CGM Contractors, Inc. v. Contractors Environmental Services, Inc.

• Decision Date: 02 August 1989
• Docket Number: No. 18315,18315
• Court: West Virginia Supreme Court
• Parties: CGM CONTRACTORS, INC. v. CONTRACTORS ENVIRONMENTAL SERVICES, INC., et al.

Page 861

383 S.E.2d 861

181 W.Va. 679

CGM CONTRACTORS, INC. v. CONTRACTORS ENVIRONMENTAL SERVICES, INC., et al.

No. 18315.

Supreme Court of Appeals of West Virginia.

Aug. 2, 1989.

Syllabus by the Court

1. Rule 609 of the West Virginia Rules of Evidence relating to impeaching the credibility of a witness by a criminal conviction is patterned after Rule 609 of the Federal Rules of Evidence. It differs from the federal rule in that under our Rule 609(a)(1) impeaching a criminal defendant is limited to specified convictions. Rule 609(a)(2) controls the impeachment of all other witnesses in both civil and criminal cases.

2. Rule 609(a)(2) of the West Virginia Rules of Evidence divides the criminal convictions which can be used to impeach a witness other than a criminal defendant into two categories: (A) crimes "punishable by imprisonment in excess of one year," and (B) crimes "involving dishonesty or false statements regardless of the punishment."

3. Before evidence of a conviction under Rule 609(a)(2)(A) of the West Virginia Rules of Evidence may be admitted, a balancing test is required to determine whether "the probative value of admitting this evidence on the issue of credibility outweighs its prejudicial effect to the parties and embarrassment to the witness[.]" For the specific crimes contained in Rule 609(a)(2)(B), commonly called crimen falsi, there is no balancing test except as provided in Rule 609(b).

4. Rule 609(b) of the West Virginia Rules of Evidence imposes a balancing test before the admission of any criminal conviction which is more than ten years old to determine whether "the probative value of the conviction supported by specific facts and circumstances substantially outweighs its prejudicial effect." It also requires written notice to be given to the opposite party of the intent to use evidence of a prior conviction.

5. Impeachment of a witness through a criminal conviction of the corporation by whom he is employed is permissible subject to certain limitations. The witness must have held a managerial position at the time the crime occurred such that it may be fairly inferred that he shared responsibility for the criminal act, or have actually participated in the criminal act. The existence of either condition should be determined at an in camera hearing. Additionally, the requirements of Rule 609 of the West Virginia Rules of Evidence must be met. Finally, the jury should be instructed that evidence of the criminal act is only for the purpose of impeaching the witness's credibility.

Joseph McFarland, Patrick McFarland, Redmond, McFarland & Hague, Parkersburg, for CGM.

John S. Bailey, Jr., J. Michael Weber, Davis, Bailey, Pfalzgraf & Hall, Parkersburg, for Contractors Environmental Services.

MILLER, Justice:

This case involves the novel issue of whether a corporate officer may be cross-examined about the prior criminal conviction of his corporation. The defendant, Contractors Environmental Services, Inc. (CESI), appeals from a final order of the Circuit Court of Wood County entered on September 28, 1987, which granted a new trial to the plaintiff, CGM Contractors, Inc. (CGM). On appeal, CESI asserts that it was not reversible error to question the vice president of CGM about a prior felony conviction of that corporation; consequently, the trial court should not have granted CGM's motion for a new trial.

I.

CESI and CGM specialize in heavy construction. In 1977, the two companies entered into a barter agreement or trade-out system. In essence, the agreement provided that CESI and CGM would use each other's construction equipment without charge. Periodically, representatives from the two companies would meet, ascertain the fair rental value of the equipment, and balance the respective accounts. The last such meeting between the companies occurred on March 21, 1985. According to CGM, the companies balanced their accounts and agreed that there would be immediate rental charges on any future trades. CESI contends that the parties failed to reach an agreement during the March 21, 1985 meeting and decided to continue negotiations at a later date. Thereafter, the parties continued to use each other's construction equipment.

In September, 1985, CGM filed suit against CESI in the Circuit Court of Wood County. CGM alleged breach of contract and sought approximately $43,000 for monies owing for equipment rental. CESI's counterclaim contended that CGM was in arrears under the barter agreement.

A trial was held in June, 1987. Initially, an in camera hearing was held to determine whether CESI could impeach CGM's office manager, Alvin Smith. CESI wanted to ask Alvin Smith whether CGM had been convicted of a felony. CESI established that CGM had pled guilty to the crime of mail fraud in violation of 18 U.S.C. § 1341 (1949) and 18 U.S.C. § 1342 (1952). Both of these sections provide for punishment in excess of one year. CGM's guilty plea was entered on November 14, 1983, or approximately four years prior to this trial. The trial court refused to allow CESI to question Alvin Smith on this issue because he was not an officer of CGM. However, the trial court ruled that the prior conviction could be used for impeachment if established by documentary evidence or through the testimony of a corporate officer of CGM.

After the in camera hearing, the vice president of CGM, Robert Smith, was called as a witness. During cross-examination, CESI's attorney asked: "Mr. Smith, was CGM convicted of a felony incident to the Pond Run project?" Initially, Robert Smith responded: "I really don't know the answer to that." Following a brief recess, the question was reread into the record, whereupon Robert Smith answered: "I didn't know what you meant by 'Felony,' and yes, we were, the details I do not have." Immediately thereafter, the trial court gave a cautionary instruction, which advised the jury that this evidence was only admissible as affecting credibility. The jury's verdict found that neither party should recover from the other.

CGM filed a motion for a new trial asserting that the trial court committed reversible error by allowing CESI to question Robert Smith about CGM's prior mail fraud conviction. The trial court agreed, set aside the jury verdict, and granted CGM a new trial.

II.

As a preliminary matter, we discuss when a witness can be impeached by a criminal conviction, which is found in Rule 609 of the West Virginia Rules of Evidence. Rule 609(a)(2) relates to all witnesses except the criminal defendant, and it provides:

"All Witnesses Other than Criminal Defendants.--For the purpose of attacking the credibility of any witness, other than a witness accused in a criminal case, evidence that he has been convicted of a crime shall be admitted if elicited from him during cross-examination or established by public record but only if

"(A) the crime was punishable by imprisonment in excess of one year under the law under which he was convicted and the court determines that the probative value of admitting this evidence on the issue of credibility outweighs its prejudicial effect to the parties and embarrassment to the witness or

"(B) the crime involved dishonesty or false statement, regardless of the punishment."

CGM does not dispute that its previous mail fraud conviction is a crime involving "dishonesty or false statement" and is, therefore, within Rule 609(a)(2)(B). This category of crimes is often called crimen falsi. ¹ See, e.g., United States v. Toney, 615 F.2d 277 (5th Cir.), cert. denied, 449 U.S. 985, 101 S.Ct. 403, 66 L.Ed.2d 248 (1980); United States v. Kuecker, 740 F.2d 496 (7th Cir.1984); United States v. Brashier, 548 F.2d 1315 (9th Cir.1976), cert. denied, 429 U.S. 1111, 97 S.Ct. 1149, 51 L.Ed.2d 565 (1977); G.M. Mosley Contractors, Inc. v. Phillips, 487 So.2d 876 (Ala.1986). See generally F. Cleckley, Handbook on Evidence for West Virginia Lawyers § 4.2(E) (2d ed. 1986). CGM does, however, argue that the court should have applied a balancing test to determine if the probative value of the impeachment of credibility through the prior criminal act is outweighed by its prejudicial effect.

Our Rule 609 is patterned after Rule 609 of the Federal Rules of Evidence, but it differs from the federal rule in that under our Rule 609(a)(1) impeaching a criminal defendant is limited to specified convictions. ² Rule 609(a)(2) controls the impeachment of all other witnesses in both civil and criminal cases. It divides the criminal convictions which can be used to impeach a witness other than a criminal defendant into two categories: (A) crimes "punishable by imprisonment in excess of one year," and (B) crimes "involving dishonesty or false statements, regardless of the punishment."

³

Our language in Rule 609(a)(2)(A) and (B) is similar to the federal rule. Before evidence of a conviction may be admitted under Rule 609(a)(2)(A), a balancing test is required to determine whether "the probative value of admitting this evidence on the issue of credibility outweighs its prejudicial effect to the parties and embarrassment to the witness[.]" For the specific crimes contained in Rule 609(a)(2)(B), commonly called crimen falsi, there is no balancing test except as provided in Rule 609(b).

Rule 609(b) imposes a balancing test before the admission of any criminal conviction which is more than ten years old to determine whether "the probative value of the conviction supported by specific facts and circumstances substantially outweighs its prejudicial effect." It also requires written notice to be given to the opposite party of the intent to use evidence of a prior conviction. ⁴

Thus, Rule 609, as applied to the facts of this case, would not require the trial court to apply a balancing test because the conviction was for a crimen falsi and was less than ten years old. Crimes under Rule 609(a)(2)(B) do not require an initial balancing test, and the general balancing test under Rule 609(b) is not...