U.S. v. Guadagno, 91-2233

• Decision Date: 08 July 1992
• Docket Number: No. 91-2233,91-2233
• Citation: 970 F.2d 214
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James J. GUADAGNO, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 214

970 F.2d 214

UNITED STATES of America, Plaintiff-Appellee, v. James J. GUADAGNO, Defendant-Appellant.

No. 91-2233.

United States Court of Appeals Seventh Circuit.

Argued April 3, 1992.

Decided July 8, 1992.

Joel D. Bertocchi, (argued), Office of the U.S. Atty., Crim. Div. and Barry R. Elden, Office of the U.S. Atty., Crim. Receiving, Appellate Div., Asst. U.S. Attys., Chicago, Ill., for plaintiff-appellee.

Jeffrey B. Steinback, Marc W. Martin (argued), Genson, Steinback, Gillespie & Martin, and Joseph R. Lopez, Chicago, Ill., for defendant-appellant.

Before BAUER, Chief Judge, EASTERBROOK, Circuit Judge, and NOLAND, Senior District Judge. ^*

NOLAND, Senior District Judge.

This is a direct criminal appeal in which defendant-appellant James J. Guadagno challenges the district court's decision denying his motion for a new trial as well as the district court's application of the Sentencing Guidelines. We affirm.

I. FACTUAL BACKGROUND

A. The Offense

Prior to early 1988, defendant-appellant James J. Guadagno (hereinafter "Guadagno") was the owner of the Archer-Cermak Food and Liquor Store (hereinafter "the Archer-Cermak Store"), which was located at 2224 South Archer Avenue, in Chicago, Illinois. The Store sold a variety of different items including groceries, beer and wine, and rented videotapes. Guadagno also operated another store which was known as the Canal Street Store.

The Archer-Cermak Store was located in a one story building that was approximately fifty feet wide and seventy-five feet in length. Although it was situated in an urban setting, bordered by vacant lots and approximately two-hundred and sixty-three feet from the nearest residence, the Store was in a residential area. Guadagno leased the actual building from its owner (Louis Spalla) beginning in January of 1986, and had personally guaranteed the lease in the amount of $20,000. The lease included a provision permitting Guadagno to terminate the same and escape his personal guarantee if the building was damaged by fire and Spalla failed to effect repairs within ninety days.

Guadagno had purchased an insurance policy on the contents of the Store from the J.J. Eastman Insurance Company in April of 1986. The policy, which was underwritten by the American Economy Insurance Company (a subsidiary of American States Insurance Company), became effective on April 11, 1986. Guadagno renewed the policy on April 11, 1987.

Business took a turn for the worse beginning in January of 1988, due in part to the closing of area factories. Guadagno made at least one late rental payment and bounced several checks. When he began to accumulate debt (his Canal Street Store owed $180,547.13 in state sales tax, penalties and interest, and he owed a balance of $35,000 on a bank credit line), Guadagno commented to his employees that he wished the Store would burn down. When efforts to sell his business failed, Guadagno asked the Archer-Cermak Store's manager (Richard David Bargas) if his fiancee's father (an Indiana manufacturer and distributor of class C fireworks) could "rig up" a time delay device to ignite the Store.

During March of 1988, Guadagno had his employees move several movie posters, which advertised videotapes that the Store rented, to the front windows. The placement of the posters on the front windows had the effect of blocking the view of passersby of the inside of the Store. During the same time period, Guadagno began moving the Store's videotapes to his Canal Street Store. Despite the fact that most if not all of the videotapes had been removed and were not being rented to the Store's patrons, Guadagno told his manager to "ring up" videotape rentals on the one of Store's cash registers to mask his physical removal of the videotapes to the Canal Street Store.

In early April of 1988, Guadagno's insurance agent telephoned Guadagno to remind him that it would soon be necessary to renew the Archer-Cermak Store's insurance policy. Despite an April 11, 1988 renewal deadline, Guadagno did not renew his policy at that time. Instead, Guadagno asked his agent to check with other insurance companies for a more competitive rate. On the date of the fire, Guadagno had not made any premium payments toward a new or renewed policy.

On April 8, 1988, Guadagno deviated from his usual routine of not working at the Archer-Cermak Store on Friday nights. Upon his arrival at approximately 10:00 p.m., he instructed his employees to total the Store's cash registers because the Store would be closing early (i.e., prior to 11:00 p.m.). As per Guadagno's instructions, Bargas gave him the Store's receipts (the money from the registers) rather than placing them in the safe. Guadagno would later inform the insurance adjuster that the day's receipts were in the safe. The stockboy responsible for taking out the trash, which consisted mostly of cardboard boxes that had been left in a pile, was told to leave it by the rear door. Guadagno was alone in the Store at approximately 10:15 p.m.

Approximately forty-five minutes later, Rose Herron, who made a purchase and left the Archer-Cermak Store just prior to its closing, was using the pay telephone which was approximately two feet from the front of the Store when she noticed a brown-beige Cadillac idling at the Store's front curb. Herron then noticed a man, whom she would testify she recognized as the Store's owner (Guadagno), exiting from the Store with a box and driving off hurriedly. ¹ Approximately one minute later, after she had finished her telephone call and walked back across the street, there was an explosion inside the Store. Herron heard the explosion and immediately telephoned 911.

The twenty-seven firefighters who responded to the 11:02 p.m. emergency call discovered that nearly the entire rear wall of the Archer-Cermak Store had been "blown out across the street" and was laying in pieces. The force of the explosion was apparently so great that it extinguished most of the fire. Relief Battalion Chief Edward Kelly, the chief firefighter on the scene, discovered two full gasoline cans, one full kerosene can, propped-open refrigerator display cases, and embers and sparks in the area of the fire. Kelly immediately ordered his firefighters to retreat.

Subsequent investigation by fire cause and origin experts revealed a low burn pattern which suggested that a flammable liquid had been poured on the Store's floor. The experts concluded that the fire had been intentionally set. After the fire, Guadagno made several statements to investigators which were inconsistent with what was found at the scene (e.g., while Guadagno stated that he had locked the rear door when he left, it was found unlocked).

While Guadagno had removed several hundred videotapes from the Archer-Cermak Store, and had allowed the Store's inventory to drop prior to the fire, Guadagno later met with his employees and instructed them to indicate that the Store was fully stocked at the time of the fire. When asked by Jeanne Castellano whether he had set the fire, Guadagno replied "[y]our father [the fireworks manufacturer/distributor] would be proud." Guadagno informed Bargas and his co-employee/fiancee that they should keep their stories straight. He also informed several of the Store's employees (including Bargas and Laurie Schillaci) what to say when they testified before the Grand Jury.

On April 14, 1989, Guadagno met with his insurance adjustor and informed him that there had been approximately four-hundred (400) videotapes in the Store at the time of the fire, that the day's receipts were in the safe, that he had not been involved in the fire, and that he estimated his total loss to be approximately $127,000. Guadagno later completed an insurance form claiming $140,000 in losses, and stating that he had not been involved in the fire. Needless to say, Guadagno's insurance claim was never paid.

B. Trial and Presentence Investigation

On January 25, 1990, Guadagno was charged by way of a five count indictment. Count I charged him with arson pursuant to 18 U.S.C. § 844(i). Counts II through IV charged him with mail fraud pursuant to 18 U.S.C. § 1341. Count V charged Guadagno with obstruction of justice pursuant to 18 U.S.C. § 1503.

On September 10, 1990, Guadagno's jury trial began. The jury returned its verdict finding Guadagno guilty on Counts I through IV, and not guilty on Count V (the obstruction of justice count) on September 20, 1990. Thereafter, the district court entered judgment on the jury's verdict and referred the matter to the Probation Department for a presentence investigation. On October 30, 1990, the district court denied Guadagno's "Motion for Judgment of Acquittal Pursuant to Rule 29(c) and Motion in Arrest of Judgment or in the Alternative a New Trial" and his Supplemental Motion for a New Trial.

On or about March 4, 1991, Guadagno's Presentence Investigation Report was distributed to the parties. The Report included recommendations by Guadagno's probation officer that (1) his offense level be increased by fourteen levels for recklessly endangering the safety of others, pursuant to Guideline § 2K1.4(b)(2), and (2) Guadagno receive a two point reduction in his offense level for his acceptance of responsibility, pursuant to Guideline § 3E1.1. The latter recommendation was based upon Guadagno's first written statement, which was reproduced in the Presentence Investigation Report, in which he purported to accept responsibility for his criminal acts. In due course, the parties objected to the portions of the Report which were adverse to their respective positions.

On March 27, 1991, the Probation Department submitted Guadagno's second written statement in which he again purported to accept responsibility for his criminal conduct. On March 29, 1991, the district court heard oral argument on the parties' objections.

C. Sentencing Hearing

On May 17, 1991, Guadagno was sentenced pursuant to the Sentencing Reform Act of 1984....