U.S. v. Dreitzler

• Decision Date: 23 June 1978
• Docket Number: 77-1591,Nos. 77-1546,s. 77-1546
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Ralph F. DREITZLER, Jr., Defendant-Appellant. UNITED STATES of America, Plaintiff-Appellant, v. Ralph F. DREITZLER, Jr., Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 539

577 F.2d 539

UNITED STATES of America, Plaintiff-Appellee, v. Ralph F. DREITZLER, Jr., Defendant-Appellant.

UNITED STATES of America, Plaintiff-Appellant, v. Ralph F. DREITZLER, Jr., Defendant-Appellee.

Nos. 77-1546, 77-1591.

United States Court of Appeals, Ninth Circuit.

June 23, 1978.

William L. Kinzel, Bellevue, Wash., for defendant-appellant.

Jerald E. Olson, Asst. U. S. Atty., Seattle, Wash., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Washington.

Before BROWNING and WALLACE, Circuit Judges, and Waters, ^* District Judge.

WATERS, District Judge:

Ralph F. Dreitzler was tried and convicted by a jury on twenty-three counts of willfully misapplying bank funds, in violation of 18 U.S.C. § 656, and on four counts of making false statements to a bank for the purpose of obtaining loans, contrary to 18 U.S.C. § 1014. Thereafter, the district court granted Dreitzler's motion for judgment of acquittal on the twenty-three misapplication counts, but left intact the jury's verdicts on the remaining counts. The United States appeals from the district court's order granting Dreitzler's motion for judgment of acquittal. ¹ Dreitzler, appellee here, appeals his convictions on the four false statement counts, and also asserts that the district court erred in several other respects. Because we are convinced that the district court erred in granting Dreitzler's motion for judgment of acquittal, we reverse and remand for reinstatement of the jury's verdicts on the twenty-three misapplication counts. In all other respects we affirm.

I. FACTS

Prior to his convictions in 1976, Dreitzler had been engaged in the insurance business for many years. In 1968, Dreitzler established his own insurance agency. The agency went through several name changes and eventually became known as R. F. Dreitzler and Co., Inc. Appellee was the majority stockholder of R. F. Dreitzler & Co., Inc., ² and had total control over the day-to-day operations of his business. It is appropriate, therefore, to refer to R. F. Dreitzler & Co., Inc., as appellee's agency.

The business of Dreitzler's agency was to place various types of insurance with its clients in the Puget Sound area of the State of Washington. The income of the agency was derived from commissions generated on the sale of insurance. There was conflicting evidence elicited during the trial in regard to the profitability of appellee's agency. While there was some testimony to the effect that the agency's commissions (i. e., gross income) increased during the period from 1969 through 1975, other evidence indicated that Dreitzler's agency lost money in five of those seven years. ³ Additional evidence revealed that Dreitzler had borrowed substantial amounts of money from his agency despite its precarious financial position. ⁴

During these years of financial difficulty, Dreitzler devised a program of "premium financing" which required the participation of a bank. Dreitzler, a Director of the Continental Bank of Washington, ⁵ approached Lloyd Snider, a loan officer at that bank, and proposed a program whereby Dreitzler's insurance clients would be able to borrow money from the bank to make a large single premium payment on an insurance policy. The insurance customers would pay 10% of the premium down and borrow the remaining 90% of the premium from Continental Bank. This 90% would be paid back to the bank in ten equal monthly installments.

As might be expected, the government and Dreitzler maintained divergent views as to Dreitzler's influence on Continental Bank in the premium financing plan. The government introduced evidence which suggested that only two individuals were really involved in the plan: Dreitzler and Snider. According to this evidence, only Dreitzler dealt with the borrowers of the funds, Dreitzler prepared the documents, obtained the necessary signatures and presented the documents to Snider at Continental Bank. No financial statement of any borrower was submitted to the bank. No loan application thus prepared by Dreitzler was rejected by Snider on behalf of the bank, since the bank relied on Dreitzler as a director. Any questions concerning the loans were referred to the Dreitzler agency and not the borrowers. Apparently the Board of Directors of Continental Bank did not first approve the loans. The evidence introduced by the government also established that the proceeds of the loans were paid directly to an R. F. Dreitzler & Co. account because Dreitzler had informed Snider that his agency would be handling the payment of the loans for its clients.

The United States also elicited substantial testimony which revealed the fraudulent nature of the premium financing program. A number of corporate officers of Dreitzler's insurance clients testified that not only did their companies not seek premium financing through Continental Bank but, in fact, someone had forged their signatures on the loan documents. ⁶

Finally, the government presented the testimony of Michele Burgoyne, appellee's former secretary at R. F. Dreitzler & Co. She examined many of the loan documents and, based upon her familiarity with appellee's handwriting, concluded that Dreitzler had forged the names of the alleged borrowers.

From this array of evidence, the United States argued to the jury that Dreitzler had made false statements to Continental Bank and further that he had willfully misapplied the bank's funds for the use of his agency.

Dreitzler attempted to present a different picture to the jury. He did not dispute the fact that many of his clients did not specifically authorize the loans. Nor did he argue that the funds were not transferred to the general account of R. F. Dreitzler & Co. Rather, appellee asserted that both the bank and some of his clients benefited from the loans: the bank by receiving interest on the loans, and his clients by actually having the funds used for premium financing.

Dreitzler also presented evidence which indicated that he personally guaranteed all the loans made by Continental Bank in its premium financing program. And, Dreitzler argued, his agency would have been able to pay off all the loans had Continental Bank not frozen his agency's account in 1976. Finally, appellee introduced testimony of an FBI agent which cast some doubt on Burgoyne's testimony concerning the forged documents.

Apparently, the jury chose not to believe the defense version of the transactions and, after some six hours of deliberation, found Dreitzler guilty on the 27 counts submitted to them. The trial court, however, disagreed with the jury's conclusions, and granted a judgment of acquittal pursuant to F.R.Crim.P. 29(c) on the willful misapplication counts (Counts 1-15 and 17-24).

II. DOUBLE JEOPARDY

The first issue which must be dealt with is whether the United States is barred from appealing the judgment of acquittal on Counts 1-15 and 17-24 by the Double Jeopardy Clause of the Fifth Amendment to the United States Constitution. Relying on the recent Supreme Court case of United States v. Martin Linen Supply Co., 430 U.S. 564, 97 S.Ct. 1349, 51 L.Ed.2d 642 (1977), Dreitzler argues that the "Double Jeopardy Clause bars appellate review and retrial following a judgment of acquittal entered under Rule 29(c)."

We cannot agree that Martin Linen stands for the broad proposition asserted by Dreitzler. A reading of that case reveals that it is factually distinguishable from this one. In Martin Linen, the trial court had discharged a "hopelessly deadlocked" jury after it was unable to agree upon a verdict. The trial court then granted the defendant's motion for judgment of acquittal. The United States sought to appeal that order pursuant to 18 U.S.C. § 3731. The Supreme Court held that such an appeal was not permitted on the facts of that case because the defendant would then be subject to multiple prosecutions, there being no verdict to reinstate if the government prevailed. Thus, "the Double Jeopardy Clause bars appeal from an acquittal entered under (F.R.Crim.P.) 29(c) after a jury mistrial . . . ." Id. at 575, 97 S.Ct. at 1356 (emphasis supplied).

Here, of course, there was no mistrial declared. The jury returned verdicts of guilty on 27 counts. Reversal of the district court's judgment of acquittal will not subject Dreitzler to a second trial since there are jury verdicts which can be reinstated. See United States v. Wilson, 420 U.S. 332, 95 S.Ct. 1013, 43 L.Ed.2d 232; United States v. Ramos, 558 F.2d 545, 546 (9th Cir. 1977); United States v. Rojas, 554 F.2d 938 (9th Cir. 1977). We hold that the Double Jeopardy Clause does not bar appellate review of the district court's entry of judgment of acquittal. The United States may prosecute this appeal pursuant to 18 U.S.C. § 3731. ⁷

III. THE JUDGMENT OF ACQUITTAL ENTERED BY THE TRIAL COURT

The jury found Dreitzler guilty on 23 counts of willful misapplication of bank funds, in violation of 18 U.S.C. § 656. ⁸ The United States contends that the trial court then committed reversible error by granting appellee's motion for judgment of acquittal. Dreitzler of course adopts the contrary view, and argues that the judgment of acquittal must be sustained. ⁹

It is well settled that a district court does not have unlimited discretion in resolving a Rule 29(c) motion for judgment of acquittal. Rather, the district court must determine "whether at the time of the motion there was relevant evidence from which the jury could reasonably find (the defendant) guilty beyond a reasonable doubt, viewing the evidence in light favorable to the government." United States v. Figueroa-Paz, 468 F.2d 1055, 1058 (9th Cir. 1972). "In ruling on a Rule 29(c) motion, a district court must bear in mind that 'it is the exclusive function of the jury to determine the credibility of witnesses, resolve evidentiary conflicts and draw reasonable inferences from proven facts.' (Citation omitted)." United States v....