U.S. v. Clark, 79-2335

• Decision Date: 01 June 1981
• Docket Number: No. 79-2335,79-2335
• Citation: 649 F.2d 534
• Parties: 8 Fed. R. Evid. Serv. 684 UNITED STATES of America, Plaintiff-Appellee, v. Charles C. CLARK and Jay G. Denney, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 534

649 F.2d 534

8 Fed. R. Evid. Serv. 684

UNITED STATES of America, Plaintiff-Appellee, v. Charles C. CLARK and Jay G. Denney, Defendants-Appellants.

No. 79-2335.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 6, 1980.

Decided June 1, 1981.

John D. Bodine, Mishawake, Ind., for defendants-appellants.

Donald P. Moroz, Asst. U.S. Atty., South Bend, Ind., for plaintiff-appellee.

Before SWYGERT, Circuit Judge, WISDOM, Senior Circuit Judge, ^* and PELL, Circuit Judge.

SWYGERT, Circuit Judge.

Defendants-appellants were convicted of conspiracy to defraud by use of the United States mails in violation of 18 U.S.C. § 371 and mail fraud in violation of 18 U.S.C. § 1341. On appeal, defendants raise the following issues for review: (1) was the indictment excessively vague as to the illegality charged; (2) was evidence of prices charged improperly admitted prior to proof of a conspiracy; (3) was there proof of a single conspiracy including both the home repair business dealings and the stock transaction; (4) was the mailing of the dividend check made for the purposes of executing the fraudulent scheme; and (5) was it error to admit the dividend checks, restrict questioning about a complaint in a civil suit, admit testimony of an admission made by one co- defendant, and deny the defendants' motion for a judgment of acquittal. For the reasons stated herein, we affirm.

I

Viewed in the light most favorable to the Government, Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942); United States v. Aviles, 623 F.2d 1192 (7th Cir. 1980), the facts in this case are as follows. Defendants-appellants Charles C. Clark and Jay G. Denney were engaged in the home repair business under the names Twin City Heating and Construction, Inc., Twin City Service Company, Twin City Heating and Home Improvement Company, and Twin City Heating and Air Conditioning Company. In June or July 1975, referring to themselves respectively as Chuck Wilson and Jay, Clark and Denney went to the home of Mary Snell, a seventy-six year old woman living alone in Logansport, Indiana and requested permission to inspect her furnace. They told Snell that her furnace was unsafe and should be replaced. Despite the fact that Snell had previously encountered no problems with her furnace which was purchased in 1971 or 1972, Snell agreed to have Clark and Denney install a new furnace, for which she was charged $4,360. Between July and September 1975, the defendants advised Snell of other defects they allegedly discovered in her home, and they performed the following work: installation of braces in the attic and basement at a cost of $1,500, installation of a flue-liner in the chimney for $2,591, and installation of a new roof for $5,798.

Steven Heinrich, a heating contractor and expert witness for the Government, testified that the cost of labor and material to install a furnace such as Snell's was $742.00 in 1978. Snell had paid $4,360 in 1975. ¹ According to Heinrich, the workmanship was "very shoddy." Edwin Medland, a building contractor, also testified as an expert for the Government. He stated that the braces should have cost $576.00, including profit, overhead, materials, and labor. A fair price for the flue-liner, he testified, was $1,270 and for the roof, $3,063. ² All of Medland's estimates were based on 1978 rates although Snell had paid for the work in 1975.

At the time of the installation of the new roof, the defendants represented that Snell would receive free labor on future repairs if she became a partner in their company. Snell testified that she was also promised $6,000-8,000 in quarterly dividends. Snell entered into an agreement with Clark and Denney whereby she agreed to purchase four hundred shares of stock for $34,000. She was told that defendants' company was doing very well. In partial payment for the stock, Snell gave the defendants a check for $26,760 on August 28, 1975. According to the stock agreement, the balance of $7,240 was to be paid by Snell out of dividends over an eighteen-month period. At Clark's request, however, in about January 1976 Snell paid most of the balance due by issuing a check for $6,277.

Snell's check for $26,760 was deposited on August 29, 1975 in the Twin City Heating and Air Conditioning account at the First National Bank of Marion, Indiana. On the same day, two checks for $13,000 each were drawn on that account. Both checks were made payable to J & M Construction Company, and endorsed "J. M. Construction" and "Bill Dunbar"; one check was also endorsed "Jay C. Clark" and the other "J. G Denney." Clark testified that J & M Construction was a small company owned by Denney and himself which he conceded had done no work for Snell. The checks, he stated, were made payable to J & M Construction as a vehicle to avoid withholding taxes on money paid to Clark and Denney from the Twin City account. The checks were deposited in the respective personal banking accounts of each of the defendants.

Between September 1975 and August 1977, Snell received $2,380 in dividend checks. After that she received no dividends at all. Snell testified that she received the dividend checks through the United States mails. Dated checks and one envelope were admitted into evidence. Subsequent to the stock agreement, defendants installed some insulation in Snell's house. She was charged $3,100. They also repaired a waste pipe and vent for which Snell paid $2,962. Defendants' business ceased operations in April 1978 due to an inability to meet expenses.

Defendants were indicted on one count of conspiracy to defraud by use of the United States mails in violation of 18 U.S.C. § 341, and seven substantive counts of mail fraud in violation of 18 U.S.C. § 1341. The jury returned a verdict of guilty on the conspiracy count and on one of the substantive mail fraud counts; defendants were found not guilty on the other six substantive counts. This appeal followed.

II

Defendants argue first that the trial judge erred in denying their motion to dismiss the indictment. Defendants contend that the indictment was excessively vague in that Count I did not apprise them of whether the illegalities charged related solely to the stock transaction or also included the home repair business dealings with Snell occurring prior to the stock transaction. Paragraph 4 of Count I, it is argued, is ambiguous, especially read together with overt acts 1-5 of the same count. The relevant paragraphs of Count I of the indictment are:

4. It was a part of the conspiracy that the defendants herein would and did falsely represent Twin City, Inc. and the service it would perform for Mary Snell.

5. It was a further part of the conspiracy that the defendants herein would and did fraudulently induce Mary Snell to buy shares of stock in Twin City, Inc.

7. It was a further part of the conspiracy that the defendants herein would and did mail dividend checks to Mary Snell for the purpose of concealing their scheme to defraud and to further obtain money from Mary Snell by means of false and fraudulent pretenses, representations and promises.

The first five overt acts of the thirteen ³ listed in Count I were:

1. In or about June or July, 1975, (defendants) spoke to Mary Snell in Logansport, Indiana,

2. In or about July, 1975, (defendants) obtained checks from Mary Snell.

3. In or about August, 1975, (defendants) obtained checks from Mary Snell.

4. In or about September, 1975 (defendants) obtained a check from Mary Snell.

5. In or about September, 1975, (defendants) each deposited or caused to be deposited money in their personal bank accounts.

In our view, the most logical reading of paragraph 4, given the circumstances of this case and the order in which the events are described in the indictment, is that the defendants are charged with falsely representing their business and the services it would perform prior to inducing Snell to buy stock. Any doubt as to that interpretation is resolved by the very portion of the indictment next challenged by defendants, namely, overt acts 1-3 which refer to business dealings in June and July and "checks" received in August. The proposal that Snell buy stock in defendants' company was not made until the installation of the new roof in late August or early September. The installation of the furnace, the braces, and the flue-liner were all paid for by Snell in July before the stock transaction was ever broached. Overt act 1 refers to a conversation occurring in June or July. Overt act 2 specifies checks obtained by the defendants in July and can only refer to the payments for the furnace, braces, and flue-liner. We are certain that overt acts 1 and 2 clarified for the defendants, assuming clarification was necessary, that their prior business dealings with Snell were alleged to comprise a part of the conspiracy. Moreover, overt act 3 refers to "checks" obtained by the defendants from Snell in or about August 1975. Only two checks fitting that description were introduced into evidence, one dated August 27, 1975 and the other dated August 28. The first August check was an initial payment on the new roof and the second, a payment of $26,760 on the stock.

In light of the above, we hold that Count I of the indictment was sufficiently detailed and unambiguous to apprise defendants of the range of activities alleged to be unlawful. United States v. Grizaffi, 471 F.2d 69 (1972), cert. denied, 411 U.S. 964, 93 S.Ct. 2141, 36 L.Ed.2d 684 (1973). In a conspiracy charge, the illegality charge need not be alleged as precisely as would be necessary in a substantive count. Id. at 73. Here the conspiracy count made sufficiently clear that the defendants were charged with an overall scheme to defraud including both the repair work on Snell's home and the subsequent stock transaction which involved the use of the United States mails.

III

Defendants next contend that the trial court erred in denying their motion in limine...