Com. v. Cerveny

• Decision Date: 26 August 1982
• Citation: 439 N.E.2d 754,387 Mass. 280
• Parties: COMMONWEALTH v. William J. CERVENY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 754

439 N.E.2d 754

387 Mass. 280

COMMONWEALTH v. William J. CERVENY.

Supreme Judicial Court of Massachusetts,

Hampden.

Argued May 7, 1982.

Decided Aug. 26, 1982.

Terry Nagel, Springfield, for defendant.

William T. Walsh, Jr., Asst. Dist. Atty., for the Commonwealth.

Before HENNESSEY, C. J., and WILKINS, LIACOS, ABRAMS, NOLAN, LYNCH and O'CONNOR, JJ.

HENNESSEY, Chief Justice.

The defendant, William J. Cerveny, appeals his convictions by a jury in the Superior Court in Hampden County on seven indictments of conspiracy to commit larceny. The indictments stem from Cerveny's operation of three nursing homes and a rest home in the Springfield-Westfield area. Prior to the conspiracy trial, Cerveny, several corporate defendants, and Howard Keeler, the alleged coconspirator, were tried together for the substantive offenses underlying the conspiracies. Cerveny was found guilty on multiple counts of perjury and attempted larceny; the corporate defendants were found guilty on indictments charging that they falsified information required to be filed with the Rate Setting Commission (commission); and Keeler was acquitted on four indictments charging attempted larceny. Cerveny appealed, and this court set aside the attempted larceny convictions on the ground that they were duplicitous with respect to the perjury convictions. Commonwealth v. Cerveny, 373 Mass. 345, 367 N.E.2d 802 (1977). During the pendency of that appeal, Cerveny was tried and convicted on the conspiracy counts that are at issue here. ¹ At that time conspiracy offenses were required to be tried separately from the substantive offenses. G.L. c. 278, § 2A, repealed by St. 1979, c. 344, § 43. See Mass.R.Crim.P. 9(e), 378 Mass. 859 (1979). Cerveny was fined $1,500 on each of the seven conspiracy convictions.

Cerveny now argues that the convictions are barred by the doctrine of collateral estoppel, on the ground that the alleged coconspirator Keeler was previously acquitted of related crimes. He also argues that certain material terminology in the regulations underlying the indictments is so vague as to require acquittal. He maintains further that he was entitled to required findings of not guilty as to all charges because the evidence was not sufficient to warrant guilty verdicts. Finally, he argues that the indictments, seven in number, are duplicitous and therefore all of the verdicts cannot stand. We disagree with all of Cerveny's arguments except the last. Some of the indictments are duplicitous and the verdicts must be reversed; there is no error as to the remaining indictments.

Most of the facts leading up to Cerveny's convictions are set forth in Commonwealth v. Cerveny, supra, and the details need not be repeated here. Cerveny, by means of a wholly owned holding company, owned and operated three nursing homes and a rest home, all providing care to a number of publicly assisted patients. The homes were compensated for this care by the Department of Public Welfare at per diem rates fixed by the commission. In fixing the rates, the commission relied on annual reports, called "RSC-1 forms," required to be submitted by each home. The rates varied according to the owner's equity interest in the home, and permitted the owner to recover a reasonable return on his investment.

Cerveny caused a number of fictitious payments to be made by the holding company to the homes. The "payments" were designed to inflate artificially the equity capital that was reflected in the RSC-1 forms, and thereby increase the per diem rates payable by the Department of Public Welfare. Some of the checks written to effectuate these transactions were signed by Cerveny. Others were written and signed by Cerveny's accountant, Howard Keeler. In addition to the transactions just described, Cerveny also caused certain mortgages on some of the homes to be increased. Although the borrowed funds were never used in connection with the operation of the homes, but were used to fund certain other enterprises, Cerveny nevertheless caused the interest payments on these loans to be listed in the RSC-1 forms as compensable operating expenses, contrary to the commission's regulations. ²

Howard Keeler, who was Cerveny's accountant and employee, prepared the RSC-1 forms each year. Keeler testified that Cerveny instructed him to enter the false information on the forms, contrary to Keeler's own recommendation. He stated that on three separate occasions, in 1971, 1972, and 1973, he discussed the matter with Cerveny, and was expressly told to enter the false information on the RSC-1 forms. He further stated that he knew the forms did not paint an accurate picture of the operations of the homes, and that he was acting contrary to his "code of ethics," but that nevertheless he "went along with it." Four witnesses, Douglas A. Madsen, Roger R. Laferriere, Shirley Petrucelli, and Mildred Keeler all testified that Keeler had expressed his misgivings about and opposition to the accounting practices. There was also testimony that during this time Keeler received substantial salary increases and the use of a car, and that after the first trial his salary was reduced and his use of the car terminated.

1. Cerveny's first contention is that his convictions cannot stand because the Commonwealth is barred by the doctrine of collateral estoppel from proving that Keeler was a coconspirator to the crimes. Cerveny alleges that at the first trial it was conclusively established that Keeler lacked the criminal intent necessary to be found guilty of the crimes. Since Keeler cannot now be convicted of conspiracy, it is argued, the conviction of the remaining alleged coconspirator must be vacated.

It will simplify matters if we assume for the purposes of this case that the question of Keeler's involvement in the conspiracy has been finally decided, and that for all practical purposes he stands acquitted of that crime. The question is then reduced to whether the prior determination of Keeler's innocence is binding on the Commonwealth in its subsequent prosecution of Cerveny.

The defendant relies primarily on Ashe v. Swenson, 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970). In Ashe, the United States Supreme Court held that principles of collateral estoppel are embodied in the Fifth Amendment guarantee against double jeopardy, and are therefore enforceable against the States through the Fourteenth Amendment. See Benton v. Maryland, 395 U.S. 784, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969). Ashe, however, involved the attempted relitigation of an issue previously decided in favor of the same defendant. It did not involve nonmutual collateral estoppel, where the determination of an issue decided favorably to one party is subsequently applied for the benefit of a different party. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979); Restatement (Second) of Judgments § 29 (1982). Ashe, founded as it was on double jeopardy principles, is therefore distinguishable from the instant case. If an issue has previously been decided favorably to defendant A, it can hardly be said that the subsequent relitigation of that issue in the trial of defendant B places B twice in jeopardy for the same offense.

In the recent case of Standefer v. United States, 447 U.S. 10, 100 S.Ct. 1999, 64 L.Ed.2d 689 (1980), the United States Supreme Court made it clear that the Federal law doctrine of nonmutual collateral estoppel does not apply to criminal cases. There the Court upheld the conviction of a defendant accused of aiding and abetting a government agent in accepting unlawful compensation, even though the agent had been acquitted earlier of the substantive crimes. Although the decision was based on Federal common law grounds, the Court stated, supra at 22 n.16, 100 S.Ct. at 2007 n.16: "Nothing in the Double Jeopardy Clause or the Due Process Clause forecloses putting petitioner on trial as an aider and abettor simply because another jury has determined that his principal was not guilty of the offenses charged. Cf. Ashe v. Swenson, [supra]." See also United States v. Espinosa-Cerpa, 630 F.2d 328, 330-333 (5th Cir. 1980).

Cerveny seeks to distinguish Standefer on the ground that in the instant case Cerveny was a party to the prior proceeding. The difference, however, is not material. We think it clear that under Ashe, the doctrine of collateral estoppel applies only where there exists mutuality of parties in the sense that the issue was previously decided in favor of the same party. It is unclear whether Cerveny also relies on Massachusetts common law in support of his collateral estoppel argument. Lest there be any doubt, however, we put any such claim to rest.

There is no doubt that one cannot commit a conspiracy alone. And it is also true that, if at a single trial for conspiracy all but one of the defendants are acquitted of the charge, a conviction of the remaining defendant must be set aside. Commonwealth v. Benesch, 290 Mass. 125, 135-137, 194 N.E. 905 (1935). See Commonwealth v. Slate, 11 Gray 60, 63 (1858). This court has never confronted the question whether, in the case of separate trials, the acquittal of a coconspirator precludes the subsequent conviction of the other. Some courts have refused to permit inconsistent verdicts. E.g., United States v. Bruno, 333 F.Supp. 570 (E.D.Pa.1971); Eyman v. Deutsch, 92 Ariz. 82, 373 P.2d 716 (1962); People v. Levy, 299 Ill.App. 453, 20 N.E.2d 171 (1939). We think the sounder view, however, is that verdicts rendered in separate conspiracy trials need not always be logically consistent. See United States v. Espinosa-Cerpa, supra; United States v. Musgrave, 483 F.2d 327 (5th Cir.), cert. denied, 414 U.S. 1023, 94 S.Ct. 447, 38 L.Ed.2d 315 (1973); People v. Superior Court, 44 Cal.App.3d 494, 118 Cal.Rptr. 702 (1975). See also Gardner v. State, 286 Md. 520, 408 A.2d 1317 (1979); Commonwealth v. Byrd, 490 Pa. 544, 417 A.2d 173 (1980). We also note that...