U.S. v. Flaherty

• Decision Date: 27 February 1996
• Docket Number: No. 95-1874,95-1874
• Citation: 76 F.3d 967
• Parties: 43 Fed. R. Evid. Serv. 1025 UNITED STATES, Appellant, v. John Charles FLAHERTY, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 967

76 F.3d 967

43 Fed. R. Evid. Serv. 1025

UNITED STATES, Appellant, v. John Charles FLAHERTY, Appellee.

No. 95-1874.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 16, 1995.

Decided Feb. 27, 1996.

Appeal from the United States District Court, for the District of Minnesota; Richard Kyle, U.S.D.C. Judge.

Paul C. Engh, Minneapolis, Minnesota, argued, for appellant.

Margaret Magill, Assistant U.S. Attorney, Minneapolis, Minnesota, argued, for appellee.

Before HANSEN, JOHN R. GIBSON, and MURPHY, Circuit Judges.

DIANA E. MURPHY, Circuit Judge.

John Charles Flaherty appeals his conviction on two counts of aiding and abetting arson for which he received concurrent 37 month sentences and three years supervised release. On appeal he argues that the district court ¹ erred by admitting a nontestifying codefendant's statements in violation of Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968), denying his motion for severance, and excluding evidence tending to show that a third party might have set the fires. He also claims that the evidence was insufficient to support the jury's verdict. We affirm.

Eddy's Hamburger and Malt Shop in Long Lake, which was owned and operated by Flaherty, was destroyed by two deliberately set fires that occurred approximately two weeks apart. On December 31, 1988, the fire department responded to put out a fire at the restaurant. An investigation found multiple points of origin, evidence of a liquid accelerant, and the remains of "trailers" consisting of commercial restroom roller towels that had been carefully draped from one fire location to the other. There was no evidence of forced entry, and all doors had been locked. The fire marshal investigator concluded that the fire had been set intentionally. On January 12, 1989 a second fire broke out at the restaurant. That investigation uncovered evidence that flammable liquids had been poured throughout the restaurant. There was no sign of forced entry. The fire marshal determined that this fire had also been deliberately set.

After an extensive investigation, Flaherty and Gregory Lee Melina were indicted by a grand jury and each charged with two counts of aiding and abetting arson, in violation of 18 U.S.C. §§ 844(i) and 2, and one count of conspiracy to commit arson, in violation of § 18 U.S.C. § 844(i). Both pleaded not guilty and went to trial before a jury. Flaherty was convicted for both fires, but Melina was convicted only of involvement in the second, and his appeal is proceeding separately.

The evidence at trial suggested that Flaherty was in severe financial trouble and set the fires to collect insurance proceeds, which he promised to share with Melina. Flaherty had incurred significant business and personal debts. The restaurant, which was his only source of income, was not generating a cash flow sufficient to cover expenses. He had not paid the taxes withheld from his employees' wages, and he owed the state significant amounts for unemployment compensation. In addition, his second business venture, the development of a teen nightclub across the street from Eddy's, had failed. In the weeks prior to the first fire, Flaherty learned that significant expenses would have to be paid before the building could open and that the city council had denied his permit applications.

The evidence also suggested that Flaherty had an opportunity to set or aid in setting the fires. He closed the restaurant early on the day of the first fire. He entertained guests at his home in the evening, but there was evidence to show that he left his guests for nearly two hours shortly before the fire was discovered. The night of the second fire Flaherty had an alibi; he was in bed recovering from hernia repair surgery that he had undergone that afternoon. The timing of the surgery was shown to be suspicious, however. Flaherty had told others that his doctor told him to have the operation on that day. The doctor testified at trial that he had told Flaherty the surgery could be scheduled at will and that Flaherty had called on January 10 to schedule the surgery for two days later, the day of the fire.

There was physical evidence to link Flaherty to the fire scene. Analysis of the toweling material used as a trailer in the first fire revealed that it had been soaked with a medium petroleum distillate similar to mineral spirits. Mineral spirits and burned scraps of similar toweling were found inside a locked area of the building that had been leased for the teen nightclub. Only Flaherty and Tom Gestach, his business partner in the nightclub, had keys. The police also recovered a half-roll of similar toweling from the nightclub. After the second fire, Flaherty decided to give up on the nightclub venture. When he and Gestach were removing contents from the building, they uncovered a pile of toweling that had been ripped into strips similar to the trailers. Flaherty attempted to conceal the existence of these toweling strips. He placed them in a bag and convinced Gestach to carry it to a dumpster at a nearby Burger King. He told Gestach that he was being framed.

The jury also heard evidence that suggested Flaherty may have attempted to divert suspicion away from himself by falsely reporting burglaries and mysterious threats over a period of time before the fires were set. He reported a string of burglaries at the restaurant, but police became suspicious because there was no sign of forced entry and no damage done. He also reported receiving a threatening phone call about his involvement in the teen night club, but police later found several scripts for the call on the nightclub premises and a diary entry by Flaherty identifying the call as a "phony harassment call."

There was also evidence linking Flaherty with Melina. The parties stipulated that the two knew each other, having met in the late 1970's or early 1980's. Liz Sorenson, Flaherty's friend and an employee at Eddy's, testified that Flaherty had used her telephone several times to contact someone named Greg and that she had received telephone calls for Flaherty from someone who identified himself as Greg. She also testified that during the time between the fires she had accompanied Flaherty when he was looking for someone matching Melina's description. In addition, a chalkboard found in Melina's basement had traces of an accurate drawing of Eddy's.

On appeal Flaherty argues that his Sixth Amendment right to confrontation was violated by the admission of certain out-of-court statements made by Melina, who did not testify and thus was not available for cross examination. Flaherty claims that the statements incriminated him in violation of Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968).

Three separate statements were involved. First, statements made by Melina at a deposition in a related civil case were admitted into evidence. They concerned his contacts with Flaherty. Hal Shillingstad, the attorney who took the deposition, testified that Melina had told him "I ain't seen Johnny since 1980, and I've seen him one time back maybe in '84. That was the last time I seen him," and "when I knew him, he drove a white, I think it was a Cadillac, white Cadillac or something...." (T. 918-20). Flaherty argues that this is incriminating if combined with the testimony of Flaherty's wife that they had owned a white Cadillac between September 1988 and March or April 1989. He argues that the two pieces of evidence show that he and Melina had seen each other near the time of the fire. Second, Heather Westergaard testified about threats made by Melina during a telephone conversation in April 1994. After she inquired about his connection to a man named John, Melina "told me if I didn't butt out of his business and stop asking questions, he was going to come and kick my fucking ass, and he called me a stupid bitch and a cunt. He was going to kick my ass and my boyfriend's ass." (T. 931). Finally, an agent from the Bureau of Alcohol, Tobacco and Firearms (ATF) testified that Melina told him that he had drawn a diagram found on the chalkboard, but denied that it was of Eddy's. Instead, Melina "said that the drawing on the board was of a bank in Mound, Minnesota" which "he and another individual had planned to rob." (T. 974).

Although Flaherty raised a Bruton objection to one of the statements at trial, he did not follow through to ensure the issue was preserved. When he objected to the admission of Melina's deposition statement, the government argued that that testimony contained only false exculpatory statements that did not directly implicate either party. The district court agreed and overruled the Bruton objection, but then asked the parties to confer about the proffered evidence. Flaherty agreed to the use of the statements now challenged, (Tr. 900-01), and did not object at the time they were introduced. (Tr. 918-20). When the evidence was brought in, the jury was instructed that "the testimony ... with respect to Mr. Melina's testimony is admissible only as to him or against him and is not to be used with respect to any charges against Mr. Flaherty." ² Flaherty did not raise any Bruton objection to the statements described in the testimony of Westergaard and the ATF agent, but he did object to the statements as hearsay.

At the close of all the evidence, the district court dismissed the conspiracy charge on the basis of insufficient evidence. At that time, Flaherty was given an opportunity to raise any Bruton concerns, but chose not to do so. His counsel stated that he did not believe any admitted evidence required a mistrial and that he believed an instruction directing the jury to consider Melina's statements only as to himself would be sufficient. ³ Although some evidence had been admitted pending proof of a conspiracy, that evidence involved statements made by Flaherty. The three statements now objected to on Bruton grounds...