U.S. v. Cain, s. 96-4143

• Decision Date: 26 January 1998
• Docket Number: Nos. 96-4143,96-4144,s. 96-4143
• Parties: UNITED STATES of America, Appellee, v. Errol Douglas CAIN, Appellant. UNITED STATES of America, Appellee, v. Paul Stephen CAIN, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1345

134 F.3d 1345

UNITED STATES of America, Appellee, v. Errol Douglas CAIN, Appellant.

UNITED STATES of America, Appellee, v. Paul Stephen CAIN, Appellant.

Nos. 96-4143, 96-4144.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 10, 1997.

Decided Jan. 26, 1998.

John R. Osgood, Lee's Summit, MO, argued, for appellant Errol Cain.

William E. Shull, Liberty, MO, argued, for appellant Paul Cain.

Linda L. Parker, Asst. U.S. Atty., Kansas City, MO, for appellee United States.

Before LOKEN, BRIGHT, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

MORRIS SHEPPARD ARNOLD, Circuit Judge.

Errol Cain and Paul Cain, who are brothers, both pleaded guilty in late 1995 to one count of conspiracy to commit mail fraud and one count of mail fraud. The conspiracy charge related to a scheme to induce several people to invest in the company that employed the defendants by knowingly misrepresenting to those people the return on the investment and the safety of the investment. The mail fraud count related to a letter sent to obtain the proceeds of an insurance policy owned by one investor. Errol Cain and Paul Cain were vice-presidents of the company. James Cain, a third brother, was the president of the company and was convicted by a jury of seven counts connected with the same scheme. See United States v. Cain, 128 F.3d 1249 (8th Cir.1997).

The district court sentenced Errol Cain to 41 months in prison and Paul Cain to 55 months in prison. Both defendants assert that the district court erred when it refused to adopt certain statements contained in their plea agreements with the government and, upon doing so, also refused to allow the defendants to withdraw their guilty pleas. In addition, both defendants challenge the district court's factual findings, for sentencing purposes, on the amount of loss and on whether one investor was an unusually vulnerable victim. Individually, each defendant also disputes various other rulings of the district court. We affirm Errol Cain's conviction (Paul Cain did not appeal his conviction), vacate both sentences, and remand the cases for limited further proceedings consistent with this opinion.

I.

In separate plea agreements, each defendant and the government stated that "the parties are in agreement" that the "amount of the total loss ... readily provable" was "approximately $298,851.61." Each defendant and the government further stated that the relevant defendant "admits ... as the factual basis for the plea" that he entered the conspiracy in September, 1993.

In determining the sentence for each defendant, the district court disagreed with the amount of loss specified in the plea agreements and found, instead, that the amount of loss for sentencing purposes (and hence for restitution as well), see U.S.S.G. § 2F1.1(b)(1), was $524,296.61. The effect of that finding was to add ten levels to each defendant's base offense level, see U.S.S.G. § 2F1.1(b)(1)(K), rather than the eight levels associated with an amount of loss between $200,000 and $350,000, see U.S.S.G. § 2F1.1(b)(1)(I).

With respect to Paul Cain, the district court also disagreed with the specified date of Paul Cain's entry into the conspiracy and found, instead, that he entered the conspiracy in mid-August, 1993. Because criminal history points are date-sensitive, see U.S.S.G. § 4A1.2(e)(1), the effect of that finding was to add two more prior convictions to Paul Cain's relevant criminal history. That addition carried with it a supplemental four points for Paul Cain's criminal history computation, thus shifting his criminal history assessment from level III (the level cited in his plea agreement that the "parties believe[d]" was applicable) to level V. See U.S.S.G. § 5A.

When it became apparent during the sentencing hearings that the district court disagreed with the statements in the plea agreements on the amount of loss and on Paul Cain's date of entry into the conspiracy, each defendant moved to withdraw his guilty plea. The district court denied those motions. On appeal, both defendants contend, first, that the district court was obligated to adopt the statements in the plea agreements with respect to the amount of loss and to Paul Cain's date of entry into the conspiracy and, second, that the district court should have allowed the defendants to withdraw their guilty pleas when it did not adopt those statements.

The judge who accepted the defendants' guilty pleas (in a joint hearing) was a different judge from the one who sentenced the defendants. As the basis for their contention that the judge who sentenced them was obligated to adopt the statements described above from the plea agreements, the defendants point to certain remarks by the judge who accepted their guilty pleas--specifically, that he "would see that the entire [plea] agreement is carried out faithfully ... I'll see to it, it's carried out," and that he would "not only accept the plea agreement, but ... have it enforced." The defendants argue, essentially, that because of those remarks by the judge who accepted their guilty pleas, it would be inequitable to uphold the decision, made by the judge who sentenced them, to disregard the relevant statements in the plea agreements in determining the appropriate sentences.

The defendants have wisely been careful not to assert that the statements in question from the plea agreements are binding, as a matter of law, on the district court. See Fed.R.Crim.P. 11(e)(1), Fed.R.Crim.P. 11(e)(2); see also U.S.S.G. § 6B1.4(d) (policy statement) (stipulations of fact in plea agreements not binding for purposes of sentencing). The defendants contend, instead, that after the remarks by the judge who accepted their guilty pleas, they were "led ... to believe" and "were left with the unequivoca[l] belief" that the relevant statements in the plea agreements would be adopted for sentencing purposes; they argue, accordingly, that as a matter of "[p]ublic policy and the fundamental purposes of plea agreements," it would be unfair to allow the judge who sentenced them to disregard what they consider to be the promissory nature of the remarks by the judge who accepted their guilty pleas.

We have read the transcript of the joint hearing in which the district court accepted the defendants' guilty pleas. The judge addressed each defendant separately, but both defendants were present for the entire hearing. Each defendant stated during the joint hearing that he had read his plea agreement, understood its contents, and had talked with his lawyer about it.

In addition to the statements in the plea agreements with respect to the amount of loss and to Paul Cain's date of entry into the conspiracy, those agreements contained statements that the defendant "understands that the [federal sentencing guidelines] will apply to the sentence," that the plea agreement "binds only the parties ... [and] not ... the Court ... with respect to the appropriate Guideline levels," and that the defendant "understands that if the Court accepts this plea agreement but imposes a sentence which he does not like or agree with, he shall not be permitted to withdraw his plea." During the joint hearing, moreover, the government specifically drew attention to the provisions in the plea agreements that "the final decision about [the] guidelines is the Judge's, and that ... what we had anticipated may be the case, but is not binding on the ... Court ... he's the one that makes that decision," and that "if the Court accepts this plea agreement, but imposes a sentence which you don't like, or you don't agree with ... you will not be permitted to withdraw your plea."

In light of each defendant's acknowledgment that he had read and understood his plea agreement, and in light of the government's specific attention during the joint hearing to the provisions of the plea agreements relating to the power of the district court to determine the appropriate sentences regardless of the expectations of the relevant defendant and the government, we do not believe that any reasonable person could have construed, or relied on, the remarks of the judge who accepted the defendants' guilty pleas as a promise that the statements in the plea agreements with respect to the amount of loss and to Paul Cain's date of entry into the conspiracy would be adopted for sentencing purposes. We therefore hold that even assuming that such an estoppel principle is available to the defendants, it is not inequitable, in the circumstances of the defendants' cases, to uphold the decision, made by the judge who sentenced the defendants, to disregard the statements in question from the plea agreements in determining the appropriate sentences. Cf. United States v. Harris, 70 F.3d 1001, 1004 (8th Cir.1995) (court may make its own calculations of offense level and criminal history rather than adopting the calculations in a plea agreement).

At oral argument, the government contended that the judge who accepted the defendants' guilty pleas might have thought that the defendants had consented to give assistance to the government. That contention is not made in the government's brief on appeal. Since we hold that it is not inequitable to uphold, in any event, the district court's decision to disregard the statements in question from the plea agreements, we need not consider the government's contention from oral argument.

II.

The defendants further assert, however, that once the district court decided not to adopt the statements in the plea agreements with respect to the amount of loss and to Paul Cain's date of entry into the conspiracy, the district court should have allowed the defendants to withdraw their guilty pleas. The basis for that assertion seems to be the defendants' contention that the government broke the promises that it made to the defendants in the plea agreements by "refus[ing] to defend" the statements in question during the sentencing hearings.

In each plea agreement, the...