U.S. v. Nichols
| Decision Date | 23 December 1982 |
| Docket Number | No. 81-1423,81-1423 |
| Citation | 695 F.2d 86 |
| Parties | 12 Fed. R. Evid. Serv. 367 UNITED STATES of America, Plaintiff-Appellee, v. Rhea Lucky NICHOLS and Michael Ford, a/k/a L.D. Haufer, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Margaret I. Miller, Atty., Dept. of Justice, Washington, D.C., for U.S Appeals from the United States District Court for the Northern District of Texas.
Before GOLDBERG, WILLIAMS and GARWOOD, Circuit Judges.
This is an appeal by two coconspirators from their convictions for fourteen counts of mail fraud, 18 U.S.C. Sec. 1341 (1976), and one count of conspiracy to commit mail fraud, 18 U.S.C. Sec. 371 (1976). We now affirm these convictions.
In April and May of 1978, the defendants conspired to stage a fake accident at Banana's Cafe in Dallas. Appellant Michael Ford, working under the assumed name of L.D. Haufer, and codefendant Mike Merritt orchestrated the scheme. Codefendant Carl Keenan, a bartender at the cafe, was the inside man; codefendant Tom Davis was to be an injured customer. Appellant Rhea Lucky Nichols, a medical doctor, was to handle the medical aspects and codefendant John Fisher, an attorney, was to handle the legal aspects.
The genesis of the scheme was in April 1978, when Ford noticed that the ceiling fans at the cafe wobbled when turned on. Over the next few weeks Ford, Merritt, Keenan, and Davis discussed the possibility of staging an accident involving a ceiling fan. Early on the morning of May 23, 1978, Keenan unlocked the cafe and Ford, Merritt, and Davis entered. They removed one of the fans and stashed it away unobtrusively. The four then left the cafe. A few minutes before the cafe opened for business, Keenan again admitted Ford, Merritt, and Davis. They sat at a table underneath the mounting fixture of the now-detached ceiling fan, and Keenan served them drinks. At an opportune moment, when that room of the cafe was deserted, Ford retrieved the detached fan and slammed it down on the table where they were sitting. Davis and Merritt lay on the floor, as if in pain. To add authenticity, Ford hit Davis in the back to make a bruise and cut his coat with a pocket knife. Keenan called a waitress, who called an ambulance. Davis was taken to a hospital emergency room and Merritt followed in his car. Both were treated and released.
The next morning Merritt, Davis, Ford, and Fisher met at Merritt's auto garage (Davis was Merritt's employee). Ford called Dr. Nichols, arranged an appointment, and verified the symptoms Davis was to allege. Davis saw Dr. Nichols and was given a series of X-rays and heat or sonic treatment. Davis returned to Dr. Nichols two or three more times.
The clinic records for Davis' visits were unusual. They were in Nichols' handwriting and showed thirty-five visits, contrary to Davis' testimony that he went to the clinic at most four times. The patient chart Nichols made also showed several prescriptions for Darvon, though the clinic's "Darvon Book," which was a record of all Darvon prescriptions dispensed, showed only one. Finally, the records and billing were all segregated from the clinic's usual billing procedures.
Following his medical treatment, Davis, with the aid of Ford, Fisher, and Merritt, filed a claim against the cafe's insurance carrier. When the carrier contested the claim, Davis filed suit. It was in the prosecution of this claim that Davis' insurance carrier and its attorneys mailed the fraudulent documents that were the basis of the mail fraud charges. Apparently, during the pendency of this suit, Keenan and Davis were caught in an unrelated fraud scheme. They cooperated with the government, led the postal inspectors to this scheme, and the inspectors moved in.
Merritt escaped and was at large at the time of trial. Keenan and Davis pleaded guilty and testified for the government. Fisher's case was severed so he could undergo an examination to determine his competency to stand trial; he later pleaded guilty
to conspiracy. Appellants Ford and Nichols were tried before a jury and convicted. Nichols was sentenced to concurrent terms of three years on all fifteen counts. Ford was sentenced to consecutive terms of five years on the first eight mail fraud counts and concurrent terms of five years on the remaining seven counts, for a total sentence of forty years. Nichols and Ford now appeal.
Nichols was convicted in large measure due to the hearsay testimony of his coconspirators. Such testimony is admissible under Fed.R.Evid. 801(d)(2)(E), following the procedures set out in United States v. James, 590 F.2d 575 (5th Cir.) (en banc), cert. denied, 442 U.S. 917, 99 S.Ct. 2836, 61 L.Ed.2d 283 (1979). Nichols argues that the trial court's James proceedings were defective and that the coconspirators' statements should not have been admitted. Without these statements, Nichols claims, there was not sufficient evidence to support a conviction. Nichols further complains that his motion for a separate trial was improperly denied. Finally, Nichols argues the trial court should have declared a mistrial when a witness improperly referred to an earlier indictment of Nichols.
Ford argues that his forty-year sentence constitutes cruel and unusual punishment, that the trial court's James proceedings were defective, and that there was not sufficient evidence to support his conviction.
A conspiracy charge is a favorite weapon in the prosecutor's arsenal. Among its other attributes, it allows the introduction of otherwise inadmissible testimony. " 'Hearsay' is a statement, other than one made by the declarant while testifying at trial or hearing, offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801(c). In the truthseeking process the courts have generally eschewed hearsay testimony, Fed.R.Evid. 802, however, a statement is not considered to be hearsay if it "is offered against a party and is ... a statement by a coconspirator of a party during the course and in furtherance of the conspiracy." Fed.R.Evid. 801(d)(2)(E). Thus, in a trial against A for mail fraud, the testimony of B that "C told me A would commit mail fraud" is normally inadmissible. In a trial for conspiracy to commit mail fraud by A and C, however, the statement would be admissible.
The crime of conspiracy being a potent weapon, the caliber of its ammunition must be carefully gauged, and courts have devised procedures to prevent misfires in the admission of coconspirator's statements. Before the statement can be admitted, it must somehow be established that: (1) there is a conspiracy; (2) the statement was made during the course and in furtherance of the conspiracy; and (3) the defendant and declarant were members of the conspiracy. United States v. James, 590 F.2d 575 (5th Cir.) (en banc), cert. denied, 442 U.S. 917, 99 S.Ct. 2836, 61 L.Ed.2d 283 (1979), establishes the procedures to be used in this Circuit for admitting coconspirator's statements.
James holds that these three issues are preliminary questions concerning admissibility to be determined by the court, Fed.R.Evid. 104(a), rather than conditional facts determining relevancy, Fed.R.Evid. 104(b). James, 590 F.2d at 577-80. In order to prevent the jury's being prejudiced by inadmissible hearsay, James establishes two procedural safeguards. Ideally, before trial the prosecutor should make a showing of substantial independent evidence that the statement is admissible. Then at the conclusion of evidence, considering both the prosecution's evidence and the defense's evidence, the trial court must find that the preponderance of the independent evidence shows the statement is admissible.
The district court should, whenever reasonably practicable, require the showing of a conspiracy and of the connection of the defendant with it before admitting declarations of a coconspirator. If it determines it is not reasonably practical to (D) At the End of the Trial
require the showing to be made before admitting the evidence, the court may admit the statement subject to being connected up.
Regardless of whether the proof has been made in the preferred order, or the coconspirator's statement has been admitted subject to later connection, on appropriate motion at the conclusion of all the evidence the court must determine as a factual matter whether the prosecution has shown by a preponderance of the evidence independent of the statement itself (1) that a conspiracy existed, (2) that the coconspirator and the defendant against whom the coconspirator's statement is offered were members of the conspiracy, and (3) that the statement was made during the course and in furtherance of the conspiracy. Rule 801(d)(2)(E). If the court concludes that the prosecution has not borne its burden of proof on these issues, the statement cannot remain in the evidence to be submitted to the jury. In that event, the judge must decide whether the prejudice arising from the erroneous admission of the coconspirator's statements can be cured by a cautionary instruction to disregard the statement or whether a mistrial is required.
Id. at 582-83 (citations omitted).
The James procedure as just described was not precisely followed in this case. Here the initial James hearing was not an evidentiary hearing, but rather a proffer hearing; both the prosecution and defense outlined the evidence they proposed to introduce, which in fact was introduced. Based on that proffer, the trial court allowed the coconspirators' statements into evidence. At the close of the prosecution's case, counsel for Nichols moved that the coconspirator statements be excluded; the trial court denied the motion. This motion was not renewed at the...
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