U.S. v. Multi-Management, Inc., MULTI-MANAGEMEN

• Decision Date: 28 September 1984
• Docket Number: INC,MULTI-MANAGEMEN,Nos. 84-3003,84-3004,s. 84-3003
• Citation: 743 F.2d 1359
• Parties: 16 Fed. R. Evid. Serv. 603 UNITED STATES of America, Plaintiff-Appellee, v., and Warren D. Hill, Defendants-Appellants. and UNITED STATES of America, Plaintiff-Appellee, v., Karl H. Herrmann, Jr., a/k/a Karl Von Herrmann, Warren D. Hill, and Eugene Smith, Defendants, and Robert Monforton, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1359

743 F.2d 1359

16 Fed. R. Evid. Serv. 603

UNITED STATES of America, Plaintiff-Appellee, v. MULTI-MANAGEMENT, INC., and Warren D. Hill, Defendants-Appellants. and UNITED STATES of America, Plaintiff-Appellee, v. MULTI-MANAGEMENT, INC., Karl H. Herrmann, Jr., a/k/a Karl

Von Herrmann, Warren D. Hill, and Eugene Smith, Defendants,

and

Robert Monforton, Defendant-Appellant.

Nos. 84-3003, 84-3004.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 8, 1984.

Decided Sept. 28, 1984.

K.M. Bridenstine, Polson, Mont., Ann S. German, Keller & German, Kalispell, Mont., for defendants-appellants.

Carl E. Rostad, Asst. U.S. Atty., Great Falls, Mont., for plaintiff-appellee.

Appeal from the United States District Court for the District of Montana.

Before PECK ^*, WRIGHT, and FARRIS, Circuit Judges.

JOHN W. PECK, Senior Circuit Judge:

Robert Monforton appeals from a judgment of conviction for conspiracy, 18 U.S.C Sec. 371, entered upon a jury verdict. Co-defendants Warren D. Hill and Multi-Management, Inc. (MMI) appeal from judgments of conviction for wire fraud, 18 U.S.C. Sec. 1343, and conspiracy, 18 U.S.C. Sec. 371, also pursuant to a jury verdict. Monforton argues on appeal that the evidence was insufficient to convict him and that he is entitled to acquittal due to the government's violation of a pretrial order arising from its suppression of Brady material and its offering at trial for admission of a previously undisclosed document. Hill and MMI argue that the trial court committed reversible error by denying the motion of their joint counsel to withdraw as counsel for MMI due to a potential conflict of interest. Finally, all defendants argue that the trial court abused its discretion by admitting, in the absence of a limiting instruction, evidence of fraudulent acts not charged in the "overt acts" section of the indictment and that the improper statements of the prosecutor in closing argument deprived defendants of their right to a fair trial. Because we find none of the arguments to be meritorious, we affirm.

I. Facts

MMI, along with sister corporations W.D. Hill Farms, Inc. and Diverse Ag-Properties, Inc., were incorporated in Delaware with their principal places of business in Great Falls, Montana. Hill was MMI's chairman of the board. Monforton was a director who also held the title of Senior Vice-President. Hill and Monforton sat on the board of the sister corporations and Hill was president of W.D. Hill Farms, Inc. Karl Herrmann, Jr., who was a member of the board of each corporation, was the president of MMI. Eugene Smith was an employee of MMI.

MMI attempted to purchase approximately 230,000 acres in Montana and South Dakota. No deal went further than the execution of "buy/sell" agreements. MMI neither paid any money to secure options nor made partial purchase payments on the land.

On March 10, 1982, Smith and Herrmann prepared an oil and gas lease option agreement purporting to offer for sale or lease all of the oil and gas rights on the 230,000 acres. The document, which warranted title to the land, was signed by Hill, among other principals. On March 12, 1982, Smith and Monforton flew to Laramie, Wyoming and presented the offer to Warren Schroefel, a Wyoming businessman. Smith had previously contacted Schroefel concerning the oil and gas leases. Monforton presented three copies of the leases to Schroefel at the meeting and signed a waiver of a clause requiring commencement of work within sixty days. A second meeting was required because Schroefel questioned Monforton's authority to waive requirements of the leases.

On March 15, 1982, Hill and Monforton went to Laramie to meet with Schroefel. At this meeting Hill represented that he owned the properties at issue. An MMI corporate resolution, signed by Herrmann and Hill and authorizing Monforton and Hill to act on behalf of MMI, was given to Schroefel. Schroefel agreed to exercise a cash advance. Schroefel wired MMI $37,500.00 on March 19, 1982. On April 15, 1982, Schroefel wired an additional $16,000.00 to MMI.

During March 1982, Smith also approached a group of three men, James Fuller, Sr., James Fuller, Jr., and Gerald Hughes, who comprised a company, Fuller-Banks Energy, Inc., with a minerals option agreement on 230,000 acres that warranted title to the land. An agreement was finalized between Fuller-Banks Energy and MMI, through Herrmann and Hill, on April 14, 1982 and a check was written to secure the option.

II. Proceedings

On June 13, 1983, a federal grand jury returned a five-count indictment in the United States District Court for the District of Montana charging MMI, Herrmann, Smith, Monforton, and Hill with conspiracy, in violation of 18 U.S.C. Sec. 371, and with wire fraud, in violation of 18 U.S.C. Sec. 1343. The overt acts section of the indictment did not include any allegations concerning the transaction involving Fuller-Banks Energy. On July 11, 1983, MMI, Hill and Monforton were arraigned, and each pleaded not guilty. ¹ Trial originally was set for September 13, 1983. On motion of MMI and Hill, the trial court reset the date to November 1, 1983.

On September 1, 1983, FBI agent Frank Wilmot interviewed Ed Focher, an officer of MMI, who gave a statement indicating that he had signed Monforton's name to various documents (Focher statement). Monforton was informed of the Focher statement on October 15, 1983. Prior to that time Focher had fled to England. Monforton's subsequent motions for dismissal and for severance of prosecution were denied following an evidentiary hearing.

On the morning of the trial, prior to voir dire, counsel for MMI and Hill moved to withdraw from representation of MMI due to an alleged conflict of interest and to continue the matter on behalf of MMI to permit substitute counsel to prepare. The trial court declined to grant a continuance. Following voir dire, the trial court, after asking counsel for MMI and Hill if he had anything to add to his prior motions, cited Holloway v. Arkansas, 435 U.S. 475, 98 S.Ct. 1173, 55 L.Ed.2d 426 (1978), as directly on point and adhered to his denial of the motions.

At trial, evidence of a fraudulent transaction not described in the overt acts section of the indictment was admitted over the objections of defense counsel. The trial court declined to give Monforton's proposed instruction that this evidence had no relevance to Monforton. During final summation, the prosecution stated that the "federal grand jury, who heard much the same evidence" as the petit jury, had put the defendants in the courtroom. Following the objections of defense counsel, the trial court gave two cautionary instructions. On November 11, 1983, the jury returned a guilty verdict on the conspiracy charge and the substantive wire fraud charge against MMI and Hill; the jury convicted Monforton of conspiracy, but acquitted him on the substantive wire fraud charge. The trial court denied motions for a new trial and defendants filed timely notices of appeal.

III. Issues

A. Monforton

1. Sufficiency of Evidence

Monforton initially argues that the evidence was insufficient to support his conviction on the conspiracy count because there was no evidence of his participation in the conspiracy. We do not agree.

When reviewing a claim of insufficiency of evidence to support a criminal conviction, an "appellate court must determine, after viewing the evidence in the light most favorable to the prosecution, whether 'any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.' Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); United States v. Becker, 720 F.2d 1033, 1035 (9th Cir.1983)." United States v. Ospina, 739 F.2d 448 at 450-451 (9th Cir.1984). In viewing the evidence in favor of the government, the court must draw all reasonable inferences favorable to the government. United States v. Cusino, 694 F.2d 185, 187 (9th Cir.1982), cert. denied, 461 U.S. 932, 103 S.Ct. 2096, 77 L.Ed.2d 305 (1983).

Not only did the evidence show that Monforton was a principal in each of the three corporations involved in the sale of the oil and gas leases, but an MMI corporate resolution empowered Monforton to act on behalf of MMI. Evidence also showed that Monforton made two trips to Laramie, Wyoming to meet with Schroefel in conjunction with the sale of the oil and gas leases. The agreement contained Monforton's signature, waiving a drilling requirement contained therein. Additionally, Smith testified that Monforton made the first trip to Laramie for the purpose of delivering the oil and gas agreement to Schroefel. Finally, both Smith and Schroefel testified that Monforton represented that the oil and gas lease rights were absolutely vested in Hill or W.D. Hill Farms, Inc. This evidence was more than sufficient to support a finding that Monforton was a member of the conspiracy to commit wire fraud.

2. Violations of the Pretrial Order

Monforton argues that the government committed violations of the pretrial order by failing to disclose in a timely fashion two documents: the Focher statement and Schroefel's copy of the oil and gas lease options agreement. Monforton argues that the tardy disclosure of the September 1, 1982 Focher statement on October 15, 1982 violated the dictates of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), and United States v. Agurs, 427 U.S. 97, 96 S.Ct. 2392, 49 L.Ed.2d 342 (1976), because the fact that Monforton's name had been forged on various documents was crucial to his defense that he was not a major figure in MMI. Monforton contends that the trial court committed reversible error in denying, following an evidentiary hearing, his motions to dismiss the indictment and to sever the prosecution based on the government's failure to timely disclose the Focher statement. We do not agree.

Assuming that this material is exculpatory and material to either guilt or...