and a terminal value of the company’s cash flow. These are discounted using a discount rate describing the required return on equity capital. Generally, higher risk dictates a higher required rate of return. Discounted earnings calculations apply the same method to earnings. In capitalized cash flow calculations, a capitalization rate that assumes certain growth and quantifies risk is applied to a past year’s average or a current year’s actual cash flow. The same method using earnings yields capitalized earnings.

¶ 34 Employing only the discounted cash flow method, Reilly arrived at a per share value of 13.4 cents. Norman arrived at a value of 1.97 cents per share using a weighted average value of discounted cash flow, capitalized cash flow, discounted earnings and capitalized earnings methods and applying a marketability discount of 31.9%. Norman explicitly valued Zinetics as part of Sy-nectics.

¶35 The district court selected Norman’s investment method valuation model, observing that investment model valuation as a subsidiary of Synectics is the most reliable approach for valuing Zinetics. It found the data, projections, and analyses in the various schedules of Norman’s report to be consistent with these criteria. The district court disregarded Reilly’s valuation, noting only that “Mr. Reilly limited his investment analysis to discounted cash flow.” This unexplained rejection of Reilly’s discounted cash flow valuation makes it difficult, if not impossible, for the Minority to marshal the evidence in favor of the court’s decision and argue that it was insufficient. The Minority is left in the untenable position of having to guess at the basis of the court’s decision — as indeed are we. The court has pointed to no specific flaw in Reilly’s income valuation model, and none is obvious to us.

¶ 36 The court acknowledged “a measure of merit” in the Minority’s criticisms that Norman had inexplicably reduced Zinetics projected earnings in 1998 from its actual 1997 earnings, considered only expected unit price increases for the catheters while disregarding inflation, and increased investor rate of return expectations using both a small cap company and a micro cap company adjustment. It identified no corresponding strengths in Norman’s analysis. Therefore, the district court recalculated the investment value and reported that “[w]hen the numbers proposed by [the Minority] for revenue, discount rate and capitalization rate are used to recalculate] Mr. Norman’s investment valuations, the results do not exceed the $ .04528 per share offered by Medtronies for the respondent’s common stock.”

¶ 37 We note first that the district court was correct in recognizing the merit of Reilly’s projections. Zinetics had enjoyed a history of robust growth and, furthermore, post merger events vindicated the Minority’s optimistic income and cash flow projections. Former Zinetics President Davis testified that just before he left the company in April of 1999, gross sales had reached $600,000 per month. Reilly’s initial revenue projections correspond closely to Davis’ undisputed testimony that Zinetics’ 1998-1999 revenues were between $4 million and $4.5 million. Norman’s projections significantly underestimated reality, beginning at $2,846,854 for 1998.

¶ 38 The governing statute defines fair value as the value on the date of the merger, excluding changes in anticipation of the merger. Utah Code Ann. § 16-10a-1301(4) (1995). However, the statute contains no prohibition against employing hindsight to verify the value on the date of the merger, as long as the merger occasioned no change in that value. Oakridge Energy did not address this issue in the context before us here.

¶ 39 The trial transcript provides several salient observations from the district court regarding the distinction between a squeeze out merger and a typical dissenters’ rights action. The district court remarked that in a dissenters’ rights action, dissenters have at least the option to participate in the corporate action. However, a squeeze out merger amounts to a forced sale, with dissenters having no control over the decision to sell, the price, or the timing. We note that while it would be impermissible to consider post-merger increases above and beyond the pre-merger projections, post-merger information may be used to verify the projections. See Gonsalves v. Straight Arrow Publishers, Inc., 701 A.2d 357, 362 (Del.1997) (supporting consideration of post-merger evidence to support projections).

¶ 40 If, as the district court held, Medtronic did not suppress the value of Zi-netics in anticipation of the merger, then there is no presumption that short-term post-merger gains were the result of the merger. Therefore, we hold that in the instant case checking projections against subsequent actuality does not conflict with the requirements of section 16-10a-1301(4).

¶ 41 We also agree with the court’s approval of Reilly’s discount and capitalization rate. However, the court’s failure to show its calculations leaves us with a number of questions. First, discounted cash flow was the only analysis that Reilly performed. This appears to be adequate, since in Norman’s analysis that result was close to the average of the results from the four methods. However, the court’s memorandum decision refers to inserting the Minority’s projections for “revenue” rather than cash flow into Norman’s model. Furthermore, Reilly’s exhibit XI (Discounted Cash Flow Synthesis) sets forth three “scenarios” valuing Zinetics, respectively, at $11,263,000, $3,811,000, and $12,096,000. Each is based on a separate set of five yearly projections and a terminal value. The court did not indicate which of these sets, or what combination, it inserted into Norman’s model. Finally, the court did not indicate whether it restricted its calculations to substituting Reilly’s numbers in Norman’s discounted cash flow model only, or whether it included other models.

¶ 42 These omissions are troubling because when the direct capitalization multiple and the projected cash flows set forth in Reilly’s exhibit XI for years one through five and the terminal values for each of the three scenarios are inserted into Norman’s Schedule J (Zinetics Medical Inc. Discounted Cash Flows as Part of Synectics) and the final results are averaged and then divided by the number of shares outstanding, the result is substantially more than 4.528 cents per share. This is also the case using the values from either scenario one or three. Only scenario two yields a value per share of less than the amount offered. The choice among the three options, or the average of all three or any two, is a factual determination within the discretion of the district court. Yet the court has not explicitly made this determination.

¶ 43 Although the district court specifically approved Norman’s investment valuation model, its later statement at least implies that if forced to choose between Norman’s and Reilly’s performance projections and discount/capitalization rates, it might choose Reilly’s. The court interpreted the results of its calculations as eliminating the need for a choice. However, if Reilly’s estimates operating in Norman’s model yield a fair value of more than 4.528 cents per share, then a choice is necessary. Therefore, we approve the court’s recognition of the factual validity of Reilly’s estimates, as discussed above, and remand this case for recalculation. For each of Reilly’s three “scenarios,” or whatever combination of the three the court chooses, it should (1) insert the cash flow projections for years one through five and the terminal values from Reilly’s exhibit XI into the calculations shown in Norman’s Schedule J; (2) calculate the “present value amount” for each year’s cash flow, using Norman’s multiples for “present value factor”; (3) calculate the terminal value for each, using Norman’s 0.17 present value factor but replacing Norman’s 16.45% capitalization rate with Reilly’s direct capitalization multiple of 6.67; and (4) add the yearly and terminal present values to obtain the cumulative present value. If the court has found that the value is best represented by a combination of Reilly’s scenarios, the court should then average the cumulative present values obtained for the combination of scenarios the court has chosen, to obtain the total value of Zinetics. Finally, the court should divide the cumulative present value derived from the court’s choice of one or a combination of scenarios by 128,806,800, the number of shares outstanding, to obtain the fair value per share.

D. Marketability Discount and Control Premium

¶ 44 Given the strong probability that the per share fair value derived by the method outlined above will be greater than 4.528 cents, we next address the issue of discounts. Norman’s report states:

All other things being equal, an interest in a business is worth more if it is readily marketable or, conversely, worth less if it is not.... There is not a ready market for [Zinetics’] stock. In our opinion, the fair value of Zinetics’ stock would include a marketability discount. In the values that reflect the non-marketable nature of Zinet-ics’ stock, we have applied a 31.93% discount.

Norman further stated that “[t]he market value of a security is impacted by the elements of control o[r] lack of control inherent in the block of stock being valued.” Noting that “[i]n this valuation, the 18.56% block of stock is clearly a minority position,” Norman confirmed that “[w]e have applied a 36.81% control premium when the value is identified to reflect a control position value.”

¶ 45 Minority shares and shares considered non-marketable are subject in some contexts to discounts that place their value below a simple percentage of the total value of the corporation. Likewise, majority shares sometimes benefit from a “control premium.” However, a majority of courts that have addressed the issue of minority discounts has held “that discounts at the shareholder level are inherently unfair to the minority shareholder who did not pick the timing of the transaction and is not in the position of a willing seller.” Hansen, 957 P.2d at 41. Moreover, some courts have reasoned that “valuing the shares at less than their proportionate share of the corporation’s fair value produces a transfer of wealth from the minority shareholder to the shareholders in control.” Id. As the Woodward court observed, contrasting dissenters’ valuation with tax valuation, “the statute is designed to protect the minority from the very considerations which resulted in a discounted value in the tax cases. By statute the minority is guaranteed the ‘real’ value of its stock.” 133 N.W.2d at 44. The Eighth Circuit Court of Appeals observed in Swope that “[t]he American Law Institute explicitly confirms the interpretation of fair value as the proportionate share of the value of 100% of the equity, by entitling a dissenting shareholder to a ‘proportionate interest in the corporation, without any discount for minority status or, absent extraordinary circumstances, lack of marketability.’ ” 243 F.3d at 492 (quoting American Law Institute, Standards for Determining Fair Value, Principles of Corporate Governance: Analysis and Recommendations (ALI) § 7.22(a) (1994)); see also Utah Code Ann. § 16-10a-301(4). The Swope court explained that “ ‘fair value’ in minority stock appraisal cases is not equivalent to ‘fair market value.’ Dissenting shareholders, by nature, do not replicate the willing and ready buyers of the open market. Rather, they are unwilling sellers with no bargaining power.” 243 F.3d at 492.

¶ 46 We agree and note that this is especially true of dissenting shareholders in a squeeze out merger. See Cavalier Oil Corp. v. Harnett, 564 A.2d 1137, 1145 (Del.1989); Security State Bank v. Ziegeldorf, 554 N.W.2d 884, 890 (Iowa 1996); In re Valuation of Common Stock of McLoon Oil Co., 565 A.2d 997,1002-05 (Me.1989); Rigel Corp. v. Cutchall, 245 Neb. 118, 511 N.W.2d 519, 525-26 (1994). Therefore, the court should not employ discounts in its valuation of the Minority’s shares of Zinetics.

CONCLUSION

¶ 47 We hold that the district court was permitted to ignore asset value and that its careful consideration of the parties’ evidence for market value fulfills the requirements of Oakridge Energy, although the court ultimately rejected both parties’ market valuation methods as unreliable. We also hold that on the facts before us the accurately calculated income valuation yields an acceptable approximation of “fair value.” We hold further that the court was correct in recognizing the merit of the Minority’s performance projections and discount/capitalization rate. The court was also within its discretion to select Norman’s income valuation model. However, the court made no explicit factual finding as to which of Reilly’s sets of numbers, or what combination, best expresses the value of Zinetics. Furthermore, the results that the court reported from its insertion of Reilly’s numbers into Norman’s model do not necessarily follow from the values and procedure that it expressed the intention to use. Since the calculations were not shown, we cannot verify them.

¶ 48 Therefore, we remand this case for recalculation, as specified above. See supra ¶ 43. We note that discounts are impermissible and hold that the result of the calculation described is the per share fair value of Zinet-ics. The Minority shareholders should receive 4.528 cents per share as offered by Medtronic, plus the excess, if any, of fair value over that amount, augmented by interest. It is unnecessary to appoint a “special master” in the instant case.

¶ 49 Affirmed in part, reversed in part, and remanded.

¶ 50 Chief Justice DURHAM, Associate Chief Justice DURRANT, Justice RUSSON, and Justice WILKINS concur in Justice HOWE’S opinion.

      . This is another term for the same valuation model that the courts have referred to as investment value. We use the terms interchangeably here.

      . Interestingly, Reilly’s own treatise on business valuation states that ”[c]apitalization of revenues is applied most frequently to service businesses, such as advertising agencies, insurance agencies, mortuaries, professional practices, and some types of publishing operations. It generally tends not to work very well for manufacturing companies.” Shannon P. Pratt & Robert F. Reilly et al., Valuing a Business, The Analysis and Appraisal of Closely Held Companies, 227 (3d ed.1996).

      . For example, in scenario 1, net cash flow is projected at $2,334,000 for year one and at $2,292,000 for year two, and the projected terminal value is $4,204,000.


source: Caselaw Access Project

author: DURHAM, Chief Justice:

license: Public Domain

text:
    2002 UT 122
    STATE of Utah, Plaintiff and Respondent, v. George David PUTNIK, Defendant and Petitioner.
    No. 20010557.
    Supreme Court of Utah.
    Dec. 20, 2002.

      Mark L. Shurtleff, Att’y Gen., J. Frederick Voros, Jr., Asst. Att’y Gen, Salt Lake City, for plaintiff.
    J. Franklin Allred, L. Clark Donaldson, Salt Lake City, for defendant.
   DURHAM, Chief Justice:

¶ 1 A jury convicted petitioner of possession of a controlled substance with intent to distribute, and possession of drug paraphernalia. After trial but before sentencing, petitioner filed a motion for arrest of judgment under rule 23 of the Utah Rules of Criminal Procedure or, in the alternative, a motion for a new trial under Utah Rule of Criminal Procedure 24. On January 25, 2001, the court imposed sentence and entered a judgment of conviction. On February 12, 2001, the trial court denied petitioner’s pending motions. On March 5, 2001, petitioner filed a notice of appeal. The court of appeals dismissed the appeal for lack of jurisdiction because petitioner failed to file his notice of appeal within thirty days of his sentence. State v. Putnik, 2001 UT App 182, 2001 WL 625041 (per curiam memorandum decision). We granted certiorari and affirm.

ANALYSIS

¶2 The court of appeals had jurisdiction over petitioner’s notice of appeal only if he complied with the language of either rule 4 of the Utah Rules of Appellate Procedure or rule 24(c) of the Utah Rules of Criminal Procedure. Rule 4 requires that petitioner must have filed his notice “within 30 days after the date of entry of the judgment or order appealed from.” Utah R.App. P. 4(a). Petitioner was sentenced on January 25, 2001. He did not file his notice of appeal until March 5, 2001, after the thirty-day period had expired.

¶ 3 As the court of appeals noted, under rule 23 of the Utah Rules of Criminal Procedure, “a motion to arrest judgment may be filed prior to imposition of sentence as was Putnik’s.” Putnik, 2001 UT App 182 at ¶ 1, 2001 WL 625041. Under Utah Rule of Appellate Procedure 4(b), however, such a motion does not toll the appeal period. See Utah R.App. P. 4(b). A notice of appeal filed outside the thirty day period may nonetheless be valid under rule 4(b). The rule states, “[I]f a timely motion under the Utah Rules of Criminal Procedure is filed in the trial court under rule 24 for a new trial, the time for appeal for all parties shall run from the entry of the order denying a new trial.” Utah R.App. P. 4(b).

¶ 4 Petitioner argued that his appeal was timely because he filed it within thirty days of the date on which the trial court denied his motion for a new trial. Because an appeal made within thirty days from the entry of the order denying a new trial is timely as long as the motion for a new trial was filed in the proper time frame, the critical question is whether petitioner’s motion, for a new trial was timely.

¶ 5 Rule 24(c) of the Utah Rules of Criminal Procedure governs the time frame for filing a motion for a new trial. It clearly states that a motion for new trial “shall be made within 10 days after imposition of sentence, or within such further time as the court may fix during the ten-day period.” Utah R.Crim. P. 24(c). Here, petitioner filed his motion for a new trial before imposition of sentence. In State v. Vessey, the court of appeals held that a motion for a new trial filed prior to the imposition of sentence was not timely. 957 P.2d 1239 (Utah Ct.App. 1998). The court of appeals explained that “The rule does not provide for timeliness of motions filed ... prior to entry of judgment .... Rather, rule 24 requires that a motion for new trial be filed within ten days after imposition of sentence.” Id. at 1240 (footnote omitted).

¶ 6 We implicitly upheld Vessey in State v. Gardner, 2001 UT 41, 23 P.3d 1043. There, we construed a motion to reconsider a motion to suppress as a motion for a new trial. Id. at ¶ 7, 23 P.3d 1043. We further construed that motion to be in response to the imposition of sentence. Id. at ¶ 8, 23 P.3d 1043. We explained that we did so because “[a] motion under rule 24(c) of the Utah Rules of Criminal Procedure must be brought within ten days after imposition of sentence.” Id.

¶ 7 “When interpreting statutes, we determine the statute’s meaning by first looking to the statute’s plain language, and give effect to the plain language unless the language is ambiguous.” Wilson Supply, Inc. v. Fradan Mfg. Corp., 2002 UT 94, ¶ 14, 54 P.3d 1177 (internal quotation and citation omitted). Webster’s New College Dictionary, 1155 (1995) defines “timely” as “occurring at a suitable or opportune time.” “Untimely” includes in its definition that which is “occurring too soon; premature.” Id. at 1211.

¶ 8 Here, as in Vessey, petitioner filed a motion for a new trial after verdict, but before the trial court sentenced him. Petitioner’s motion was premature, and thus untimely. Petitioner was therefore required to file his notice of appeal within thirty days of the January 25th sentencing date, rather than within thirty days of the February 12th disposition of his motion for a new trial.

¶ 9 Petitioner argues that Vessey was wrongly decided and that Bellion v. Durand, 39 Utah 532, 117 P. 798 (Utah 1911), should control the interpretation of the timing procedure in the rule. In Bellion, the court addressed whether a motion for a new trial, filed after verdict but before judgment, was timely under a civil statute, Compiled Laws 1907, section 3742. Id. at 798. In Bellion, the court noted that the motion was based on a charge of insufficiency of evidence to justify the verdict. Id. at 799. The court reasoned that “insufficiency of the evidence assails the verdict ... not the judgment” and that thus it is timely to file a notice of appeal after verdict but before judgment. Id.

¶ 10 Bellion has no application to this case. Bellion was written in 1911, long before enactment of the current Utah Rules of Criminal Procedure. Utah R.Crim. P. 1 (compiler’s notes). More importantly, Bel-lion concerned a civil statute, rather than a criminal statute, and construed a different rule. 117 P. at 798. The rules governing civil actions do not control the procedures followed in criminal cases when there is an applicable criminal rule. Because petitioner did not file his motion for a new trial within the time frame mandated in rule 24, he was required to file his motion for appeal within thirty days of sentencing. He failed to do so. The court of appeals properly dismissed his appeal for lack of jurisdiction.

¶ 11 Associate Chief Justice DURRANT, Justice HOWE, Justice RUSSON, and Justice WILKINS concur in Chief Justice DURHAM’S opinion.


author: HOWE, Justice:

text:
    2002 UT 124
    STATE of Utah, Plaintiff and Appellee, v. Brookes Colby SHUMWAY, Defendant and Appellant.
    No. 20001100.
    Supreme Court of Utah.
    Dec. 20, 2002.

      Mark L. Shurtleff, Att’y Gen., Joanne C. Slotnik, J. Frederic Voros, Jr., Asst. Att’ys Gen., Narda Beas-Nordell, Salt Lake City, for plaintiff.
    Linda M. Jones, Salt Lake City, for defendant.
   HOWE, Justice:

INTRODUCTION

¶ 1 Defendant Brookes Colby Shumway appeals from a judgment of conviction for murder, a first degree felony under section 76-5-203 of the Utah Code, and for tampering with evidence, a second degree felony under section 76-8-510.

BACKGROUND

¶ 2 On January 22, 2000, then fifteen-year-old Brookes Colby Shumway spent much of the day with his friend, fourteen-year-old Christopher Ray. That evening, Brookes “slept over” at Christopher’s trailer home. Brookes and Christopher were up until 5:30 a.m. playing video games. At about 7 a.m., Brookes went to Christopher’s mother’s room and awoke her by exclaiming that Christopher had tried to stab him and that he stabbed Christopher back and thought that he might be dead. Christopher’s mother came out of her room and found Christopher lying on his back on the floor in the front room with a butcher knife covered in blood next to him. She called 911, and the police and paramedics arrived shortly thereafter. After trying to revive Christopher, the paramedics declared him dead at the scene. The police searched the trailer and took into evidence the butcher knife, along with other knives from the kitchen. The police also found that blankets the boys had been using had blood stains and stab patterns in them and were rolled up in the corner of the front room. A gym bag in Christopher’s bedroom contained bloody socks. Later that day, after the police finished their search and investigation, a crime scene cleanup company cleaned out the trailer. The next day, the state medical examiner reported that Christopher had been stabbed thirty-nine times and that some of the stab wounds, including the fatal neck wound to the carotid artery, apparently had been inflicted with an instrument other than the butcher knife found by police. That instrument was never found.

¶ 3 Brookes was subsequently charged with murder and with tampering with the evidence. The juvenile court certified him to stand trial as an adult in the district court. Following deliberations, the jury convicted Brookes of both charges. He now appeals.

ANALYSIS

I. FIRST DEGREE MURDER CONVICTION

¶4 Brookes contends that the trial court erred in giving jury instruction 26, which mandated the order of deliberation on the murder charge. That instruction stated:

Before you can convict the defendant, Brookes Colby Shumway, of the offense of Manslaughter, a lesser included offense in count I of the information, you must have found that the evidence fails to establish one or more of the elements of Murder, as charged in count I of the information, beyond a reasonable doubt....

¶ 5 Brookes’ trial counsel made no objection to the jury instruction. Brookes now contends, and the State concedes, that the instruction was erroneous under State v. Gardner, 789 P.2d 273 (Utah 1989), cert, denied, 494 U.S. 1090, 110 S.Ct. 1837, 108 L.Ed.2d 965 (1990). In that case, we held that the trial court is not to mandate a specific order of deliberation to the jury concerning lesser included offenses; rather, such an instruction should be given by way of suggestion and recommendation. Id. at 284. Our decision in Gardner respecting the order of jury deliberation has been followed in State v. Powell, 872 P.2d 1027, 1031-32 (Utah 1994); see also State v. Piansiaksone, 954 P.2d 861, 869-70 (Utah 1998). Thus instruction 26 in the instant case was erroneous for mandating the order of jury deliberation.

¶ 6 Additionally, the instruction was erroneous because it can be interpreted to mean that the jury must find the defendant not guilty of murder before they may consider the offense of manslaughter.- As we pointed out in Gardner, the jury may be instructed

that they should consider the lesser included offenses if they do not find the defendant guilty of the charged offense. While the difference in wording is subtle, it avoids any misunderstanding that the jury must, by unanimous vote, acquit the defendant on the charged offense before it may consider the lesser included offenses.

789 P.2d at 284. Additionally, in the instant case the instruction was particularly erroneous because the jury should have been allowed to consider extreme emotional disturbance manslaughter even if they determined that all the elements of murder had been proved. In Piansiaksone, we wrote:

[I]t was theoretically possible that the jury could have found that every necessary element for murder had been satisfied and yet that manslaughter was the crime committed if the jury found that the killing was committed under the influence of extreme emotional disturbance for which there is a reasonable explanation or excuse.

954 P.2d at 870. As previously mentioned, defendant’s counsel at trial made no objection to jury instruction 26. However, defendant now contends that it was plain error on the part of the trial court and that under Utah Rule of Evidence 103(d), we should nevertheless hold that it was reversible error. Rule 103(d) states: “Nothing in this rule precludes taking notice of plain errors affecting substantial rights, although they were not brought ■ to the attention of the court.”

¶ 7 Our case law requires that to establish plain error, a defendant must show that (1) the instruction was erroneous; (2) the error should have been obvious to the trial court; and (3) but for the error, there would be a reasonable likelihood for a more favorable outcome for the defendant. State v. Saunders, 1999 UT ¶¶ 57, 59, 992 P.2d 951; State v. Dunn, 850 P.2d 1201, 1208-09 (Utah 1993). The State concedes that the jury instruction was erroneous and does not dispute that the error should have been obvious to the trial court, but counters that any error caused thereby was harmless because there is no evidence which would support the conclusion beyond a reasonable doubt that defendant killed the victim as a result of an extreme emotional disturbance or in imperfect self-defense, either of which would justify a verdict of manslaughter.

¶ 8 The State’s contention that the trial court’s error was harmless requires us to examine the evidence that might support a verdict of manslaughter. Utah Code Ann. section 76-5-203(3) provides two circumstances where a charge of murder can be reduced to manslaughter:

(3)(a) It is an affirmative defense to a charge of murder or attempted murder that the defendant caused the death of another or attempted to cause the death of another:
(i) under the influence of extreme emotional distress for which there is a reasonable explanation or excuse; or
(ii) under a reasonable belief that the circumstances provided a legal justification or excuse for his conduct, although the conduct was not legally justifiable or excusable under the existing circumstances.
(b) under subsection (3)(a)(i), emotional stress does not include:
(i) ...
(ii) distress that is substantially caused by the defendant’s own conduct.
(c) The reasonableness of an explanation or excuse under Subsection (3)(a)(i) or the reasonable belief of the actor under Subsection (3)(a)(ii) shall be determined from the viewpoint of a reasonable person under the then existing circumstances.

A. Extreme Emotional Distress Manslaughter

¶ 9 Turning first to consideration under subsection (3)(a)(i), we ■ explained in State v. Bishop, 753 P.2d 439, 471 (Utah 1988), overruled on other grounds by State v. Menzies, 889 P.2d 393 (Utah 1994), that a person suffers from an extreme emotional disturbance “when he is exposed to extremely unusual and overwhelming stress” such that

the average reasonable person under that stress would have an extreme emotional reaction to it, as a result of which he would experience a loss of self-control and that person’s reason would be overborne by intense feelings such as passion, anger, distress, grief, excessive agitation, or other similar emotions.

Id. However, an extreme emotional disturbance will not serve to reduce murder to manslaughter if the actor brought about his own mental disturbance. Gardner, 789 P.2d at 282-83; § 76-5-203(3)(b)(ii).

¶ 10 One interpretation of the evidence supports the necessity for a manslaughter instruction under subsection (3)(a)(i). Brookes disclosed to police that on the morning of the altercation Christopher was irritated at him for beating Christopher at video games. As the boys went to bed, Christopher went to the kitchen and retrieved a knife that he began to throw in the air and catch. Christopher then lunged at Brookes and began poking him with the knife. The boys wrestled over control of the knife and in his anger, Brookes stabbed Christopher. Brookes also suffered stab wounds to his hand. There was evidence that Christopher had a reputation for being a “hothead” and losing his temper, while Brookes was known to be cooperative and peaceful. Other evidence supported the argument that Brookes had been bullied and pushed around by his peers since he was in the third grade, and that all of this “came out on Chris” when the boys fought over the knife.

¶ 11 Under this interpretation of the evidence, Brookes arguably did not bring about the disturbance by his own conduct, but rather Christopher initiated a violent and traumatic act by attacking Brookes with the knife. Christopher’s aggressive conduct could be found by a jury to provide a reasonable excuse or explanation for Brookes’ stress and rage that resulted in Brookes stabbing Christopher in the throat and chest. According to the medical examiner, “the lethal wound to the victim’s throat was inflicted early in the struggle, while the victim’s blood pressure was still good.” There is evidence that the wounds other than the two potentially fatal stabs would not have been deadly. At the end of the encounter, Brookes went to Christopher’s mother’s bedroom to awake her and told her twice that Christopher had tried to stab him. Brookes assisted her in her efforts to resuscitate Christopher. He was peaceful and sobbing. Police officers who responded testified that Brookes was not violent or a danger, but was cooperative and nonthreatening.

¶ 12 The State responds that the plain intent of our statutory scheme is to mitigate the crime of murder where a defendant’s conduct was clearly wrong but where the circumstances were so provocative that even a reasonable person might have reacted similarly. But, the State asserts, even assuming the truthfulness of defendant’s version of the incident, those facts would not constitute a “reasonable explanation or excuse” for the stabbing of Christopher. The State asserts that no reasonable person under the then existing circumstances, teased by a good friend playing with a knife during a sleepover, would have become so enraged or experience such an extreme emotional disturbance as to cause him to kill that person by cutting his throat and stabbing him thirty-nine times.

¶ 13 We conclude that defendant was entitled to an instruction under subsection (3)(a)(i) because a jury could conclude that Brookes caused the death of Christopher “under the influence of extreme emotional distress for which there is a reasonable explanation or excuse.” In holding that the defendant was entitled to an instruction under subsection (3)(a)(i), we do not suggest that Brookes’ version of the events that took place is the only reasonable interpretation of the evidence. Most disturbing, of course, is the fact that the medical examiner testified that Christopher had been stabbed thirty-nine times. However, in State v. Standiford, 769 P.2d 254, 264, 266 (Utah 1988), we approved of the giving of instructions for manslaughter and self-defense based on the defendant’s theory of the case where he had stabbed the victim 107 times. See also State v. Cloud, 722 P.2d 750, 753-55 (Utah 1986), in which we held that the defendant would be entitled to an instruction on extreme emotional distress manslaughter where the victim had been stabbed twenty-seven times and died of multiple critical wounds.

B. Imperfect Legal Justification

¶ 14 We next consider the evidence under subsection (3)(a)(ii) which reduces murder to manslaughter where defendant acted “under a reasonable belief that the circumstances provided a legal justification or excuse for his conduct, although the conduct was not legally justifiable or excusable under the existing circumstances.” Again, under defendant’s version of the events, Christopher was the aggressor. He approached Brookes in a threatening manner with a knife. The medical examiner testified that the fatal wounds were inflicted early in the struggle. Arguably, this could have occurred while Brookes perceived Christopher to be a threat. The injuries inflicted thereafter were not life threatening and in some instances were superficial. As earlier stated in this opinion, there is no evidence that Brookes was known to be a violent person or had aggressive tendencies. After the incident, Brookes went to Christopher’s mother’s room and told her what had happened. The State correctly argues that under a different interpretation of the evidence Christopher was lying down on his back when the fatal stab wounds were inflicted, and therefore Christopher’s mother and sister, who were sleeping in other rooms in the trailer, were not awakened by any struggle. These conflicting interpretations of the evidence underline the importance of a correct jury instruction on Brookes’ theory of imperfect legal justification manslaughter.

II. EVIDENCE TAMPERING

¶ 15 Brookes next contends that the evidence is insufficient to support his conviction of evidence tampering. This crime is defined in section 76-8-510 of the Utah Code, which provides:

A person commits a felony of the second degree if, believing an official proceeding or investigation is pending or about to be instituted, he:
(1) alters, destroys, conceals, or removes anything with a purpose to impair its verity or availability in the proceeding or investigation ....

In our consideration of this assignment of error, we review the evidence and all inferences which may reasonably be drawn from it in the light most favorable to the verdict of the jury. We will reverse a jury conviction for insufficient evidence only when the evidence is sufficiently inconclusive or inherently improbable that reasonable minds must have entertained a reasonable doubt that the defendant committed the crime of which he was convicted. State v. Petree, 659 P.2d 443, 444 (Utah 1983) (citing numerous cases). An observation made by this court in Petree bears repeating here:

[Notwithstanding the presumptions in favor of the jury’s decision this Court still has the right to i-eview the sufficiency of the evidence to support the verdict. The fabric of evidence against the defendant must cover the gap between the presumption of innocence and the proof of guilt. In fulfillment of its duty to review the evidence and all inferences which may reasonably be drawn from it in the light most favorable to the verdict, the reviewing court will stretch the evidentiary fabric as far as it will go. But this does not mean that the court can take a speculative leap across a remaining gap in order to sustain a verdict.

Id. at 444-45 (citations omitted). The State based its charge of evidence tampering on Brookes’ alleged concealment or destruction of the “second implement” which the medical examiner determined was used to inflict many or possibly all of the wounds on Christopher’s body. Investigating officers’ search of the trailer failed to produce the “second implement.” Deputies Grogan and Bowman were the first officers to arrive on the scene. Bowman picked up the bloody butcher knife from the floor beside Christopher and placed it on the couch. Later, Detective Nelson conducted a search of the trailer. He had the scene and various items photographed and videotaped, identified items of evidence and placed yellow numbers by them, and collected items in an evidence bag. The items included various swabs from the trailer, the bloody gym socks, the knife that Deputy Bowman had placed on the couch, two blankets, a pillow, knives with barbeque sauce on them, and a fork. Nelson also collected at a later date the victim’s clothing, Brookes’ clothing, hair samples, and Brookes’ journal. Nelson searched the outside garbage cans. Detective Park testified that three individuals spent several hours on January 23 processing the scene. He looked through trash cans and outside the trailer, and he talked to neighbors. He characterized the investigation as “thorough.” It was not until the next day, January 24, that the medical examiner reported that at least eleven stab wounds were caused by a second implement which he described as approximately three inches in length with a narrow blade. He further opined that it was possible that the second implement was used to inflict all of the stab wounds.

¶ 16 The second implement was not found by anyone in the search and investigation conducted on January 23. Detective Nelson testified that when he learned on January 24 that a second implement that was not found by officers might have been used in the incident, he was “surprised.” However, he did not make any attempt to go back to the trailer to search further. After officers had left the trailer on January 23, crime scene cleaners cleaned the trailer, and it was left unsecured.

¶ 17 In support of Brookes’ conviction, the State points to Brookes’ statement that the altercation took place at 5:30 a.m. and lasted for about thirty minutes, but that he did not awaken Christopher’s mother until 7 a.m. There was no testimony as to what happened during that hour, but the State asserts that Brookes had ample time to conceal or dispose of the second implement. Brookes, Christopher, his mother, and his sister were the only persons in the trailer at that time. It is undisputed that the latter two persons were sleeping. The State also relies on evidence that officers found blankets with slash marks and blood stains on the floor in the living room. The blankets appeared to have been bundled up and set aside. Police also found bloody socks in a gym bag in Christopher’s bedroom. Because the bloody blankets and socks had been moved by Brookes, the State argues that it can be inferred that he disposed of the weapon he used. Finally, the State relies on an entry in Brookes’ journal written several months after the stabbing which reads: “Do they know what kind of knife is the other.” The State argues that that entry constitutes an admission by Brookes that a second implement did exist. The defense counters that the entry implies that Brookes was hopeful the officers were able to locate the unknown implement since it would clear him of evidence tampering.

¶ 18 After giving full weight to all of the evidence supporting Brookes’ conviction of evidence tampering, we conclude that the evidence is insufficient to sustain his conviction. At most, the evidence supports only the proposition that Brookes had the opportunity to destroy or conceal the second implement, if indeed it ever existed. As we wrote in State v. Workman, 852 P.2d 981, 985 (Utah 1993), “[a] guilty verdict is not legally valid if it is based solely on inferences that give rise to only remote or speculative possibilities of guilt.” Other reasonable explanations exist why the instrument was not found. It could have fallen behind or underneath pieces of furniture in the living room where officers missed it in their search. It could have been found and discarded by the crime scene cleaners. Officers did not contact the crime scene cleaners after the clean-up to inquire whether they had found any such instrument. The journal entry is too terse and ambiguous to be reasonably relied upon. Only speculation supports the conviction. As we observed in Petree, 659 P.2d at 444-45, while we review the evidence and all inferences in the light most favorable to the verdict, and stretch the evidentiary fabric as far as it will go, we cannot take a speculative leap across a remaining gap in order to sustain a verdict.

CONCLUSION

¶ 19 Brookes’ conviction of murder is reversed, and the case is remanded for a new trial. His conviction for tampering with evidence is reversed, and the charge is dismissed for insufficiency of the evidence.

1120 Chief Justice DURHAM, Associate Chief Justice DURRANT, Justice RUSSON, and Justice WILKINS concur in Justice HOWE’s opinion.


author: DURRANT, Associate Chief Justice:

text:
    2002 UT 126
    STATE of Utah in the interest of W.A., a child under eighteen years of age. State of Utah, Petitioner and Cross-Respondent, v. E.A., Respondent and Cross-Petitioner.
    No. 20020236.
    Supreme Court of Utah.
    Dec. 20, 2002.

      See also 63 P.3d 607.
    Mark L. Shurtleff, Att’y Gen., Annina M. Mitchell, Asst. Att’y Gen., Salt Lake City, for petitioner.
    Martha Pierce, Salt Lake City, Guardian Ad Litem.
    Scott Wiggins, Salt Lake City, for respondent.
   DURRANT, Associate Chief Justice:

¶ 1 This case concerns the termination of parental rights. The State of Utah and W.A., acting through a guardian ad litem, filed a motion to terminate the rights of both of W.A.’s parents. In response, W.A.’s father argued that the juvenile court lacked personal jurisdiction over him under both Utah and federal law. The juvenile court disagreed and terminated his parental rights. The court of appeals reversed, reasoning that Utah’s long-arm statute did not confer personal jurisdiction over him and that the status exception was inapplicable to parental termination proceedings.

¶2 On certiorari, we conclude that the juvenile court had personal jurisdiction over the father pursuant to subsection 78-3a-110(13) of the Utah Code. We also conclude that asserting jurisdiction over him complied with the due process requirements of the Fourteenth Amendment because the status exception extends to parental termination proceedings and the facts of this case otherwise support the exercise of jurisdiction. We therefore reverse the court of appeals’ decision.

BACKGROUND

¶ 3 W.A., a juvenile, is the biological son of D.A. and E.A. In December 1993, the State of Oklahoma filed felony charges against both his mother, D.A., and his father, E.A. Thereafter, a Kentucky court granted temporary custody and guardianship of W.A. to his sister, D.D.

¶ 4 On July 2, 1996, D.A. pleaded nolo contendere to sexually abusing a minor child and was sentenced by an Oklahoma court to ten years in prison. That same day, E.A. pleaded nolo contendere to lewd molestation of a child and sexual abuse of a minor. As a result of this plea, an Oklahoma court sentenced E.A. to a term of twenty years for the first charge and a term of life imprisonment for the second.

¶ 5 Sometime between 1995 and 1998, D.D. moved to Utah with W.A. In February of 1998, D.D. contacted the Division of Child and Family Services (“the State”) and informed it that she could no longer care for W.A. The State then filed a dependency petition regarding W.A. A juvenile court adjudicated W.A. a dependent child on February 25, 1998, and awarded the State temporary custody and guardianship.

¶ 6 On October 8, 1998, the State and W.A.’s guardian ad litem filed a motion to terminate D.A.’s and E.A.’s parental rights. Both parents moved to dismiss, reasoning that Utah’s long-arm statute, see Utah Code Ann. § 78-27-24 (2002), did not afford the juvenile court personal jurisdiction over them and, even if it did, such an assertion of jurisdiction violated the due process requirements of the Fourteenth Amendment. The juvenile court disagreed, concluding that the parents had sufficient contacts with the State of Utah to allow the court to exercise personal jurisdiction under subsections 78-27-24(3) and (6) of the Utah Code. Alternatively, the juvenile court reasoned that it had personal jurisdiction over the parents under the status exception because a parental termination proceeding involves the “status” of a child vis-a-vis its parents.

¶ 7 Following a trial, the juvenile court terminated the parental rights of both E.A. and D.A., concluding that they were unfit under sections 78-3a-407(3), -408(2)(e), and - 408(4)(a) of the Utah Code, and had abandoned W.A. pursuant to sections 78-3a-407(1) and -408(l)(c) of the Utah Code. E.A. appealed, and the court of appeals reversed. E.A. v. State (State ex rel. W.A.), 2002 UT App 72, ¶¶ 39-40, 2002 WL 355970. The court of appeals reasoned that although E.A. had sufficient contacts with the State of Utah to satisfy the due process requirements of the Fourteenth Amendment, id. at ¶¶ 12-13, Utah’s long-arm statute did not confer personal jurisdiction over him, id. at ¶ 16. The court of appeals further held that the status exception does not extend to parental termination proceedings. Id. at ¶ 39.

¶ 8 We subsequently granted the State’s petition for certiorari and E.A.’s cross-petition for certiorari. We have jurisdiction pursuant to Utah Code Ann. § 78-2-2(3)(a) (2002). On certiorari, the State contends that either personal jurisdiction over E.A. was not required or that the juvenile court had an adequate basis for asserting personal jurisdiction over E.A. It offers three arguments in support of these alternative positions. First, it claims that the Juvenile Court Act, Utah Code Ann. §§ 78-3a-102, - 103(a), (h), (r), and -104(l)(c) (2002), the Termination of Parental Rights Act, Utah Code Ann. §§ 78-3a-401 to —415, and the Uniform Child Custody and Enforcement Act, Utah Code Ann. §§ 78-45c-101 to -318, do not require personal jurisdiction over a nonresident parent. Second, it argues that the juvenile court had personal jurisdiction under Utah law because a parental termination proceeding involves the status of a child vis-a-vis his or her parents. Finally, the State argues that Utah’s long-arm statute conferred personal jurisdiction over E.A.

¶ 9 In response, E.A. asserts that (1) none of the juvenile court acts cited by the State displace the requirement that the court have personal jurisdiction over him, (2) the status exception does not extend to parental termination proceedings, and (3) Utah’s long-arm statute is inapplicable. Alternatively, he argues that the court of appeals erred in concluding that he had sufficient minimum contacts with the State of Utah to satisfy the due process requirements of the Fourteenth Amendment.

ANALYSIS

I. STANDARD OF REVIEW

¶ 10 “When exercising our certiora-ri jurisdiction, we review the decision of the court of appeals and not that of the trial court.” Longley v. Leucadia Fin. Corp., 2000 UT 69, ¶ 13, 9 P.3d 762. Moreover, “we review the decision of the court of appeals for correctness.” Brookside Mobile Home Park, Ltd. v. Peebles, 2002 UT 48, ¶ 11, 48 P.3d 968.

II. PERSONAL JURISDICTION

¶ 11 This case is a companion ease to D.A. v. State (State ex reí. W.A.), 2002 UT 127, 63 P.3d 607, and raises an issue identical to an issue addressed in that ease. Specifically, as in D.A., E.A. contends that the juvenile court lacked personal jurisdiction over him under both Utah and federal law. We rejected D.A.’s assertions, however, reasoning that (1) subsection 78-3a-110(13) of the Utah Code confers personal jurisdiction over a nonresident parent, (2) the status exception applies to parental termination proceedings, and (3) other considerations in the case showed compliance with Fourteenth Amendment fairness requirements. Id. at ¶ 47. We adopt the same analysis here. Accordingly, we hold that the juvenile court appropriately asserted personal jurisdiction over E.A. under Utah law and that asserting personal jurisdiction over him complied with the due process requirements of the Fourteenth Amendment.

CONCLUSION

¶ 12 We conclude that the juvenile court had personal jurisdiction over E.A. under both Utah and federal law. We therefore reverse the decision rendered by the court of appeals.

¶ 13 Justice HOWE, Justice RUSSON, and Justice WILKINS concur in Associate Chief Justice DURRANT’s opinion.

¶ 14 Chief Justice DURHAM concurs in the result.

      . We note that all of the statutory sections cited in this paragraph of our opinion refer to the 1998 version of the Utah Code that was in effect at the time of the termination proceedings. This is important to note because some of the sections were reordered in 2002.

      . We note that both of W.A.’s parents remained incarcerated through at least the completion of the termination proceeding. Specifically, as of that time, D.A. resided in a Texas penitentiary, and E.A. resided in an Oklahoma prison.

      .D.A. also appealed. The court of appeals certified her case directly to us, however. We resolve that appeal in a separate opinion issued today. D.A. v. State (State ex rel. W.A.), 2002 UT 127, 63 P.3d 607.

      . In reaching our conclusion that subsection 78-3a-l 10(13) of the Utah Code afforded the juvenile court personal jurisdiction over E.A., we note that (1) E.A. received actual notice of the parental termination proceeding as evidenced by his opposition to the juvenile court's authority to terminate his parental rights, and (2) it is undisputed that W.A. lived in the State of Utah at the time the parental termination proceeding commenced.


author: ORME, Judge: DAYIS, Judge

text:
    2003 UT App 1
    STATE of Utah, Appellant, v. José Daniel ROBINSON, Appellee.
    No. 20020027-CA.
    Court of Appeals of Utah.
    Jan. 3, 2003.
    Mark L. Shurtleff, Attorney General, and Joanne C. Slotnik, Asst. Attorney General, Salt Lake City, for Appellant.
    Shelden R. Carter, Harris & Carter, Provo, for Appellee.
    Before Judges BILLINGS, DAVIS, and ORME.
   OPINION

ORME, Judge:

¶ 1 The State appeals a magistrate’s dismissal of a manslaughter charge against José Robinson, which arose from the deadly combination of drinking alcohol and playing with a gun. We affirm.

BACKGROUND

¶ 2 In the early morning of June 10, 2000, José Robinson and Christina Galbraith, his sister-in-law, were drinking beer and examining Mr. Robinson’s handgun. While Ms. Galbraith was handling the gun, Mr. Robinson heard the slide activate. He then took the gun from her. Noticing that the gun appeared to be jammed, he pulled back the slide, ejecting a bullet from the gun. Mr. Robinson put the bullet back into the clip, and the next thing he remembers is hearing the gun fire. He then looked over at Ms. Galbraith and noticed that she was slumped over the arm rest of the couch. The bullet had hit her just below her left ear, and she died shortly thereafter. Investigators who later arrived on the scene determined Mr. Robinson’s blood alcohol level to be .10.

¶ 3 Believing Mr. Robinson’s conduct to be reckless, the State charged him with manslaughter. After considering the State’s evidence at a preliminary hearing, however, a magistrate dismissed the charge, choosing not to bind Mr. Robinson over for trial. The State now appeals the dismissal.

STANDARD OF REVIEW AND APPLICABLE LAW

¶ 4 “The determination of whether to bind a criminal defendant over for trial is a question of law. Accordingly, we review that determination without deference to the court below.” State v. Clark, 2001 UT 9, ¶ 8, 20 P.3d 300 (citations omitted).

¶ 5 “To bind a defendant over for trial, the State must show ‘probable cause’ at a preliminary hearing by ‘present[ing] sufficient evidence to establish that “the crime charged has been committed and that the defendant has committed it.” ’ ” Id. at ¶ 10 (quoting State v. Pledger, 896 P.2d 1226,1229 (Utah 1995) (quoting Utah R.Crim. P. 7(h)(2))) (alteration in original). The “quantum of evidence necessary to support a bind-over” is that amount necessary “to support a reasonable belief that an offense has been committed and that the defendant committed it.” Id. at ¶ 16 (emphasis added). In assessing the evidence presented, the magistrate “ ‘must view all evidence in the light most favorable to the prosecution and must draw all reasonable inferences in favor of the prosecution.’ ” Id. at ¶ 10 (quoting State v. Hester, 2000 UT App 159, ¶ 7, 3 P.3d 725).

¶ 6 Because the State “must ... produce ‘ “believable evidence of all the elements of the crime charged,” ’ ” id. at ¶ 15 (quoting State v. Emmett, 839 P.2d 781, 784 (Utah 1992) (quoting State v. Smith, 675 P.2d 521, 524 (Utah 1983))), we review the elements of manslaughter. A person commits manslaughter if he or she “recklessly causes the death of another.” Utah Code Ann. § 76-5-205(l)(a) (Supp.2002). Section 76-2-103(3) provides that a person acts recklessly

when he is aware of but consciously disregards a substantial and unjustifiable risk that the circumstances exist or the result will occur. The risk must be of such a nature and degree that its disregard constitutes a gross deviation from the standard of care that an ordinary person would exercise under all the circumstances as viewed from the actor’s standpoint.

Utah Code Ann. § 76-2-103(3) (1999). Determining whether a person acts recklessly under this definition “presents a conjecture-laden inquiry, involving both objective and subjective elements.” State v. Singer, 815 P.2d 1303, 1307 (Utah Ct.App.1991). See

State v. Wessendorf, 777 P.2d 523, 526 (Utah Ct.App.) (“[T]he trial court did not err in referring to an objective as well as a subjective standard, as both are involved in applying the manslaughter statute.”), cert, denied, 781 P.2d 878 (Utah 1989). Two subjective elements of the definition are whether the person actually perceived the risk that his or her actions presented and whether he or she consciously disregarded it. See State v. Howard, 597 P.2d 878, 881 (Utah 1979) (recognizing that whether an actor perceived and disregarded a risk “is purely [a question] of subjective intent in the mind of the actor”); State v. Martinez, 2000 UT App 320, ¶ 12 n. 5, 14 P.3d 114 (“[Liability for criminal recklessness ... require[s] actual knowledge or awareness and thus turn[s] on the defendant’s subjective mental state.”) (citations omitted), aff'd, 2002 UT 80, 52 P.3d 1276. The magnitude of the risk itself, on the other hand, is an objective matter. See Wessendorf, 777 P.2d at 526 (“[T]he statutory language includes application of an objective standard, i.e., that ‘[t]he risk in both cases must be of such a degree that an ordinary person would not disregard or fail to recognize it.’ ”) (quoting State v. Dyer, 671 P.2d 142, 148 (Utah 1983)).

ANALYSIS

¶ 7 Although it is undisputed that Mr. Robinson contributed to Ms. Galbraith’s death, we hold that the State did not establish probable cause that Mr. Robinson acted recklessly in doing so. For whatever reason, the only evidence the State presented at the preliminary hearing was the testimony of Detective Don Grothe, who had investigated the incident. During direct examination, Detective Grothe recited his understanding of what had occurred and also said the following: “[Mr. Robinson] stated that when he retrieved the gun from [Ms. Galbraith], there was nothing that caused him to think that the gun — well that she had activated a round or loaded it or anything like that.”

¶ 8 Then, during cross-examination, the following exchange took place between Mr. Robinson’s counsel and Detective Grothe:

Q. Detective, what did he tell you that would make you think that he knew that the gun was loaded or in a firing position? A. There was nothing that made him think that.
Q. He didn’t think it was loaded?
A. No.
A.... He told me that when he retrieved the gun ... he assumed that it was empty and didn’t have a round in the chamber, and it didn’t have a clip in the gun. That’s what he stated.
Q. There was no clip in the gun?
A. That’s what he stated.
Q. And he advised you he assumed the gun was safe?
A. Yes.
Q. Is there anything to suggest in any form from anybody or any evidence that this was an intentional act?
A. No.
Q. Would it be fair to describe this, that this was an accident?
A. Yeah. There’s nothing at this point that would indicate any criminal intention that he fired the gun with the intent to hurt her. Yes, that would be my opinion.
Q. And you’re telling me from your information you’ve gathered that he did not know the gun was loaded or had a bullet in the firing chamber?
A. Yes.
Q. What information do you have to suggest that Mr. Robinson knew the gun to have live ammunition in it that could be fired?
A. There was no information that I have that would have confirmed for sure that he knew that it was loaded.
Q. Did you make any examination of the gun as to its malfunctioning abilities, or how — was it functioning properly? Was there any reason to explain why that bullet would be in that firing position?
A. I’m not a gun expert per se, but from what I saw, it appeared that it had been jammed. It was a round that had been spent that was in the process of being ejected out of the gun and got jammed in there. Detective Orndorff, who -is a much more skilled person in firearms, he’s an instructor, and he looked at the gun closer than I did.
Q. What information did Detective Orn-dorff give you?
A. Other than what I just said, I don’t recall any.
Q. That it was jammed?
A. Yeah.

¶ 9 Given this testimony, we simply cannot conclude that the State “presented] sufficient evidence to support a reasonable belief’ that Mr. Robinson acted recklessly in causing Ms. Galbraith’s death. State v. Clark, 2001 UT 9, ¶ 16, 20 P.3d 300. Detective Grothe’s testimony that Mr. Robinson did not know the gun was loaded and that he thought the gun was safe, as well as his explanation of how the bullet likely came into firing position, falls well short of establishing a reasonable belief that Mr. Robinson was “aware of’ any risk, much less that he was “aware of but consciously disregard[ed] a substantial and unjustifiable risk.” Utah Code Ann. § 76-2-103(3) (1999). In fact, it refutes such a conclusion.

¶ 10 We emphasize that our decision is highly dependent upon the strategy pursued by the State, and in particular the fact that Detective Grothe’s testimony is the only evidence that the State presented at the preliminary hearing. At that hearing, the State said it felt confident that it “could make probable cause with one detective,” but it failed to do so. In this case we are faced with one person’s testimony, and that testimony, fairly viewed, suggests that Mr. Robinson did not act recklessly.

¶ 11 Even “viewing] all evidence in the light most favorable to the prosecution and ... drawing] all reasonable inferences in favor of the prosecution,” Clark, 2001 UT 9 at ¶ 10, 20 P.3d 300, the evidence provided in this case simply does not support a probable cause determination. The inferences that the State asks us to make, that Mr. Robinson “knew that the gun contained at least one live round” and that he was aware that his actions would cause the gun to fire, would not be “reasonable inferences” flowing logically from the evidence because such inferences would directly contradict the only testimony that was presented in this case by the State’s own witness. That witness characterized Mr. Robinson as having no perception of any risk that the gun was ready to fire a live round. On the contrary, it establishes not that Mr. Robinson perceived a risk and consciously disregarded it, but rather that he failed even to perceive the risk. See supra note 2.

CONCLUSION

¶ 12 Because the State did not produce enough evidence at the preliminary hearing “to support a reasonable belief’ that Mr. Robinson was “aware of but consciously disregard[ed]” the risk that his handgun was ready to fire, we affirm the magistrate’s dismissal of the manslaughter charge against him.

¶ 13 I CONCUR: JUDITH M. BILLINGS, Judge.

DAYIS, Judge

(concurring):

¶ 14 I write separately to highlight concern I have with the lowered probable cause standard for bindover. Part of the rationale for a lowered standard is the so-called presumption “that the prosecution’s case will only get stronger as the investigation continues. Evans v. State, 963 P.2d 177, 182 (Utah 1998). This presumption has no legal or factual basis and should not be relied upon.

¶ 15 A presumption is a “legal inference or assumption that a fact exists, based on the known or proven existence of some other fact or group of facts.” Black’s Law Dictionary 1203 (7th ed.1999); see also Webster’s Ninth New Collegiate Dictionary 932 (9th ed.1986) (defining presumption as “a legal inference as to the existence or truth of a fact not certainly known that is drawn from the known or proved existence of some other fact”).

¶ 16 Several Utah cases rely in whole or in part on the presumption that the “ ‘prosecution’s case will only get stronger as the investigation continues.’ ” State v. Clark, 2001 UT 9, ¶ 10, 20 P.3d 300 (quoting Evans, 963 P.2d at 182 (other citation omitted)). Utah case law has incorporated this presumption from a line of Oklahoma cases that presume “ ‘the State will strengthen its evidence at trial’ ” State v. Pledger, 896 P.2d 1226, 1229 (Utah 1995) (quoting Diaz v. State, 728 P.2d 503, 510 (Okla.Crim.App.1986)).

¶ 17 The Oklahoma presumption seems to have originated in McAllister v. State, 97 Okla.Crim. 167, 260 P.2d 454 (1953). In McAllister, the Oklahoma appellate court stated that “[t]he presumption is that the State would strengthen its evidence at trial by production of everything favorable to support the charge.” Id. at 465. However, the court cited no legal or factual basis to support this assumption.

¶ 18 The Utah Supreme Court, in citing the baseless Oklahoma presumption, dropped the qualification set forth in McAllister. Instead of simply presuming the prosecution’s case would improve at trial because the prosecution would produce “everything favorable to support the charge,” id., our supreme court ruled that the prosecution’s case would “only get stronger as the investigation continued].” Clark, 2001 UT 9 at ¶ 10, 20 P.3d 300 (quotations and citations omitted).

¶ 19 Now, the presumption is embedded in Utah jurisprudence. However, it has no factual or legal basis to support it. The presumption that “the prosecution is entitled to hold the defendant on a lesser standard while it hunts for additional evidence ... may have been supportable in the middle of the last century when the police were not as sophisticated as they are today and when it may have been easier to flee to avoid prosecution.” Kenneth Graham & Leon Letwin, The Preliminary Hearings in Los Angeles: Some Field Findings and Legal-Policy Observations, 18 UCLA L.Rev. 635, 692 (1971). However, today, “unless the statute of limitations is about to run, it is difficult to defend binding over the defendant while the police search for evidence that will support a conviction.” Id. In fact, “[a]s a practical matter, in most cases police investigation ceases once the complaint has been issued.” Id.

¶ 20 In addition, the presumption is not based on known or proven facts. McAllister offers no known or proven facts to support its presumption, and the Utah Supreme Court simply relies on McAllister and its progeny to support its presumption. See Clark, 2001 UT 9 at ¶ 10, 20 P.3d 300; see also Evans, 963 P.2d at 182.

¶21 Therefore, although I concur in the main opinion, which correctly states the law, I believe our supreme court, at its earliest opportunity, should revisit the so-called presumption that the prosecution’s case will only get stronger as the investigation continues.

      . This preliminary hearing standard for probable cause is the same standard that applies to issuing an arrest warrant. In State v. Clark, 2001 UT 9, 20 P.3d 300, the Utah Supreme Court recognized that there had been some confusion as to "what quantum of evidence is sufficient to support a finding of probable cause at the preliminary hearing stage of a prosecution.” Id. at ¶ 11. After reviewing the various standards that had been articulated over the years, the Court ultimately concluded the following:
      [W]e see no principled basis for attempting to maintain a distinction between the arrest warrant probable cause standard and the preliminary hearing probable cause standard.... Therefore, at both the arrest warrant and the preliminary hearing stages, the prosecution must present sufficient evidence to support a reasonable belief that an offense has been committed and that the defendant committed it.

        Id. at ¶ 16. The Court acknowledged that this rule imposes a " 'relatively low' ” burden upon the State at preliminary hearings. Id. at V 10 (quoting Evans v. State, 963 P.2d 177, 182 (Utah 1998)). “Yet, '[t]he magistrate’s role in this process ... is not that of a rubber stamp for the prosecution.’ ” Id. (quoting State v. Hester, 2000 UT App 159,¶ 7, 3 P.3d 725, cert, denied, 9 P.3d 170 (Utah 2000)). The magistrate is still expected to “fulfill the primary purpose of the preliminary hearing, [which is to] 'ferret[ ] out ... groundless and improvident prosecutions.’ " Id. at ¶ 16 (quoting State v. Anderson, 612 P.2d 778, 783-84 (Utah 1980)) (ellipses in original).

      . As is “often the case with respect to state of mind questions, objective evidence of the surrounding circumstances may be weighed in malting the factual determination.” People v. Licitra, 47 N.Y.2d 554, 419 N.Y.S.2d 461, 393 N.E.2d 456, 459 (1979). Even so, the determination to be made is whether the defendant was subjectively “aware of but consciously disregarded]" the risk his actions posed. Utah Code Ann. § 76-2-103(3) (1999).
      It is this perception of the risk that marks the difference between criminal negligence and recklessness. As the Utah Supreme Court recognized, the "difference between reckless and criminally negligent conduct is that under the former, one perceives a risk and consciously disregards it, whereas under the latter, one fails to even perceive the risk.... The distinction, then, is merely one of the degree of perception of the risk.” State v. Dyer, 671 P.2d 142, 148 (Utah 1983). See Utah Code Ann. § 76-2-103(3) & (4) (1999) (defining recklessness to require that one be "aware of” a risk but "consciously disregard[]” it and defining criminal negligence to require that one merely “ought to be aware of” a risk); State v. Standiford, 769 P.2d 254, 267 (Utah 1988) ("The sole difference between reckless manslaughter and negligent homicide is whether the defendant actually knew of the risk of death or simply was not, but should have been, aware.”); State v. Howard, 597 P.2d 878, 881 (Utah 1979) ("The difference between the minimum required mens rea of recklessness for manslaughter and criminal negligence for negligent homicide is simply whether the defendant was aware, but consciously disregarded a substantial risk the result would happen, or was unaware but ought to have been aware of a substantial risk the result would happen.”) (emphasis in original). This distinction is not unique to Utah. See, e.g., Ala.Code § 13A-2-2 cmt. (1994) ("The reckless offender is aware of the risk and 'consciously disregards' it. On the other hand, the criminally negligent offender is not aware of the risk created (‘fails to perceive') and, therefore, cannot be guilty of consciously disregarding it.”); People v. Brito, 232 Cal.App.3d 316, 283 Cal. Rptr. 441, 443 n. 4 ("An essential distinction between second degree murder based on implied malice[, defined as conscious disregard for life,] and involuntary manslaughter based on criminal negligence, is that in the former the defendant subjectively realized the risk to human life created by his conduct, whereas in the latter the defendant's conduct objectively endangered life, but he did not subjectively realize the risk.”), cert, denied, No. S022570, 1991 Cal. LEXIS 4790 (Oct. 16, 1991); State v. Ray, 228 Conn. 147, 635 A.2d 777, 781 (1993) ("[Tjhe issue that distinguishes the two criminal offenses is whether the defendant subjectively realized and chose to ignore a substantial risk of death or merely failed to realize that he was creating a substantial risk of death.”) (citation omitted); Saunders v. State, 871 S.W.2d 920, 924 (Tex.App.1994) ("The difference between the culpable mental states for involuntary manslaughter and criminally negligent homicide is appreciation of the risk. Recklessness requires that one perceive the risk and disregard it; in criminal negligence the actor simply does not perceive the risk that an ordinary person would recognize.”), affd, 913 S.W.2d 564 (Tex.Crim.App.1995); 1 Charles E. Torcia, Wharton's Criminal Law § 27, at 170 (15th ed. 1993) (“The difference between the terms 'recklessly' and 'negligently' ... is one of kind, rather than of degree. Each actor creates a risk of harm. The reckless actor is aware of the risk and disregards it; the negligent actor is not aware of the risk but should have been aware of it.”) (emphasis in original).
      As will be explained, the testimony provided by the State's only witness in this case precludes any reasonable belief that Mr. Robinson actually perceived any risk. Therefore, we cannot conclude that there exists a reasonable belief that his conduct was reckless.

      . It surely is tempting to simply conclude that anyone who handles a firearm in any manner other than to treat it as a loaded weapon that could fire at any instant is reckless, especially if they are drunk while doing so. Indeed, this statement is true when using the word "reckless” in its colloquial sense, and many hunter safety and firearms instructors would undoubtedly agree with this definition. However, the definition of "reckless” that we are bound to follow— the definition set forth in Utah Code Ann. § 76-2-103(3) (1999) — is narrower. As discussed earlier in this opinion, the statutory definition requires that one actually and subjectively perceive a risk and consciously disregard it. When one does not perceive any risk, his or her conduct will be, at most, criminally negligent. See Utah Code Ann. § 76-2-103(4) (1999) (defining criminal negligence to include situations in which one "ought to be aware of" a risk).
      Past case law suggests that if one purposefully aims a gun at a person or at a location where people are likely to be and the gun discharges, courts are willing to infer that the actor was aware of a risk and was, therefore, reckless. See, e.g., State v. Singer, 815 P.2d 1303, 1306-09 (Utah Ct.App.1991) (upholding a manslaughter conviction when the defendant shot and killed an officer while, he claimed, merely aiming at a police dog). However, in cases such as the present one, in which it is undisputed that the aiming was inadvertent, such an inference does not follow. See, e.g., People v. Montanez, 41 N.Y.2d 53, 390 N.Y.S.2d 861, 359 N.E.2d 371, 374-75 (1976) (reversing a conviction for reckless manslaughter because even if proven, the fact that "the weapon was in the defendant’s hand at the time of the shooting” would not be sufficient by itself to prove recklessness). Cf. People v. Bernier, 204 A.D.2d 732, 612 N.Y.S.2d 629, 629 (affirming a conviction for criminally negligent homicide when a security guard, holding a shotgun across his chest and using it to push back a crowd, accidentally shot and killed a person), cert, denied, 84 N.Y.2d 822, 617 N.Y.S.2d 142, 641 N.E.2d 163 (1994).