Summaries of selected Tenth Circuit Opinions appear on a space-available basis. The summaries are prepared for the Colorado Bar Association (CBA) by Katherine Campbell and Frank Gibbard, licensed Colorado attorneys. They are provided as a service by the CBA and are not the official language of this Court. The CBA cannot guarantee the accuracy or completeness of the summaries. Full copies of the Tenth Circuit decisions are accessible from the CBA website: www.cobar.org (click on "Opinions/Rules/Statutes").
No. 07-1138. Pompa v. American Family Mutual Insurance Co. 03/31/2008. D.Colo. Judge Hartz. Colorado Insurance—Duty to Defend—Guilty Plea—Criminal Conviction Exclusion—Public Policy—Complaint Rule.
Pompa entered a guilty plea to criminally negligent homicide in the death of Domianus. In the ensuing wrongful death action filed by the Domianus family, Pompa’s homeowners’ insurer refused to defend or indemnify him. Following a judgment entered against him in the wrongful death case, Pompa sued his insurer, alleging it had breached the insurance contract when it refused to defend him. The district court entered summary judgment in favor of the insurer, concluding that the policy’s exclusion for a criminal conviction did not require the insurer to defend Pompa. Pompa appealed.
Pompa first argued that the criminal conviction exclusion applied only to a conviction entered after a trial, and did not apply to a guilty plea. The Tenth Circuit determined that the exclusion was not ambiguous and held it applied to both situations. Next, the court evaluated Pompa’s claim that the criminal conviction exclusion violated public policy because it permitted an insurer to deny coverage for negligent acts. The crime to which Pompa pled guilty, however, was not an act of simple negligence.
The Tenth Circuit considered the two types of exclusion that the Colorado Supreme Court has held violate public policy: those that dilute statutorily mandated coverage and those that render coverage illusory. The Circuit held that the criminal conviction exclusion was not contrary to public policy.
Pompa also asserted that the insurer could not deny him a defense under the "complaint rule." He argued that because the wrongful death complaint did not allege he was convicted of a crime, the insurer could not rely on the criminal conviction exclusion. The Tenth Circuit held that the reasons for the complaint rule did not apply here, because Pompa’s criminal conviction was an indisputable fact that clearly absolved the insurer from defending him. The fact of his conviction was a judicially noticeable fact that was incorporated into the complaint. Under these circumstances, the Circuit concluded that the Colorado Supreme Court would recognize such an exception to the complaint rule. The district court’s judgment was affirmed.
No. 07-1223. U.S.A. v. Sutton. 04/03/2008. D.Colo. Judge Kelly. Sentencing Guidelines—Calculation of Loss—Odometer Tampering.
Defendant pled guilty to one count of mail fraud and one count of odometer tampering. He purchased seventy-six "high-mileage" vehicles at auction and rolled back the odometers in these vehicles so that they displayed false, lower-mileage figures.
Using forged odometer disclosure statements, defendant obtained titles from the state of Colorado that indicated the mileage shown was "not actual mileage." He then converted these to Arizona titles without the "not actual mileage" indication, and sold the vehicles in Colorado.
In his plea agreement, defendant stipulated that the loss should be calculated for U.S. Sentencing Guidelines (USSG) purposes by multiplying the number of fraudulently sold vehicles by an estimated average loss per vehicle. Relying on the government’s estimated loss of $4,000 per vehicle (representing a diminution in value of approximately 40 percent of the average purchase price), the district court calculated the aggregate loss at $304,000 and imposed a twelve-level enhancement to the offense level for the purpose of calculating the USSG range.
On appeal, defendant contended that the average loss should have been calculated instead based on the difference in value as estimated by the National Association of Automotive Dealers between the stated mileage and the actual mileage. This resulted in an average estimated loss of only $1,107.80 per vehicle, resulting in an eight-level enhancement to his offense level rather than the twelve-level enhancement applied by the district court. The issue on appeal was whether the district court’s approach represented a reasonable estimate of the loss.
The government presented expert testimony to the district court to justify its loss figure. This testimony showed that a vehicle with a "not actual mileage" title is worth less than one with equal mileage and a clean title. The diminution in value in most cases is from 40 to 50 percent of fair market value. The Tenth Circuit held that the district court’s approach, which did not rely on a "blue book" value based on mileage, was reasonable. Although other courts have upheld different methods of calculating loss in criminal odometer tampering cases, this proves only that there is more than one permissible way to measure loss. The district court’s estimate in this case constituted one such permissible measure. The Tenth Circuit therefore affirmed defendant’s sentence.
No. 07-2142. U.S.A. v. $148,840. 04/04/2008. D.N.M. Judge Lucero. Forfeiture—Standing to Object.
Claimant was pulled over by a deputy sheriff in New Mexico for speeding while driving a rental car. The sheriff found claimant’s explanation of his travel plans suspicious and asked if claimant had any large sums of currency or drugs in the vehicle. Claimant said no, and refused to give consent for a search of the vehicle. After a drug-sniffing dog arrived, however, claimant gave his permission to have the dog inspect the vehicle. The dog alerted to a cooler containing cash, wrapped in plastic bags and aluminum foil under ice in the cooler. The officer seized the cash and searched the vehicle but found no additional cash or contraband. Claimant told the officer that the money belonged to him, but refused to reveal its source or to further discuss the cash without advice of an attorney.
The government filed a complaint seeking forfeiture of the cash, which claimant opposed, again asserting that he was the owner of the currency. At a deposition taken in the forfeiture action, claimant repeatedly stated to be the owner of the currency. He asserted the Fifth Amendment privilege against self-incrimination, however, when asked about the source of the cash, the reasons for its peculiar packaging, why he was carrying such a large amount of cash, his sources of income, his employment history and previous residences, and his travel itinerary prior to the stop.
The district court found that claimant lacked standing to object to the seizure because his claim was based only on "naked, unexplained possession" of the cash. It therefore granted summary judgment to the government. On appeal, the Tenth Circuit rejected the government’s argument that claimant had to prove his standing to challenge the forfeiture by explaining how he came into possession of the money, the nature of his possession of it, or the story behind his control of it. The Tenth Circuit agreed with claimant that he had asserted a categorical claim of personal ownership of the funds, rather than mere possession of them. This, combined with the undisputed evidence that the money was in his possession and control when seized, provided him with sufficient standing to object to the forfeiture, even without an explanation of the source of the money. The district court’s award of summary judgment therefore was reversed.
No. 06-6331. Smith v. Rockett. 04/11/2008. W.D.Okla. Judge McKay. Bankruptcy—Chapter 13—Debtor Has Standing to Bring Civil Complaint.
Plaintiff appealed the district court’s order dismissing her case, alleging a violation of the Fair Debt Collection Practices Act. The court dismissed it on the ground that her Chapter 13 bankruptcy case was still pending at the time of filing, so the bankruptcy trustee had standing, not the plaintiff.
The Tenth Circuit noted that a Chapter 13 debtor, unlike a Chapter 7 debtor, remains in possession of the property of the bankruptcy estate. In addition, the duties of the respective trustees differ, and a Chapter 13 debtor has many of the same rights and powers as a Chapter 7 trustee. Therefore, the Tenth Circuit held that a Chapter 13 debtor has standing to bring claims in his or her own name on behalf of the bankruptcy estate. The district court’s judgment was reversed and remanded.
No. 06-5149. Bass v. Potter. 04/15/2008. N.D.Okla. Judge Baldock. Family Medical Leave Act—Statute of Limitations—Willful Violation.
Plaintiff sued his former employer, the U.S. Postal Service (USPS), alleging it had willfully interfered with his rights to leave under the Family Medical Leave Act (FMLA). He filed his suit between two and three years after his claim accrued. Therefore, he missed the two-year limitations period for FMLA claims, except those asserting a willful violation, for which the statute of limitations is three years. The district court granted summary judgment to the USPS based on its finding that plaintiff did not adduce evidence of willful interference with his FMLA rights. Consequently, the court applied the two-year statute of limitations.
The evidence on summary judgment showed that plaintiff had been given a last-chance plan to keep his job, which was in jeopardy due to numerous violations of the USPS attendance policy. Then, plaintiff requested FMLA leave, thus triggering a USPS request for appropriate medical documentation. Plaintiff failed to provide the necessary documents by the deadline, despite meetings and extensions of time. Accordingly, the USPS characterized his absences as unexcused and terminated his employment pursuant to the last-chance plan.
On appeal, the Tenth Circuit first determined the meaning of "willful" in this context: the employer knew or showed reckless disregard for whether its conduct was prohibited by the FMLA. The court then evaluated the USPS’s efforts to obtain the necessary documentation and the plaintiff’s responses, and concluded that plaintiff had presented no evidence that the USPS had knowingly or recklessly violated the FMLA’s strictures. The Tenth Circuit also rejected plaintiff’s claims that he was entitled to equitable tolling or that the USPS should be equitably estopped. The district court’s judgment was affirmed.
No. 06-2348. U.S.A. v. Gabaldon. 04/16/2008. D.N.M. Judge Hartz. 28 U.S.C. § 2255 Motions—Timeliness—Equitable Tolling.
Defendant’s convictions became final when the U.S. Supreme Court denied his petition for certiorari on March 21, 2005. He had one year after that date to bring a motion under 28 U.S.C. § 2255 to vacate or set aside his sentence, until March 21, 2006. On February 2, 2006, however, he was placed in segregation and prison officials confiscated all his legal materials. They did not release his papers to him until April 4, 2006, after the deadline for filing a § 2255 motion already had passed. He sent his motion to his mother for typing and she filed his motion with an accompanying typewritten brief on April 26, 2006, thirty-six days after the deadline.
In response to the district court’s order to show cause why his untimely motion should not be dismissed, defendant submitted the following: affidavits from himself and a cellmate regarding his requests for return of his documents during his time in segregation; copies of written requests he had submitted to prison staff seeking return of his papers; and a memorandum from a prison employee stating that the segregation had resulted in confiscation of his papers and, consequently, his inability to meet the deadline for filing his motion. The district court nevertheless concluded that equitable tolling of the deadline was inappropriate and dismissed the petition.
On appeal, the Tenth Circuit noted that equitable tolling can be appropriate when an inmate diligently pursues his claims but an adversary’s conduct prevents him from timely filing. The circumstances of this case fit within that scenario. Although defendant had shown no affirmative or intentional misconduct by prison authorities, such misconduct was not required to justify equitable tolling. Regulations governing the Bureau of Prisons required the prison warden to provide an inmate in segregation access to his personal legal materials and an opportunity to prepare legal documents, even where the segregation was imposed for disciplinary reasons. The prison’s actions fit the definition of an adversary’s conduct that prevented a timely filing.
Defendant also had demonstrated due diligence. Although he did not file the motion immediately after his papers were returned to him, it was obvious that he had them in close to final form even before his papers were confiscated, because he was able to send out the motion and brief for typing and have them filed within twenty-two days after the materials were returned to him. Most important, because he had an entire year to file, and it appeared that he would have met the deadline had prison officials not seized his materials, it was inconsequential that he might have filed them sooner than he did. Given that prisoners have only one unrestricted opportunity to file a collateral attack on their convictions, it is appropriate for them to use the time available to ensure that their motion is thorough and complete. The Tenth Circuit therefore vacated the district court’s order of dismissal, and remanded for further proceedings.
Nos. 07-2137, 07-2140 & 07-2143. U.S.A. v. Butts. D.N.M. Judge Murphy. Collateral Order Rule—First Amendment—Religious Freedom Restoration Act as Defense to Prosecution.
Defendants were indicted for conspiracy to possess and possession of marijuana with intent to distribute. They moved to dismiss the indictment, claiming to be members of the "Church of Cognizance" who sincerely believe that cannabis is a deity and sacrament essential to the practice of their religion. They further argued that the prosecution violated their rights under the Religious Freedom Restoration Act (RFRA). The district court held an evidentiary hearing, after which it determined that defendants had not established the existence of a sincerely held religious belief. It therefore refused to dismiss the indictment. It also denied defendants’ motion to present an RFRA defense at trial, and granted the government’s motion in limine to prevent the assertion of such a defense. Defendants appealed.
The Tenth Circuit noted that it can hear appeals only from final orders of the district court. An interlocutory order may be considered final and appealable if it meets the requirements of the "collateral order doctrine"; that is, if it finally determines claims of rights separable from and collateral to rights asserted in the action that are too important to be denied review and too independent of the cause itself to require that the appellate court wait until the whole case is finished to hear them. The question here was whether RFRA gave defendants a right not to go to trial that would be lost unless they were permitted to vindicate that right through an interlocutory appeal.
The Circuit noted that in the related context of prosecutions for ordinary speech protected by the First Amendment, courts generally have held there is no right not to be tried, as opposed to a defense to be asserted at trial. A First Amendment defense is adequately safeguarded by review after any adverse final judgment. The same is true of the RFRA defense asserted by defendants. The RFRA permits assertion of the statute as a defense in a criminal proceeding, rather than providing for a right not to be tried. Not only does the statute not provide for such a right, but defendants had failed to show that such a right not to go to trial was guaranteed to them by the Constitution. There was no evidence here of a government campaign to use repeated criminal prosecution to chill the exercise of First Amendment rights. Any right guaranteed to defendants by the RFRA could be vindicated by appellate review after final judgment. Because the district court’s orders were not reviewable under the collateral order doctrine, the Tenth Circuit dismissed the appeal.