U.S. v. Holley

• Decision Date: 13 September 1991
• Docket Number: No. 90-8523,90-8523
• Citation: 942 F.2d 916
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Jerry Don HOLLEY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 916

942 F.2d 916

UNITED STATES of America, Plaintiff-Appellee, v. Jerry Don HOLLEY, Defendant-Appellant.

No. 90-8523.

United States Court of Appeals Fifth Circuit.

Sept. 13, 1991.

W.V. Dunnam, Jr., Waco, Tex., for defendant-appellant.

Ronald F. Ederer, U.S. Atty., San Antonio, Tex., Joe C. Lockhart, Asst. U.S. Atty., Fort Worth, Tex., for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Texas.

Before CLARK, Chief Judge, GOLDBERG, and GARWOOD, Circuit Judges.

GARWOOD, Circuit Judge:

Appellant-defendant Jerry Holley (Holley) appeals his conviction on two counts of perjury in violation of 18 U.S.C. § 1623. ¹ Holley challenges his conviction on the ground, inter alia, that the district court's refusal to give a specific unanimity jury instruction denied him his right to a unanimous jury verdict. We agree and accordingly reverse and remand.

Facts and Proceedings Below

In the latter half of 1985, Holley served as the chairman of the board of Peoples Savings and Loan (Peoples) of Llano, Texas. He was also a part owner of Peoples. His office was at the Peoples Mortgage Company, a Peoples subsidiary, in Dallas, Texas. In addition to attending board meetings, Holley actively solicited commercial real estate loans on behalf of Peoples. He also served on Peoples' senior loan committee, which was responsible for approving loans in excess of $250,000.

Holley was introduced to Eileen Marcus (Marcus) in 1985 for the purpose of conducting real estate transactions. Under the arrangement between Holley and Marcus, Marcus was to find property for sale and then a buyer for the property. They intended to realize a quick turnover profit on the purchase and immediate resale of the property to the buyer at a price above what they had paid. Peoples was to provide the financing for the purchase of the property.

Pursuant to her arrangement with Holley, Marcus signed a contract to purchase Southwest Parkway Plaza (the property) in Lewisville, Texas from Midway Development Company (Midway) for $2,400,000. The contract required that the buyer deposit with the Safeco Title Company (Safeco) an irrevocable letter of credit for $25,000 as earnest money on the purchase. The contract closing date was November 1, 1985.

Paulette Hubbard (Hubbard), an escrow agent employed by Safeco, received the contract for the property on September 10, 1985, from the real estate broker. She received the letter of credit, in the name of Peoples as issuer, on September 27, 1985, which was the origination date of the letter of credit. ² By its terms, the letter of credit expired sixty days after its origination date. Some time after receiving the letter of credit, Hubbard noticed that it lacked a signature.

She spoke to Holley on October 11, 1985, to discuss the absence of a signature. Holley apologized and told her that it was an oversight. He made an appointment to meet with Hubbard at 9:00 a.m. on the following Monday. Hubbard went to People's Dallas office at the arranged time and Holley was not there. Hubbard met an unidentified woman there who said that Holley had instructed her to sign the letter of credit on his behalf. This woman crossed out Holley's typed name as it appeared just below the signature line and signed the name "Mary Kam" on the signature line, writing "Secretary" just below that line.

The woman Hubbard met at Peoples was Carol Kam (Kam). ³ She worked as Holley's personal receptionist and secretary. On the morning that Hubbard was to meet with Holley, he instructed Kam that a woman would come by with some papers to sign and that Kam should sign them with her mother's maiden name, which is Mary Margaret Hilz. Her mother goes by her married name, Mary Margaret Kam. Carol Kam signed the letter with the name "Mary Kam." She did not know why she used that name instead of the name "Mary Margaret Hilz."

When Marcus failed to close, Midway sought to collect on the letter of credit, but Peoples refused to honor it on the stated grounds that the letter was not entered in its register of letters of credit and that the president of Peoples, Joel Daniel (Daniel), was unable to learn who Mary Kam was.

Around the time that Marcus and Holley attempted to purchase Southwest Parkway Plaza, Marcus, in furtherance of her arrangement with Holley, signed a contract to purchase another property known as the Arapaho Station Shopping Center (Arapaho) in Richardson, Texas. The contract Marcus signed for the purchase of Arapaho required that she submit earnest money in the amount of $500,000. Holley signed a $500,000 Peoples letter of credit as earnest money, which, although Marcus failed to close, was never cashed by the sellers. Marcus and Holley intended to realize a quick turnaround profit on Arapaho as well.

Marcus was never required, as condition of the issuance of the letter of credit with respect to either of the transactions described above, to complete a credit application or file a financial statement with Peoples. She also was never required to provide any collateral for the extension of credit or to sign a promissory note in order to have the letters of credit issued on her behalf.

In January 1988 Holley filed his voluntary bankruptcy petition in the United States Bankruptcy Court for the Western District of Texas, Waco division. On April 6, 1988, Peoples filed in Holley's pending personal bankruptcy case an adversary action in the form of a complaint to establish and determine dischargeability of alleged debts of Holley to Peoples. Peoples filed an amended complaint (hereafter referred to simply as the complaint) in October 1988. There were no further amendments. Pursuant to formal notice filed therein by Peoples, Holley was deposed in connection with this adversary proceeding on December 21, 1988, December 22, 1988, and January 9 and 10, 1989. ⁴ On May 15, 1990, Holley was indicted on two counts of perjury, in violation of 18 U.S.C. § 1623, on the basis of statements he made in the course of that deposition.

The indictment charges Holley with two counts of perjury. ⁵ In each count, a section of Holley's deposition testimony is quoted and portions of this quoted testimony are underlined. Each count charges that in the deposition Holley did knowingly

association, Lloyd Kitchen or Joel or somebody, and asked them to send a sample copy of our LC, which was done for their chance to view it. This is a separate deal from Arrapahoe Station.make the false and material declarations that are the underlined portions of the quoted testimony. In the first count, testimony from Holley's deposition taken on December 22, 1988, is quoted and material in four of his responses is underlined. In the second count, testimony from statements Holley made on January 10, 1990, is quoted and material in eleven of his responses is underlined. ⁶

At trial, Holley contended that the government had failed to prove that his statements were material. He also objected to the court's jury instructions respecting the unanimity requirement on the ground that the court failed to instruct the jury that it must be unanimous as to at least one particular statement in each count. The district court overruled Holley's objections. The court instructed the jury that, in order to find Holley guilty, it must find beyond a reasonable doubt that Holley's testimony "was false in one or more of the respects charged in" the proceeding pursuant to which the testimony was given.

The jury found Holley guilty on both counts. The district court sentenced him to concurrent sixteen-month terms of imprisonment and concurrent three-year terms of supervised release on each count. The court also ordered him to pay a $25,000 fine and a $100 special assessment. Holley timely appealed.

Discussion

On appeal, Holley asserts several grounds of error. He claims that there was insufficient evidence to support the jury's verdict with respect to either count because the government failed to adduce sufficient evidence of the materiality of the alleged perjury, an essential element of the offense charged. He also claims that the district court committed reversible error by failing to instruct the jury that it must be unanimous with respect to at least one statement in each count of the indictment in order to find him guilty.

We find that the deposition statements that were the basis of Holley's indictment were material to the proceeding pursuant to which he was deposed. We also find, however, that the district court committed reversible error by failing to instruct the jury that it must unanimously agree that Holley perjured himself with respect to at least one statement in each count charged in the indictment. We accordingly reverse and remand. ⁷

A. Materiality

Holley contends that the subject of the deposition testimony that formed the basis of his perjury conviction was not material to the issues raised in Peoples' complaint. The complaint, Holley notes, lists several specific instances of fraudulent conduct by Holley but fails to refer even once to the letter of credit transaction. Holley also notes that the letter of credit transaction involved fraud against a third party other than Peoples and the specific transactions alleged in the complaint alleged fraud against Peoples.

The government contends that although the complaint did not list the letter of credit transaction as a specific instance of fraudulent conduct, the transaction was material because it increased the likelihood that the fact finder would conclude that Holley had committed the fraudulent acts that were specified in the complaint. The acts that were specified in the complaint occurred roughly contemporaneously with the letter of credit transaction and these acts similarly involved Holley's making of loans without obtaining adequate loan applications or financial statements. The government also claims that the letter of credit transaction was material to the general...