Summaries of selected Tenth Circuit Court of Appeals 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. 09-1182. United States v. Metzener. 10/21/2009. D.Colo. Judge Ebel. Supervised Release—"Participation" in Treatment Program—Failure to Meet Conditions.
Defendant pled guilty to knowingly receiving child pornography. He was sentenced to thirty-three months’ imprisonment, followed by a three-year term of supervised release. One of the terms of his supervised release was that he participate in a sex offender evaluation and treatment program, including polygraph and plethysmograph examinations as directed by his probation officer.
Defendant complied with the conditions during most of the term of his supervised release. However, four days before the release term was set to expire, he failed his final scheduled polygraph examination and admitted to engaging in activities not permitted under his treatment program. He confessed to using computers at home and in the library without approval, as well as to viewing nudity during R-rated movies, on an Internet dating site, and on a friend’s phone. In addition, his wife notified the treatment team that she had found sexually explicit text messages sent to another woman on his phone.
After a hearing, the district court revoked defendant’s supervised release, finding that he failed to "participate" in and successfully complete the sex offender program. The court re-sentenced him to another twelve-month term of supervised release, on the same conditions.
On appeal, defendant argued that he had, in fact, participated in a sex offender treatment program, and that the district court erred by revoking his term of supervised release. The Tenth Circuit reviewed the district court’s interpretation of the term "participate" under the abuse-of-discretion standard. The district court had made it clear that it was not only defendant’s failure to pass the final polygraph that mattered; it was the totality of circumstances, including his lack of honesty, noncompliant behavior, and the exchange of sexually explicit text messages, that led to the conclusion that defendant had not substantially complied with the program throughout the term of supervised release.
Defendant had signed a contract setting forth conditions of compliance as a requirement to participating in the program. His failure to comply with these conditions was the equivalent of announcing that he did not intend to fulfill the program requirements, which would have led to a denial of his participation in the program, had it been announced explicitly. The district court did not err in concluding that participation required substantial compliance throughout the three-year term of supervised release. Finally, the rule of lenity had no application, because it applies to the interpretation of ambiguous criminal statutes, not to alleged ambiguities in a court order. The Circuit therefore affirmed the revocation and reinstitution of defendant’s term of supervised release.
No. 08-1213. United States v. Cobb. 10/26/2009. D.Colo. Judge McKay.
Sentence Reduction Based on Sentencing Guidelines Range—Eligibility Given Stipulation to Specific Sentence.
Defendant pled guilty to possession of crack cocaine with intent to distribute. His plea agreement specified a Sentencing Guidelines (Guidelines) range of 168 to 210 months, and stipulated to a sentence of 168 months at the bottom of this range. After accepting the F.R.Crim.P. 11 plea agreement and stating it found no reason to depart from the Guidelines range, the district court imposed a sentence of 168 months.
The Sentencing Commission subsequently amended the drug quantity table associated with the crack cocaine guidelines. Defendant moved for a sentence reduction based on the modification, which would result in his sentencing range being between 135 and 168 months. Defendant argued that his plea agreement was "tethered" to the Guidelines and that he therefore should be re-sentenced at the bottom of this range. The government responded that defendant should be held to his stipulated sentence of 168 months. The district court found that it lacked the power to reduce defendant’s sentence, which was based on a specific stipulation of the parties rather than the Guidelines range. Although it had referred to the Guidelines range in accepting the plea, the district court explained that the prior sentence had not actually been based on the Guidelines; the court considered itself to have only a black-and-white choice of accepting or rejecting the plea.
The Tenth Circuit explained that under the sentence reduction statute, 18 U.S.C. § 3582, a court can modify a term of imprisonment only where the underlying sentence is "based on a sentencing range that has subsequently been lowered by the Sentencing Commission." Here, the parties’ negotiations and the stipulated sentence were based on the Guidelines, and the parties expected the district court to consider the applicable Guideline in imposing a sentence—which it did. Section 3582 imposes one requirement: to be based on a qualifying range, the sentence must be a non-negotiated Guidelines sentence. Where, as here, the sentence was based at least in part on the then-applicable sentencing range, the district court has authority to reduce a sentence imposed pursuant to a F.R.Crim.P. 11 plea. The Circuit therefore reversed the district court’s judgment and remanded for further proceedings.
No. 08-4031. United States v. Johnson. 10/27/2009. D.Utah. Judge Ebel. Fourth Amendment—Standing—Storage Unit Rented Using Stolen Identification.
During a traffic stop of defendant’s vehicle, an officer searched a purse owned by defendant’s girlfriend. He found stolen identification documents in another woman’s name but with the girlfriend’s picture on them, along with a rental contract for a storage unit in the other woman’s name. The officer contacted the other woman and discovered that her purse containing her identity documents had been stolen. He then obtained her consent to search the storage unit that had been improperly rented in her name. Inside the unit, the officer discovered two firearms. Defendant later admitted that the storage unit was his, that he possessed the firearms found inside, and that he knew they were inside the unit. Defendant entered a conditional guilty plea to being a felon in possession of firearms and was sentenced to thirty months’ imprisonment.
On appeal, defendant contended that the search of the storage area violated his Fourth Amendment rights. The Tenth Circuit held that he failed to show a reasonable expectation of privacy in the unit. People generally have a reasonable expectation of privacy in a storage unit, even in cases where they are not the lessee; however, this case is different. Here, the unit was rented through fraudulent use of stolen identification.
Even though defendant paid for the unit, the victim was still at risk for a claim for rent being made against her if defendant failed to make the subsequent rental payments or if he damaged the unit. The identity of the renter was a material term of the rental contract, which was voidable at the storage unit owner’s option, given the use of a stolen identity. The Circuit refused to legitimize the fraudulently obtained interest in the storage unit for Fourth Amendment purposes. It therefore affirmed the district court’s denial of defendant’s motion to suppress the firearms.
No. 09-1072. In re Riebesell, Jr.: Johnson, Jr. v. Riebesell, Jr. 10/28/2009. Bankruptcy Appellate Panel. Judge O’Brien. Bankruptcy—Loan to Attorney From Client—False Representations—Loan Non-dischargeable—Money Judgment Entered by Bankruptcy Court.
Over the course of a few years, plaintiff Johnson made loans to his attorney, defendant Riebesell. Although Riebesell executed promissory notes, he did not comply with Colo. RPC 1.8(a), which required that the deal be fair and reasonable to the client and that the client be informed that the use of independent counsel might be advisable. Riebesell failed to pay. Eventually, Johnson sued on the past-due notes. Riebesell filed for Chapter 7 bankruptcy protection and attempted to discharge the debt he owed to Johnson. Johnson’s adversary proceeding resulted in a judgment in his favor for most of the debt, plus interest at the notes’ default rate of 24 percent. The bankruptcy court held that the debt was non-dischargeable because Riebesell had made a false representation to Johnson in connection with the loan. The Bankruptcy Appellate Panel (BAP) affirmed.
The Tenth Circuit first considered Riebesell’s assertion that he did not have an attorney–client relationship with Johnson when the loans were made. The Circuit noted that an attorney–client relationship is ongoing until the client understands that it has ended. Riebesell did legal work for Johnson over several years, until Johnson ended the relationship when he sued on the notes. Therefore, the two had an attorney–client relationship when the loans were made.
Riebesell also argued that the transaction fell into the "standard commercial transaction" exception referred to in the commentary to Colo. RPC 1.8(a). However, the relationship between Johnson and Riebesell was not a commercial one, such as banking or utilities services, so the exception did not apply.
Next, the Circuit considered Riebesell’s argument that the evidence did not establish his intent to deceive Johnson. Even though Riebesell had not concealed his deteriorating financial condition, the totality of the circumstances established his requisite intent: similar treatment of other clients, transfer of his house title to his wife’s name, and the bankruptcy court’s finding that Riebesell’s testimony was not credible. Finally, the Circuit affirmed the bankruptcy court’s determination that Johnson’s reliance on the attorney–client relationship in making the loans was justified.
The Circuit concluded that the bankruptcy court had jurisdiction to enter a money judgment, but that the post-judgment interest would accrue at the statutory rate rather than at the 24 percent default rate in the notes. The BAP’s judgment was affirmed, except for the post-judgment interest rate.
No. 07-6276. Conrad v. Phone Directories Co. 11/10/2009. W.D.Okla. Judge Ebel. Arbitration—Interlocutory Appeal—Jurisdiction—Invoke Remedies Under the Federal Arbitration Act.
Plaintiff Conrad sued his former employer, claiming the employer violated an agreement to employ him and to pay him 5 percent of the profits when the company was sold. The employer countered that Conrad had signed an employment agreement that included a clause requiring all disputes to be submitted to arbitration. The employer moved to dismiss on various grounds, including that the agreement required Conrad to arbitrate his claims. The employer did not ask the district court to stay the court proceedings pending arbitration or to compel arbitration. The district court refused to dismiss the complaint under the arbitration agreement. The employer filed an interlocutory appeal.
Addressing an issue of first impression, the Tenth Circuit held that it does not have jurisdiction over an interlocutory appeal of the denial of a motion to dismiss premised on the existence of an arbitration agreement, even where the defendant did not explicitly move to stay the litigation or compel arbitration under the Federal Arbitration Act (FAA). Accordingly, to invoke the appellate jurisdiction provided in the FAA, a defendant either must move to compel arbitration and stay litigation explicitly under the FAA, or must make it clear that he or she seeks only the remedies provided by the FAA (arbitration rather than any judicial determination) in his or her prayer for relief. Here, the employer did neither, so the appeal was dismissed for lack of jurisdiction and the case was remanded.
No. 09-1004. Berry & Murphy, P.C. v. Carolina Casualty Insurance Co. 11/12/2009. D.Colo. Judge Briscoe. Legal Malpractice—"Claims-Made" Policy—Notice to One Insured was Sufficient—No Coverage.
Murphy, a co-shareholder of plaintiff Berry & Murphy, P.C., was hired to pursue a personal injury suit. He then left the firm, taking the injury suit with him. Due to Murphy’s failure to prosecute, the injury suit was dismissed, and the clients hired new counsel. New counsel sent a letter to Murphy in January 2007, advising that the clients would pursue a legal malpractice action against him. Murphy’s former co-shareholder, Berry, was not given notice. The clients filed a malpractice lawsuit against Murphy and Berry & Murphy, P.C. in January 2008. Berry carried a claims-made malpractice insurance policy that was effective from February 2008 to February 2009. Berry accepted service of the malpractice lawsuit in July 2008. He gave notice to his carrier, Carolina Casualty, which denied coverage because a claim was made against an insured—Murphy—prior to the inception of the insurance policy. Berry sued, claiming Carolina Casualty wrongfully denied coverage. The district court entered judgment in favor of Carolina Casualty, because the claim was made against an insured prior to the policy period.
The Tenth Circuit concluded there was one "related wrongful act" under the policy, even though the January 2007 letter and the January 2008 lawsuit occurred on different dates. Therefore, they were considered one claim under the policy. Next, the Circuit determined that Murphy was an insured, because the policy defined "insured" to include an individual who has left the law firm if the claim involved that individual’s acts or omissions while at the firm. It then followed that notice of the claim was given to Murphy in the January 2007 letter, which was sent before the policy period was effective. Consequently, Carolina Casualty had no duty to defend or indemnify plaintiffs and the district court’s judgment was affirmed.
No. 09-6077. United States v. Livingston. 11/16/2009. W.D.Okla. Judge Briscoe. Waiver of Appeal—Stipulation to Elements of Crime—Knowing and Voluntary Nature of Waiver.
After a raid on a motel room occupied by defendant, officers found defendant inside a closet. They also found in the closet a bag containing counterfeit currency and a firearm. Defendant was convicted of passing, uttering, and possessing counterfeit notes with the intent to defraud, and of possessing a firearm. After his motion to suppress this evidence, defendant waived his right to a jury trial. At his subsequent Bench trial, the parties stipulated to evidence in support of all of the elements of each crime with which defendant was charged. These stipulations, along with an oral stipulation that defendant should receive a downward adjustment for acceptance of responsibility, were the sum total of the evidence presented to the district court.
Defendant appealed, contending that the district court had erred in denying his motion to suppress. The Tenth Circuit sua sponte questioned its jurisdiction. If defendant’s stipulations were the equivalent of an unconditional guilty plea, then he waived all non-jurisdictional defenses, including his right to appeal the district court’s denial of his motion to suppress. Defendant explained that he was told the stipulation would not deprive him of his right to appeal. He entered into the stipulation solely to avoid a time-consuming jury trial. Evidence therefore was lacking concerning whether defendant knowingly entered into the stipulation with full awareness that he might be waiving his right to appeal the suppression ruling. Given this gap in the evidence, the Circuit remanded for an evidentiary hearing to determine whether defendant entered into the stipulation knowing the consequences for his appeal and whether he voluntarily surrendered his appeal of the suppression motion.