U.S. v. Peterman, 85-1993

• Decision Date: 10 March 1988
• Docket Number: No. 85-1993,85-1993
• Citation: 841 F.2d 1474
• Parties: 25 Fed. R. Evid. Serv. 80 UNITED STATES of America, Plaintiff-Appellee, v. Larry PETERMAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1474

841 F.2d 1474

25 Fed. R. Evid. Serv. 80

UNITED STATES of America, Plaintiff-Appellee, v. Larry PETERMAN, Defendant-Appellant.

No. 85-1993.

United States Court of Appeals Tenth Circuit.

March 10, 1988.

Rehearing Denied June 7, 1988.

Jerome H. Mooney of Mooney & Smith, Salt Lake City, Utah, for defendant-appellant.

Francis Leland Pico, Asst. U.S. Atty., Cheyenne, Wyo. (Richard A. Stacy, U.S. Atty. and Lisa E. Leschuck, Asst. U.S. Atty., with him on the brief), for plaintiff-appellee.

Before SEYMOUR, REINHARDT, ^* and TACHA, Circuit Judges.

TACHA, Circuit Judge.

Larry Peterman appeals from his conviction for wire fraud and conspiracy to commit wire fraud. He also appeals from the enhancement of his sentence by the district court. We affirm the conviction, but because of the lack of findings, we remand for resentencing.

Peterman was the founder of "Meat Masters," a chain of stores that sold sides of beef and other large quantities of meat to the public. Meat Masters stores were located in Utah and Wyoming. The stores advertised their products on Salt Lake City and Cheyenne television stations and in print media throughout the area. Consumers were instructed to call a toll-free telephone number to arrange appointments for the purchase of meat. Over 400 consumers bought meat from Meat Masters through its stores in Casper, Cheyenne, and Eden, Wyoming.

Peterman and other Meat Masters employees were indicted for consumer fraud arising from the sale of meat in the stores in Wyoming. The nine defendants were charged with various fraudulent practices in the advertising and sale of meat in violation of the wire fraud provisions of 18 U.S.C. Sec. 1343. Peterman and three other defendants were convicted in a trial in 1981. This court reversed Peterman's conviction because of the district court's failure to give a good faith instruction to the jury. United States v. Hopkins, 744 F.2d 716 (10th Cir.1984) (en banc). ¹ Peterman was again convicted in 1985 and sentenced to three years in prison.

Peterman brings four allegations on appeal: (1) the district court's instructions to the jury expanded the scope of the indictment, (2) the court erred in allowing the government to introduce evidence of the 1981 conviction of one of Peterman's original codefendants, (3) the court erred in allowing the prosecution to read parts of Peterman's testimony from the 1981 trial into the record, and (4) the court improperly enhanced the sentence.

I.

Peterman alleges that the district court's instructions to the jury improperly expanded the scope of the indictment. In particular, Peterman contends that the court's definition of "bait and switch" tactics allowed the jury to reach a guilty verdict on the basis of a theory not relied upon by the grand jury in delivering the indictment.

Jury instructions may not include an element of an offense if that element was not charged in the indictment. United States v. Sloan, 811 F.2d 1359, 1363 (10th Cir.1987). The court in United States v. Lemire, 720 F.2d 1327, 1344 (D.C.Cir.1983), cert. denied, 467 U.S. 1226, 104 S.Ct. 2678, 81 L.Ed.2d 874 (1984), noted two dangers that arise from a substantial deviation of instructions from an indictment. First, a defendant is required to answer to a charge that was not brought by a grand jury, thus violating the express language of the fifth amendment that "[n]o person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury." Second, a defendant is denied sufficient notice to present and prepare an adequate defense to the crime charged. Nevertheless, instructions necessarily deviate somewhat from an indictment because instructions explain to a jury how the law relates to the facts presented at trial. Therefore, instructions will be found invalid only if their deviation from the indictment infringes on a defendant's rights. Lemire, 720 F.2d at 1344; see also Sloan, 811 F.2d at 1362-63. ²

Count one of the indictment charged Peterman with "using deceptive sales techniques and making false representations to victim-consumers." The indictment alleged that "different consumer-victims were deceived in varying ways," including "the use of 'bait and switch' tactics, in which the Defendants persuaded consumers to purchase more expensive cuts of meat than those advertised, by making the advertised cuts either unavailable or so unattractive in appearance that no reasonable consumer would purchase them." The indictment then recited several overt acts that Peterman had allegedly committed, such as "provid[ing] certain advertised items of bonus meats which were green and moldy," failure to provide consumers with promised bonus meat, selling "a quantity of spoiled pork that was part of the bonus package," and selling meat to one customer with "an estimated cutting loss of 47%, and ... overcharg[ing him] an additional 20cents per pound, for 'custom cutting', contrary to the representations of the Defendants." The indictment identified twenty-one specific instances in which the defendant had sold or participated in the sale of meat in furtherance of the charged offense.

The court instructed the jury as follows:

Count 1 of the indictment charges as a part of the conspiracy to defraud, that bait and switch tactics were used by the defendant in the operation of various Meat Masters stores.

Under Wyoming law, a person engages unlawfully in a deceptive trade practice when he knowingly in the course of his business and in connection with a consumer transaction engages in bait and switch advertising.

Bait and switch advertising consists of an offer to sell merchandise, which the seller doesn't intend to sell, which advertising is accompanied by one or more of the following practices:

A. Refusal to show the merchandise advertised; or

B. False disparagement in any material respect to the advertised merchandise or the terms of sale; or

C. Requiring undisclosed tie-in sales, or other undisclosed conditions to be met prior to selling the advertised merchandise; or

D. Knowingly showing or demonstrating defective merchandise, which is unusable or impractical for the purpose set forth in the advertisement; or

E. Accepting a deposit for the merchandise and subsequently charging the buyer for a higher priced beef item without his consent, or

F. Willful failure to make either deliveries of the merchandise or to make a refund therefor.

Even assuming that part of the definition of bait and switch in the jury instructions diverged from the activities alleged in the indictment, no evidence was offered at trial to prove the offenses described in the objectionable parts of the instructions. Instead, the evidence produced at trial was consistent with the activities the government alleged in the indictment.

Fourteen consumers who had purchased meat from Meat Masters testified against Peterman at trial. Their testimony was strikingly consistent. They described a pattern of sales tactics that shows that this was perhaps the classic "bait and switch" case.

A prospective consumer learned of Meat Masters through advertisements for meat priced at 97cents, 99cents, $1.04, $1.09, or $1.29 per pound. The consumer then called Meat Masters on its toll free telephone number to arrange an appointment at one of its stores. Upon arrival at the store, the consumer would be asked if he or she had ever purchased meat in bulk quantities before. Most consumers answered "no." The sales representative would then show the consumer the meat. First, the consumer would see the meat available at the sale price. It was variously described as "kind of gray and brown and kind of had a green tinge to it," "pretty dried out," "pretty fatty," "really dark," "terrible" and "kind of grayish color," having "tendons coming ... through it," and "really gross." The sales representative would then show the consumer another cut of beef which looked "real nice," "really attractive," "fresher," "a lot better," "real appealing," or "a hundred percent better." This meat, however, was priced at $2.39, $2.45, $2.49, $2.67, or $2.87, per pound. The representative would then attempt to convince the consumer that the more expensive meat afforded a better buy because there was less waste than the sale meat. The consumer would agree to purchase the more expensive meat.

In a few instances there were variations from the general pattern. In one instance, the representative told the consumer that he could not sell the sale meat, despite the consumer's desire to purchase it, because it must be kept available for other consumers who might wish to purchase it. Several consumers also complained that the advertised bonus items--such as chickens, ham, bacon, or pork chops--that were promised free for the purchase of meat were unavailable.

Thus, the evidence produced at trial closely corresponds to the offense initially described in the indictment. There is no evidence in the record which would have allowed the jury to convict Peterman of an offense that was not charged in the indictment. We therefore hold that the district court's instructions to the jury did not constitute prejudical error.

II.

Peterman raises several challenges to the admissibility of evidence that Mark Lundquist, who had managed Meat Masters stores in Eden and in Casper, was convicted in the first trial in this matter. Lundquist was a codefendant of Peterman in the 1981 trial, during which Lundquist denied his involvement in the illegal activities alleged in the indictment. Lundquist was convicted and did not appeal. The government called Lundquist as a witness against Peterman in this trial. When Lundquist began to testify favorably to Peterman, the prosecutor sought to impeach Lundquist through evidence of his prior conviction. The district court allowed the impeachment over Peterman's objection.

A.

The admissibility of testimony regarding the conviction of a codefendant depends on the...