U.S. v. Zipkin

• Decision Date: 07 March 1984
• Docket Number: No. 83-3042,83-3042
• Citation: 729 F.2d 384
• Parties: 15 Fed. R. Evid. Serv. 358 UNITED STATES of America, Plaintiff-Appellee, v. Lewis A. ZIPKIN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 384

729 F.2d 384

15 Fed. R. Evid. Serv. 358

UNITED STATES of America, Plaintiff-Appellee, v. Lewis A. ZIPKIN, Defendant-Appellant.

No. 83-3042.

United States Court of Appeals Sixth Circuit.

Argued Dec. 1, 1983.

Decided March 7, 1984.

Gerald A. Messerman (argued), Messerman & Messerman, Cleveland, Ohio, for defendant-appellant.

William J. Edwards, Asst. U.S. Atty., Cleveland, Ohio, for plaintiff-appellee.

Before KRUPANSKY, Circuit Judge and PHILLIPS and PECK, Senior Circuit Judges.

PHILLIPS, Senior Circuit Judge.

Defendant Lewis A. Zipkin, an attorney, was indicted and convicted of violating 18 U.S.C. Sec. 153 ¹ by knowingly and fraudulently appropriating to his own use $6,000 belonging to Greenwood Village, Incorporated, a bankrupt estate for whom Zipkin was serving as receiver. We conclude that the district judge improperly permitted opinion testimony of a bankruptcy judge on a question of law to be introduced at trial. We further hold that the district judge erred in permitting the bankruptcy judge to interpret an order he issued in a bankruptcy proceeding. The introduction of this evidence was permitted by the district judge over the objections of defense counsel. This Court is of the opinion that the foregoing testimony was highly prejudicial and constituted reversible error. Accordingly, we reverse the conviction.

I

On September 21, 1976, by order of Bankruptcy Judge John F. Ray, Jr., Lewis A. Zipkin, defendant-appellant, was appointed receiver of Greenwood Village, Incorporated (Greenwood Village), a bankrupt estate. On August 24, 1977 Judge Ray issued an order pertaining to the Greenwood Village estate, which in part provided, "that upon payment to Lewis A. Zipkin, Receiver, of the sum of $6,000.00 for attorneys' fees on units processed and sold by the Trustee and Receiver," Zipkin was to assign to First Federal Savings and Loan Association of Cleveland (First Federal) various savings accounts.

On September 6, 1977, a check from First Federal to Zipkin was deposited in Zipkin's law firm account. In reports filed with the bankruptcy court, by the Receiver (Zipkin), the $6,000.00 was listed as "cash on hand" of the Greenwood Village estate. This "cash on hand" figure came to the attention of Judge Ray in June 1978. On June 15, 1978 Judge Ray discussed the matter with the Chief Judge of the United States District Court for the Northern District of Ohio, and Thomas Pavlik, attorney for Zipkin in his capacity as Receiver of the Greenwood Village estate. Pavlik advised Judge Ray that Zipkin had informed him (Pavlik) that he was using the money. Judge Ray also attempted to meet with the defendant, but Zipkin was unable to meet until the following day. On June 15, 1978 defendant deposited $6,000.00 from his law firm account into the account of Greenwood Village. This check was dated October 15, 1977. Subsequent meetings were held concerning the $6,000.00. Judge Ray asked Zipkin to demonstrate that the $6,000.00 had been carried in a "special account" for the Greenwood Village estate. The only evidence introduced were bank records indicating that during the period in question there was over $7,000 in an account under the names of Lewis A. Zipkin and his brother, Herbert F. Zipkin. The record indicates that on November 28, 1977, the balance in Zipkin's law firm account was $73.64.

On August 31, 1982, some four years after the incidents in question, Lewis Zipkin was indicted by a grand jury charging that from September 6, 1977 through June 15, 1978, he "did knowingly and fraudulently spend, embezzle and appropriate to his own use property, that is, Six Thousand Dollars ($6,000.) belonging to the estate of Greenwood Village, Inc." in violation of 18 U.S.C. Sec. 153. Defendant was arraigned on September 9, 1982 and pleaded not guilty. Trial began on October 12, 1982 and on October 18, 1982, the jury returned a verdict of guilty. Zipkin was placed on probation for three years and ordered to pay a fine of $3,000. The district judge denied motions for judgment of acquittal and for a new trial, and this appeal ensued.

Appellant raises numerous assertions of error by the district court, two of which are of particular concern to this court. Appellant contends his conviction should be reversed because the trial judge erred in (1) admitting testimony of a bankruptcy judge and two lawyers about the bankruptcy law in 1977 concerning the payment of interim compensation to a receiver; and (2) in permitting the bankruptcy judge to interpret the meaning of the August 24, 1977 order concerning the payment of $6,000.00 in fees to defendant.

II

Bankruptcy Judge John F. Ray, Jr. was permitted to testify at the trial, over objections of defense counsel, as follows:

Q. Under the Bankruptcy Act, under which this petition was filed, was there a provision in the Bankruptcy Act for a Receiver to receive interim fees?

Mr. Messerman: Objection

The Court: Overruled

A. (Judge Ray): No.

Q. Was it possible for a receiver to obtain interim fees even if there was no provision?

Mr. Messerman [Defense Counsel]: Objection

The Court: Overruled

A. (Judge Ray): No.

On cross-examination Judge Ray testified that he did not believe that the bankruptcy law prior to 1978 permitted interim fees to receivers. On further cross-examination defense counsel demonstrated that the bankruptcy law did not prohibit interim compensation, but rather that it was Judge Ray's practice not to award such fees.

Appellant contends that despite efforts by defense counsel during cross-examination to show that Judge Ray's views of the law were erroneous, permitting a bankruptcy judge to testify as to matters of law violates the general rule that only the trial judge may instruct the jury as to the law. Further, appellant contends that the introduction of such testimony is prejudicial error. We agree.

Federal Rule of Evidence 704 permits a witness to testify in the form of an opinion or inference to an "ultimate issue to be decided by the trier of fact." However, "[i]t is not for the witnesses to instruct the jury as to applicable principles of law, but for the judge." Marx & Co., Inc. v. Diner's Club, 550 F.2d 505, 509-510 (2d Cir.) cert. denied 434 U.S. 861, 98 S.Ct. 188, 54 L.Ed.2d 134 (1977). In Marx, the Second Circuit ruled the trial court was in error when it permitted a witness--a lawyer, qualified as an expert in securities regulation--to testify as to the legal obligations of the parties under a contract. Id. at 509. Expert testimony on the law is excluded because the trial judge does not need the judgment of witnesses. "[T]he judge (or the jury as instructed by the judge) can determine equally well" the law. VII Wigmore on Evidence Sec. 1952 (Chadbourn rev. 1978); Marx, supra, 550 F.2d at 510. The special legal knowledge of the judge makes the witnesses' testimony superfluous. Id.

It is the function of the trial judge to determine the law of the case. It is impermissible to delegate that function to a jury through the submission of testimony on controlling legal principles. See Stoler v. Penn Central Transportation, 583 F.2d 896 (6th Cir.1978) (no abuse of discretion to prohibit expert witness from testifying that he believed crossing was "extrahazardous" since the expert was being asked for what amounted to a legal opinion); Cooley v. United States, 501 F.2d 1249, 1253-54 (9th Cir.1974), cert. denied 419 U.S. 1123, 95 S.Ct. 809, 42 L.Ed.2d 824 (1975). (In the orderly trial of a case, the law is given to the jury by the court and not introduced as evidence. It would be most confusing to a jury to have legal material introduced as evidence.); United States v. Phillips, 478 F.2d 743 (5th Cir.1973) (Prosecutor's presentation through conclusory expert testimony of its claim to make a warrant insulated the Government from having to point out to the court the statutes, regulations and case law which would have brought to the surface the questions of law involved.)

In the case at bar we conclude that the testimony of Judge Ray on a question of law was improperly introduced, and its introduction was prejudicial. A jury listening to a bankruptcy judge testify as to a question of bankruptcy law would be expected to give special credence to such testimony. It was not proper for the witness to testify as to a legal conclusion; it is the sole function of the trial judge to instruct the jury on the law. In the present case the district judge erred by delegating in part that responsibility.

The Government contends that even if it was error to have Judge Ray testify as to the law, there is no prejudicial error because defense counsel demonstrated on cross-examination that Judge Ray's view of the law was erroneous. We do not agree. Although defense counsel made a diligent effort to discredit Judge Ray's direct testimony, we cannot conclude that there was no prejudice. The testimony of Judge Ray included his legal conclusions. These are not a proper subject of testimony and their prejudicial effect substantially outweighed any probative value they might have had. ² In effect Judge Ray's testimony amounted to a statement that under the applicable law the defendant was guilty. Such testimony from a bankruptcy judge obviously would have impact upon a jury.

We hold therefore that the district court committed reversible error in admitting this testimony.

III

Appellant further asserts the district judge erred in permitting Bankruptcy Judge Ray to interpret the meaning of the August 24, 1977 order concerning the payment of $6,000.00 in fees to Lewis A. Zipkin. ³

On direct examination Bankruptcy Judge Ray testified as to the meaning of the order stating:

Q. Can you please identify that? [Exhibit 2]

A. [Judge Ray] This is a journal entry signed by me as of October [sic August] the 24th, 1977, where it is releasing funds to First Federal Savings & Loan of Cleveland from savings accounts that were on deposit with them, which represented the proceeds from the...