U.S. v. Ballard
| Decision Date | 03 January 1986 |
| Docket Number | No. 85-4145,85-4145 |
| Parties | Bankr. L. Rep. P 70,944, 20 Fed. R. Evid. Serv. 109 UNITED STATES of America, Plaintiff-Appellee, v. Tony Davis BALLARD, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Dixon L. Pyles, Dixon L. Pyles, Jr., F. Kent Stribling, Jackson, Miss., for defendant-appellant.
George Phillips, U.S. Atty., Nicholas B. Phillips, Asst. U.S. Atty., Jackson, Miss., for plaintiff-appellee.
Appeal from the United States District Court for the Southern District of Mississippi.
Before GEE, RUBIN, and DAVIS, Circuit Judges.
The defendant was found guilty of making false statements in his petition for bankruptcy. He attacks his conviction on a number of grounds, including the admission in his criminal trial of his former lawyer's testimony concerning alleged privileged conversations between him and his erstwhile counsel. Confidential communications from a client to a lawyer for the purpose of obtaining legal advice and the lawyer's responses to those inquiries are privileged. If, however, the client seeks legal advice for the purpose of being assisted or guided in the commission of a crime or the perpetration of a fraud, the communication is not sheltered. We conclude that the client was engaged in a continuing fraudulent or criminal activity, sought the lawyer's advice for the purpose of furthering that wrongful activity, and utilized that advice to commit a crime. For these reasons, we hold that the lawyer's testimony was properly admitted. We reject, however, the government's contention that, because the client had sued the former lawyer for malpractice relating to services concerned with filing the bankruptcy petition, the client waived any privilege that might otherwise have applied.
Finding all the other arguments for reversal of his conviction to be without merit, we affirm.
Tony Ballard operated an auto parts business in Jackson, Mississippi. His lawyer and sometime business associate at the time was Ron Smith. In August 1979, Ballard deeded nine acres in Madison County, Mississippi, to Smith, who in turn deeded the property to Ballard's father-in-law. Though the facts are contested, it appears that Ballard's father-in-law gave Smith a check for $14,000. The check was cashed; Smith kept $4,000, an amount he said represented legal fees due him, and gave the remaining $10,000 to Mrs. Ballard, who obtained a safe deposit box and put the money in the box.
Ballard contends he entered into this transaction both to pay legal fees to Smith and "so a tax lien could be avoided on this land when bankruptcy was filed." The jury might reasonably have concluded from Smith's testimony that the purpose of the transaction was to conceal some of Ballard's assets from his creditors, and, indeed, Ballard's position asserts the purpose at least of hiding his assets from the tax collector.
Ballard contends that a month later, in September, he paid Smith a fee of $1000 to file a bankruptcy petition, but that Smith later refused to represent him. Ballard then retained another lawyer who, on July 8, 1980, filed a bankruptcy petition on Ballard's behalf in the Southern District of Mississippi. Approximately a year later, Ballard's debts were discharged in bankruptcy and the bankruptcy estate was closed.
In 1982, Ballard filed a civil suit against Smith and one of Ballard's former business associates, claiming, inter alia, that Smith was guilty of legal malpractice because he had failed to file the bankruptcy proceedings for which he had allegedly been retained. Ballard's deposition was taken in the civil suit, but the case had not yet been tried when, in 1984, Ballard was indicted for making false statements in his bankruptcy petition in violation of 18 U.S.C Sec. 152. In his bankruptcy petition, Ballard had stated that he had made no transfer of real property within one year preceding the filing of the petition and that he did not have a safe deposit box. In fact, the evidence established that Ballard had transferred the nine-acre tract to Smith, his attorney, and had access to his wife's safe deposit box obtained in his wife's name.
Ballard asserts that, in the criminal trial, the district court erred (1) in permitting the deposition taken from him in his civil suit against Smith to be introduced in evidence, in violation of his privilege against self-incrimination; (2) in permitting Smith to testify about Ballard's communications with Smith and Smith's responses, in violation of the attorney-client privilege; (3) in failing to dismiss the indictment because of the delay in prosecution; (4) in refusing to allow Ballard to introduce evidence of prosecutorial misconduct, in violation of his due process rights; and (5) in refusing to give jury instructions requested by Ballard. We discuss Ballard's contentions in the order he chose to present them, which presumably reflects their relative strength in his eyes.
Ballard's testimony in his civil deposition was admitted as an admission by a party-opponent pursuant to Federal Rule of Evidence 801(d)(2). 1 There is not the slightest suggestion in the record that this testimony was involuntary or that Ballard refused to testify on the basis of self-incrimination. The trial court did not abuse its discretion in admitting the civil deposition. 2 Extra-judicial admissions, voluntarily made, are admissible in evidence. 3 Their admissibility is not altered by their utterance under oath during the course of the civil proceedings. 4
The argument that the defendants in the civil suit fraudulently induced Ballard to make these statements lacks any support in the record. Furthermore, any "impropriety in the taking of [a] deposition[ ] will authorize [its] suppression under the fifth amendment if and only if such conduct may be imputed to the government." 5 The record here lacks any evidence to support a contention that the government was involved in any way in the taking of Ballard's civil deposition. Ballard instituted the civil action voluntarily. Although his deposition was sought by the defendants, his giving it was an essential step in prosecution of his civil suit. The charge that Smith and Smith's counsel in the civil case acted fraudulently and in a manner improper for officers of the court are, so far as basis in the record can be discerned, but constructs of counsel's imagination in preparing an appellate brief.
Further, Ballard's ignorance at the time of the taking of his deposition that he might later be charged with a crime is inconsequential. Neither due process nor any procedural rule requires the suppression of a voluntary admission that later proves to be a link in proof of criminality. 6
The district court admitted the testimony of Ballard's former lawyer, Ron Smith, on the basis that Ballard, by suing Smith for malpractice, waived any privilege shielding his communications with Smith. The government argued on appeal that, because Ballard's malpractice suit against Smith "arose from the same transactions" that comprised the basis of the criminal suit against Ballard, the waiver of the privilege should extend to the criminal trial. We do not agree. A lawyer may reveal otherwise privileged communications from his clients in order to recover a fee due him, or to defend himself against charges of improper conduct, without violating the ethical rules of confidentiality 7 or the attorney-client privilege. 8 The mere institution of suit against a lawyer, however, is not a waiver of the privilege for all subsequent proceedings, however unrelated.
The conversations between Ballard and Smith, however, were admissible for a different reason. Some time after Ballard's nine acres had been transferred to his father-in-law and the cash had been put in Mrs. Ballard's safe deposit box, Ballard came to Smith's office and asked Smith to file a bankruptcy petition. As Smith testified in the criminal trial, Smith had "explained to Ballard that if a petition was filed on his behalf, that there was a question about transferring of property within one year, and that this transfer from him to me, and then from me to his father-in-law, would have to be disclosed on that petition and chances were that it would relate back to--go back to the bankruptcy court as part of the assets of the estate."
Later, according to Smith's testimony, Ballard returned and told Smith that his creditors were pressing him. Smith told Ballard he would "have to disclose this property transfer if he filed within one year." Smith asked Ballard "to wait, told him to wait, and he said he would." Subsequently, Ballard retained another lawyer who asked Smith to deliver Ballard's files to him. Smith complied. Thereafter Ballard, represented by this second counsel, filed the bankruptcy petition in which the assets mentioned by Smith were not disclosed.
Privileges are recognized because law-makers and courts consider protecting confidential relationships more important to society than ferreting out what was said within the relationship. The privilege for communications between client and attorney ceases when the purpose of the privilege is abused, when the lawyer becomes either the accomplice or the unwitting tool in a continuing or planned wrongful act.
A half century ago, Justice Cardozo wrote: 9 The admissibility of the evidence does not turn on the lawyer's complicity in the wrongful transaction: "The attorney may be innocent, and still the guilty client must let the truth come out." 10 Once the party seeking disclosure makes a prima facie case that the attorney-client relationship was used to promote an intended criminal activity, the confidences within the relationship are no longer shielded. 11 These precepts have...
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