United States v. Novak

• Decision Date: 11 January 2000
• Docket Number: Nos. 99-2583,99-2586,s. 99-2583,99-2586
• Citation: 217 F.3d 566
• Parties: (8th Cir. 2000) UNITED STATES OF AMERICA, APPELLEE, v. DAVID NOVAK, APPELLANT. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 566

217 F.3d 566 (8th Cir. 2000)

UNITED STATES OF AMERICA, APPELLEE, v. DAVID NOVAK, APPELLANT.

Nos. 99-2583,99-2586

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: January 11, 2000

Filed: June 20, 2000

Appeal from the United States District Court for the Western District of Missouri. [Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Bowman and Loken, Circuit Judges, and Alsop, ¹ District Judge.

Bowman, Circuit Judge.

Defendant David Novak appeals two separate convictions. In the first case, 99-2583 (Novak I), Novak pleaded guilty to the facts underlying a twelve-count indictment for violating the terms of his supervised release imposed following an earlier bank fraud conviction. Novak conditioned his plea on retaining the right to appeal the ruling of the District Court ² denying his motion to dismiss all counts. In the second case, 99-2586 (Novak II), Novak appeals his unrelated conviction for bankruptcy fraud. Having reviewed Novak's arguments, and finding no basis for reversal, we affirm both convictions.

I.

We turn first to the background of Novak I. By agreement filed August 8, 1991, Novak pleaded guilty to bank fraud for misrepresenting pledged collateral. In that agreement, Novak acknowledged that the government would seek approximately $63,000 in restitution and that "the final decision as to an order of restitution is entirely up to the Court." 1991 Plea Agreement 6. Novak further agreed "to waive any appeal of the amount of restitution ordered by the Court." Id. The District Court ³ sentenced Novak to five months' imprisonment followed by two years of supervised release. In addition to imposing the standard conditions of supervised release--including that "the defendant . . . shall submit a truthful and complete written report" to the United States Probation Office (USPO) each month and that "the defendant shall answer truthfully all inquiries by the probation officer"--the District Court also imposed a special condition that Novak "shall not sell cars for himself or others during [the] term of supervised release." Judgment of Jan. 17, 1992, at 3. The District Court ordered Novak to pay $63,000 in restitution (less the amount obtained by the liquidation of certain collateral) "[o]n a payment schedule determined by the [USPO]." Id. at 4. Novak did not appeal this order.

A twelve-count indictment, filed on August 19, 1996, charged Novak with violating the terms of his supervised release in the 1991 bank fraud case. ⁴ As noted above, Novak signed a conditional plea agreement acknowledging the facts underlying all twelve counts, namely, that during the period of his supervised release in the bank fraud case (that is, from June 1992 to June 1994), he violated the conditions of his supervised release. Novak admitted, inter alia, that he "attempted to hide his employment, income and assets from the [USPO] in order to avoid payment of Court- ordered restitution [and] provided false information to the [USPO]." 1997 Plea Agreement at 5, K. Novak admitted that he "submitted to the [USPO] monthly supervision reports as well as yearly financial statements . . . which he acknowledged were correct, when in fact defendant well knew that he owned additional motor vehicles, real estate, earned commission income and had additional employment activities which he intentionally did not disclose to the [USPO]." Id. at 6, K. Ultimately, on May 20, 1999, the District Court ⁵ sentenced Novak to twenty months' imprisonment on each of the twelve counts, the terms to be served concurrently.

As noted, Novak's guilty plea was conditioned on preserving his right to appeal the District Court's denial of his motion to dismiss all twelve counts. ⁶ We review Novak's arguments de novo. See United States v. Smith, 171 F.3d 617, 619 (8th Cir. 1999) (standard of review).

A.

Novak's first point is that the object of the conspiracy in Count One--to provide false information to the USPO in order to conceal assets and avoid restitution, see 1996 Indictment at 3, 7--is not an illegal act because, he claims, "the underlying order of restitution entered in the [bank fraud] case, so far as it purported to vest authority to establish a [restitution] payment schedule to be determined by the [USPO,] was a nullity." Brief of Appellant in Novak I at 8. In furtherance of his position, Novak points out that several courts outside this Circuit have held that a district court may not delegate the responsibility for establishing a restitution payment schedule to the USPO, ⁷ as the District Court did in the underlying bank fraud case here. We apparently have not had occasion to reach this issue squarely ⁸ and we expressly decline to do so now because of a procedural obstacle that prevents us from considering the merits.

As noted above, Novak failed to appeal the restitution order to which he now objects. He therefore is foreclosed from doing so now. See United States v. Evans, 87 F.3d 1009, 1010 (8th Cir. 1996) ("Because [defendant] never appealed from that earlier proceeding, we believe that he waived the issue of any legal infirmity in that sentence."); United States v. Kress, 58 F.3d 370, 373 (8th Cir 1995) ("Where a party could have raised an issue in a prior appeal but did not, a court later hearing the same case need not consider the matter."). Indeed, the District Court was persuaded that "[t]he central factor in this analysis is the fact that defendant never appealed his [bank fraud sentence] to the Eighth Circuit." Report and Recommendation of April 10, 1997, at 5. We agree.

While Novak also might have tested the 1992 Order by explicitly refusing to obey it and subjecting himself to a contempt proceeding, it is beyond cavil that a defendant must attack a court's order through the judicial process, not by self-help alone. This much Novak partially concedes. ⁹ If Novak disputed the propriety of any portion of the 1992 order, he should have challenged it through lawful means, not by willfully disregarding it. "If a party can make himself a judge of the validity of orders which have been issued, and by his own act of disobedience set them aside, then are the courts impotent, and what the Constitution now fittingly calls the 'judicial power of the United States' would be a mere mockery." Gompers v. Bucks Stove & Range Co., 221 U.S. 418, 450 (1911). We see no basis for reversal on this point.

B.

We turn next to Novak's challenge to Counts Two through Six, the charges that he submitted false reports to the USPO in violation of 18 U.S.C. 1503. ¹⁰ Novak argues that his misconduct, occurring as it did during a term of supervised release, may not be reached by 1503 because there was no "pending judicial proceeding" when the misconduct occurred.

Novak was charged under 1503's broadly-worded omnibus clause which provides, in relevant part, that "[w]hoever . . . . corruptly . . . influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice" shall be punished. 18 U.S.C. 1503. As an initial matter, we question whether 1503 imposes any requirement that there be a "pending judicial proceeding." ¹¹ While the instant prosecution may be unusual, there is nothing on the face of 1503 requiring a pending proceeding nor precluding its use in targeting those who make knowing and fraudulent misrepresentations to the USPO in violation of a court order during a period of supervised release.

Out of an abundance of caution, however, we shall consider whether this case satisfies a "pending judicial proceeding" requirement, assuming, arguendo, the existence of such a requirement. This question is one of apparent first impression for this Court. While we have noted that 1503's application typically begins "after the commencement of formal judicial proceedings," United States v. Werlinger, 894 F.2d 1015, 1016 n.3 (8th Cir.1990), we evidently have not had occasion to consider when a proceeding ends for purposes of 1503. In fact, there is relatively little case law addressing this question. Cf. United States v. Fulbright, 105 F.3d 443, 450 (9th Cir.) (noting that only "a few cases address post-trial conduct"), cert. denied, 520 U.S. 1236 (1997); United States v. Johnson, 605 F.2d 729, 730 (4th Cir. 1979) ("While many cases have determined when a proceeding begins for purposes of [ 1503], neither counsel nor research has produced any authority as to when one terminates."), cert. denied, 444 U.S. 1020 (1980). Counsel have cited no cases, ¹² nor could we find any, that address our question of whether 1503 applies to a defendant's knowing and fraudulent misrepresentations to the USPO in violation of the terms of a district court's order governing his supervised release.

Nonetheless, we agree with the District Court that Novak's misconduct occurred while a judicial proceeding was "pending" because the relevant conduct "occurred prior to sentencing and within the time after sentencing for filing a request for reduction of sentence pursuant to Rule 35(b)." ¹³ Report and Recommendation at 9; see United States v. Fernandez, 837 F.2d 1031, 1034 (11th Cir.) (holding that, even if 1503 requires "a pending judicial proceeding," such requirement was met where misconduct occurred after sentencing but within period to file motion to reduce sentence pursuant to Federal Rule of Criminal Procedure 35(b)), cert. denied, 488 U.S. 838 (1988); Johnson, 605 F.2d at 731 (concluding that criminal action remains pending until "disposition is made of any direct appeal taken by the defendant assigning error that could result in a new trial").

Here, the disputed counts involve conduct occurring from July 1992 to November 1992. See 1996 Indictment (Count Two (July 1, 1992); Count Three (August 2, 1992); Count Four (September 1, 1992); Count Five (October 1, 1992); Count Six (November 1, 1992)). Novak was sentenced in the underlying bank fraud matter on January 17, 1992, with a subsequent order...