August 3, 2015

Colorado Court of Appeals: Police Officer’s Testimony Within Knowledge of Average Computer User

The Colorado Court of Appeals issued its opinion in People v. Froehler on Thursday, July 30, 2015.

Child Pornography—Lay Testimony—Personal Observations—Specialized Knowledge.

Froehler accidently left a flash drive on a public business computer at a hotel. The flash drive was recovered by two hotel guests, who opened it and found that some of the files contained child pornography. They turned over the flash drive to hotel security, who contacted police. A jury found Froehler guilty of sexual exploitation of a child.

On appeal, Froehler contended that the trial court abused its discretion by allowing the detective who investigated the case to give improper lay testimony. The detective testified about her personal observations of the dates the files on the flash drive were created and modified. Admission of the detective’s lay testimony was proper under CRE 701 because the method she used to view the dates did not require any specialized knowledge or familiarity with computers beyond that of the average lay person. The detective’s testimony about the ImageScan software program used to search Froehler’s home computers, however, was improperly admitted as lay testimony because this testimony did require specialized knowledge about the software. Nevertheless, its admission was harmless because no child pornography had been found on Froehler’s home computers and this evidence had no direct bearing on whether Froehler “knowingly possessed” the child pornography on the flash drive. The judgment was affirmed.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Affirmative Self-Defense Instruction Available for All General Intent Crimes

The Colorado Court of Appeals issued its opinion in People v. DeGreat on Thursday, July 30, 2015.

Self-Defense—Robbery—Jury Instruction—Peremptory Challenge—BatsonChallenge.

DeGreat’s criminal charges arose from an altercation with a taxi cab driver over the fare, which culminated in DeGreat stabbing and wounding the driver. DeGreat defended on a theory of self-defense. The jury found DeGreat guilty of aggravated robbery and a related crime of violence count.

On appeal, DeGreat contended that, given the unique facts presented, he was entitled to a jury instruction on self-defense as an affirmative defense to aggravated robbery. A person may use physical force to defend himself from what “he reasonably believes to be the use or imminent use of unlawful physical force” by another person. Here, evidence was presented that supported an affirmative self-defense instruction, and DeGreat successfully defended against attempted murder and first-degree assault charges on that basis. Because the robbery was intertwined with the assault, the jury could have concluded that DeGreat had the right to defend himself. The refusal to give the self-defense instruction for the charge of aggravated robbery lowered the prosecution’s burden of proof and was not harmless. Therefore, DeGreat’s aggravated robbery conviction was reversed and the case was remanded for a new trial.

DeGreat also contended that the trial court erred in denying his Batson challenge to the prosecutor’s use of a peremptory challenge to remove Juror M, an African American, from the panel [Batson v. Kentucky, 476 U.S. 79 (1986)]. In light of the prosecutor’s stated basis for the strike, which was Juror M’s reaction to self-defense questioning, the trial court did not err in finding the prosecution offered a good faith, race-neutral basis for its peremptory challenge.

DeGreat contended that the trial court plainly erred in failing to sua sponte strike testimony that DeGreat had been offered a plea bargain. DeGreat’s attorney did not make a contemporaneous objection to this testimony. Because no binding precedent clearly precludes evidence regarding plea offers, the trial court could not have been expected to sua sponte strike such unsolicited testimony.

DeGreat contended that the trial court erred in admitting recorded phone calls he placed from jail in which he attempted to solicit the victim not to appear for trial. There is no reasonable expectation of privacy in phone calls placed from jail. Furthermore, the wiretapping statute does not apply to inmate phone calls placed from jail. Thus, the trial court did not err in admitting the jailhouse phone calls.

Summary and full case available here, courtesy of The Colorado Lawyer.

Tenth Circuit: Sole Shareholders Should Not Be Discouraged from Infusing Capital Into Failing Businesses

The Tenth Circuit Court of Appeals issued its opinion in In re Alternate Fuels, Inc.: Redmond v. Jenkins on Friday, June 12, 2015.

Alternative Fuels, Inc. (AFI) is a Kansas corporation that formerly engaged in surface coal mining operations in Missouri. AFI filed for Chapter 11 bankruptcy in Kansas in 1992 and briefly continued operations while its bankruptcy was pending. John Warmack acquired 100% of AFI’s stock and formed Cimarron Energy Co. to continue the mining operations for which AFI still held permits. Mr. Warmack provided the State of Missouri with new reclamation bonds to assure that AFI would reclaim the mining land when its mining operations were finished. The bonds were secured with 24 certificates of deposit, worth approximately $1.4 million.

Mr. Warmack finished mining in 1999 and entered into an agreement with Mr. Jenkins where Mr. Jenkins would fulfill the reclamation obligations and obtain the proceeds of the 24 certificates of deposit and Cimarron’s remaining mining equipment. Mr. Jenkins paid Mr. Warmack $549,250 in exchange for 100% of AFI’s stock and 99% of Cimarron’s stock, certain equipment owned by Cimarron, and the 24 certificates of deposit. On the same day, AFI executed a promissory note for $500,000 to Mr. Jenkins. AFI executed three promissory notes to Mr. Jenkins altogether—two for $500,000 and one for $1,000,000. In 2002, AFI filed a lawsuit against certain state officers and employees, alleging tortious interference with the reclamation efforts. AFI assigned $3,000,000 of its potential recovery to Mr. Jenkins.

Judgment entered for AFI in the tort suit for $6.4 million, which, following an appeal and payment of attorney fees and costs, resulted in a recovery of about $5 million. AFI’s creditors began making claims against the proceeds, and in 2009 AFI applied for help from the bankruptcy court in distributing the funds. Mr. Jenkins filed a proof of claim against AFI’s estate for about $4.3 million. Exercising discretion and applying the Tenth Circuit test for recharacterization, the bankruptcy court recharacterized the transfers evidenced by the promissory notes as equity infusions and found he no longer held a claim secured by the alleged assignment of the suit proceeds. The bankruptcy court held in the alternative that Mr. Jenkins failed to provide sufficient documentation to prove the amount of his claim, and additionally held in the alternative that equitable subordination would be appropriate since Mr. Jenkins had acted inequitably to the detriment of AFI’s creditors and his claim should be subordinated to the level of an unsecured creditor. Mr. Jenkins appealed. The Tenth Circuit Bankruptcy Appellate Panel affirmed, and Mr. Jenkins again appealed.

The Tenth Circuit first rejected Mr. Jenkins’ argument that two recent Supreme Court decisions overruled Tenth Circuit precedent in In re Hedged Investments. The two cases relied on by Mr. Jenkins dealt with disallowance, not recharacterization, so the Tenth Circuit found the 13-step Hedged Investments recharacterization test applied. The bankruptcy court found three steps superficially supported treating Mr. Jenkins’ advances as loans: the names given to the certificates evidencing indebtedness, no increased participation in management as a result of the advances, and the extent to which the advances were used to acquire capital assets. The Tenth Circuit agreed that these three steps supported treating the advances as loans, but averred they did so more than superficially.

The Tenth Circuit found little support for the bankruptcy court’s determination that other factors necessitated recharacterization. It discounted the bankruptcy court’s decision that the ninth factor, the identity of interest between creditor and shareholder, pointed to recharacterization, finding that because there was only one shareholder this factor did not apply. As for the second factor, the presence or absence of a fixed maturity date, the Tenth Circuit disagreed with the court’s finding that the notes lacked a maturity date, finding instead they each required full payment after five years. The fact that Mr. Jenkins did not seek repayment did not render the requirement meaningless. Concerning the eighth factor, recapitalization, the Tenth Circuit found that placing too much emphasis on the factor could discourage investors from funding “rescue efforts” for failing businesses. As to the seventh factor, the intent of the parties, the Tenth Circuit found the parties intended the capital contributions to be treated as loans. The Tenth Circuit balanced the remaining factors and decided the bulk of the Hedged Investments factors weighed against recharacterization. The Tenth Circuit painted a picture of Mr. Jenkins as a sole shareholder loaning money to a failing business in hopes of keeping it afloat.

The Tenth Circuit similarly rejected the bankruptcy court’s alternative holding discharging Mr. Jenkins’ claim because he failed to meet his burden of persuasion as to amount. The Tenth Circuit found the copies of the three promissory notes proved his claim amount. The Tenth Circuit also declined to accept the bankruptcy court’s determination that if Mr. Jenkins’ claim were allowed to proceed it should be equitably subordinated. The Tenth Circuit noted that equitable subordination is an extraordinary remedy that should be employed sparingly and only if three factors are present: inequitable conduct, injury to the other creditors, and consistency with the provisions of the Bankruptcy Code. The Tenth Circuit further noted that the inequitable conduct warranting subordination must be egregious, tantamount to fraud, or involving moral turpitude. The Tenth Circuit found no such conduct from Mr. Jenkins.

The Tenth Circuit reversed the bankruptcy court’s judgment, finding neither recharacterization nor equitable subordination appropriate to Mr. Jenkins’ claims. Judge Phillips wrote a thoughtful and detailed dissent.

Tenth Circuit: Unpublished Opinions, 7/31/2015

On Friday, July 31, 2015, the Tenth Circuit Court of Appeals issued four published opinions and three unpublished opinions.

Didier v. Abbott Laboratories

Moore v. Hartley

General Steel Domestic Sales v. Chumley

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

Tenth Circuit: District Court Abused Discretion by Rejecting Plea Bargain Based on Appeal Waiver

The Tenth Circuit Court of Appeals issued its opinion in United States v. Vanderwerff on Wednesday, June 10, 2015.

Timothy Vanderwerff was indicted in the District of Colorado on three child pornography-related counts: Count 1 charged him with receipt of child pornography and Counts 2 and 3 charged him with possession. Vanderwerff entered into a plea agreement with the government wherein he would plead guilty to Count 2, which carried a statutory sentencing range of zero to ten years, in exchange for dismissal of Counts 1 and 3. The plea agreement contained an appeal waiver. The district court rejected the plea agreement, citing a “tectonic shift” in jurisprudence following the Supreme Court’s decision in Lafler v. Cooper which suggested the court should be a participant in the plea bargaining process. The district court also relied on United States v. Booker to support its finding that sentencing requires a court to consider context and apply criteria instead of performing mechanical judgment. The district court suggested that some of the judges on the Tenth Circuit were not “paying attention to their obligations” in reviewing lower court decisions. The district court rejected the proposed plea agreement.

Vanderwerff sought review of the district court’s rejection of the first plea agreement, but the Tenth Circuit determined it lacked jurisdiction because the issues were premature. The parties then negotiated a new plea agreement, wherein Vanderwerff would plead guilty to Count 1 in exchange for dismissal of Counts 2 and 3. Notably, the new plea agreement did not contain an appeal waiver. The statutory sentencing range for Count 1 was five to twenty years’ imprisonment. The district court sentenced Vanderwerff to 108 months’ imprisonment, and Vanderwerff timely appealed.

On appeal, the government agreed that the district court abused its discretion in rejecting the first plea agreement. The Tenth Circuit appointed pro bono amicus counsel to independently assess the legal propriety of the district court’s sentence decision. The amicus also agreed that the district court abused its discretion. The Tenth Circuit similarly concluded the district court abused its discretion in rejecting the plea agreement based on the appeal waiver, since its decision was premised on legally erroneous and irrelevant considerations. The Tenth Circuit opined that the district court’s reading of Lafler as a basis for rejecting the plea agreement evinced a serious misunderstanding of the case. The Tenth Circuit did not read Lafler to introduce a new role for the judiciary in the plea bargaining process.

The Tenth Circuit also disagreed with the district court’s interpretation of Booker, finding nothing in the case to suggest that district courts were obligated to exercise a wider scope of discretion in evaluating plea agreements. The Tenth Circuit noted the core holding of Booker was that the Guidelines are advisory, and found the district court seriously misconstrued Booker‘s mandate, constituting an abuse of discretion. In fact, the Tenth Circuit found nothing in Booker that spoke to appellate waivers at all, much less anything that allowed the district court to restrict a defendant’s ability to knowingly and voluntarily waive his or her appellate rights.

Finally, the Tenth Circuit disapproved of the district court’s use of the § 3553(a) factors as a basis for its rejection of the appeal waiver. The Tenth Circuit found the court committed serious error by applying the sentencing factors to the entry of guilt phase. The Tenth Circuit also did not appreciate the suggestion that it was not paying attention to its obligations to review the decisions of district court judges, and noted that it had its responsibilities firmly in hand. The Tenth Circuit found that plea bargaining was strongly favored and the appellate waiver was an important bargaining tool for a defendant.

The district court’s judgment was reversed and remanded. Judge Hartz separately concurred.

Tenth Circuit: No Fundamental Right Exists to Limitless Taxation in Order to Fund Education

The Tenth Circuit Court of Appeals issued its opinion in Petrella v. Brownback on Monday, June 1, 2015.

Plaintiffs, parents of students in the relatively wealthy Shawnee Mission School District (SMSD) in Kansas, sued various Kansas officials in U.S. District Court in 2010, seeking to enjoin enforcement of Kansas’ cap on local property taxes for education. The district court dismissed their suit for lack of standing, but the Tenth Circuit reversed in an opinion limited to the sole issue of standing. The district court dismissed Plaintiffs’ claims that the tax cap is subject to heightened scrutiny but allowed the rational basis claims to proceed. Plaintiffs filed a motion to reconsider and a notice of appeal. When the district court denied the motion for reconsideration, plaintiffs again appealed. The Tenth Circuit consolidated the appeals.

Plaintiffs sought relief as to four district court rulings: (1) the denial of Plaintiffs’ motion for a preliminary injunction; (2) denial of Plaintiffs’ motion for summary judgment; (3) partial grant of Defendants’ motion to dismiss; and (4) denial of Plaintiffs’ motion for reconsideration. First addressing jurisdiction, the Tenth Circuit found it lacked jurisdiction to consider the denial of Plaintiffs’ motion for summary judgment. Next, the Tenth Circuit considered whether Plaintiffs’ claims were moot because of subsequent amendments to Kansas’ school financing system, and found they were not, since the slight increases to the budget cap did not ameliorate their claims that the cap burdened their constitutional rights. The Tenth Circuit proceeded to address the merits of Plaintiffs’ claims.

The district court concluded Plaintiffs were unlikely to prevail on their claims that the budget cap violated their First Amendment rights, burdens their fundamental rights, imposes an unconstitutional condition, and denies them equal protection. The Tenth Circuit agreed. Plaintiffs argued the budget cap violated their First Amendment rights because education is speech and the budget cap burdens education, therefore the budget cap burdens speech. The Tenth Circuit found each premise seriously flawed, and noted that no court has recognized that a limit on public funding for education constitutes a limit on speech. Plaintiffs argued the budget cap limits their free association rights because it prevents them from coming together as a community to vote to raise property taxes for education at the district level. However, the Tenth Circuit found that there is no First Amendment right to a voter initiative, and Plaintiffs were free to raise funds for the school district privately, which they did.

As to Plaintiffs’ argument that the cap violates their civil liberties, the Tenth Circuit found there is no fundamental right to tax one’s neighbors without limitation in order to fund education. Plaintiffs also argued the cap undermines their right to direct the education of their children, but the Tenth Circuit reiterated that there is no fundamental liberty interest in setting public policy for public education funding, and the cap only prevents Plaintiffs from compelling their neighbors to vote on a tax increase. As to Plaintiffs’ argument that the cap burdens their fundamental voting rights, the Tenth Circuit again disagreed, finding that precedential case law only scrutinized who may be subject to voting restrictions, not which topics may be restricted.

The Tenth Circuit similarly dismissed Plaintiffs’ argument that the cap should be reviewed under heightened scrutiny because it denies them equal protection of the law in a base desire to harm them, holding that wealth, or residence in a wealthy school district, is not a suspect class subject to heightened scrutiny. The district court dismissed Plaintiffs’ various claims that the budget cap should be reviewed under heightened scrutiny, and the Tenth Circuit affirmed this dismissal.

The Tenth Circuit dismissed Plaintiffs’ challenge to the district court’s denial of summary judgment, and otherwise affirmed and remanded for further proceedings.

Tenth Circuit: Unpublished Opinions, 7/30/2015

On Thursday, July 30, 2015, the Tenth Circuit Court of Appeals issued one published opinion and nine unpublished opinions.

Janczak v. Tulsa Winch, Inc.

Landmark American Insurance Co. v. VO Remarketing Corp.

Carlson v. Pryor

United States v. Chisholm

Peterson v. Timme

In re Harth: Tal v. Harth

Villanueva v. Frawner

United States v. Charre

United States v. Cervantes

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

Colorado Court of Appeals: Announcement Sheet, 7/30/2015

On Thursday, July 30, 2015, the Colorado Court of Appeals issued six published opinions and 28 unpublished opinions.

People v. DeGreat

People v. Froehler

In the Interest of Neher v. Neher

Zeke Coffee, Inc. v. Pappas-Alstad Partnership

Todd v. Hause

People in Interest of C.G.

Summaries of these cases are forthcoming, courtesy of The Colorado Lawyer.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. The case announcement sheet is available here.

Tenth Circuit: Complete Prohibition on Internet Access Constitutes Greater Deprivation of Liberty than Reasonably Necessary

The Tenth Circuit Court of Appeals issued its opinion in United States v. Ullmann on Tuesday, June 9, 2015.

Ronald Ullmann pleaded guilty to making a false statement, arising from a sexually explicit online conversation he had with an undercover FBI agent posing as a 13-year-old. He served a 60-month prison term and began his three years of supervised release. Ullmann contended that the district court’s imposition of a special condition restricting his use of the internet and a panoply of electronic devices impose a greater deprivation of liberty than is reasonably necessary.

The Tenth Circuit noted that its prior precedent suggested that a complete prohibition on internet access would constitute a greater deprivation of liberty than reasonably necessary, and in the decade since the two precedential cases were decided the internet has become an even more indispensable tool of everyday life. The Tenth Circuit found the probation office’s restriction as written to be unreasonable, but because in this case the district court orally modified the condition to be not a blanket prohibition but rather a restriction, there was no error. The Tenth Circuit cautioned the probation office that adjudicating further appeals based on the prohibitive language would not be a valuable use of its judicial resources.

Ullmann also argued the modified condition is inconsistent with the Sentencing Guidelines, but the Tenth Circuit disagreed because the condition restricts rather than prohibits Ullmann’s internet use. Ullmann further contended the modified condition unconstitutionally delegated authority to perform a judicial function to the probation office. The Tenth Circuit disagreed, finding a district court’s oral delegation to a probation officer controls over the written conditions of probation imposed by the probation office. The district court exercised its authority at the sentencing hearing when it clarified that Ullmann would only have to comply with the written restrictions related to internet-capable devices.

The Tenth Circuit affirmed the district court’s judgment.

Tenth Circuit: Unpublished Opinions, 7/29/2015

On Wednesday, July 29, 2015, the Tenth Circuit Court of Appeals issued one published opinion and three unpublished opinions.

United States v. Le

Tlalpan-Ochoa v. Lynch

United States v. Little

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

Tenth Circuit: District Court Empowered to Consider All Relevant Conduct When Calculating Loss for Sentencing Purposes

The Tenth Circuit Court of Appeals issued its opinion in United States v. Alisuretove on Monday, June 8, 2015.

Elvin Alisuretove pleaded guilty to one count of conspiracy to commit wire fraud after authorities discovered his connection in a scheme to “skim” bank information off debit cards and make cash withdrawals from ATM machines. Alisuretove was sentenced to 63 months’ imprisonment followed by 36 months’ supervised release and was ordered to pay $240,682.27 in restitution. Alisuretove appealed both his sentence and restitution amount, arguing the district court erred in determining his total offense level, in calculating the amount of loss associated with his conduct, and in determining the amount of restitution owed under the Mandatory Victims Restitution Act (MVRA).

The Tenth Circuit first examined the total amount of loss attributed to Alisuretove. Under the Sentencing Guidelines, a loss between $200,000 and $400,000 would result in a 12-level increase to Alisuretove’s base offense level of 1. Alisuretove contends the district court’s calculation of $360,856.80 total loss was “clearly erroneous” because no evidence showed he placed or used the skimming devices. Alisuretove asserted that the only loss that should be attributed to him was the $140,000 he told officers about after arrest. The Tenth Circuit noted that the district court was empowered to consider not just the conduct proffered by defendant but also all of defendant’s relevant conduct. In this case, Alisuretove’s guilty plea, statements to law enforcement, and other evidence supported the district court’s calculation of $360,856.80 total loss. The Tenth Circuit found no error in this calculation.

The Tenth Circuit next evaluated the restitution amount under the MVRA. Alisuretove contended the district court erroneously took into account losses suffered by twelve financial institutions even though only five were named in the indictment. The Tenth Circuit found the word “victim” in the MVRA is not limited to only those victims named in the indictment but rather encompasses any person harmed in the course of defendant’s criminal conduct. However, because neither the PSR nor the district court made any factual findings regarding the specific losses suffered by the financial institutions, the Tenth Circuit remanded for recalculation of restitution.

The district court’s judgment was affirmed in part, reversed in part, and remanded for further findings.

Tenth Circuit: Unpublished Opinions, 7/28/2015

On Tuesday, July 28, 2015, the Tenth Circuit Court of Appeals issued two published opinions and six unpublished opinions.

Esparza v. Falk

United States v. Magnan

Rodriguez-Casillas v. Lynch

United States v. Romero-Leon

United States v. Bartley

Jackson v. Park Place Condominiums Association, Inc.

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.