Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-04047/USCOURTS-ca10-89-04047-0/pdf.json

Parties Involved:
Zell Lou Mills
Appellant
United States of America
Appellee

Document Text:

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

FIL 

Uflited Statej Court of Appeals 

Tenth Circuit 

UNITED STATES OF AMERICA, ) 

MAY 21 1990 

ROBERT L. HOECKER 

Clerk 

v. 

ZELL 

Plaintiff-Appellee, 

LOU MILLS, 

Defendant-Appellant. 

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Nos. 89-4044 

89-4047 

(D.C. No. 88-CR-81A) 

(District of Utah) 

ORDER AND JUDGMENT1 

Before McKAY, LOGAN, and BALDOCK, Circuit Judges. 

This case comes to us on appeal from the conviction of 

defendant-appellaht Zell Lou Mills. A jury convicted Mr. Mills of 

defrauding a bank under 18 U.S.C. § 1344 (1988). 

I. Facts 2 

On November 23, 1984, Mr. Mills received a check for $25,000 

from one Ronald DiGiorno, at which time DiGiorno informed 

Mr. Mills that the check was drawn against insufficient funds. 

1 This order and judgment has no precedential value and shall 

not be cited, or used by any court within the Tenth Circuit, 

except for purposes of establishing the doctrines of the law of 

the case, res judicata, or collateral estoppel. 10th Cir. R. 

36.3. 

2 Because this appeal involves a challenge to the sufficiency 

of the evidence, we state the facts as viewed most favorably to 

the government. 

Appellate Case: 89-4047 Document: 01019970236 Date Filed: 05/21/1990 Page: 1 
Although he had three accounts in his own name at First Security 

Bank of Utah, Mr. Mills deposited the DiGiorno check into an 

account of his wife, Diane Mills, on November 27, 1984. Before he 

made the deposit, Mr. Mills was told by a First Security officer 

that the check would not be deposited immediately, but would be 

accepted for collection. Later, the Bank's officer agreed to 

place the check "on deposit," but told Mr. Mills that all three of 

Mr. Mills' accounts at First Security would be subject to $25,000 

holds until the check was collected. In addition, Mr. Mills 

agreed not to write checks against the deposited funds until the 

$25,000 DiGiorno check had cleared the Texas bank against which it 

was drawn. The Bank's officer was apparently unaware that Diane 

Mills had an account and that Mr. Mills would deposit the check in 

that account instead of one of his own accounts. 

Despite his agreement, Mr. Mills began writing checks against 

the funds on November 29, 1984, and First Security honored those 

checks. After First Security honored several of the checks, the 

DiGiorno check was dishonored leaving First Security with a substantial loss. The check deposit coupled with the issuance of 

checks against the funds formed the basis for the bank fraud 

charge against Mr. Mills. 

During the ensuing criminal trial, the_ government successfully admitted into evidence a second check that was written and 

drawn by Mr. Mills against one of his own accounts at First 

Security. This check was for the amount of $84,575.49, was dated 

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December 20, 1984, and was made payable to Marrot Construction 

Company. Testimony at trial indicated that Mr. Mills was indebted 

to Marrot Construction for approximately $110,000 worth of work 

done on the Mills' home. Mr. Mills was under financial pressure 

because Marrot Construction had a lien on the Mills' home and had 

threatened to foreclose. Mr. Mills objected to the admission of 

the Marrot check, claiming that it was not relevant to the fraud 

case concerning the DiGiorno check deposit. Mr. Mills argued further that any probative value the check may have had was outweighed by the potential for unfair prejudice and that the check 

should have been excluded under Rule 403. See Fed. R. Evid. 403. 

The district court nevertheless allowed the admission of the 

Marrot check under Rule 404(b). 3 

Mr. Mills renews these arguments on appeal. In addition, 

Mr. Mills argues that the government wrongfully failed to disclose 

to him the existence of a witness, Mr. Marrot, prior to trial. 

Finally, Mr. Mills challenges his conviction on the ground that 

there was insufficient evidence to support the jury's verdict. 

II. Admissibility of the Marrot Check Under Rule 404(b) 

Evidentiary rulings are matters generally committed to the 

discretion of the trial court. Accordingly, we review the 

3 Rule 404(b) provides: "Evidence of other crimes, wrongs, or 

acts is not admissible to prove the character of a person in order 

to show action in conformity therewith. It may, however, be 

admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence 

of mistake or accident." Fed. R. Evid. 404(b). 

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district court's admission of the Marrot check only to determine 

whether the court abused its discretion. See Alexander v. United 

States, 849 F.2d 1293, 1301 (10th Cir. 1988); Bannister v. Town of 

Noble, Okl., 812 F.2d 1265, 1270 (10th Cir. 1987). 

In his challenge of the court's ruling, Mr. Mills argues that 

the Marrot check had no relevance to any proper issue concerning 

the DiGiorno check deposit. As a threshold matter, evidence of 

other similar acts must be "probative of a material issue other 

than character" in order to be admitted under Rule 404(b). 

Huddleston v. United States, 485 U.S. 681, 686 (1988). Mr. Mills 

argues that the government failed to meet this requirement because 

it did not articulate how the Marrot check was probative of any 

proper issue. Our examination of the record, however, leads us to 

a different conclusion. During the trial, counsel pointed out the 

government's theory that the Marrot check "goes directly to 

[Mr. Mills'] motive in doing what he did as to the [DiGiorno check 

deposit] • • " Record, vol. 3, at 114. Counsel explained that 

the financial pressure that Marrot Construction put on Mr. Mills 

provided the motive for both the DiGiorno check deposit and the 

issuance of the Marrot check. Thus, under the government's 

theory, the Marrot check was directly probative as to Mr. Mills' 

motive and intent at the time he made the DiGiorno check deposit. 

We conclude that the government's stated purpose for the check's 

admission was proper because the check was probative of Mr. Mills' 

motive and not simply his character. 

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Mr. Mills also argues that the Marrot check is irrelevant to 

motive and intent unless the government has come forward with some 

proof that Mr. Mills intended to issue the Marrot check without 

sufficient funds. We agree that the Marrot check is not probative 

of motive unless there is some evidence to show that Mr. Mills 

issued the Marrot check with knowledge of the insufficient funds. 

We do not agree, however, that the government must "prove" that 

Mr. Mills issued the check knowingly. 

The Supreme Court has stated clearly that the district court 

need not make a formal finding regarding similar acts before they 

may be admitted under Rule 404(b). See Huddleston v. United 

States, 485 U.S. 681, 687 (1988). In so holding, the Court specifically rejected the petitioner's argument that 404(b} requires 

the district court to find by a preponderance of evidence that the 

act occurred. Id. at 689. Instead, Rule 404(b} must be read in 

conjunction with Rule 104(b), which provides: "When the relevancy 

of evidence depends upon the fulfillment of a condition of fact, 

the court shall admit it upon, or subject to, the introduction of 

evidence sufficient to support a finding of the fulfillment of the 

condition." Fed. R. Evid. 104(b). Interpreting this provision, 

the Court held that: "The [district] court simply examines all the 

evidence in the case and decides whether the jury could reasonably 

find the conditional fact ... by a preponderance of the evidence." Id. at 690. 

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In this case, we conclude that there was sufficient evidence 

to support a finding by the jury that Mr. Mills knowingly issued 

the Marrot check without sufficient funds. There was testimony by 

Mr. DiGiorno indicating that Mr. Mills was under financial pressure from Marrot Construction. Mr. Mills' own testimony corroborated this. In addition, there was evidence introduced that 

showed Mr. Mills had several accounts at First Security that were 

overdrawn or empty. Finally, the evidence showed that Mr. Mills 

discussed the DiGiorno deposit at length with an officer of First 

Security. This evidence may indicate to a reasonable jury that 

Mr. Mills knew about the emptiness of his accounts when he issued 

the Marrot check some time after the DiGiorno check deposit. Consequently, the Marrot check met the requirements of Rule 104(b) 

and was relevant to motive and intent under Rule 404(b). 

Mr. Mills further challenges the admission of the Marrot 

check by arguing that the district court failed to articulate the 

specific purpose under Rule 404(b) for which the check was admitted. Indeed, this circuit has held that district courts must 

articulate the specific purpose or purposes for which Rule 404(b) 

evidence is admitted. See United States v. Morales-Quinones, 812 

F.2d 604, 612 (10th Cir. 1987): United States v. Kendall, 766 F.2d 

1426, 1436-37 (10th Cir. 1985), cert. denied, 474 U.S. 1081 

(1986). "[A] broad statement merely invoking or restating Rule 

404(b) will not suffice." Kendall, 766 F.2d at 1436. See also 

United States v. Record, 873 F.2d 1363 (10th Cir. 1989): United 

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States v. Orr, 864 F.2d 1505 (10th Cir. 1988). 

Despite Mr. Mills' argument, however, we conclude that the 

district court articulated adequately the purpose for which the 

Marrot check was admitted. As we pointed out earlier, the government stated on the record that motive and intent were the purposes 

for which the check was probative. In response, Mr. Mills' counsel objected to the admission of the Marrot check and argued that 

the check was issued too long after the DiGiorno deposit to have 

any similarity or probative value. See record, vol. 3, at 115-16. 

Mr. Mills' counsel went on to point out that the check was too 

remote in time and factual connection "to show any kind of common 

plan or scheme or intent." Id. at 116. The court disagreed, 

indicating its belief that the Marrot check was probative as to 

Mr. Mills' motive in making the DiGiorno deposit. The court stated 

that Mr. Mills' "stressful circumstances ... extended over a 

period of time" and that between the DiGiorno check deposit and 

the issuance of the Marrot check, "the motivation [in one] is 

likely as to motivation in the other, and so on." Id. 

Based on the record as quoted above, we conclude that the 

court plainly adopted the government's theory as to why the Marrot 

check was probative of Mr. Mills' motive in the charged offense. 

Because it is apparent in the record what purpose the court had in 

mind when it admitted the check, we hold that the requirement of 

Kendall was met in this case. See also United States v. Record, 

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873 F.2d 1363 (10th Cir. 1989); United States v. Orr, 864 F.2d 

1505 (10th Cir. 1988). 

Finally, Mr. Mills argues that the district court should have 

excluded the Marrot check because its potential for undue 

prejudice outweighed its probative value. See Fed. R. Evid. 403. 

To this contention, we simply respond by pointing out that the 

decision on the Rule 403 objection was discretionary for the 

district court. The court had properly concluded that the Marrot 

check was probative on the issue of Mr. Mills' motive. Moreover, 

the court had expressed its belief that the issuance of the Marrot 

check arose from the same "stressful circumstances" that led to 

the DiGiorno check deposit. Accordingly, the court decided that 

the admission of the Marrot check was not unfairly prejudicial. 

We cannot say, based on this reasoning, that the court abused its 

discretion. 

For the reasons stated above, we hold that the trial court 

did not abuse its discretion when it admitted the Marrot check 

into evidence as an "other act" under Rule 404(b). 

III. Withheld Government Evidence 

After Mr. Mills was indicted and before trial, the FBI interviewed Mr. _William Marrot, the man to whom Mr. Mills gave the 

worthless Marrot check. The FBI prepared a summary of the interview, but the government failed to provide the summary to defense 

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counsel prior to trial. During the trial, the government determined that it might want to use Mr. Marrot as a witness. In the 

end, however, Mr. Marrot did not testify. Until that time, 

Mr. Mills' counsel was unaware of the existence of the FBI 

interview summary and of the possibility that Mr. Marrot might be 

a government witness. Mr. Mills claims, therefore, that he was 

denied due process according to the principle set forth in Brady 

v. Maryland, 373 U.S. 83, 87 (1963). Mr. Mills claims further 

that the interview summary should have been provided as Jencks Act 

material under 18 U.S.C. § 3500 (1988). Accordingly, Mr. Mills 

argues that he should be granted judgment of acquittal or a new 

trial. 

Under Brady, the government must disclose to the defendant 

any exculpatory evidence in the government's possession. See 

Brady, 373 U.S. at 87. Having reviewed the briefs and record, we 

conclude that the existence of Mr. Marrot as a witness and the 

information he provided in the FBI interview was not exculpatory. 

Consequently, Mr. Mills' due process claim under Brady necessarily 

fails. Mr. Mills' Jencks Act claim also fails because Mr. Marrot 

never testified at trial. Under the Act, "no statement or report 

in the possession of the United States .•• shall be the subject 

of subpena [sic], discovery, or inspection until said witness has 

testified on direct examination in the trial of the case." 18 

u.s.c. § 3500(a) (1988). We hold, therefore, that no due process 

violation occurred when the government failed to disclose the 

existence of Mr. Marrot as a potential government witness, and 

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further that no violation of the Jencks Act resulted from the government's failure to produce the interview summary. 

IV. Sufficiency of Evidence 

Finally, Mr. Mills challenges his conviction by arguing that 

there was not sufficient evidence to support the jury's verdict. 

In evaluating this challenge, we must view all the evidence, both 

direct and circumstantial, in the light most favorable to the government. United States v. Cuch, 842 F.2d 1173, 1178 (10th Cir. 

1988); United States v. Culpepper, 834 F.2d 879, 881 (10th Cir. 

1987). "Evidence is considered sufficient to support a criminal 

conviction if, when viewed in the light most favorable to the government, a reasonable jury could find the defendant guilty beyond 

a reasonable doubt." Culpepper, 834 F.2d at 881. 

In this case, the only element of the crime in serious dispute is the state of mind required to commit bank fraud. According to section 1344, a person must "knowingly'' execute the act 

constituting the crime. 18 U.S.C. § 1344(a) (1988). The record 

contains ample evidence to support the jury's conclusion that 

Mr. Mills intended to defraud First Security. At trial, Mr. 

DiGiorno testified that Mr. Mills knew the DiGiorno check was no 

good when it was issued. Mr. Mills, however, stated that he 

believed the DiGiorno check was good. Viewing the evidence in the 

light most favorable to the government, the jury could reasonably 

have believed Mr. DiGiorno's testimony and discredited Mr. Mills' 

testimony. In addition, there was evidence produced showing that 

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• 

Mr. Mills promised a First Security officer that he would not 

write checks against the DiGiorno check deposit until the check 

cleared. Because Mr. Mills did write checks against the deposit, 

a jury could reasonably infer that Mr. Mills intended to defraud 

First Security. We conclude that this evidence, viewed most 

favorably toward the government's case, was sufficient to support 

the jury's verdict under the standards of this circuit. 

AFFIRMED. 

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Entered for the Court 

Monroe G. McKay 

Circuit Judge 

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