U.S. v. Gaydos

• Decision Date: 22 January 1997
• Docket Number: No. 95-3468,95-3468
• Citation: 108 F.3d 505
• Parties: UNITED STATES of America, Appellee, v. Olga GAYDOS, Appellant. . Submitted under Third Circuit LAR 34.1(a)
• Court: U.S. Court of Appeals — Third Circuit

Page 505

108 F.3d 505

UNITED STATES of America, Appellee, v. Olga GAYDOS, Appellant.

No. 95-3468.

United States Court of Appeals Third Circuit.

Submitted under Third Circuit LAR 34.1(a)

Jan. 22, 1997.

Decided March 14, 1997.

Bonnie R. Schlueter, Shaun E. Sweeney, Office of the U.S. Attorney, Pittsburgh, PA, for Appellee.

Karen S. Gerlach, Office of the Federal Public Defender, Pittsburgh, PA, for Appellant.

Before NYGAARD and LEWIS, Circuit Judges, and SCHWARZER, District Judge. ^*

OPINION OF THE COURT

NYGAARD, Circuit Judge:

Olga Gaydos appeals her conviction for malicious destruction of property by means of fire, contending that the evidence at trial did not meet the interstate commerce nexus required under 18 U.S.C. § 844(i). She also argues that the district court failed to make the required findings to support her sentence and restitution order; and, that the district court improperly refused to reach the merits of her untimely post-trial motions for judgment of acquittal and for a new trial. We conclude that the government failed to prove the jurisdictional element of 18 U.S.C. § 844(i), and will reverse her conviction on that count. We will also vacate the restitution order and remand the matter for the district court to make the required findings and, if indicated, enter a new order of restitution. In all other respects, we will affirm.

I.

Olga Gaydos owned a house located on Shadeland Avenue in Pittsburgh, Pennsylvania that she rented to William Minor, Jeannie McComb and their children. In December 1992, a fire of incendiary origin damaged its garage. Kenneth Evans testified that he saw David Minor (William Minor's brother) coming out of the garage at approximately the same time the garage was afire. There was also testimony that Gaydos offered two other tenants $15,000 each to burn down the house and that she had suggested starting a fire in the garage. Gaydos filed an insurance claim with her homeowner's insurance carrier for damage to the garage and contents allegedly lost in the fire.

In June 1993, Fidelity Savings Bank began foreclosure proceedings on the property. While the foreclosure proceedings were pending, Gaydos met with Jeannie McComb to discuss a lead contamination problem the Health Department had found at the Shadeland Avenue house. McComb testified that at this meeting Gaydos told her that she (Gaydos) intended to burn down the house. Gaydos and McComb then supposedly struck a deal whereby Gaydos would allow McComb, William Minor, and their children, to move to another house where they could live rent-free if they remained silent about the fire Gaydos was planning for the Shadeland Avenue house.

Soon after, Gaydos discussed the lead problem with William Minor. According to Minor's testimony, Gaydos told him that she did not want to put any money into the house to correct the lead problem. Gaydos also allegedly offered Minor $10,000 to burn down the house, which he refused. Minor, McComb and their children, did, however, leave the house and moved into another house owned by Gaydos. Approximately two weeks later, the Shadeland Avenue house burned to the ground in a fire determined to be of incendiary origin. Gaydos again submitted a claim to her homeowner's insurance carrier.

Gaydos was charged in a six count indictment alleging four counts of mail fraud in violation of 18 U.S.C. §§ 1341 and 1342 (Counts 1-4), one count of use of fire to commit a felony in violation of 18 U.S.C. §§ 844(h)(1) and (2) (Count 5), and one count of malicious destruction of property by means of fire in violation of 18 U.S.C. § 844(i) (Count 6). Her codefendant, David Minor, was charged in two of the mail fraud counts (Counts 1 and 2). Gaydos was found guilty on all counts and David Minor was acquitted of the two charges against him.

Gaydos was sentenced to 51 months in prison for mail fraud and malicious destruction of property by means of fire, and to 60 months for use of fire to commit a felony. The district court ordered the sentences to run consecutively for a total of 111 months, to be followed by supervised release for three years. The court also ordered restitution in the amount of $190,139.42.

II.

Gaydos challenges her conviction for malicious destruction of property by means of fire, contending that there was insufficient evidence for the jury to conclude that the government had satisfied the jurisdictional element of 18 U.S.C. § 844(i), which requires the government to prove that the property was used in an activity affecting interstate commerce. She contends that a vacant and uninhabitable building, with neither prospect nor intention of being returned to the stream of commerce, cannot satisfy the interstate commerce nexus required for a conviction under § 844(i).

Gaydos also argues that the district court committed two sentencing errors. First, she asserts that a vacant and uninhabitable building cannot be characterized as a "dwelling" for purposes of Section 2K1.4(a)(1)(B) of the United States Sentencing Guidelines. Second, she contends that the district court did not make the findings of fact necessary to support the restitution order it imposed.

Gaydos' final argument on appeal is her claim that the district court erred by finding that it lacked jurisdiction to consider her untimely post-trial motions for judgment of acquittal and for a new trial.

III.

Section 844(i) provides in pertinent part:

Whoever maliciously damages or destroys ... by means of fire or an explosive, any building, vehicle, or other real property or personal property used in interstate or foreign commerce or in any activity affecting interstate or foreign commerce shall be imprisoned for not more than twenty years....

In Russell v. United States, 471 U.S. 858, 105 S.Ct. 2455, 85 L.Ed.2d 829 (1985), the Supreme Court held that § 844(i) could be constitutionally applied to a rented apartment building. The Court first noted that the statute "express[ed] an intent by Congress to exercise its full power under the Commerce Clause." 471 U.S. at 859, 105 S.Ct. at 2456. The Court next determined that the legislative history of § 844(i) suggested that Congress intended the statute to protect "all business property, as well as some additional property that might not fit that description, but perhaps not every private home." Id. at 862, 105 S.Ct. at 2457. Noting that the express terms of the statute only applied to property that was "used" in an "activity" that affects commerce, the Court held that "[t]he rental of real estate is unquestionably such an activity." Id. The Court further opined that the local rental of an apartment unit is an element of a much broader commercial market in rental properties to which congressional power to regulate extends. Id. (citations omitted). Because Russell was renting his apartment building to tenants at the time he attempted to burn it, the Court concluded that the property was being used in an activity affecting commerce within the meaning of § 844(i) and affirmed his conviction.

Gaydos concedes that Russell clearly stands for the proposition that renting real estate is an activity which affects interstate commerce within the meaning of § 844(i). She argues, however, that Russell is inapposite. First, Gaydos asserts that the Supreme Court's recent decision in United States v. Lopez, 514 U.S. 549, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995), calls the constitutionality of § 844(i) into question. Second, she contends that even if § 844(i) is facially constitutional, the evidence was insufficient to prove beyond a reasonable doubt that the house on Shadeland Avenue was being used in an activity affecting interstate commerce at the time it was destroyed by fire. We are only persuaded by Gaydos' second argument.

A.

Gaydos asserts that the district court lacked subject matter jurisdiction over her alleged offense because § 844(i) exceeds the authority of Congress to regulate commerce under the Commerce Clause. In support of her argument, Gaydos relies on the Supreme Court's recent decision in Lopez. Lopez, she argues, stands for the proposition that criminal statutes that regulate activities affecting interstate commerce pass constitutional muster only where the regulated activity "substantially affects" interstate commerce.

In Lopez, the Supreme Court invalidated the Gun-Free School Zones Act of 1990, which made it a federal offense "for any individual knowingly to possess a firearm at a place that the individual knows, or has reasonable cause to believe, is a school zone." 18 U.S.C. § 922(q)(2)(A) (1994); Lopez, 514 U.S. at ----, 115 S.Ct. at 1626. The Court first observed that § 922(q) "neither regulates a commercial activity nor contains a requirement that the possession be connected in any way to interstate commerce." Id. at ----, 115 S.Ct. at 1626. It then identified three broad categories of activity that Congress may regulate under its commerce power: (1) the use of the channels of interstate commerce; (2) the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate commerce; and, (3) those activities that substantially affect interstate commerce. Id. at ----, 115 S.Ct. at 1629-30.

Quickly disposing of the first two categories, the Lopez Court focused on the third category. The Court held that the statute could not "be sustained under our cases upholding regulations of activities that arise out of or are connected with a commercial transaction, which viewed in the aggregate, substantially affects interstate commerce." Id. at ----, 115 S.Ct. at 1631. The statute failed this test, the Court said, because "by its terms," it had "nothing to do with 'commerce' or any sort of economic enterprise," id. at ----, 115 S.Ct. at 1630-31, nor was it "an essential part of a larger regulation of economic activity, in which the regulatory scheme could be undercut unless the intrastate activity were...