United States v. Yi

• Decision Date: 02 January 2013
• Docket Number: No. 11–50234.,11–50234.
• Citation: 704 F.3d 800
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Charles YI, AKA Jang Ho Yi, Defendant–Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

704 F.3d 800

UNITED STATES of America, Plaintiff–Appellee,

v.Charles YI, AKA Jang Ho Yi, Defendant–Appellant.

No. 11–50234.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Nov. 6, 2012.

Filed Jan. 2, 2013.

Marilyn Bednarski, Kaye, McLane & Bednarski LLP, Pasadena, CA, for Defendant–Appellant.

John E. Arbab, United States Department of Justice, Environmental & Natural Resources Division, Washington, D.C., for Plaintiff–Appellee.

Appeal from the United States District Court for the Central District of California, Percy Anderson, District Judge, Presiding. D.C. No. 2:10–cr–00793–PA–1.

Before: ALFRED T. GOODWIN and DIARMUID F. O'SCANNLAIN, Circuit Judges, and JACK ZOUHARY, District Judge.^*

OPINION

GOODWIN, Circuit Judge:

Charles Yi appeals his conviction and sentence, assigning error to a jury instruction, and to his custodial sentence for conspiracy to violate the Clean Air Act. The judgment is affirmed.

I. FACTS

Yi was the CEO of Millennium Pacific Icon Group, a real estate development company. In April 2004, Millennium purchased Forest Glen, a 204–unit condominium complex, after Yi and some of his Millennium associates did a walk-through of the property.

Joseph Yoon, Millennium's Forest Glen project manager, testified that Yi commented during the walk-through that he was certain the ceilings contained asbestos because of the age of the building. Yi's sister, Sheri Yi Hill, was also present at the walk-through. Hill testified that she discussed the ceilings with Yi and the two decided not to touch the ceilings because they assumed the ceilings contained asbestos, which would be costly to remove.

Yi signed a purchase offer for Forest Glen that included a due diligence clause allowing time to review environmental materials and to conduct an environmental review. The seller provided a due diligence binder that included two Phase I environmental reports and an “Operations and Maintenance Plan for Asbestos–Containing Materials” (“The O & M Plan”). The reports contained test results showing the presence of asbestos in the ceilings. The O & M Plan incorporated the test results and stated that it was developed to minimize exposure to the release of asbestos fibers. Yoon testified that he presented the due diligence binder to Yi and identified its contents. Yoon also testified that Yi asked another employee to assess the diligence materials with respect to the building's physical condition, including the environmental aspects. The employee prepared a handwritten summary. Yoon testified that he typed the summary into a one-page document and handed it to Yi.

According to Yoon, Yi subsequently instructed him to secure a bid for removing the asbestos from the Forest Glen ceilings. Yoon contacted Sky Blue Environmental in June 2004, and ultimately received a $437,000 proposal for asbestos abatement. Yoon testified that Yi indicated he would not pursue the abatement because he felt it was unnecessary for selling the units. Yoon also testified that Yi rejected a later bid to install drywall over the ceilings, which would have cost anywhere from $1,800 to $2,800 per unit. Millennium employee Timothy Yu testified that Yi said asbestos abatement would be too expensive.

After Millennium purchased Forest Glen, an agent for Millennium's insurance carrier visited the property, observed ceiling material on the ground, and took a sample to test for asbestos. The agent later emailed Millennium employee Andrew Lavaux, stating that the test showed 1% asbestos. Yi testified that he was told the sample came back “negative,” but Lavaux testified that he never told Yi the sample was asbestos-free. Lavaux also testified that he never heard anyone else tell Yi that the sample was asbestos-free.

In September 2005, unit sales at Forest Glen began to slow and evidence showed Yi became concerned about the slowdown in November 2005. Yoon testified that Yi instructed him to draw up a contract to have the condominium ceilings scraped and refinished, and on January 16, 2006, Millennium contracted to have the ceilings scraped. The agreed-upon price broke down to $1,500 per unit for the first ten—less per unit than either the previously rejected bid for asbestos abatement or for installing drywall over the ceilings. The contractor, Rudys Palacios, testified that no one informed him that the ceilings contained asbestos. Palacios hired four or five men to do the scraping. They wore no special clothing to protect against asbestos exposure and only “white masks.” He also stated that powdery ceiling material was simply placed into bags and wheelbarrows before being thrown into dumpsters.

A state inspector, Larry Israel, testified that the work site was one of the worst he had ever seen and that ceiling material was blowing everywhere: public walkways, sidewalks, driveways, and around the dumpsters.

Yi testified that he did not remember being shown the due diligence binder; he never read either environmental report; and he did not believe Forest Glen's ceilings contained asbestos because one of the Millennium managers had told him that the insurance agent's asbestos test “came [back] negative” for asbestos. According to Yi, he was not shown the actual test results; he simply trusted the manager. As to the abatement work, Yi testified that he was not involved in choosing the ceiling-scraping crew, and did not know who made the choice or how it was made.

Yi also offered testimony about the closing documents, claiming he did not read the due diligence paragraph and its reference to environmental review. According to Yi, he read and complied with the “Good Faith Deposit” provision of KeyBank's conditional letter of interest, but specifically did not read the immediately preceding “Environmental” provision which called for an environmental report. He also said he did not read any portion of the ultimate loan agreement with KeyBank despite signing it. Yi then denied reading an email sent to him containing items needed prior to closing the loan—specifically denying that he read the email's reference to the requirement of a Phase I environmental report. He also denied reading an email sent to him the day of closing in which KeyBank stated it needed the O & M Plan to be in place to close the loan.

II. THE DELIBERATE IGNORANCE INSTRUCTION

Yi argues that the district court erred in giving a jury instruction on deliberate ignorance, asserting that it was not warranted because the facts shown at trial did not support a finding of deliberate ignorance. The district court instructed the jury using the Ninth Circuit model instruction:

You may find that the defendant acted knowingly if you find beyond a reasonable doubt that the defendant:

1. was aware of a high probability that there was asbestos in the ceilings at Forest Glen Condominiums, and

2. deliberately avoided learning the truth.

You may not find such knowledge, however, if you find that the defendant actually believed that there was no asbestos in the ceilings at the Forest Glen Condominiums, or if you find that the defendant was simply careless.

A district court's decision to give a particular jury instruction is reviewed for abuse of discretion. United States v. Heredia, 483 F.3d 913, 921 (9th Cir.2007) (en banc). An instruction's substance is reviewed de novo. Id. An instruction is appropriate if it is “supported by law and has foundation in the evidence.” Id. at 922. As such, “the district court must view the evidence in the light most favorable to the party requesting it.” Id. If a party requests alternative instructions, the district court considers them separately to “determine if the evidence could support a verdict on either ground.” Id.

Willful blindness is inconsistent with actual knowledge, and thus a deliberate ignorance instruction is appropriate only where “the jury could rationally find willful blindness even though it has rejected the government's evidence of actual knowledge.” Id. Deliberate ignorance contains two prongs: (1) a subjective belief that there is a high probability a fact exists; and (2) deliberate actions taken to avoid learning the truth. Global–Tech Appliances, Inc. v. SEB S.A., ––– U.S. ––––, 131 S.Ct. 2060, 2070, 179 L.Ed.2d 1167 (2011).

Regarding the first Global–Tech prong, testimony from Hill, Yoon, and Yi himself supports an inference that Yi was aware of a high probability that the Forest Glen ceilings contained asbestos. Both Hill and Yoon testified that Yi commented on the likelihood that the Forest Glen ceilings contained asbestos during their initial walk-through. Yi's 16–year experience in property management bolsters the evidence that he suspected the ceilings contained asbestos, as the age of the Forest Glen building and the ceiling's physical appearance would, according to both Hill and Yi's own testimony, have put a person experienced in property management on notice of the likelihood that it contained asbestos. While he argues that the insurance company's supposedly negative test allayed his suspicions, that inference need not be drawn when viewing the evidence in the government's favor. Thus, there was sufficient evidentiary support for the first Global–Tech prong.

Turning to the second Global–Tech prong, if the jury could infer that Yi was aware of a high probability that the ceilings contained asbestos, it also could infer that Yi engaged in a deliberate pattern of failing to read documents that might clarify whether asbestos was in fact present. The jury would not be required to believe Yi's argument that he was very busy, that he trusted all of his subordinates to read everything for him, or even that he was told the insurance company's test had come back “negative” for asbestos. The evidence regarding Yi's real estate experience and pattern of failing to read documents common to real estate transactions supports a finding that Yi deliberately avoided learning the truth about whether the Forest Glen ceilings contained...