United States v. Donelli

• Decision Date: 07 April 2014
• Docket Number: No. 13–2548.,13–2548.
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Stephanie L. DONELLI, Defendant–Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

747 F.3d 936

UNITED STATES of America, Plaintiff–Appellee,

v.Stephanie L. DONELLI, Defendant–Appellant.

No. 13–2548.

United States Court of Appeals, Seventh Circuit.

Argued March 5, 2014.

Decided April 7, 2014.

Doris L. Pryor, Attorney, Office of the United States Attorney, Indianapolis, IN, for Plaintiff–Appellee.

Joseph M. Cleary, Attorney, Sara J. Varner, Attorney, Indiana Federal Community Defenders, Inc., Indianapolis, IN, for Defendant–Appellant.

Before EASTERBROOK, MANION, and HAMILTON, Circuit Judges.

HAMILTON, Circuit Judge.

Defendant Stephanie Donelli appeals the 60–month prison sentence she received after pleading guilty to wire fraud and tax evasion. She argues that the district court made a procedural error by failing to address her diagnosis of a mental illness, bipolar II disorder, which Donelli now calls a “principal argument in mitigation.”

Since our decision in United States v. Cunningham, 429 F.3d 673 (7th Cir.2005), we have required sentencing judges to address a defendant's principal arguments in mitigation when those arguments have recognized legal merit. See, e.g., United States v. Vidal, 705 F.3d 742, 744 (7th Cir.2013); United States v. Chapman, 694 F.3d 908, 913–14 (7th Cir.2012); United States v. Gary, 613 F.3d 706, 709 (7th Cir.2010). Our cases do not show clearly, however, what is necessary for a defendant's mitigation argument to trigger the district court's duty to explain under Cunningham. Donelli asserts that briefly mentioning her bipolar disorder at sentencingwas enough to require a response from the district court.

We disagree, and we affirm Donelli's sentence for two independent reasons. First, she failed to present the fact of her diagnosis as a principal argument in mitigation relevant to her sentence. Second, she waived her claim of a Cunningham procedural error by telling the district court at the close of her sentencing hearing that she had no objection to her sentence apart from the fact that the sentence was above the guideline range.

I. Donelli's Crimes

In 2007 Donelli and her family began renting a home from an elderly couple, Ruth and Eugene Vigus. For the next four years Donelli led the Viguses to believe that her minor daughter would receive a $750,000 settlement from an oil company after suing for injuries sustained in a car accident with a drunk employee of the company. Apart from the fact that Donelli had a young daughter, the story was entirely false.

Using this ruse, Donelli persuaded the Viguses to “lend” her money more than 500 times to get her family through tough straits until the long-awaited settlement arrived. Each time Donelli signed a promissory note, even committing to paying interest. These phony loans totaled almost $443,000, much of it spent on lavish vacations with her family. None of the money was reported to the IRS as income. The Viguses never saw a dime of their money again. As a result of this fraud, Donelli was indicted on five counts of tax evasion, 26 U.S.C. § 7201, and one count of wire fraud, 18 U.S.C. § 1343.

II. The Presentence Report

Donelli agreed to plead guilty to all charges under a plea agreement. The United States Probation Office prepared a presentence report. The report said that Donelli had sought treatment for drug abuse in May 2012 from Dr. Michael J. Deal, an Indianapolis psychiatrist. The probation officer had reviewed records from Dr. Deal, who prescribed medication for opioid addiction and also diagnosed Donelli with “Type II Bipolar Disorder.” Beyond the report of the diagnosis of bipolar II disorder, though, the report included no information about this mental illness or its impact on Donelli. The report did not conclude or even suggest that the illness was a contributing factor in Donelli's crimes, past or present.

The presentence report calculated a total offense level of 20 and placed Donelli within criminal history category III. The district court ultimately adopted the entire presentence report, including the uncontested guideline calculations. Donelli's guideline imprisonment range was 41 to 51 months.

III. The Sentencing Hearing

Donelli did not submit a sentencing memorandum, nor did she present any evidence during the sentencing proceeding except for letters of support from her husband and children. She exercised her right to speak on her own behalf at sentencing. Donelli attributed her fraud against the Viguses to her addiction to prescription opioids. The district judge acknowledged the reference in the presentence report to Donelli's diagnosis of bipolar II disorder, which prompted the judge to ask Donelli:

[D]o you still sense that you need some mental health counseling? I mean, was it just a problem of getting off the drugs or is there something in there, some mystery, that needs to be unlocked with respect to why you became addicted and why you resorted to these means?

Donelli replied: “No, it's just—I lost my dad at age 12.... Then I lost my mother in 2006. And that's when it became really bad.”

Donelli's lawyer also noted the presentence report's reference to her bipolar II diagnosis, arguing that Donelli's previously undiscovered mental health problems, coupled with her “reasonably serious narcotic addiction,” offered “not an excuse but an explanation” for her behavior. The lawyer asked the district court to take the bipolar II diagnosis into account as one of Donelli's characteristics. Her lawyer also argued that because Donelli's offense level was adjusted both for the amount of money she took from the Viguses and the vulnerability of her victims, “the guidelines encompass most of what needs to be taken into account.”

The district court imposed a sentence of 60 months in prison, nine months above the high end of the guideline range. The court explained that the guidelines did not “capture the extent of the harm here.” While recognizing that the guidelines accounted for the amount of loss and vulnerability of the victims, the judge explained that “what is not reflected in the guidelines is how long this went on and how many deceitful acts were perpetrated by you driven by your addiction.” The judge also remarked that Donelli had been given opportunities to recognize the harm she was causing, but at every turn she had failed to stop her destructive behavior. The judge did not mention the bipolar diagnosis when explaining the sentence.

The judge closed the sentencing hearing by asking counsel whether they had any objection to the sentence or required “any further elaboration” of the judge's reasons. Donelli's lawyer objected to the above-guideline sentence and repeated the argument that the guidelines already accounted for the nature of the harm. Her lawyer offered no other objection to the sentence, the manner in which it was imposed, or the sufficiency of the court's explanation of its reasons.

IV. Analysis

On appeal, Donelli argues that the district judge failed to address a principal argument in mitigation. According to her appellate counsel, the unaddressed argument made by the lawyer in the district court was that Donelli had a serious mental health disability. Donelli asserts that the court's procedural error also resulted in a prison term that is substantively unreasonable. Donelli does not otherwise challenge the above-guideline sentence as unreasonable.

We conclude first that the lawyer's assertion at sentencing that Donelli's bipolar II disorder was “not an excuse but an explanation” for her crimes was not a developed “principal argument” that the district court was required to address. Second, even if the court had a duty to respond, Donelli's failure to object to the omission when the court asked about the sufficiency of the explanation at the close of the sentencing hearing forecloses her argument on appeal.

A. The Cunningham Duty

When pronouncing sentence, the district court generally must comment on what we have called a defendant's “principal arguments in mitigation.” See, e.g., United States v. Garcia–Segura, 717 F.3d 566, 568 (7th Cir.2013); United States v. Schmitz, 717 F.3d 536, 541 (7th Cir.2013). Although sentencing is an exercise of the district court's discretion, a reviewing court must be able to satisfy itself that the district court actually exercised its discretion. Cunningham, 429 F.3d at 679.

Cunningham imposes a procedural requirement. It does not constrain the district court's discretion in deciding upon a reasonable sentence under the broad guidance of 18 U.S.C. § 3553(a). This procedural requirement is designed to ensure that the judge has in fact considered the principal issues affecting the sentencing decision. The requirement is based on the view that a “judge who fails to mention a ground of recognized legal merit (provided it has a factual basis) is likely to have committed an error or oversight.” Cunningham, 429 F.3d at 679.

The district court did not fail to comply with its Cunningham duty. Donelli did not present her mental health diagnosis as part of an argument that triggered the court's duty to respond. Where the effect is not otherwise obvious, a defendant relying on a personal characteristic as a mitigating factor must offer a cogent argument as to why that characteristic should be deemed a mitigating rather than aggravating factor. This principle applies equally to mental illness. See United States v. Cheek, 740 F.3d 440, 455 (7th Cir.2014) (age); United States v. Annoreno, 713 F.3d 352, 358 (7th Cir.2013) (“mental characteristics” including bipolar disorder and...