U.S. v. Lively

• Decision Date: 28 March 1994
• Docket Number: No. 93-3788,93-3788
• Citation: 20 F.3d 193
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Helen L. LIVELY, a/k/a Helen Flugga, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 193

20 F.3d 193

UNITED STATES of America, Plaintiff-Appellee, v. Helen L. LIVELY, a/k/a Helen Flugga, Defendant-Appellant.

No. 93-3788.

United States Court of Appeals Sixth Circuit.

Argued Dec. 2, 1993.

Decided March 28, 1994.

Randall E. Yontz (argued and briefed), Office of the U.S. Atty., Columbus, OH, for plaintiff-appellee.

Dennis C. Belli (argued and briefed), Columbus, OH, for defendant-appellant.

Before: KEITH and NORRIS, Circuit Judges; and ZATKOFF, District Judge. ^*

ZATKOFF, District Judge.

Defendant-appellant Helen L. Lively ¹ appeals the criminal sentence and restitution order imposed on her by the district court. Lively raises the following issues in her appeal: (1) whether the district court abused its discretion when it sentenced her to a term of imprisonment, in lieu of home confinement; (2) whether the district court abused its discretion when it ordered her to make restitution to the victims of her offense in the amount of the retail price of the mail-order items, as opposed to the wholesale price; and (3) whether the district court abused its discretion when it concluded that she had the ability to pay the order of restitution.

The district court sentenced Lively to a term of six months imprisonment after Lively entered a plea of guilty to an one count information charging her with mail fraud. 18 U.S.C. Sec. 1341. In addition, the district court ordered Lively to pay restitution in the amount of $30,963.54. Lively's timely appeal followed. We AFFIRM the incarceration portion of Lively's sentence and the use of the retail price of the mail-order items to establish the amount of restitution, but VACATE the order of restitution, and REMAND this cause to the district court on the limited issue of whether Lively has the ability to pay the restitution order.

I.

The Postmaster of Russell's Point, Ohio, filed a report with the United States Postal Inspection Service indicating that Lively had been receiving numerous mail parcels under various fictitious names at Post Office Box 1175 ("P.O. Box 1175"), Russell's Point, Ohio. Although Lively's common law husband, William Flugga, rented P.O. Box 1175, the Postmaster advised the Postal Inspection Service that Lively also received mail at P.O. Box 1175.

A Postal Inspection Service's investigation revealed that Lively and her sister, Kathy Henson, devised and perpetuated a scheme to defraud mail order companies by having certain items ² either mailed to their respective residences or mailed to P.O. Box 1175. Lively and her sister employed various fictitious names when ordering the merchandise. They never paid for the merchandise. Instead, Lively and her sister would resell the merchandise at local flea markets.

The postal inspector assigned to the case directed inquires to approximately 450 mail order companies that had shipped merchandise to P.O. Box 1175. Fifty-one of the mail order companies responded to this inquiry and these companies noted that from August 1, 1990 through November 20, 1991, Lively and her sister had ordered, under fictitious names, merchandise with a retail value of $31,908.24. ³ It was determined that Lively used more than 50 fictitious names when ordering merchandise.

The 51 mail order companies also provided the postal inspector with 73 original order forms for the merchandise which Lively and her sister had ordered. Lively and her sister both submitted handwriting exemplars to the postal inspector. ⁴ These documents were sent to the postal inspector's crime laboratory for examination and comparison. Laboratory results revealed that Lively had executed 65 of the 73 mail order forms. The total retail value of the merchandise which Lively obtained through these 65 orders was $30,963.54.

On March 18, 1993, the United States Attorney for the Southern District of Ohio filed an one count information charging Lively with mail fraud, in violation of 18 U.S.C. Sec. 1341. On April 2, 1993, Lively appeared before the district court for an arraignment on the information. At her arraignment, Lively waived indictment by a grand jury and entered a plea of guilty to the one count information. A Presentence Report ("PSR") was prepared and it concluded that Lively's total offense level was 10 and that Lively's criminal history category was I. ⁵ Paragraph 54 of the PSR stated that:

Guideline Provisions: Based on an offense level of 10 and a criminal history category of I, the guideline range for imprisonment is 6 to 12 months (Zone B). According to Sec. 5C1.1(c) if the applicable guideline range is in Zone B of the Sentencing Table, the minimum term may be satisfied by: 1) A sentence of imprisonment; 2) A sentence of imprisonment that includes a term of supervised release with a condition that substitutes community confinement or home detention, provided that at least 1 month is satisfied by imprisonment; or 3) A sentence that includes a condition or combination of conditions that substitutes intermittent confinement, community confinement, or home detention for imprisonment.

On July 9, 1993, the district court sentenced Lively to a six month term of imprisonment; three years of supervised release; ordered restitution in the of $30,963.54 to be paid by the end of her supervised release; and imposed a $50 special assessment pursuant to the statute. ⁶ This appeal is limited to the kind of sentence imposed by the district court (imprisonment) and the district court's order of restitution (both as to the amount of restitution and as to the district court's finding that defendant has the ability to pay restitution).

II.

A.

With respect to the district court's decision to sentence Lively to a term of imprisonment, Lively does not challenge the following: (1) a total offense level of ten; (2) a criminal history category of I; (3) a guideline range falling within Zone B of the sentencing table; and (4) a guideline range of 6 to 12 months. As indicated above, Lively does challenge the kind of sentence imposed, that is, imprisonment, rather than home confinement.

Lively argues that the district court failed to consider certain congressional mandates when sentencing her. Lively relies on 18 U.S.C. Sec. 3582(a), which provides, in part, that:

The court, in determining whether to impose a term of imprisonment, and, if a term of imprisonment is to be imposed, in determining the length of the term, shall consider the factors set forth in section 3553(a) to the extent that they are applicable, recognizing that imprisonment is not an appropriate means of promoting correction and rehabilitation....

18 U.S.C. Sec. 3582(a) (West 1985) (emphasis added). Lively contends that the record is devoid of any indication that the district court either recognized or considered this congressional mandate.

During oral argument, the government, for the first time, raised the issue of whether this Court has jurisdiction over this portion of Lively's appeal. In support of its argument, the government cited United States v. Wilkinson, 9 F.3d 110 (6th Cir.1993) (Table). Under 18 U.S.C. Sec. 3742(a), a defendant has the right to appeal (1) a sentence imposed in violation of the law, (2) a sentence imposed as a result of an incorrect application of the Guidelines, and (3) an upward departure from the Guidelines. United States v. Smith, 918 F.2d 664, 667 (6th Cir.1990) (paraphrasing 18 U.S.C. Sec. 3742(a)). ⁷

Because Lively is challenging her sentence on the grounds that the district court failed to consider certain directives contained in the sentencing reform act of 1984, specifically 18 U.S.C. Secs. 3553(a) & 3582(a), Lively is appealing her sentence on the grounds that it was imposed in violation of the law. Consequently, this is an appealable issue under 18 U.S.C. Sec. 3742(a)(1). See, e.g., United States v. Byrd, 984 F.2d 251, 252 (8th Cir.1993) (holding that defendant's appeal based on the district court's alleged error in not considering defendant's medical condition when sentencing defendant, in violation of Sec. 3553(a)(2)(D), was appealable under Sec. 3742(a)(1)) (citation omitted).

The parties agree that the proper standard of review is whether the district court abused its discretion when it sentenced Lively to a term of imprisonment. See United States v. Jones, 533 F.2d 1387, 1394 (6th Cir.1976), cert. denied, 431 U.S. 964, 97 S.Ct. 2919, 53 L.Ed.2d 1059 (1977) (citation omitted). Lively argues that the district court abused its discretion in refusing to consider a sentence of probation under Sec. 5C1.1(c)(3) of the sentencing guidelines. ⁸

While this issue seems to be one of first impression in this Circuit, the First Circuit, in United States v. Delloiacono, 900 F.2d 481 (1st Cir.1990), had this to say in an appeal similar to the one before this Court.

The Sentencing Guidelines evidence an elaborate strategy for accommodating the competing policy aims implicated in a typical fraud case, like the present. The Sentencing Commission concluded that certain economic crimes, such as fraud, are "serious," and that serious economic crimes can be deterred significantly under a sentencing scheme that holds out "the definite prospect of prison, though the term is short...." [citing U.S.S.G. Ch. 1, Part A, Sec. 4(d) at 7, intro. comment]. At the same time, a competing congressional mandate--requiring that the courts recognize "that imprisonment is not an appropriate means of promoting correction and rehabilitation," 18 U.S.C. Sec. 994(j)--posed a potential impediment to deterring economic crimes. The Sentencing Commission accordingly structured the Sentencing Guidelines to require that a first offender, convicted of serious fraud, must serve at least a brief period of confinement, leaving considerable discretion in the sentencing court, however, to determine not only its duration, intermittency and restrictiveness, but the place of confinement.

Delloiacono, 900 F.2d at 484-85 (emphasis added).

The defendant in Delloiacono pleaded guilty to wire...