Com. v. Cola

• Decision Date: 29 November 1984
• Citation: 18 Mass.App.Ct. 598,468 N.E.2d 1094
• Parties: COMMONWEALTH v. Neil R. COLA.
• Court: Appeals Court of Massachusetts

Page 1094

468 N.E.2d 1094

18 Mass.App.Ct. 598

COMMONWEALTH v. Neil R. COLA.

Appeals Court of Massachusetts Suffolk.

Argued May 21, 1984.

Decided Sept. 28, 1984.

Further Appellate Review Denied Nov. 29, 1984.

Thomas D. Edwards, Boston (Stephen M. Perry, Boston, with him), for defendant.

Frances L. Robinson, Asst. Atty. Gen., for the Commonwealth.

Before ARMSTRONG, KASS and WARNER, JJ.

KASS, Justice.

Neil Cola was convicted by a jury on separate indictments charging two violations of G.L. c. 268A, the conflict of interest law.

One indictment, founded on G.L. c. 268A, § 4(c ), as amended by st.1978, c. 210, §§ 4 and 5, accused Cola of acting, while a State employee, as agent for someone other than the Commonwealth in connection with a particular matter in which the Commonwealth had a substantial interest. We shall refer to that as the "agency indictment." ¹ A second indictment, founded on G.L. c. 268A, § 6(a ), charged the defendant with participating, while a state employee, in a particular matter in which, to his knowledge, he and his immediate family had a financial interest. This is the "financial interest" indictment. ²

For the agency indictment conviction, a judge of a Superior Court sentenced Cola to one year's imprisonment in the House of Correction. As to the financial interest indictment, the defendant was fined $3,000. On appeal, Cola challenges the sufficiency of the government's evidence and claims error in denial of his motions for a required finding of not guilty as to each indictment. He also claims errors in the judge's instructions to the jury.

From the evidence at the close of the prosecution's case, ³ the jury might have found the following:

Cola, a lawyer in the compliance bureau of the Massachusetts Department of Revenue, first met Michael Rapp in 1976, when Rapp saw Cola in his official capacity about past due meals taxes owed to the Commonwealth by one of several restaurants which Rapp owned. ⁴ Cola and his wife, Marian, became friendly with Rapp and his close friend, Janet Swift. From 1978 through 1981, about three to four times a week, Rapp treated Cola to dinner or drinks at another restaurant he had come to own, the Sea and Surf, in Framingham. During this period the Sea and Surf was accruing indebtedness to the Commonwealth at a rate of approximately $6,000 to $9,000 per month on account of meals and withholding taxes. ⁵ From December, 1979, to September, 1980, the period of the indictments, Cola was the tax official responsible for the collection of these taxes and Rapp, as he put it, "dealt with Mr. Cola strictly. I saw other people, but I dealt with Mr. Cola." On several occasions Cola filled out Rapp's meals tax returns and advised him how to delay paying his taxes. When Cola sensed pressure from his office, he and Rapp would agree on a relatively small payment, often about $2,000, which served to defer more aggressive tax collection measures.

State taxes were not the only delinquency into which Sea and Surf fell. Framingham Food Services, Inc. (Food Services), which owned the real estate in which Sea and Surf operated (the restaurant operating company was Framingham S and S Corporation), ⁶ fell behind in its real estate taxes. That circumstance precipitated a crisis in December, 1979. The town of Framingham said it would not renew Sea and Surf's alcoholic beverages license unless the taxes were brought current and threatened to remove the license at the stroke of midnight on December 31st, an act calculated to cast a pall over the New Year's revels of seven to eight hundred patrons expected by Rapp at that climactic hour.

To stave off such a calamity, Rapp plunged Sea and Surf into a reorganization under c. 11 of the Bankruptcy Code, 11 U.S.C. § 1101 et seq. (1976). That maneuver produced the side effect, unpleasant for Rapp, of the installation of a trustee to run the restaurant under the supervision of the Bankruptcy Court. The trustee controlled the cash and was paying expenses such as taxes. Rapp viewed the trustee as "a hindrance on me operating."

Dissatisfied with his loss of control over the restaurant's cash flow, Rapp cast about for means to alter the situation. He spoke several times about his problem to Cola, who represented the interests of the Commonwealth in Sea and Surf's reorganization proceedings. What Rapp needed was $30,000 so that he might deposit that sum with the Bankruptcy Court to cover the claims of unsecured creditors and be in a position to move to have the trustee discharged. Cola agreed to lend Framingham S and S Corporation (S & S) the required $30,000, the loan to be secured by a second mortgage on the real estate which Sea and Surf occupied. ⁷

Apparently Cola thought it prudent not to receive the mortgage directly. He asked one Volpe, a fellow employee at the Department of Revenue, if a trust of which Volpe was trustee, the Utopia Realty Trust, would hold the mortgage. When Volpe inquired about the identity of the corporation giving the mortgage, Cola told him the principal was Michael Rapp.

On January 8, 1980, in a hallway outside of the Bankruptcy Court, Cola gave Rapp's lawyer a check for $30,000 in exchange for the mortgage, executed by Swift, from Food Services to Utopia. Rapp's lawyer presented the $30,000 check to the Bankruptcy Court and sought to have the trustee removed. A representative of the United States Internal Revenue Service and the trustee in the c. 11 reorganization opposed the removal of the trustee. The trustee testified that Cola also was present, and that, in response to an inquiry by the Bankruptcy Court judge, Cola stated that the Commonwealth did not oppose the removal of the trustee. The court granted Rapp's motion to remove the trustee and Rapp's corporation became a debtor in possession. Rapp repaid the $30,000 to Cola in June of 1980.

Later that year, in September, 1980, Rapp again needed cash. He arranged to receive a check for $20,000 from one Garabedian in exchange for $10,000 and some stock. The ill-conceived idea was that should Rapp fail to pay Garabedian back the remaining $10,000, Garabedian could claim a loss on the stock for which he had purportedly paid $20,000, and come out even. For the $10,000 which he transiently required, Rapp turned to Cola. The latter did not have $10,000 but offered to approach Volpe, whom Rapp had never met, for the money. Negotiations ensued, which culminated in Volpe's agreeing to lend Rapp the $10,000 in exchange for a $1,000 profit. On September 10, 1980, Cola and Volpe took the $10,000 in cash to the Sea and Surf, where they exchanged it with Rapp for a $20,000 check made out to Cola. Volpe accompanied Cola to a bank, where the latter cashed the check and gave Volpe a check for $11,000. Rapp agreed that a check for $2,000 should be drawn to the Commonwealth on account of taxes in response to pressure upon Cola from his department. In addition, Cola caused a bank check for $3,500 to be written to Boston Edison, to which Rapp also owed money. Cola delivered the cash balance to Rapp at the Sea and Surf.

During the period from December, 1979, through April, 1981 (on the latter date S & S moved to convert the c. 11 reorganization to a c. 7 bankruptcy and the restaurant was closed), Cola continued to tolerate payment of taxes by Rapp at a meager rate. Although Rapp estimated that he had made approximately twenty payments to Cola during this timespan, the records of the Department of Revenue reflected only seven such payments by Rapp.

We turn to the errors of law raised on appeal in inverse order of difficulty.

1. The jury instructions. Although Cola's appellate counsel condemns the trial judge's jury instructions as suffused with "pervasive" and "fundamental" error, the flaws were not as obvious at the conclusion of the charge as when appellate counsel performed their autopsy. When invited to comment on the charge, the only subject trial counsel pressed was an amplified instruction to the effect that the burden was on the government to establish that Cola and Rapp in dealing with Sea and Surf had torn the corporate veils shielding S & S, Food Services, and Rapp from one another. Indeed, the judge asked defense counsel, "If I give them 11 [the number of the requested instruction], does that make you happy?" He then gave the desired additional instruction.

As matters developed, it was not the last opportunity counsel had to consider the charge. Two hours after the jury had retired to deliberate, the jury sent to the judge the following remarkable question: "If, now that we have heard all the testimony and the charge to the jury, are we free to decide guilt or innocence on any basis whatsoever (except, of course, for being paid off for a vote)?" The judge told the jurors they were confined to finding facts on the basis of what had developed before them in the courtroom and to apply the law to the facts they found. Counsel were invited to offer additions and suggested none.

In the circumstances there is no occasion for us to consider the claimed errors in the jury instructions. Mass.R.Crim.P. 24(b), 378 Mass. 895 (1979), provides: "No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, specifying the matter to which he objects and the grounds of his objection." Commonwealth v. Pope, 15 Mass.App. 505, 511-512, 446 N.E.2d 741 (1983). As to the charge, the residual question, therefore, is whether, viewed as a whole, it created a substantial risk of a miscarriage of justice. Commonwealth v. Freeman, 352 Mass. 556, 564, 227 N.E.2d 3 (1967). Commonwealth v. Howell, 386 Mass. 738, 739, 437 N.E.2d 1067 (1982). We perceive no such risk. The judge paraphrased the pertinent statutes which defined the crime with reasonable accuracy. Nuances and definitions of terminology could unquestionably have been improved upon; the distinction between the agency indictment and...