Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-16-01217/USCOURTS-ca8-16-01217-0/pdf.json

Parties Involved:
Leon J. Brandriet
Appellant
United States of America
Appellee

Document Text:

United States Court of Appeals

For the Eighth Circuit

___________________________

No. 16-1217

___________________________

United States of America

lllllllllllllllllllll Plaintiff - Appellee

v.

Leon J. Brandriet

lllllllllllllllllllll Defendant - Appellant

____________

Appeal from United States District Court 

for the District of South Dakota - Sioux Falls

____________

 Submitted: October 17, 2016

Filed: October 27, 2016

[Published]

____________

Before MURPHY, BEAM, and GRUENDER, Circuit Judges.

____________

PER CURIAM.

Appellate Case: 16-1217 Page: 1 Date Filed: 10/27/2016 Entry ID: 4463340 
Leon J. Brandriet pleaded guilty to one count of mail fraud and now appeals the

district court's1

 application of a two-level sentencing enhancement. For the following

reasons, we affirm.

I. BACKGROUND

In September 2011, a van struck the home of Mary Ann Espelien in Watertown,

South Dakota. Espelien hired Brandriet, an independent insurance adjustor, to act as

an agent on her behalf to adjust a claim with her insurer, DeSmet Farm Mutual

Insurance Company. They agreed that in exchange Brandriet would keep ten percent

of payments made for reimbursement for damages to the structure and contents of

Espelien's home but that he would not keep any portion of payments made for

Espelien's living expenses. They also agreed the payments from DeSmet would go

directly to Brandriet, who would then disburse the funds according to their agreement. 

Espelien was distressed that she would not have enough money to afford housing

while her badly damaged house was being repaired. Espelien had apparently moved

to Watertown only recently to be near family, and she had spent much of her money

fixing up her house. She asked her employer if she could be sent to another area of

the country where she could earn more money, and her employer sent her to Pueblo,

Colorado. Because Espelien was without much money, she temporarily lived out of

her car while she looked for affordable housing in Pueblo. She also occasionally

traveled back to South Dakota to check on her home and belongings. The added

expenses caused her to dip into her retirement savings, postponing her retirement

plans.

Of the $62,643.08 paid by DeSmet to Brandriet, $12,745.31 was earmarked for

paying the costs of Espelien's living expenses, moving to a new residence, and

1

The Honorable Karen E. Schreier, United States District Judge for the District

of South Dakota.

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Appellate Case: 16-1217 Page: 2 Date Filed: 10/27/2016 Entry ID: 4463340 
cleaning and storing her personal property. In total, Brandriet passed on $18,709.69

to Espelien, and $7,561.60 to Mark Kruse, the contractor working on Espelien's home

(and Brandriet's nephew). Because the timing of the payments to Espelien for living

and moving expenses is germane to this case, we briefly summarize the relevant

specifics.2

 DeSmet issued a check to Espelien (but sent to Brandriet) on November

22, 2011, in the amount of $7,269.49 for cleaning personal property, packing

materials, and moving charges. Brandriet deposited that check, along with another

check from DeSmet, on November 28, and on November 30 he mailed a check to

Espelien for $8,000. DeSmet sent another check to Brandriet in the amount of

$2,676.82 on December 22, 2011, for rent and living expenses, and Brandriet

deposited that amount on January 30, 2012. But he did not forward any funds on to

Espelien until April 30, 2012, when he mailed her a check for $735, and on June 1

when he electronically deposited another $735 in Espelien's account. Also on June

1, 2012, DeSmet sent a check to Brandriet for $14,567.68, of which $2,175 was for

rent and $624 for property storage. Brandriet deposited that check June 6 and that

same day sent $561.60 to Kruse for storage fees. (Espelien had been storing her

property in Kruse's garage while she was living in Colorado, and so this amount

apparently compensated Kruse for doing so.) On June 14, 2012, Brandriet sent

Espelien a check for $9,239.69.

Brandriet converted roughly $30,000 of Espelien's insurance payments to his

own use. After an investigation by the FBI and an indictment on five counts of mail

fraud, he pleaded guilty to one count and agreed to pay restitution for the amount in

all five counts. At sentencing and over Brandriet's objection, the district court

increased his offense level by two because it found his offense caused Espelien

substantial financial hardship. The district court stated:

2

We will not belabor the details of other payments by DeSmet made for the

purpose of repairing Espelien's home.

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Appellate Case: 16-1217 Page: 3 Date Filed: 10/27/2016 Entry ID: 4463340 
Having heard the testimony of Miss Espelien, I find [Brandriet's

offense] did result in substantial financial hardship to her. She ended up

having to relocate herself, relocate her business. The Defendant was

using money that was hers and should have been hers for the purpose of

temporary housing. He didn't give the money to her for that purpose. He

spent it himself.

Brandriet now appeals the application of this sentencing enhancement.

II. DISCUSSION

Brandriet argues that the district court erred in finding his crime resulted in

substantial financial hardship to Espelien. "In reviewing a sentence for procedural

error, we review the district court's factual findings for clear error and its application

of the guidelines de novo." United States v. Barker, 556 F.3d 682, 689 (8th Cir.

2009). Under clear error review, we ask whether we have a definite and firm

conviction that the district court has committed a mistake. United States v. Sistrunk,

612 F.3d 988, 991 (8th Cir. 2010). The U.S. Sentencing Guidelines Manual

(U.S.S.G.) directs the district court to increase a defendant's offense level by two if the

offense "resulted in substantial financial hardship to one or more victims." U.S.S.G.

§ 2B1.1(b)(2)(A)(iii). The application note to § 2B1.1 on when to apply the

substantial-financial-hardship enhancement states that

the court shall consider, among other factors, whether the offense

resulted in the victim– 

. . . . 

(iii) suffering substantial loss of a retirement, education, or other savings

or investment fund; 

(iv) making substantial changes to his or her employment, such as

postponing his or her retirement plans; [and] 

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Appellate Case: 16-1217 Page: 4 Date Filed: 10/27/2016 Entry ID: 4463340 
(v) making substantial changes to his or her living arrangements, such as

relocating to a less expensive home[.]

Id. § 2B1.1 cmt. n.4(F). 

Brandriet acknowledges that Espelien suffered substantial financial hardship,

but he asserts that this hardship was caused by the accident and not by his theft of her

insurance proceeds. He points out that the financial hardship Espelien suffered was

difficulty with living expenses and that he paid Espelien more than the amount she

would have received from DeSmet for that purpose. In short, the money he stole was

money for repairs to Espelien's home and not for her living expenses. Therefore,

Brandriet argues, it was the accident rather than his crime that resulted in her need to

dip into her retirement savings, postpone her retirement plans, and relocate. The

government points out that Brandriet did not pass on DeSmet's second payment

related to living expenses to Espelien for several months. He deposited the December

22, 2011, check a month later, and did not write a check to Espelien until April 2012,

three months later. The government also argues that Brandriet's theft resulted in

prolonging the amount of time it took to repair Espelien's home, thus increasing the

cost of Espelien's living expenses and causing her substantial financial hardship. 

Brandriet replies that "the record is not clear whether and how much Brandriet's

conduct extended the period during which Espelien was displaced from her home." 

We agree with the government. The mere fact that Brandriet paid Espelien an

amount greater than the insurance proceeds she would have received for living

expenses does not foreclose the district court, within its discretion to which we must

defer, from making a factual finding that his theft of approximately $30,000 caused

Espelien's troubles. Rent and other living expenses are time sensitive, and Brandriet

withheld a roughly $2,700 check for that purpose for four months after it was issued,

and then he only passed on two payments of $735 for a total of $1,470. Ultimately

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Appellate Case: 16-1217 Page: 5 Date Filed: 10/27/2016 Entry ID: 4463340 
Brandriet did pass on around $19,000, an amount greater than the roughly $13,000

DeSmet paid for living expenses and moving and related storage costs. But although

the money Brandriet stole was earmarked for home repairs, Espelien was under no

obligation to spend it for that purpose. She could have decided to use some of that

amount to meet her living expenses and delay some or all of the repairs to her home. 

We agree that direct evidence of the details of how Brandriet's theft resulted in

Espelien's substantial financial hardship are, on this record, thin, and that the district

court relied to some degree on inference to make such a finding. It was not, however,

clear error for the district court to have done so.

III. CONCLUSION

Accordingly, we affirm.

______________________________

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Appellate Case: 16-1217 Page: 6 Date Filed: 10/27/2016 Entry ID: 4463340