Patterson v. Com.

• Decision Date: 02 September 1986
• Docket Number: No. 0475-85,0475-85
• Citation: 348 S.E.2d 285,3 Va.App. 1
• Parties: Louis Jennings PATTERSON, Jr. v. COMMONWEALTH of Virginia. Record
• Court: Virginia Court of Appeals

Page 285

348 S.E.2d 285

3 Va.App. 1

Louis Jennings PATTERSON, Jr. v. COMMONWEALTH of Virginia.

Record No. 0475-85.

Court of Appeals of Virginia.

Sept. 2, 1986.

Stuart C. Sullivan, III (Edmunds Coleman, Franklin, Franklin, Denny & Heatwole, Costello, Dickinson, Johnston, Greenlee, Coleman & McLoughlin, on briefs), for appellant.

Margaret Poles Spencer, Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., on brief), for appellee.

Present: KOONTZ, C.J., and COLEMAN and MOON, JJ.

KOONTZ, Chief Judge.

Appellant, Louis Jennings Patterson, Jr., was convicted in a jury trial on seven counts of embezzling from his former employer, White's Truck Stop, Inc., during the period dated January 1, 1980 through June 30, 1983. On appeal, he challenges the refusal of the trial court to grant him access to certain corporate records, and he argues that the court erred in certain rulings regarding expert testimony. For the reasons stated below, we find error and reverse the convictions, remanding the case for a new trial if the Commonwealth be so advised.

White's Truck Stop, Inc., located off Interstate 81 in Rockbridge County, Virginia, provides services for commercial truck drivers. David A. White owns the business, and first hired Patterson in February 1972. Patterson rose to become president and chief financial officer of the company, a position through which he managed the company's financial affairs. After an accountant allegedly found irregularities in the books which led him to believe that Patterson had been removing funds from the corporation, Patterson was fired on February 1, 1983. The matter was then taken to the appropriate authorities and this prosecution followed.

Patterson defended on two grounds. First, he claimed that he had broad authority to approve all expenditure of funds. He contended that this authority derived from a 1978 arrangement in which he personally loaned the corporation $136,000. Second, he argued that the types of transactions which he had engaged in were a common and accepted practice among members of this closely held corporation. In order to attempt to prove the facts relevant to his defense, Patterson sought, prior to trial, certain corporate records pursuant to then existing Rules 3A:14 ¹ (hereinafter referred to as the Brady ² motion) and 3A:15 ³ (hereinafter referred to as the motion for a subpoena duces tecum). At issue were requests for the production of the corporate minute books and for other corporate records and documents relating to the financial transactions of others in the corporation. The court ruled that only the corporate records involving Patterson's transactions were relevant to the proceedings, and refused to order the production of documents relating to four other named employees of the company. In reference to the minute book, the court determined that it would examine the book in camera, and photocopy any relevant pages for distribution to Patterson.

At trial, Richard A. Nossen, an expert in the investigation, detection and analysis of financial crimes, testified that he had reviewed financial documents which had been introduced by the Commonwealth. Through his analysis of the documents, he concluded that some of the transactions were "irregular." For example, Nossen stated that the "same vendor" method appeared to have been used whereby an individual would retain for his personal use the services of tradesmen who also provided services to the company. Tradesmen would present invoices to the company seeking payment for those services. Nossen maintained that the invoices for the individual's personal work were mixed with invoices for company work, thus causing the company to pay for services rendered to the individual. Additionally, Nossen described a second irregular transaction, the "journal adjusting entry." White's Truck Stop maintained a fund from which its employees could borrow money for their personal use. Once the money was borrowed, an entry in that amount was placed in the records of that employee's "accounts receivable." Nossen testified that on various occasions Patterson borrowed money by this method. However, the books indicated that he was relieved of the obligation of repaying these sums due to adjustments made on various journal entries. Most noticeable, according to Nossen, were erasures on Patterson's "employee accounts receivable" record.

After explaining these two techniques, Nossen was asked whether he was able to form an opinion as to the "regularity" of the erasures on Patterson's "employee accounts receivable" records. Nossen stated that "the erasures that I found there would constitute a highly irregular action on the part of the person who made them." Later in his testimony, Nossen again stated that an entry was "highly irregular." When asked by the Commonwealth why this was so, Nossen replied: "Because it--it just doesn't conform to proper bookkeeping and accounting practices." Still later, Nossen again described a transaction as "highly irregular." Patterson objected, arguing that these characterizations went to the ultimate issue in the case and invaded the province of the jury. The court overruled the objections.

Nossen was also asked whether he was able to form an opinion as to the regularity of the transactions involving purchases from the same vendors. Nossen stated: "It is a common embezzlement technique." Patterson objected and moved for a mistrial. The court sustained the objection, struck the question and the response, denied the motion for a mistrial, and instructed the jury to disregard the statement. The court told the jurors that Nossen's testimony was offered only to assist them, and that they should form their own opinions as to Patterson's guilt or innocence.

Nossen also stated that his testimony and a summary chart used to assist him in that testimony were based upon:

a review of the documentary evidence that has been received here, a summary of the oral testimony that was furnished to me by Mr. Kaestner [a private prosecutor employed by White's Truck Stop, Inc. to assist the Commonwealth] and ...

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based upon my review of the books and records, and based upon my preparation of the trial schedule.

Patterson moved to strike all of Nossen's testimony, arguing that the testimony was based on out-of-court summaries of the testimony of other witnesses furnished to him by the private prosecutor. The trial court ruled that the testimony forming the basis of Nossen's opinion was in evidence, and overruled Patterson's objection.

The following issues are presented for our consideration:

1. Whether the trial court erred in refusing to permit Patterson to have access to certain corporate records of White's Truck Stop, Inc., thereby preventing Patterson from presenting evidence in support of his theory of the case;

2. Whether the testimony of the Commonwealth's expert witness was required to aid the jurors in their determination, and whether that testimony invaded their exclusive province by going to the ultimate issue in the case;

3. Whether the trial court erred by refusing to grant a mistrial when the Commonwealth's expert witness spoke to the ultimate issue in the case;

4. Whether the Commonwealth's expert witness used an improper basis in forming his opinion of Patterson's actions, and if so, whether that error requires reversal.

I.

Through a Brady motion and a motion for a subpoena duces tecum, Patterson sought access to certain corporate records of White's Truck Stop, Inc. Patterson attacks the trial court's ruling restricting his access to those portions of the corporate minute book which specifically refer to Patterson or to the general functions of the corporate officers. Additionally, he attacks the trial court's response to his motion for a subpoena duces tecum. ⁴ Patterson objects to the limitations contained in this order. Patterson also sought access to the minute book by means of the same motion for a subpoena duces tecum.

Cox v. Commonwealth, 227 Va. 324, 315 S.E.2d 228 (1984), established the framework for courts to analyze a motion for a subpoena duces tecum. Cox was convicted of embezzling funds from the City of Fairfax. Cox filed a pretrial motion for a subpoena duces tecum seeking production of certain bank records. When the banks failed to produce a large amount of the requested material, the trial court conducted a hearing and ruled that the bank records were not material, and denied a request for a continuance. The Supreme Court held that the trial court erred in finding that the bank records were not material. The Court stated:

Article 1, § 8, of the Constitution of Virginia provides that, in criminal prosecutions, the accused has the right "to call for evidence in his favor." This unqualified right includes "the right to prepare for trial which, in turn, includes the right to interview material witnesses and to ascertain the truth." Bobo v. Commonwealth, 187 Va. 774, 779, 48 S.E.2d 213, 215 (1948). See also Winston v. Commonwealth, 188 Va. 386, 49 S.E.2d 611 (1948). This right applies with equal force to the procurement of documentary evidence.

When a defendant seeks disclosure of evidence, the standard to be applied in determining its materiality is whether "a substantial basis for claiming materiality exists." United States v. Agurs, 427 U.S. 97, 106 [96 S.Ct. 2392, 2398, 49 L.Ed.2d 342] (1976). If materials in the hands of third parties "could be used at the trial," they are the proper subject of a subpoena duces tecum. Bowman Dairy Co. v. United States, 341 U.S. 214, 221 [71 S.Ct. 675, 679, 95 L.Ed. 879] (1951).

In the present case, the Commonwealth virtually conceded some of the bank records were "necessary and material to prove the Commonwealth's case," and the defendant produced witnesses, albeit at trial, who testified regarding the materiality of the records. Moreover, the Commonwealth's witnesses relied in part upon some of these very records.

Id. at 328, 315...