USA v. Bowling

• Decision Date: 14 September 2010
• Docket Number: No. 08-6184.,08-6184.
• Citation: 619 F.3d 1175
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Daniel J. BOWLING, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

619 F.3d 1175

UNITED STATES of America, Plaintiff-Appellee,

v.Daniel J. BOWLING, Defendant-Appellant.

No. 08-6184.

United States Court of Appeals,Tenth Circuit.

Sept. 14, 2010.

COPYRIGHT MATERIAL OMITTED.

Stephen Jones (April M. Davis with him on the briefs) Jones, Otjen & Davis, Enid, OK, for Appellant.

Vicki Zemp Behenna, Assistant United States Attorney (John C. Richter, United States Attorney, with her on the brief, and Sanford C. Coats, United States Attorney, Scott E. Williams, Assistant United States Attorney, and Jeb Boatman, Assistant United States Attorney, with her on the supplemental brief), Office of the United States Attorney, Oklahoma City, OK, for Appellee.

Before TACHA, McWILLIAMS, and TYMKOVICH, Circuit Judges.

TYMKOVICH, Circuit Judge.

Daniel J. Bowling appeals his conviction and sentence for bank fraud. The underlying conduct relates to his Oklahoma cattle ranching operation: he obtained a consolidated loan-secured by his cattle, property, and equipment-from Farmers Exchange Bank (FEB) and less than six months later both the money and the cattle were gone.

We have jurisdiction under 28 U.S.C. § 1291. In a previous order and judgment, we reversed Bowling's conviction and remanded for a new trial based entirely on our application of United States v. Hopkins, 744 F.2d 716 (10th Cir.1984), to the good faith instruction issue. See United States v. Bowling, 343 Fed.Appx. 359, 364-67 (10th Cir.2009). The government subsequently filed, and we granted, a petition for rehearing en banc regarding Hopkins. Hopkins required a good faith instruction where the defendant interposed a good faith defense, requested the instruction, and provided sufficient evidence to support it. See Bowling, 343 Fed.Appx. 359, 364-67 (10th Cir.2009). Sitting en banc, this court by order overturned Hopkins and remanded for reconsideration. See United States v. Bowling, No. 08-6184, 2009 WL 6854970 (Dec. 23, 2009) (en banc).

As a result of the overturning of Hopkins, we must now consider additional arguments for reversal raised by Bowling. He challenges the district court's denial of his motion for a judgment of acquittal, exclusion of some of his proffered evidence and refusal to instruct the jury regarding his waiver theory, refusal to instruct the jury on his good faith theory, denial of his motion to suppress evidence, denial of his motion for a new trial, and order of restitution. Bowling also argues the district court's accumulated errors warrant a reversal.

As we discuss below, we find no error by the district court. We therefore VACATE our previous decision and AFFIRM Bowling's conviction and sentence.

I. Background

A. Bowling's Ranching Operations

Daniel Bowling is a cattle rancher and farmer in Oklahoma. Since the mid-1990's, FEB and its predecessor, Service Exchange Bank, have financed Bowling's cattle ranching operations as well as his land, personal vehicles, and ranching equipment.

According to Bowling, he bought and sold cattle for two types of commercial ranching activities. One type, which he describes as cow farming, involved purchasing adult cows and breeding them to produce calves. The second, a “stocker” operation, consisted of purchasing smaller cattle, increasing their weight, and then selling them.

Bowling and FEB executed dozens of loan agreements over the decade preceding the indictment. In exchange for a security interest in Bowling's cattle, FEB loaned hundreds of thousands of dollars to Bowling for use in his ranching operation-mostly to purchase cattle. Each loan agreement contained similar provisions: Bowling was required to (1) provide invoices evidencing any cattle purchases; (2) obtain prior written approval for any cattle sales; (3) remit any proceeds to the order of FEB and himself as co-payees; and (4) make principal and interest payments as necessary.

Throughout the years, Bowling made payments on his loans, but rarely, if ever, obtained prior written approval from FEB for his sales. Likewise, Bowling did not always provide FEB his cattle purchase invoices or have the proceeds from his cattle sales written to the order of FEB as a co-payee. In some instances, Bowling sold cattle in the name of his mother, Edna Bowling, and his son, Brian Bowling. It appears as though FEB officers at least tacitly, if not explicitly, approved of Bowling's practices despite the loan agreements' express terms to the contrary.

Between October 2003 and March 2005, Bowling obtained six loans from FEB totaling $611,240. According to the loan documents, Bowling requested these loans to purchase stocker cattle. Under the terms of these loans and their associated security agreements, FEB obtained, among other things, a perfected security interest in Bowling's ranching operations, including:

All farm products, inventory, documents and accounts, all proceeds thereof, including but not limited to all cattle and their products and offspring, feed additives and any other farm products and inventory now owned or hereafter acquired and wherever located and all increases or substitutions thereof and all proceeds therefrom.

Supp. App'x at 5, 8, 11, 14, 17. As with all previous agreements between Bowling and FEB, these security agreements also required Bowling to (1) obtain prior written permission from FEB to sell any of his cattle, and (2) make any proceeds from such cattle sales payable to the order of both FEB and himself. Bowling and FEB, however, continued to operate informally under these agreements. Bowling never obtained written permission for his cattle sales, and he usually did not have the proceeds remitted to FEB as a co-payee.

Despite this “business as usual” approach, by late 2005 the relationship between Bowling and FEB began to deteriorate.

B. September 2005 Loan Consolidation

During 2005, although Bowling made several substantial payments on his indebtedness to FEB, he also began to request loan advances to purchase more cattle. Additionally, Bowling's checking account with FEB had several substantial overdrafts. Because of FEB's concern over Bowling's financial situation, on September 27, 2005, FEB required Bowling to consolidate his outstanding cattle loans and these overdrafts into one note totaling $904,134. This note also included a line of credit for Bowling's ranching operations.

At the same time as the loan restructuring, FEB conducted a cattle inspection at Bowling's various locations. During this inspection, Bowling directed his FEB loan officer and an FEB director to his various grazing lands in and around Tonkawa, Oklahoma. The FEB loan officer counted the cattle, noted their brands, and recorded their approximate weight and dollar value. Bowling also stated he had cattle at a Pratt, Kansas location. An FEB shareholder audited that location sometime later. Based on these audits, FEB determined Bowling had a total of 759 steers.

Bowling and FEB then executed a new agreement to secure the consolidated loan. In addition to a perfected security interest in Bowling's cattle and farm products, the agreement granted FEB an interest in all of Bowling's accounts, inventory, and equipment. And, just like all the previous loans, this agreement imposed the same conditions on Bowling with respect to his cattle sales and proceeds.

In October 2005, within a month of executing the new loan, Bowling wrote several checks on the new credit line, ostensibly for cattle purchases and supplies. He did not, however, submit invoices evidencing any cattle purchases. Nor did Bowling respond to requests by FEB to come to the bank and address several other notes on his real estate that had matured and were up for renewal. Later, in January 2006, FEB attempted to schedule another cattle inspection but was unsuccessful, allegedly because of Bowling's lack of cooperation.

By February 2006, Bowling had not made any payments on the consolidated loan yet continued to draw upon his line of credit under the new note. It also appears Bowling was past due on his home and real estate mortgages with FEB at that time. As a result, FEB declared Bowling in default on all his indebtedness, including the September 2005 consolidated loan, and sued in state court to foreclose on Bowling's property, cattle, and ranching operations.

In July 2006, during the pendency of the state foreclosure action, FEB deposed Bowling. FEB's counsel asked Bowling where his cattle were then located; FEB had been unable to locate the cattle at any of the previous locations Bowling had formerly permitted FEB to inspect. Bowling responded the cattle were either missing or stolen. Upon receiving this information, FEB contacted Joe Rector, a Special Ranger with the Oklahoma State Bureau of Investigation (OSBI) and field inspector with the Texas and Southwestern Cattle Raisers Association, to investigate the cattle's disappearance.

Rector obtained documents relating to Bowling's loans and security agreements with FEB, as well as records from local cattle barns. As part of his investigation, Rector prepared an affidavit to search Bowling's home. The affidavit and an application for a warrant were presented to a Kay County, Oklahoma judge, who issued a warrant. Rector subsequently searched Bowling's home with assistance from an OSBI agent and Tonkawa Police Department officers.

As a result of this investigation, Rector discovered that beginning in February 2005, Bowling had sold much of his cattle at sale barns in Oklahoma and Kansas. Many of these sales were made in the names of Bowling's mother and son. The proceeds from these sales were then allegedly deposited in Bowling's accounts at other banks (not FEB) and were never remitted to FEB. Upon learning this information, FEB contacted the Federal Bureau of Investigation (FBI) and filed a Suspicious Activity Report.

C. Indictment on Bank Fraud and Trial

Based upon the FBI's independent investigation into Bowling's business dealings since the beginning of 2005, Bowling was indicted on one...