U.S. v. Neary

• Decision Date: 16 April 1984
• Docket Number: No. 873,D,873
• Citation: 733 F.2d 210
• Parties: 15 Fed. R. Evid. Serv. 569 UNITED STATES of America, Appellee, v. Gregory NEARY, Defendant-Appellant. ocket 83-1299.
• Court: U.S. Court of Appeals — Second Circuit

Page 210

733 F.2d 210

15 Fed. R. Evid. Serv. 569

UNITED STATES of America, Appellee, v. Gregory NEARY, Defendant-Appellant.

No. 873, Docket 83-1299.

United States Court of Appeals Second Circuit.

Argued March 5, 1984.

Decided April 16, 1984.

Hubert J. Santos, Hartford, Conn. (Buckley & Santos, P.C., Hartford, Conn., of counsel), for defendant-appellant.

Nancy B. Lukingbeal, Asst. U.S. Atty., Hartford, Conn. (Alan H. Nevas, U.S. Atty., D. Conn., New Haven, Conn., of counsel), for appellee.

Before FEINBERG, Chief Judge, MANSFIELD and CARDAMONE, Circuit Judges.

MANSFIELD, Circuit Judge.

Appellant Gregory Neary appeals from a judgment of conviction entered in the District of Connecticut by Judge T. Emmet Clarie on May 10, 1983, following a jury verdict finding him guilty of (1) maliciously destroying his fast-food restaurant in East Hartford, Conn., by means of an explosive in violation of the Explosive Control Act, 18 U.S.C. Sec. 844(i) ¹ (Count One); (2) mail fraud in violation of 18 U.S.C. Sec. 1341 ² for submitting a false insurance claim following the destruction of his restaurant (Count Two); and (3) mail fraud for submitting a false insurance claim following the earlier destruction by fire of his dry cleaning business, also in East Hartford, in violation of 18 U.S.C. Sec. 1341 (Count Three).

Neary challenges his conviction on three grounds. First, he argues that his fast-food restaurant was not destroyed by means of an "explosive" within the meaning of 18 U.S.C. Sec. 844(j) and that therefore Count One should be dismissed. Second, he contends that evidence with respect to prior fires to his property was so prejudicial as to outweigh its probative value and that he should therefore be granted a new trial on Count Two. Third, he asserts that the evidence of mailing in support of Count Three, which related to the earlier cleaning establishment fire, was insufficient and that the district court thus erred in failing to grant his motion of acquittal on that count. We agree with the second and third arguments. We therefore reverse, remanding Counts One and Two for a new trial and directing that Count Three be dismissed.

The record, viewed as it must be in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1940), reveals the following. On July 8, 1981, shortly before midnight, Neary's Restaurant, owned and operated by appellant, was destroyed by a gas explosion. Investigators from the East Hartford fire and police departments arrived at the scene within minutes of the explosion. They found that one wall of the restaurant had been "blown out," the roof "flipped over," and that a fire fueled by natural gas escaping from a broken pipe was burning at the northwest exterior of the building. The fire was immediately extinguished and the investigators entered the building at which time they discovered two disconnected natural gas lines in a utility room--one to a furnace and the other to a hot water heater--and a third disconnected line in the kitchen leading into a deep-fat frying machine. Examination of the gas pipes at the points where they were disconnected revealed no damage to the pipe threads, which normally would have occurred if they had been sundered by the blast, thus suggesting that the gas lines had deliberately been disconnected by someone prior to the explosion. There was no evidence of forced entry into the restaurant; all of the doors were bolted. Moments later, the investigators discovered an open coiled hotplate in the kitchen connected to an electric timer, scheduled to turn on at 11:30 P.M. The investigators determined that the hotplate was the origin of the explosion. At trial, one of the police investigators testified that once the natural gas began escaping into the building, it would have taken between two and five hours for it to reach an explosive level. Another investigator testified that Neary told him two days after the explosion that he had left the restaurant about 8:00 P.M. on the night of the explosion, about four hours prior to the blast.

Neary did not come to the restaurant until the next morning, stating that he feared for his family. When he did come, he stayed briefly; later that day, he sent the operator of a payloader to knock down what remained of the basic structure. The payloader was ordered off the premises by the Fire Marshal, but returned the next day to complete the job. Several witnesses testified at trial that they had observed barely damaged or undamaged expensive pieces of equipment at the restaurant and had communicated their observations to Neary; nevertheless, Neary ordered the building razed.

Other suspicious circumstances surrounded the midnight explosion. One employee stated that he had seen a large wrench on the premises the day of the explosion; that same employee testified that he had overheard Neary say to his wife: "If the place ever did blow up, it would take quite a while to get the insurance." Also, earlier on the day of the explosion, Neary asked various employees if they smelled gas; none did. Suppliers and customers noticed pieces of equipment missing during the weeks prior to the explosion.

At trial, the government suggested that Neary's motive for destroying his own restaurant was the desire to collect insurance proceeds. In December 1980, Neary had signed a potentially lucrative lease with the McDonald's Corporation. The lease, however, was contingent upon obtaining proper zoning approval from the Town of East Hartford, which had been denied. Moreover, Neary's net income exceeded his mortgage payments on the restaurant by a mere $21 per month, a paltry sum for a family of five.

The government also presented extensive testimony with respect to three prior fires to Neary's property from which he had collected insurance proceeds, thus suggesting that he was familiar with the "benefits" of property destroyed by fire. One of the mail fraud counts (Count Three) arose out of an insurance claim filed after a February 3, 1980 fire had destroyed Neary's dry cleaning business next door to the restaurant. The government alleged that Neary had inflated his insurance claim. The government did not suggest, however, that Neary had deliberately set the prior fires.

Neary countered with testimony at trial that the restaurant was underinsured, thus implying that he had no motive to destroy it. He presented further testimony that a competitor, Billy Grant, was linked to previous damage to Neary's property and that Grant feared the approval of Neary's lease. Neary thereby attempted to suggest that Grant had sabotaged his restaurant.

The jury was ultimately persuaded that Neary had deliberately destroyed his own restaurant in July 1981 in order to collect the insurance proceeds and that Neary had used the mails to collect on a false insurance claim with respect to that fire (Count Two) as well as with respect to the earlier February 1980 fire at his dry-cleaning business (Count Three). The jury found him guilty on all three counts.

DISCUSSION

The Alleged Violation of The Explosive Control Act, 18 U.S.C. Secs. 841-848 (Count One)

Count One of the indictment charges the defendant with violation of 18 U.S.C. Sec. 844(i). To establish a violation of this statute the government must prove that the defendant maliciously destroyed property "by means of an explosive." Section 844(j) defines "explosive" as meaning:

"gunpowders, powders used for blasting, all forms of high explosives, blasting materials, fuzes (other than electric circuit breakers), detonators, and other detonating agents, smokeless powders, other explosive or incendiary devices within the meaning of paragraph (5) of section 232 of this title, and any chemical compounds, mechanical mixture, or device that contains any oxidizing and combustible units, or other ingredients, in such proportions, quantities, or packing that ignition by fire, by friction, by concussion, by percussion, or by detonation of the compound mixture, or device or any part thereof may cause an explosion."

Title 18 U.S.C. Sec. 232(5), which is incorporated by reference in the above definition provides:

"(5) The term 'explosive or incendiary device' means (A) dynamite and other forms of high explosives, (B) any explosive bomb, grenade, missile, or similar device, and (C) any incendiary bomb or grenade, fire bomb, or similar device, including any device which (i) consists of or includes a breakable container including a flammable liquid or compound, and a wick composed of any material which, when ignited, is capable of igniting such flammable liquid or compound, and (ii) can be carried or thrown by one individual acting alone."

Neary contends that our recent decisions in United States v. Gelb, 700 F.2d 875 (2d Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 167, 78 L.Ed.2d 152 (1983), and in United States v. Katsougrakis, 715 F.2d 769 (2d Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct. 704, 79 L.Ed.2d 169 (1984), holding that uncontained gasoline is not an "explosive" within the meaning of Sec. 844(j), mandate dismissal of Count One for the reason that for purposes of the statutory definition there is no significant difference between uncontained gasoline and uncontained natural gas. Both, he argues, must be treated the same under the statute.

The government, on the other hand, argues that, unlike the mere manual ignition of spread gasoline involved in Gelb and Katsougrakis, which did not fit within the statutory definition of explosive, the explosive device used by the defendant here consisted not merely of gas but of a hotplate, a timer and a closed restaurant, which were designed in combination to produce an explosion when the restaurant became filled with escaping gas and the timer then electrically activated the hot plate to the point where it would detonate the gas-filled restaurant. This combination, it is contended, amounted to a huge "explosive...