Opinion
Case No. 2:04-CR-141 TS.
March 11, 2005
ORDER RESOLVING VARIOUS MOTIONS IN LIMINE
Before the Court are a number of motions in limine. Specifically, the Court now considers the following: (1) Mr. Wade's Motion in Limine Concerning Prior Conviction; (2) Mr. Wade's Motion in Limine of November 23, 2004; (3) Mr. Wade's Motion in Limine Concerning Pretrial Release and Other Issues; (4) Mr. Wade's Motion to Limit Marked Exhibits; (5) Mr. Wade's Motion to Limit as to David Black Letter; (6) Mr. Wade's Motion to Limit Marked Exhibits; (7) Mr. Wade's Motion to Limit Concerning 1985-1992 Tax Information; (8) Mr. Wade's Motion in Limine Concerning Expert Witness and Exhibits; (9) Mr. Wade's Motion to Limit Evidence of Criminal Conviction of Witness Troy Powell; (10) Mr. Wade's Motion in Limine Concerning Expert Witness; (11) Government's Motion in Limine Regarding Pretrial Diversion Agreement; (12) Government's Notice to Introduce Evidence of Charged Misconduct and Mr. Wade's Motion to Limit; (13) Government's Oral Motion Regarding Marvin Haney's Prior Criminal Conviction; and (14) Government's Notice of Additions to Witness List and Mr. Wade's Motion to Limit Testimony.
Due to the overlapping legal and factual issues presented by these motions, the Court addresses these motions in a single written order. After considering the arguments set forth in the memoranda and in oral argument at the hearing, the Court is now prepared to rule on these matters. However, in making these determinations, the Court reaffirms what it told the parties at the hearing: the Court recognizes that as the trial goes forward and evidence begins to accumulate, either party may find it necessary to request that the Court revisit the rulings set forth herein. Any requests to revisit any of these rulings shall be made in writing.
I. LEGAL STANDARDS APPLICABLE TO SEVERAL OF THE MOTIONS
The Court briefly lays out general standards that have relevance to multiple motions in limine before the Court.
First, every piece of evidence to be admissible must first be relevant. The Court grounds this analysis with the standard set forth in Fed.R.Evid. 401, which states: "`Relevant evidence' means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Of course, "[t]he standard is not stringent; it is aimed at each `brick' of evidence potentially making a wall and not every witness `mak[ing] a home run.'" U.S. v. Yazzie, 188 F.3d 1178, 1189 (10th Cir. 1999) quoting Fed.R.Evid. 401 advisory committee's note.
Second, all relevant
evidence must survive the crucible of Fed.R.Evid. 403, which excludes otherwise relevant evidence "if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or delay, waste of time, or needless presentation of cumulative evidence.Id. Fed.R.Evid. 403. Evidence is unfairly prejudicial "if it makes a conviction more likely because it provokes an emotional response in the jury or otherwise tends to affect adversely the jury's attitude toward the defendant wholly apart from its judgment as to his guilt or innocense of the crime charged." United States v. Rodriguez, 192 F.3d 946, 951 (10th Cir. 1999) (quotation and citation omitted) (emphasis in original).
Additionally, Rule 404(b) proscribes admission of evidence of prior crimes, wrongs, or acts if offered "to prove the character of a person in order to show action in conformity therewith." Fed.R.Evid. 404(b). Such evidence "may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident." Id. In addition, the Tenth Circuit, relying on the Supreme Court's decision in United States v. Huddleston, 485 U.S. 681, 691-92 (1988), has provided a four-prong requirement for any evidence admitted under Fed.R.Evid. 404(b).
(1) the evidence is offered for a proper purpose under Fed.R.Evid. 404(b); (2) the evidence is relevant under Fed.R.Evid. 401; (3) the probative value of the evidence is not substantially outweighed by its potential for unfair prejudice under Fed.R.Evid. 403; and (4) the district court, upon request, instructs the jury to consider the evidence only for the purpose for which it is admitted.United States v. Tan, 254 F.3d 1204, 1207-1208 (10th Cir. 2001).
II. ANALYSIS OF SPECIFIC MOTIONS IN LIMINE
A. Mr. Wade's Motion in Limine Concerning Prior Conviction
Mr. Wade moves the Court to exclude evidence of his prior conviction for filing false tax returns. Defendant argues (1) that the Court should exclude evidence of his prior conviction under Fed.R.Evid. 404(b) as improper character evidence; (2) that, even if proper under Rule 404(b), evidence of a prior conviction for failure to file tax returns is unfairly prejudicial in a case charging filing of false tax returns and should be excluded under Rule 403; and (3) that the Court should exclude evidence of the prior conviction to impeach Defendant's direct testimony under Rule 609(b) because the conviction occurred more than ten years ago and does not have adequate probative value to substantially outweigh its prejudicial effect. At the hearing, Defendant represented that he was willing to stipulate that he had knowledge of his prior tax deficiency as of 1991 and that he was required to pay this deficiency. The Court addresses the admissibility of Defendant's prior conviction in light of Defendant's willingness to make this stipulation.
As to the first two Huddleston requirements, the Court finds that the Government is offering the evidence for a proper purpose under Rule 404(b). Specifically, the Government would offer such evidence to show that Mr. Wade had knowledge as to his prior tax liability. The Court also finds that evidence of such knowledge is relevant under Rule 401.
As to the third Huddleston requirement, however, the Court finds that the probative value of the prior conviction is substantially outweighed by its potential prejudicial effect on the jury and is, therefore, inadmissible under Rule 403. The Government, in meeting its burden, must show that Defendant willfully and affirmatively evaded, or attempted to evade, a tax deficiency. See 26 U.S.C. § 7201; United States v. Afflerbach, 547 F.2d 522, 524 (10th Cir. 1976). In proving willfulness, the Government need not show any nefarious motive behind the evasion, id., so the prior conviction need not be used to establish that Defendant appreciated the criminal nature of his alleged activities. In this case, then, the probative value of the prior conviction is its tendency to establish that Defendant knew of his tax deficiency and the requirement that he pay this deficiency. The Court finds that the probative value of his prior conviction, given Defendant's willingness to stipulate as to knowledge of the deficiency, is substantially outweighed by the prejudice of the jury improperly construing his guilt in the prior tax matter as evidence of his guilt in the present tax matter. Indeed, the similarity between the prior conviction and the current charge heightens the potential for prejudice.
Because the prior conviction evidence is inadmissible under Rule 403, the fourth Huddleston factor — proper instructions limiting the jury's consideration of the evidence — need not be addressed.
Turning now to Defendant's argument under Rule 609(a)(1), which states that, for purposes of attacking the credibility of a witness, "evidence that an accused has been convicted of [a crime involving imprisonment in excess of one year of which the accused witness was convicted] shall be admitted if the court determines that the probative value of admitting this evidence outweighs its prejudicial effect to the accused. Fed.R.Evid. 609(a)(1). Subsection (b) adds, however, that "[e]vidence of a conviction under [Rule 609] is not admissible if a period of more than ten years has elapsed . . . unless the court determines, in the interests of justice, that the probative value of the conviction . . . substantially outweighs it prejudicial effect." The Court finds that the use of the prior conviction to impeach the Defendant as a witness is unfairly prejudicial for the reasons already set forth. The fact that the conviction is more than ten years passed and that the probative value must substantially outweigh the prejudicial effect makes the decision that much more clear. Unless Defendant testifies contrary to his stipulation that he had no knowledge that he owed past taxes, the Government may not introduce evidence of the prior conviction to impeach under Rule 609.
B. Mr. Wade's Motion in Limine of November 23, 2004, and Mr. Wade's Motion in Limine Concerning Pretrial Release and Other Issues
Defendant submitted two nearly identical motions in limine, Defendant Stanley L. Wade's Motion in Limine and Defendant Stanley L. Wade's Motion in Limine Concerning Pretrial Release and Other Issues. The Government only responds to Mr. Wade's Motion in Limine; however, due the similarities of Defendant's motions, the Court finds that the Government's response adequately addresses all the issues raised in both motions.
These motions raise five distinct issues: (1) evidence of Mr. Wade's violation of pretrial release; (2) evidence of Mr. Wade's veracity, specifically including evidence as to Mr. Wade's failure to self-surrender to serve the sentence on his prior conviction; (3) evidence of privileged marital communications between Mr. and Mrs. Wade; (4) evidence of Mr. Wade's history as a tax protester; and (5) evidence about the alleged conspiracy between Mr. Wade and Mrs. Wade.
1. Mr. Wade's Pretrial Release
Defendant asks the Court to limit any evidence at trial concerning Defendant's actions during pretrial release or any alleged violation of pretrial release. At the hearing, the Government agreed not to make any reference to Mr. Wade's violation of pretrial release. As such, the Court grants this aspect of Mr. Wade's motions.
2. Defendant's Failure to Self-Surrender in 1990
Defendant asks the Court to limit the Government from introducing evidence regarding Defendant's failure to voluntarily surrender to the Government in 1990. At the hearing, the Government represented that it would not make any references to this incident, and therefore, the Court grants this aspect of Mr. Wade's Motion as well.
3. Privileged Marital Communications
Based on the Government's representation in its memorandum that it does not intend to offer any confidential marital communications at trial, the Court grants this aspect of the motion and limits the Government from offering such communications as evidence.
4. Tax Protester
Defendant moves to exclude any evidence that the he is a tax protestor under Rule 403. Defendant cursorily argues that the unfair prejudice of any such evidences outweighs its probative value and that the Court should evaluate all evidence of his tax protestor filings outside the presence of the jury. The Government counters that the tax protestor evidence is probative of Defendant's willfulness, which is an element of the charged crime, and notes that Defendant fails to identify any unfair prejudice that would warrant the evidence's exclusion under Rule 403. At the hearing, the Government represented that it did not intend to offer evidence in order to show that Mr. Wade was a tax protester but rather any such evidence was a reflection of Mr. Wade's response to an IRS summons. The Government argued that any such responses would be relevant to Mr. Wade's intent to avoid taxes and work to undermine any argument that any neglect to pay taxes was done in good faith.
The Government must show Defendant's willfulness, see 26 U.S.C. § 7201; United States v. Afflerbach, 547 F.2d 522, 524 (10th Cir. 1976), and the Court finds that this non-compliance is probative of Defendant's willfulness. Defendant does not make clear, and the Court does not see how this evidence would taint the jury's attitude toward Defendant. Without that taint, the tax protestor evidence is admissible because its probative value is not "substantially outweighed by the danger of unfair prejudice." Fed.R.Evid. 403. The Court will, therefore, allow such evidence for the purposes the Government set forth at hearing: to show Defendant's intent and lack of good faith in his nonpayment of taxes.
5. Evidence of Conspiracy
Defendant argues that the Government should be limited from referring to a conspiracy between Defendant and Mrs. Wade. He asks the Court to bar the Government from admitting evidence under the hearsay exception for co-conspirators, Fed.R.Evid. 801(d)(2), until the Government has introduced substantial independent evidence at trial. However, parties were willing to stipulate to the reading of a instruction regarding how the jury should evaluate evidence of conspiracy prior to the jury receiving any such evidence in lieu of the Court making a ruling as to this aspect of Mr. Wade's motions. As such, the Court denies this aspect of the motion unless the parties are unable to agree on an appropriate jury instruction, in which case the Court will revisit this ruling.
C. Mr. Wade's Motion to Limit as to David Black Letter
Defendant moves the Court to limit discussion concerning the David Black letter ("Black Letter"). The Court has reviewed the admissibility of the Black Letter previously, but did so in the context of determining that Mr. Wade waived any attorney-client privilege that may have attached to the letter. In the present motion, Mr. Wade argues that (1) the Government must qualify an expert witness to testify regarding the opinion set forth in the David Black letter and has failed to do so; (2) the letter is inadmissible hearsay; (3) the Court should prohibit the Government from opining as to correctness of the legal conclusions in the letter in both opening and closing arguments; and (4) the letter is unfairly prejudicial to the extent that its probative value is outweighed. The Court addresses these points in the order listed above.
Because the Government concedes that it does not intend to argue the legal validity of the opinion contained in the Black Letter, the Court finds that expert opinion is not necessary. The jury does not need a witness to make the factual determination of what notice or knowledge would be gained by a lay person by the receipt of this letter. Furthermore, the Court is not inclined do allow expert testimony on the ultimate correctness of the legal opinion contained in Black Letter. The Government avers that it will only elicit testimony for the purpose of showing that the letter provided Defendant notice and knowledge that the UBO scheme may be illegal and not that the opinion was correct or incorrect. The Court finds that the Government need not qualify an expert for this propose.
Second, Mr. Wade argues that the Black Letter is inadmissible hearsay. The Government argues that it intends to admit the evidence under Fed.R.Evid. 801(d)(2)(D), which provides that a statement is not hearsay, but rather an admission, where the statement is offered against the party and is a statement attributed to the party as "a statement made by the party's agent or servant concerning a matter within the scope of agency or employment, made during the existence of the relationship." The Court has already heard evidence regarding the Black Letter in a prior hearing regarding the privilege of that letter. This prior testimony establishes that Mr. Black was Defendant's agent, specifically he was Mr. Wade's attorney fulfilling a legal research assignment that Mr. and Mrs. Wade had asked him to complete. Additionally, by fulfilling this assignment, the letter concerned a matter within the scope of agency and was written while Mr. Black was serving as Defendant's agent. Therefore, the Court finds that this letter qualifies as admissible nonhearsay. However, the Court will reserve it judgment as to whether the Government can make this showing because the proper foundation will need to be established during trial before said evidence can be properly admitted.
Third, in the memoranda the parties dispute the degree to which the Government should be able to give its opinion as to the legal conclusions found in the Black Letter during opening or closing arguments. The Court, however, relies on the Government's representation that the Government will not to comment on the correctness of the legal opinion contained in the Black Letter and will thus permit the Government to refer to the letter.
Finally, Mr. Wade argues that under Fed.R.Evid. 403, that the probative value of the evidence contained in the Black Letter is substantially outweighed by the risk of unfair prejudice. The Court finds that the letter is high probative, in that it evidences that Defendant's use of UBOs amounted to an affirmative effort to evade taxes. While this in all likelihood damage Mr. Wade's position at trial, it does not do so unfairly. Nothing in the Black letter provokes an emotional response or adversely affects the jury's attitude about the Defendant wholly apart from the jury's judgment as to the Defendant's guilt or innocence.
D. Mr. Wade's Motion to Limit Marked Exhibits
Mr. Wade attempts to limit the introduction of seventeen marked exhibits. The Government, based on Mr. Wade's motion, has voluntarily withdrawn four exhibits, numbered Plaintiff's Exhibits 340, 353, 521 and 531. At hearing, the Government also informed the Court that it would withdraw the photo contained in Plaintiff's Exhibit 461. This moots the Court's need to address these exhibits.
Mr. Wade objects to Plaintiff's Exhibit 215, which is a package of documents sent to the IRS in response to summones served on Mr. Wade and Mrs. Wade in July of 1998. The Government characterized these documents as evidence of Mr. Wade's history as a tax protester. Mr. Wade characterizes it as a document submitted in an irrelevant civil enforcement matter. The Court has reviewed this exhibit and found it probative of Mr. Wade's response to the IRS's attempt to enforce this matter. For the reasons and under the same conditions the Court allowed evidence of Mr. Wade's history as a tax protester above, the Court will allow this evidence.
Plaintiff's Exhibits 216 and 382-385 all refer to Mr. Wade's prior criminal conviction record. The Court has already determined that Mr. Wade's prior conviction does not survive the Court's Fed.R.Evid. 403 analysis. The Court will likewise exclude these documents that refer to his criminal conviction as unfairly prejudicial under Fed.R.Evid. 403.
Plaintiff's Exhibits 380-381 refer to the civil enforcement of the same taxes at issue. For reasons further set forth below in addressing the Government's Notice to Introduce Evidence of Charged Misconduct and Mr. Wade's Motion to Limit, the Court will allow these documents.
Mr. Wade objects to Plaintiff's Exhibits 439, which is a picture of boat which is the same model that the Government alleges were made with UBO funds. Likewise, Mr. Wade objects to Plaintiff's Exhibits 246-249, which are pictures of properties alleged to have been purchased with UBO funds. The Court finds that none of these photographs are inherently prejudicial. The Court finds that any prejudice that would arise by the introduction of this evidence would not be unfair prejudice. The only hostility that these pictures may provoke comes with the jury determining, as the Government appears ready to argue, that Mr. Wade should have used these funds to pay taxes and should have claimed these assets in bankruptcy. This is not unfair prejudice, rather, this is the nature of the determination that will must be made by the finder of fact. The only limitations the Court will impose are the following: (1) the Court will not allow Defendant to use large blown-up photographs of the boat and the houses because this would unnecessarily dramatize these investments and create the risk of unfair prejudice; and (2) the Court will require the photographs to be of the actual assets purchased, or in the case of the boat, at least the exact model purchased.
E. Mr. Wade's Motion to Limit Concerning 1985-1992 Tax Information
Mr. Wade argues that the Government should be barred for referring to the tax information that predates the charged conspiracy. Specifically he requests that the Government be prohibited from introducing tax information from 1985-1992. The Government response is two fold. First, it correctly alleges that Indictment states that the UBO conspiracy began in 1992 and that, based on this, the 1992 tax returns are relevant to the charged conduct. The Court agrees with the Government's assessment of the Indictment and will allow 1992 tax information.
Second, as to the 1985-1991 documents the Government asked if it could reserve the right to ask witnesses with knowledge of the prior taxes as to whether Mr. Wade reported the apartment revenues prior to the alleged UBO scheme. The Government argues that this is probative as to Mr. Wade's knowledge as to his duty to report the apartment rents on his personal income tax return. The Court agrees in principle with the Government that this would be probative of Mr. Wade's knowledge of his tax obligations. At the hearing, the Government qualified this stipulation that it may be necessary to admit limited evidence of such tax liabilities. The Court instructs the Government, to the extent possible, to present such evidence through witnesses and demonstrative exhibits in order to avoid unnecessarily confusing the jury and to promote efficiency.
F. Mr. Wade's Motion to Limit Evidence of Criminal Conviction of Witness Troy Powell
The Government agrees to limit evidence of Mr. Powell's prior criminal conviction as requested by Mr. Wade. The Court therefore grants Mr. Wade's Motion to Limit Evidence of Criminal Conviction of Witness Troy Powell.
G. Mr. Wade's Motion in Limine Concerning Expert Witness and Exhibits
Mr. Wade argues that the Government should be prohibited from designating an expert witness who may give testimony regarding the validity of the UBO business entities or concerning whether UBO expenditures are personal or business expenses. The Court first addresses the issue of testimony regarding the validity of the UBOs.
Defendant argues, and the Court notes, that testimony regarding the validity of the UBOs would necessarily rest on the legality of such entities, which is in large part the major issue the jury will face. Mr. Wade submits that the Government's designated expert, Agent Steve Roberts, does not have sufficient expertise to give an opinion as to the legality of the UBOs. After reviewing Agent Roberts' resume and taking notice of his prior testimony provided in a similar case before Judge Benson, the Court gives notice to the parties that it is going to allow Agent Roberts to testify as to the distinction between a legitimate trust and a sham trust. The Court is not aware of any profession that is more likely to foster this expertise than that of an IRS agent. Contrary to Defendant's suggestion, the Court would certainly not allow an attorney to provide such testimony. However, admissibility is dependant on the context and wording of such testimony. Therefore, the Court will reserve ruling on admissibility for trial.
Mr. Wade also avers that Agent Roberts does not have personal knowledge as to the expenditures made with UBO funds so Agent Roberts lacks foundation to testify as to which of these expenditure qualify as business versus personal expenditures. The Government responds that it intends to call Agent Roberts as both a summary witness and an expert witness. It argues the Agent will have personal knowledge of the nature of the expenditures from evaluating the evidence and the testimony presented during the course of the trial. The Government further informs the Court that it intends to call Agent Roberts to testify after all the relevant testimony regarding expenditures made by UBO funds is presented.
The Court will allow Agent Roberts to observe the trial and act as a summary witness. The Court finds that if the Government can establish proper foundation, Agent Roberts would be able to draw on this evidence and have personal knowledge of the evidence before the Court.
H. Government's Motion in Limine Regarding Pretrial Diversion Agreement
The Government asks the Court to limit Defendant from referring to the pretrial diversion agreement between the Government and Mrs. Wade or from referring to the disposition of the case against Mrs. Wade. Mr. Wade argues that the diversion agreement is relevant because Mrs. Wade agreed to work with Mr. Wade to pay taxes, which Mr. Wade argues is exculpatory evidence.
The Court fails to see how this diversion agreement has any relevance to the case before it. The Indictment does not hinge on any allegations that occurred after the Indictment was lodged and the diversion agreement obviously does not call for any actions prior to the lodging of the Indictment. The Court finds that evidence regarding the diversion agreement would likely confuse, distract, and invite the improper speculation of the jury. The Court will, therefore, grant the Government's motion and prohibit any reference to Mrs. Wade's diversion agreement or to the disposition of the case against Mrs. Wade.
I. Government's Notice to Introduce Evidence of Charged Misconduct and Mr. Wade's Motion to Limit
The Government gives notice that it intends to introduce evidence of a civil enforcement action brought against Mr. Wade, which among other things led to the IRS issuing various summones, Mr. Wade's arrest, Mr. Wade providing documents through his attorney, and Mr. Wade being found in contempt by Judge Kimball. Mr. Wade moves to limit this evidence arguing that it is irrelevant to the issues before the Court.
In considering the admissibility of this evidence, the Court finds that the primary question is whether this conduct is encapsulated in charges found in the Indictment. The Government responds that this is evidence of Mr. Wade's participation in a conspiracy to impede, impair, obstruct, and defeat the IRS. The Government notes that these summonses were issued after Mr. Wade represented to the IRS that he had no assets to pay the taxes due from 1982-84. The Government also argues that this evidence is relevant to Mr. Wade's willfulness. At this juncture, the Court is not in the position to determine whether the Government can lay the foundation that would connect the civil enforcement action with the attempt to avoid payment of the 1982-84 taxes, however, the Court finds that if the Government is able to do so, the Court would permit this evidence.
Because the Court makes this finding under the assumption that the Government can lay the foundation that it proffers in its motion providing notice, the Court finds that this evidence need not meet the standards of 404(b). In the event that the Government cannot lay proper foundation, the Court will revisit this issue.
J. Government's Oral Motion Regarding Marvin Haney's Prior Criminal Conviction
At the hearing, the Government made a motion to allow for evidence that a witness to be called in the Government's case-in-chief, Mr. Marvin Haney, is an convicted felon. The Defendant objected to this motion, stating that the felony is more than ten years old and that it has very limited relevance. The Government argued that this is relevant because it intends to evoke testimony that Mr. Wade knew of Mr. Haney's criminal background before he met with Mr. Haney. The Government also speculated that Mr. Wade would use the fact that Mr. Haney prepared Mr. Wade's taxes to shift blame from Mr. Wade to Mr. Haney.
The Court finds that Mr. Haney's criminal background has much more relevance than that of the background of a typical witness. The Court will allow the Government to solicit testimony from Mr. Haney that establishes he has been convicted of a felony and as to what felony he was convicted. If the Government can provide evidence that Mr. Wade knew of Mr. Haney's criminal background the Court would also allow this evidence.
K. Government's Notice of Additions to Witness List and Mr. Wade's Motion to Limit Testimony
The Government provided notice that it intended to call three witnesses that did not appear on its original witness list. Mr. Wade responded that he would stipulate to allowing two of those witnesses but that he would object to the Government calling Mr. Donald Taylor. At the hearing, the Government gave notice that it if Mr. Taylor is called at all, it would be as a rebuttal witness and not during its case-in-chief. The Government asked that Court give the Government some leeway in determining what rebuttal witnesses it may call, particularly since it is difficult to predict specifics as to Mr. Wade's defense.
The Court agrees that the Government needs some flexibility in determining what rebuttal witnesses it will call. The Court will allow Mr. Taylor to be called during rebuttal but not during the Government's case-in-chief. The Court also directs the Government to provide Mr. Wade any evidence that Mr. Taylor has received any benefit from the Government in exchange for his testimony.
L. Mr. Wade's Motion in Limine Concerning Expert Witness
Counsel for Mr. Wade represented at hearing that Mr. Wade's Motion in Limine Concerning Expert Witness was withdrawn, the Court treats it as such, and therefore does not it address it further but finds it moot.
SO ORDERED.