U.S. v. Wright

• Citation: 496 F.3d 371
• Decision Date: 09 August 2007
• Docket Number: No. 05-10894.,05-10894.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Dunyell Lasalle WRIGHT, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

496 F.3d 371

UNITED STATES of America, Plaintiff-Appellee, v. Dunyell Lasalle WRIGHT, Defendant-Appellant.

No. 05-10894.

United States Court of Appeals, Fifth Circuit.

August 9, 2007.

Marc Woodson Barta (argued), Dallas, TX, David Lee Jarvis, Asst. U.S. Atty., Fort Worth, TX, for U.S.

Christopher Allen Curtis (argued), Fort Worth, TX, for Wright.

Appeal from the United States District Court for the Northern District of Texas.

Before HIGGINBOTHAM, DAVIS, and WIENER, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

Defendant Dunyell Wright plead guilty to wire fraud stemming from a scheme which defrauded mortgage lenders. He challenges the district court's enhancements to his sentence for obstruction of justice, abuse of position of trust, and use of sophisticated means, as well as its finding of relevant conduct and order of restitution. We vacate the sentence and remand for resentencing.

I

Defendant Dunyell Wright founded MFG Financial Services, a mortgage brokerage, in Arlington, Texas in November of 2001. From December 10, 2002 through January, 2003, Wright worked with David Hale to fraudulently secure a mortgage in Hale's name, the purchased house to be used by Hale and his partner K&B One Stop Real Estate Services as part of a business venture. As part of the scheme, Wright misstated Hale's creditworthiness on applications to WMC Mortgage Corporation, the eventual lender, secretly used his own funds to pay the closing costs, and used a cashier's check from his account to pay the down payment, then submitted a copy of the check to WMC that had Hale's name on it to imply that Hale had paid the down payment. All of this, of course, was to ensure that Hale was approved with a good rate, increasing Wright's commission, and possibly garnering him a side payment. Chase Home Finance eventually purchased the mortgage from WMC and lost $104,000 on it.

As part of another scheme, Damon Tippie sought to purchase a house, which K&B would then turn into an assisted living center, after which K&B would pay Tippie a salary and pay Tippie's mortgage for six months. Tippie, who knew he didn't have the means to get the required $750,000 mortgage, was told by K&B to work with Wright. Wright again performed his sleight of hand. Chase Home Finance eventually purchased this mortgage as well, suffering a $149,727 loss.

Following Wright's indictment, FBI Special Agent Frank Super found Wright at an apartment in Grand Prarie, Texas. After knocking on the door, Wright appeared and initially denied his identity. After Wright admitted his identity, Super advised him of the warrant for his arrest. While standing in front of the door, Super told Wright to get dressed because he was going to be arrested and transported to jail in Forth Worth. Wright briefly argued with Super, then abruptly closed and locked the door. Super called local police, who arrived fifteen minutes later and knocked on the door. They suspected Wright was inside because they heard noises and saw the blinds move. Sometime later, the police forcefully entered the house and determined that Wright had earlier fled out the back door. Wright remained a fugitive until his capture in Irving, Texas six weeks later.

The Government charged Wright with three counts of bank fraud, one count of false use of a Social Security Number, and one count of wire fraud. Wright eventually plead guilty to the last count without a plea agreement. The PSR concluded that the loss amount was $270,446, representing the two losses to Chase Home Finance and about $16,755 of losses to other banks alleged in counts one through four. It then added two levels for obstruction of justice based on Wright's flight, two levels for abuse of trust, and two levels for use of sophisticated means. After deducting three levels for acceptance of responsibility, the range was 70 to 87 months.

Wright objected to all three enhancements and the inclusion of the Tippie loss and the $16,755 in the loss amount. Regarding the obstruction of justice enhancement, Wright argued that "the Application notes for U.S.S.G. § 3C1.1 specifically exclude `avoiding or fleeing from arrest' as grounds for an enhancement for obstruction of justice." In its response, the Government agreed that the obstruction of justice enhancement should not apply but defended the other two. It conceded that the $16,755 should not be included in the loss amount, but it defended inclusion of the Tippie loss. The amended PSR reaffirmed all three enhancements and inclusion of the Tippie loss.

At sentencing, the parties discussed the enhancements and the loss amount with the court. The district court applied all three enhancements and found the loss to include the Tippie loss, but apparently not the $16,755—it never mentioned that number. After sustaining Wright's objection to the calculation of his criminal history points, the final range was 46 to 57 months. The court gave Wright 57 months and ordered him to pay $270,466 in restitution, a figure which includes the $16,755. Pursuant to the Government's motion, the court dismissed the first four counts.

Wright appeals application of the three enhancements, the inclusion of the Tippie loss in calculating the offense level, and the inclusion of the Tippie and $16,755 losses in the order of restitution. We address each in turn.

II

U.S.S.G. § 3C1.1 provides a two-level increase for obstruction of justice. Application Note five lists conduct for which the increase doesn't apply, and 5(d) is "avoiding or fleeing from arrest." Note 4 lists conduct for which the increase does apply and 4(c) is "escaping or attempting to escape from custody."

As an initial matter, Wright argues that we review de novo the applicability of this enhancement to the undisputed facts of this case.¹ The Government urges plain error because, as we explain later, the parties and the court used the wrong standard in analyzing the issue. Thus, the Government asserts, Wright's "theory" on appeal is different from that advanced below. While it is true that a defendant can't argue a new "theory" on appeal,² Wright is not presenting a new theory here—he objected to the enhancement, citing the exact note to the Guideline provision that controls the issue, he just didn't cite this court's controlling precedent interpreting that note. The cases cited by the Government all involve more than just lack of citation to the proper cases. And, of course, it was up to the district court to apply the proper law. Wright preserved the issue, which we review de novo.

The PSR stated that the enhancement applied because Wright fled in a "deliberate" rather than "spontaneous" manner. In response to Wright's objection, the amended PSR urged again that Wright's flight was deliberate. At sentencing, Wright's counsel disputed the enhancement, stating: "[T]he probation officer says the flight [was] other than spontaneous, but actually, the facts show just the opposite. They show a spontaneous flight. They don't show any kind of deliberation." The court and counsel then discussed whether Wright's flight was spontaneous or deliberate. The district court ultimately ruled:

I'm going to hold on to my position there. If he just fled and had been caught promptly, I think I would not tip over the line, but when he's been told he's about to be arrested, closes the door, and he goes out the back, and then he's out for six more weeks, they can't find him, he doesn't report, he knows at that point that he is—has an arrest warrant outstanding for him and still stays out, I think that's obstruction.

In United States v. Huerta,³ this Court adopted the reasoning of the Fourth Circuit in United States v. Williams⁴ and Sixth Circuit in United States v. McDonald⁵ that the critical, simple inquiry under 5(d) and 4(e) is whether the defendant escaped from custody or was avoiding custody, regardless of his state of arrest. In Williams, the defendant escaped soon after being placed in the back of a police car. On appeal, Williams argued that although he had technically been arrested when he fled, he was not "truly in custody" at that time because he escaped during the "arrest episode," noting that most § 3C1.1 enhancements were levied for escape long after arrest, after the defendants were clearly in "custody." The court rejected this reach for a "gray area" between 5(d) and 4(e) because "custody" and "arrest" are "well-settled" as separate legal concepts, hence a defendant who escapes from "custody," even if he does so during the "arrest episode," has obstructed justice. In other words, the court reconciled 5(d) and 4(e) by holding that "custody" is the key question—once a defendant is in "custody," he is no longer "avoiding or fleeing from arrest" if he escapes. This court in Huerta explicitly rejected the reasoning of the Second and Seventh Circuits, which focused on whether the defendant's conduct was deliberate or spontaneous.⁶ Consequently, the parties and the court below used the wrong standard, as the parties recognize on appeal. We ask only whether Wright was in custody when he fled.⁷

This court recently defined "custody" under § 3C1.1 as the Miranda standard of "custody." In United States v. Brown, deputies responded to a domestic violence call.⁸ They picked up the victim and drove her to her boyfriend's trailer. On the way, they learned the boyfriend's name and discovered he had a warrant for his arrest. After arriving at the trailer, they informed Brown of the warrant and one deputy grabbed him, but he broke free and ran away, remaining on the lam for about eight months before he was finally captured. The court, quoting a Supreme Court case defining "custody" for Miranda purposes, framed the question as whether there was "a formal arrest or restraint on freedom of movement of the degree associated with formal arrest."⁹ The court then held that Brown was never in such "custody" because he broke free and escaped and the deputies never exercised "a...