U.S. v. Taylor

• Decision Date: 03 April 1998
• Docket Number: No. 97-3028,97-3028
• Parties: UNITED STATES of America, Appellee, v. Robert N. TAYLOR, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 924

139 F.3d 924

329 U.S.App.D.C. 231

UNITED STATES of America, Appellee, v. Robert N. TAYLOR, Appellant.

No. 97-3028.

United States Court of Appeals, District of Columbia Circuit.

Argued Jan. 21, 1998.

Decided April 3, 1998

Appeal from the United States District Court for the District of Columbia (No. 96cr00233-01).

Lisa B. Wright, Assistant Federal Public Defender, argued the cause for appellant, with whom A.J. Kramer, Federal Public Defender, Washington, DC, was on the briefs. David A. Howard, Assistant Federal Public Defender, entered an appearance.

Rachel Adelman-Pierson, Assistant U.S. Attorney, Washington, DC, argued the cause for appellee, with whom Mary Lou Leary, U.S. Attorney, Washington DC, at the time the brief was filed, John R. Fisher and Elizabeth Trosman, Assistant U.S. Attorneys, Washington, DC, were on the brief.

Before: EDWARDS, Chief Judge, WALD and ROGERS, Circuit Judges.

ROGERS, Circuit Judge:

Appellant Robert N. Taylor appeals the denial of his pre-sentence motion to withdraw his guilty plea to felony criminal contempt and wire fraud. He contends that, despite the fact that his plea was entered following the trial, the district court abused its discretion by not holding an evidentiary hearing on claims that his trial counsel had a conflict of interest that denied him the effective assistance of counsel under Cuyler v. Sullivan, 446 U.S. 335, 100 S.Ct. 1708, 64 L.Ed.2d 333 (1980). Because Taylor's averments related to matters outside of the trial record and were sufficient to demonstrate, if credited, that trial counsel had a conflict of interest that adversely affected the adequacy of his representation, we reverse and remand the case for an evidentiary hearing.

I.

In the fall of 1995, the Securities and Exchange Commission ("SEC") filed a civil enforcement action against appellant, Robert N. Taylor, alleging that he had operated his company, the Better Life Club of America, Inc., as a fraudulent Ponzi scheme. Thereafter, the district court issued both a temporary restraining order and a preliminary injunction freezing all of Taylor's personal and corporate assets. ¹ The instant appeal arises out of Taylor's prosecution for criminal contempt for his alleged violation of these freeze orders.

The government pursued two contempt citations against Taylor, one for criminal contempt arising out of a series of bank transactions and a second for civil contempt arising out of Taylor's refinancing of his home. The first effort began on May 1, 1996, when the government filed a show cause application for criminal contempt alleging that Taylor had violated the freeze orders by engaging in more than two hundred different banking transactions and by failing to disclose the existence of several bank accounts. To avoid a jury trial, the government asked the district court, and it agreed, to limit any sentence to no more than six months imprisonment or a fine of no more than $5,000, effectively charging Taylor with a petty offense misdemeanor of criminal contempt. See 18 U.S.C. § 1(3) (1988); United States v. Nachtigal, 507 U.S. 1, 4, 113 S.Ct. 1072, 1073-74, 122 L.Ed.2d 374 (1993); Frank v. United States, 395 U.S. 147, 148-50, 89 S.Ct. 1503, 1504-06, 23 L.Ed.2d 162 (1969). The show cause hearing began on July 1, and was continued until July 19, when the district court deferred its ruling until July 22, pending ongoing plea negotiations.

While the criminal contempt proceeding was pending, the SEC learned that Taylor and his girlfriend, who had been brought into the civil enforcement action as a relief defendant, had refinanced their home and received a "cash out" share of the refinancing. It subsequently initiated a civil contempt proceeding, alleging that Taylor and his girlfriend had violated the freeze orders. A hearing was held on July 17, 1996, before a different judge, who took the matter under advisement.

Before either judge ruled in the criminal or civil contempt proceedings, however, Taylor entered into a comprehensive plea agreement with the government. The global agreement encompassed not only the banking transactions underlying the misdemeanor contempt proceedings, but also Taylor's actions in securing the home refinancing. Taylor agreed to plead guilty to wire fraud, see 18 U.S.C. §§ 2, 1343, for several alleged misrepresentations he had made in his refinancing application, ² as well as to felony contempt, see 18 U.S.C. § 401(3), for both the refinancing and the bank transactions. ³ Taylor faced a maximum possible sentence of five years' imprisonment and a substantial fine on the wire fraud charges, see 18 U.S.C. § 1343, in addition to three years of supervised release and a requirement that he make full restitution. The felony contempt charge carried an unspecified maximum sentence to be determined at the discretion of the court. See 18 U.S.C. § 401. In exchange, the government agreed to withdraw its original misdemeanor criminal contempt charges, request the SEC to dismiss its civil contempt application, and request concurrent sentences for contempt and wire fraud, with the former sentence no longer than the latter. Additionally, the government agreed to allocute for the maximum reduction of his sentence for acceptance of responsibility under section 3E1.1 of the Sentencing Guidelines, forego the underlying securities fraud claim as relevant conduct, and not to prosecute Taylor's girlfriend. Pursuant to the agreement, Taylor pleaded guilty, following a Rule 11 hearing, to wire fraud and felony criminal contempt on July 22, 1996. See FED.R.CRIM.P. 11.

Prior to sentencing, Taylor wrote a letter to the district court indicating that he wanted to withdraw his guilty plea and request the appointment of new counsel. On the same day, August 30, 1996, he filed a motion to withdraw his plea on the ground of ineffective assistance of counsel. With newly appointed counsel, Taylor filed a revised motion and a supporting affidavit. Taylor's ineffectiveness allegations initially consisted of three general claims: erratic conduct, economic coercion, and a conflict of interest.

As to the first, the record shows that during the course of the securities fraud and misdemeanor contempt proceedings, the district court repeatedly had expressed concern about the adequacy of Taylor's representation. Trial counsel had failed to appear for two hearings in the SEC proceeding and exhibited other erratic behavior as a result of personal problems relating to substance abuse. Notwithstanding suggestions from the district court that he might wish to retain a different lawyer, Taylor continually expressed satisfaction with trial counsel. ⁴ Nevertheless, in support of his motion to withdraw his guilty plea, Taylor averred that trial counsel had missed several meetings with him regarding the plea negotiations and been otherwise distracted or inattentive. Additionally, Taylor alleged that trial counsel had failed to explain fourteen different provisions of the plea agreement prior to his entry of his plea.

Taylor also claimed that trial counsel had "financially coerced" him into pleading guilty because Taylor was unable to meet counsel's "unrelenting" fee demands. Specifically, Taylor alleged that in late June or early July of 1996, trial counsel "asked for an additional $5,000 to proceed to trial, and expressed a clear lack of interest in fighting [the] case when [Taylor] advised him that he could not pay." Thereafter, counsel allegedly pressured Taylor to accept the government's plea offer.

Finally, Taylor alleged that trial counsel was unable to render effective assistance due to a conflict of interest. In his revised motion, Taylor focused on trial counsel's substance abuse problems and claimed that trial counsel was "inclined to divest himself" of any additional burdens to his recovery. He also noted that trial counsel faced possible disciplinary action by the bar as well as a contempt sanction from the district court. Thus, Taylor claimed, trial counsel pressured him into accepting the government's plea agreement in order to dispose of the case as quickly as possible.

Trial counsel's affidavit, submitted with the government's opposition to the motion to withdraw, painted a very different picture of his relationship with Taylor. Trial counsel denied any economic coercion and portrayed conscientious efforts on behalf of a client who was potentially facing multiple criminal charges. Trial counsel acknowledged his advice that Taylor pursue a global plea agreement with the government, and described his repeated efforts, some successful, to obtain more favorable terms.

When Taylor's motion to withdraw came before the district court on December 9, 1996, the court observed that neither the pleadings nor the affidavits suggested that Taylor had any viable defense to the criminal contempt or wire fraud charges. Taylor's new counsel then alerted the court, for the first time, to a factual dispute over trial counsel's advice to Taylor regarding the refinancing of his home. ⁵ Trial counsel stated in his affidavit that he had "specifically advised [Taylor] against [the refinancing] and told him that to refinance the house would probably constitute the encumbrance of an asset and would likely be in violation of the court ordered asset freeze." Taylor disputed this statement, averring that trial counsel had advised him to proceed with the refinancing. Thus, new counsel argued, Taylor had an advice of counsel defense to the contempt charges of which he had not been informed. Further, new counsel urged that trial counsel would have had a conflict of interest in presenting this defense. Although this issue had not been previously briefed, the district court continued the hearing to allow Taylor to file "whatever he alleges his defense is."

In a supplemental affidavit Taylor averred that prior to refinancing his home he had sought advice from trial counsel and had been told, "Go ahead and do it. There is...