U.S. v. Morales

• Decision Date: 05 March 1997
• Docket Number: No. 94-10507,94-10507
• Citation: 108 F.3d 1031
• Parties: , 46 Fed. R. Evid. Serv. 1145, 97 Cal. Daily Op. Serv. 1637, 97 Daily Journal D.A.R. 3116 UNITED STATES of America, Plaintiff-Appellee, v. Gloria Ann MORALES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1031

108 F.3d 1031

65 USLW 2647, 46 Fed. R. Evid. Serv. 1145,

97 Cal. Daily Op. Serv. 1637,

97 Daily Journal D.A.R. 3116

UNITED STATES of America, Plaintiff-Appellee, v. Gloria Ann MORALES, Defendant-Appellant.

No. 94-10507.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Sept. 26, 1996.

Decided March 5, 1997.

Larry Kupers, Assistant Federal Public Defender, San Francisco, CA, for defendant-appellant.

Stephen H. Jigger, Assistant United States Attorney, San Francisco, CA, for plaintiff-appellee.

Appeal from the United States District Court for the Northern District of California, Sandra B. Armstrong, District Judge, Presiding. D.C. No. CR-93-00336-SBA.

Before: HUG, Chief Judge, and BROWNING, SNEED, FLETCHER, REINHARDT, HALL, NOONAN, THOMPSON, FERNANDEZ, RYMER and HAWKINS, Circuit Judges.

DAVID R. THOMPSON, Circuit Judge:

Federal Rule of Evidence 704(b) precludes an expert, testifying as to the mental state or condition of a defendant, from stating "an opinion or inference as to whether the defendant did or did not have the mental state or condition constituting an element of the crime charged or of a defense thereto." Fed.R.Evid. 704(b). There is a conflict in our circuit concerning the admissibility of expert testimony under this rule when an expert is asked to give an opinion on a predicate matter from which a jury might infer the defendant's required mens rea.

In United States v. Brodie, 858 F.2d 492 (9th Cir.1988), we held Rule 704(b) precluded an expert from testifying to a predicate matter from which the jury might "extrapolate" whether the defendants possessed the necessary mens rea. Id. at 496. In cases decided since Brodie, however, we have held Rule 704(b) does not preclude an expert from testifying to a predicate matter, even if the jury might infer the necessary mens rea from such testimony, so long as the testimony as to the predicate matter does not necessarily imply the mens rea element. See United States v. Rahm, 993 F.2d 1405, 1411-12 (9th Cir.1993); United States v. Gomez-Norena, 908 F.2d 497, 501-02 (9th Cir.), cert. denied, 498 U.S. 947, 111 S.Ct. 363, 112 L.Ed.2d 326 (1990). We take this opportunity to overrule Brodie.

In the present case, Gloria Ann Morales, a bookkeeper, was convicted of two misdemeanor counts of willfully making false entries in a union ledger in violation of 29 U.S.C. § 439(c). She appeals the district court's exclusion of expert testimony that she had a weak grasp of bookkeeping principles. She proffered this testimony to establish a predicate from which the jury could infer she lacked the necessary mens rea. The district court did not specify which rule of evidence it relied upon in excluding the testimony.

We have jurisdiction under 28 U.S.C. § 1291. We hold that the district court erred if it excluded the proffered testimony under Rule 704(b). Nor was the testimony excludable under Federal Rules of Evidence 702, 103(a)(2), (b), or 403. The error in excluding the testimony was not harmless, and we reverse Morales's conviction.

FACTS

Gloria Ann Morales worked as the exclusive bookkeeper for Local 304 of the Laborers' International Union of North America (the Local) from 1988 to 1991 when she was terminated. As part of her bookkeeping duties, she recorded in a bookkeeping ledger all monies received by the Local and all bank deposits made. She was also responsible for preparing all bank deposits and keeping copies of deposit slips after she sent the deposits to the bank.

Each page of the bookkeeping ledger Morales used represented one month. Each page had an "Amount" column in which all income received each day was to be recorded, and a "Deposit" column in which all bank deposits actually made each day were to be recorded.

Morales accurately recorded the Local's receipts in the "Amount" column. Her recording The Local did not discover what Morales was doing until 1991 when she told the Local's secretary-treasurer, Julian Vega, that money was missing but that she did not know how much or for how long.

of deposits, however, was flawed. Each time she entered an amount of receipts in the "Amount" column, she entered a matching figure in the "Deposits" column even though she did not actually make a matching deposit that day. She would make the deposit with future receipts when sufficient funds became available to equal the undeposited amount.

A special audit by the Local's regular auditor, Sondra Melling, revealed that approximately $36,000 was missing. Morales could not produce deposit slips or money for all of the "deposits" she had recorded.

Morales was charged with one felony count of embezzlement from a labor organization in violation of 29 U.S.C. § 501(c) and two misdemeanor counts of willfully making false entries in union records required to be kept by federal law in violation of 29 U.S.C. § 439(c).

One of the crucial issues at Morales's jury trial with regard to the false entry charges was whether her admitted bookkeeping inaccuracies were intentional or were the result of her ignorance of proper bookkeeping procedures. The government elicited testimony from three witnesses who testified that in their opinions Morales had a relatively strong grasp of bookkeeping procedures. Sandra Pritchett, who preceded Morales as the Local's bookkeeper and trained Morales for her bookkeeping duties, testified that Morales had "a very good understanding" of her training and that she ranked in the top third of the individuals Pritchett had trained as bookkeepers. Sondra Melling, the Local's auditor, testified that Morales exhibited "an understanding of the bookkeeping process," and appeared "knowledgeable concerning both handling receipts and disbursements." Morales's supervisor, Julian Vega, testified that Morales was a "very, very good employee, and she is a very, very intelligent person, very knowledgeable.... She happens to know everything that needs to be known, at least done in that office...." He also testified, however, that she was never given any sort of training manual or written instructions with regard to her new assignment as bookkeeper, and that at the time he hired Morales (originally as a dispatcher), he did not know if she had had any bookkeeping training or experience.

Morales testified that although she now knows the entries she made in the "Deposit" column were incorrect, she did not know they were incorrect when she made them. She thought that was the way it was supposed to be done. She denied having any intention to make any false entries and denied stealing any money. She also testified she never completed high school, never had any course or training in bookkeeping or accounting, and had received very limited training and supervision by the Local.

Morales proffered expert testimony from Hilary Crosby, a certified public accountant with twenty years of bookkeeping and auditing experience, regarding Morales's level of knowledge and understanding of bookkeeping principles. The district court sustained the government's objection to the admission of this testimony, but did not state what federal rule of evidence it relied upon in excluding it. The court stated it would not allow Crosby "to testify as to what Ms. Morales did or did not understand" because "that is a conclusion that ... is properly within the jury." The court explained that

obviously Ms. Morales can testify to it herself. But I don't know that this witness can testify [that] just because someone does or does not manifest an understanding does not mean that they necessarily don't understand. But she can testify to what she observed that is inconsistent with good or average or even marginal bookkeeping practices that could then lend itself to an argument that [Morales] didn't understand.

The jury acquitted Morales of the felony embezzlement charge but convicted her of the two misdemeanor counts of willfully making false entries. She was sentenced to a three-year term of probation and required to perform eighty hours of community service.

On appeal, Morales contends the district court erred by excluding Crosby's proffered expert testimony relating to Morales's lack of understanding of bookkeeping principles.

DISCUSSION

A. Standard of Review

We review for abuse of discretion the district court's decision whether to exclude expert testimony. United States v. VonWillie, 59 F.3d 922, 928-29 (9th Cir.1995); United States v. Alonso, 48 F.3d 1536, 1539 (9th Cir.1995); United States v. Rahm, 993 F.2d 1405, 1409-10 (9th Cir.1993). ¹ A district court abuses its discretion when it bases its decision on an erroneous view of the law or a clearly erroneous assessment of the facts. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 2460-61, 110 L.Ed.2d 359 (1990).

Neither the government in objecting to the proffered expert testimony nor the district court in excluding it stated the rule of evidence on which it relied. The court stated only that it would not allow Crosby to testify as to what Morales did or did not understand because that was a question for the jury. Presumably, the court excluded Crosby's testimony under Federal Rule of Evidence 704(b) or under Federal Rule of Evidence 702. These are the two relevant federal rules which govern the admissibility of expert testimony. Rule 702 provides that the witness must qualify as an expert and that there must be a justification for his testimony in the particular case. Once that test is met, Rule 704(b) limits the expert's testimony by prohibiting him from testifying as to whether the defendant had the mental state or condition that constitutes an element of the crime charged.

Because we do not know which of these two rules may have formed the basis for the district court's decision, we evaluate the proffered evidence's admissibility under both rules. If the evidence could have been excluded under either rule, the district court did not abuse its discretion. See United States v....