THE STATE OF SOUTH CAROLINA In The Supreme Court

Michael Gonzales, Petitioner,

v.

State of South Carolina, Respondent.

Appellate Case No. 2015-001553

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS

Appeal from Spartanburg County Roger L. Couch, Post-C onviction Relief Judge

Opinion No. 27695 Heard September 21, 2016 – Filed January 5, 2017

REVERSED

Appellate Defender Susan Bar ber Hackett of Columbia,

for Petitioner.

Attorney General Alan McC rory Wilson and Assistant Attorney General Alicia A. O live, both of Columbia, for Respondent.

ACTING JUSTICE PLEICONES: Petitioner was convicted of trafficking in 400 grams or more of methamphetamine. He was sentenced to thir ty years'imprisonment, and his conviction and sentence were affirmed on direct appeal.

State v. Gonzales , 360 S.C. 263, 600 S.E. 2d 122 (Ct. App. 2004). 1 Petitioner then filed this post-conviction relief ("PCR") action, arguing his t rial counsel had a

conflict of interest which advers ely affected trial counsel's p erformance. The PCR judge denied relief, and in a s plit decision, the Court of Appe als affirmed the PCR judge's order. Gonzales v. State , 412 S.C. 478, 772 S.E. 2d 557 (Ct. App. 2015). Because we find the Court of App eals erred in affirming the PCR judge's order denying petitioner relief, we reverse the denial of petitioner' s application for PCR.

FACTS

Petitioner, who was a juvenile, liv ed with his mother and her l ongtime boyfriend, Dino Perez. In 2001, a t the request of petitioner's mother, tr ial counsel successfully represented Perez in a drug related forfeiture act ion. Less than a year later, in January 2002, petitione r was arrested for trafficking in marijuana over one thousand pounds. At the request of petitioner's mother, trial counsel agreed to represent petitioner on the traffi cking charge. Three months later, in April 2002, Perez was also arrested for trafficking in marijuana in excess of one thousand pounds. At the request of petitioner's mother, trial counsel a greed to also represent Perez on his trafficking charge.

In June 2002, petitioner was arrested on the charge of traffick ing in methamphetamine—the conviction which petitioner challenged at t he PCR proceeding leading to the case now before this Court. Trial counsel agreed to represent petitioner on the traffi cking in methamphetamine char ge. Thus, as of June 2002, trial counsel was simu ltaneously representing petiti oner on his trafficking in marijuana and traf ficking in methamphetamine cha rges, as well as representing Perez on his traffi cking in marijuana charge.

One month later, in July 2002, wh ile petitioner's and Perez's r espective trafficking in marijuana charges were still pending, petitioner was tried a nd convicted on his trafficking in methamphetamine charge. Petitioner received a t hirty year sentence, and hired a different attorney t o represent him on his direct a ppeal ("appellate counsel").

1 Later overruled in part by State v. Gentry , 363 S.C 93, 610 S.E.2d 494 (2005).It is uncontroverted that prior to petitioner's July 2002 trial for trafficking in methamphetamine, trial counsel knew: (1) petitioner was a juvenile; (2) petitioner's mother had approached him twice to represent petitioner, and tw ice to represent Perez; (3) petitioner and Perez had each been arrested on separ ate charges— trafficking in marijuana in ex cess of one thousand pounds—in th e same geographical area within a three month period; (3) petitioner's mother had paid the $50,000 attorney's fees for repr esentation of both petitioner's and Perez's trafficking in marijuana charge s; (4) when petitioner's mother was "trying to find money" to pay the additional $25,000 attorney's fee for petitioner's trafficking in methamphetamine charge, trial c ounsel discussed with petitioner 's mother using the money he had assisted Perez in recovering in his 2001 forfe iture action; (5) a

check written from Perez's account for $3,220 was used to pay part of the attorney's fee in petitioner's tr afficking in methamphetamine c ase; and (6) the remainder was paid by J&M Contractors. 2

Despite all such indicators, tri al counsel testified he never r ecognized the potential

for a conflict of interest. Th erefore, prior to petitioner's J uly 2002 methamphetamine trial, trial c ounsel never discussed with petit ioner or Perez the potential for a conflict of inter est or sought a waiver by eith er client. Trial counsel also never discussed with petitioner that his attorney's fees w ere being paid for by a third-party, and particularly a t hird-party who may have an adv erse interest in petitioner's case.

In 2003, under the advisement of appellate counsel, petitioner agreed to provide

federal authorities with substant ial information as to Perez's wide-scale trafficking operation in exchange for complete protection from federal pros ecution. Subsequently—after petitioner's me thamphetamine trial, but whil e petitioner's and Perez's marijuana charges we re still pending—trial counsel was contacted by the United States Attorney's Office regarding his representation of both petitioner and Perez. Specifically, Perez's tr afficking charge had become the subject of federal jurisdiction, and trial counsel w as contacted by several Assistant United States Attorneys who warned there were allegations of a conspiracy bet ween Perez and petitioner in regards to the pending trafficking charges, and t hat petitioner was a potential witness in the federal government's case against Pere z. The United States

2 At the PCR hearing, trial counsel testified he could not remem ber if J&M

Contractors was affiliated with Perez, petitioner, or petitione r's mother; however, petitioner testified J& M Contractors was affiliated with Perez.Attorney's Office informed trial counsel that based on the alle ged conspiracy, his common representation of Perez and petitioner created a conflic t of interest.

Trial counsel withdrew from repr esentation of Perez a short tim e thereafter. Trial counsel then met with petitioner and explained that if petition er were cooperating with the federal government on th e Perez marijuana investigatio n, it created a

conflict of interest for tria l counsel, and petitioner needed t o sign a waiver in order

for trial counsel to continue r epresenting him. Petitioner den ied any dealings with Perez, or meeting with federal a gents, but stated he needed to think about signing a

waiver. 3 Trial counsel never heard from petitioner again. From Spring 2003 until his formal withdrawal in 2004, the only information trial couns el received as to petitioner was from a ppellate counsel, who was representing pet itioner on a federal

material witness warrant in the case against Perez.

In July 2004, trial counsel filed a motion to be relieved as co unsel in petitioner's trafficking in marijuana case bas ed on "certain actions underta ken by [petitioner] in his own behalf," causing trial counsel a conflict of interest b y "engaging in negotiations . . . interviews, et cetera" with the federal gove rnment without consulting with or informing tr ial counsel. By the time trial counsel confronted petitioner about alleged cooperation with the federal governmen t, petitioner had already provided significant in formation to federal authorities regarding Perez's business of trafficking in illic it drugs. Perez pleaded guilty to the federal trafficking in mar ijuana charge.

Appellate counsel was appointed to represent petitioner on the state marijuana charge. She negotiated on petiti oner's behalf a five-year conc urrent sentence on the reduced charge of traffick ing in marijuana 10–100 pounds. Petitioner was sentenced to five years' impris onment to run concurrently with the sentence for

3 At the PCR hearing, petitioner ad mitted to "lying" when he tol d trial counsel after his conviction on the methamphetamine charge that he did not ha ve any connection with Perez; petitioner claims he was not forthcoming because pr ior to his trafficking in methamphetamine t rial, he attempted to inform tr ial counsel of his connection to Perez, and trial c ounsel refused to listen. Peti tioner further admitted

that he was untruthful when he told trial counsel he was not co operating with the federal government in the case ag ainst Perez. Petitioner claims he withheld his cooperation from trial counsel b ecause, in part, he knew trial counsel still represented Perez, and petitioner was scared of Perez both for his sake and his

mother's sake.trafficking in methamphetamine . Petitioner then brought this P CR action claiming

trial counsel had a conflict of i nterest in representing both p etitioner and Perez.

At the PCR hearing, trial counsel was asked whether, once made aware of the conflict of interest, he attemp ted to file any type of motion on behalf of petitioner

to inform the circuit court ther e may have been a conflict of i nterest at the time of petitioner's methamphetamine tr ial. Trial counsel responded th at his remedy was

to move to be relieved as counsel on petitioner's marijuana cha rge. Trial counsel further explained he did not seek a new trial on the methamphet amine conviction

because he did not believe he ha d a conflict of interest until petitioner became a material witness against Perez, which occurred only after petit ioner's methamphetamine trial.

The PCR judge found trial counsel 's testimony—that he was unawa re of any conflict of interest prior to pe titioner's methamphetamine tria l—was credible and "supports Counsel's claims that he was not operating under a co nflict of interest." Accordingly, the PCR judge found petitioner failed to meet his burden of proving

there was a conflict of interes t. The Court of Appeals disagre ed with the PCR judge's finding that there was n ot an actual conflict of interest; however, the Court of Appeals' majority affirmed the PCR judge's denial of relief, concluding petitioner failed to prove tri al counsel recognized the conflic t, and, therefore, petitioner could not prove he was adversely affected by trial c ounsel's performance. Gonzales v. State , 412 S.C. 478, 772 S.E. 2d 557 (Ct. App. 2015). We granted petitioner's petition for a writ of certiorari to review the decision of the Court of Appeals.

ISSUE

Did the Court of Appeals err in holding that in order to prevail on his claim of ineff ective assistance of counsel, petitioner was required to pro ve trial counsel recognized

an actual conflict of interest?

ANALYSIS

Petitioner contends the Court of Appeals erred in holding that in order to succeed

on his claim of ineffective assi stance of counsel, he had to pr ove trial counsel recognized the existence of an ac tual conflict of interest. We agree.A criminal defendant's Sixth Amen dment right to effective assis tance of counsel includes a right to counsel "unhi ndered by a conflict of intere st." Cuyler v.
Sullivan, 446 U.S. 335, 345–50, 355 (1980) (quoting Holloway v. Arkansas , 435 U.S. 475, 483 n. 5 (1978)). When counsel is burdened by an act ual conflict of interest, he "breaches the duty of loyalty, perhaps the most ba sic of counsel's

duties." Strickland v. Washington , 466 U.S. 668, 692 (1984). Due to the

seriousness of the breach and th e difficulty in "measure[ing] t he precise effect on the defense of representation corrupted by conflicting interest s," the Strickland

ineffective assistance of couns el standard is modified in actua l conflict of interest

cases in that the defendant is not required to show prejudice. Strickland , 466 U.S. at 692; see also Duncan v. State , 281 S.C. 435, 438, 315 S.E.2d 809, 811 (1984) (quoting Cuyler , 446 U.S. at 348). In other words, a defendant is not require d to show prejudice in the traditional Strickland sense, i.e., that there is a reasonable probability the result of the p roceeding would have been differ ent. Strickland , 466 U.S. at 692–94 (citing Cuyler , 446 U.S. at 345–50). Rather, "prejudice is presumed" if the defendant demons trates that counsel "'actively represented conflicting interests' and that ' an actual conflict of interest adversely affected his lawyer's performance.'" Strickland , 466 U.S. at 692 (quoting Cuyler , 446 U.S. at 350); see also Duncan , 281 S.C. at 438, 315 S. E.2d at 811 (quoting Cuyler , 446 U.S. at 348)); Lomax v. State , 379 S.C. 93, 102, 665 S.E.2d 164, 168 (2008).

An actual conflict of interest arises where:

a defense attorney places hims elf in a situation inherently conducive to divided loyalties . If a defense attorney owes duties to a party whose interests are adverse to those of the defendant, then an actual conflict exists. The

interests of the other clie nt and the defendant are sufficiently adverse if it is s hown that the attorney owes a duty to the defendant to take some action that could be

detrimental to his other client.

Jordan v. State , 406 S.C. 443, 449, 752 S.E. 2d 538, 541 (2013) (quoting Duncan

, 281 S.C. at 438, 315 S. E.2d at 811 (quoting Zuck v. Alabama , 588 F.2d 436, 439 (5th Cir. 1979))). In a PCR proc eeding, the applicant bears th e burden of proving her attorney had a conflict of interest necessitating relief. Jordan , 406 S.C. at 449,

752 S.E.2d at 541.Generally, this Court gives grea t deference to the PCR court's findings of fact and

conclusions of law. Miller v. State , 379 S.C. 108, 115, 665 S.E.2d 596, 599 (2008). However, this Court will reverse the decision of the PCR court when it is controlled by an error of law. Terry v. State , 383 S.C. 361, 371, 680 S.E.2d 277, 282 (2009) (cita tion omitted).

A majority of the Court of App eals held an actual conflict of interest existed prior to petitioner's trafficking in met hamphetamine trial; we agree, and the State does not challenge this assertion.

Notably, several events occurred between trial counsel's repres entation of petitioner on the trafficking in marijuana charge beginning in January 2002, and petitioner's trafficking in metha mphetamine trial in July 2002, that, collectively,

demonstrate an actual conflict of interest existed. Those indi cators are, inter alia : Perez exhibiting an interest in petitioner's case when he paid, at least in part, if not in full, petitioner's attorney's fees; a clear, close connectio n between petitioner's mother and Perez; petitioner and Perez's arrests for traffickin g in marijuana over one thousand pounds in a very shor t time frame in the same geog raphical area; and the unlikelihood that a juven ile would act independently when e ngaging in trafficking over one thousand pounds of marijuana. We find par ticularly troubling the fact that trial counsel admitted to discussing with petitio ner's mother ways in which she could come up with t he money to pay petitioner's atto rney's fees on the methamphetamine charge, and one o f the ways discussed was using the funds

recovered in Perez's forfeiture action in which he was represented by trial counsel. See Wood v. Georgia , 450 U.S. 261, 268–69 (1981) (fi nding "inherent dangers []

arise when a criminal defendant i s represented by a lawyer hire d and paid by a third party, particularly when t he third party is the operator of the alleged criminal enterprise."). Accordingly, we f ind the Court of Appeals corre ctly held an actual

conflict of interest existed due to trial counsel's representat ion of both petitioner

and Perez.

However, the Court of Appeals' m ajority then held, "Although an actual conflict existed, because trial counsel did not recognize the conflict , Gonzales cannot

demonstrate the conflict affect ed trial counsel's performance." Gonzales , 412 S.C. at 498, 772 S.E.2d at 567–68 (emphasis supplied). We find this assertion—which suggests that only an attorney who intentionally violates his d uty of loyalty has a

conflict of interest—amounts to an error of law. Stated anothe r way, the Court of Appeals' majority opinion is tantamount to holding that regardl ess of howegregious the evidence may be that an actual conflict of intere st exists, unless the attorney acknowledges the conflict, it cannot be shown the conf lict adversely affected the attorney's perform ance. We find that such a holding is contrary to this Court's precedent. See, e.g.

, Jordan , 406 S.C. 443, 752 S.E.2d 538 (2013) (demonstrating trial counsel's testimony stopped short of ackno wledging the existence of an actual conflict of interest); cf. State v. Gregory , 364 S.C. 150, 153, 612 S.E.2d 449, 450–51 (2005); Duncan , 281 S.C. 435, 315 S.E.2d 809 (1984).

While trial counsel's failure t o recognize the actual conflict may have resulted in his inability to provi de effective assistance of counsel, his r ecognition of the conflict is not required to show it adversely affected trial co unsel's performance.

See Duncan , 281 S.C. at 438, 315 S.E.2d at 811 (holding in conflict of in terest inquires, prejudice is presumed where the defendant demonstrate s counsel "actively represented conflictin g interests" and that an "actual conflict of interest adversely affected his lawyer's performance" (citations omitted )); cf. Cuyler , 446 U.S. at 347 (finding an attorney r epresenting two defendants in a criminal matter is in the best position professionally and ethically to determine when a conflict of interest exists or may develop in the course of a trial (citing Holloway , 435 U.S. at 485 (quoting State v. Davis , 110 Ariz. 29, 31 (1973)))).

Evidence that the actual conflict of interest adversely affecte d trial counsel's performance is demonstrated by his failure to advise petitioner as to favorable options he may have otherwise exercised—favorable options appel late counsel successfully negotiated in both th e federal and state context. Cf. Strickland , 466 U.S. at 692 (noting the difficulty in "measure[ing] the precise effect on the defense of representation corrupted by conflicting interests."); United States v. Almany , 621 F.Supp.2d 561, 569–70 (E.D. Tenn. 2008) (finding where an attor ney represents two members of a drug distribu tion conspiracy, the lack of effo rt by the attorney to explore his client's potential fo r a plea agreement or cooperat e with the "Government" was, "in itself, s trong evidence of a conflict," a nd noting, "Exploring possible plea negotiations is an important part of providing adequate representation of a criminal c lient, and this part is easily pr ecluded by a conflict of interest" (citing United States v. Hall , 200 F.3d 962, 965 (6th Cir. 2000); United

States v. McLain , 823 F.2d 1457, 1464 (11t h Cir. 1987) (citing Holloway , 435 U.S. at 490); Newman v. United States , 1998 WL 553048, at *3 (6th Cir. 1998);

Mannhalt v. Reed , 847 F.2d 576, 582 (9th Cir. 1988); United States v. Lopez , 989 F.2d 1032, 1043, amended and superseded by United States v. Lopez , 4 F.3d 1455 (9th Cir. 1993); United States v. Tatum , 943 F.2d 370, 376 (4th Cir. 1991); UnitedStates v. Balsirov , 2005 WL 1185810 (E.D. Va. 2005 )). Indeed, a lieutenant involved in the state investigat ions of petitioner and Perez te stified at the PCR hearing that the conflict of interest "absolutely" hindered law enforcement's ability to secure cooperation from petiti oner prior to Perez being transferred to federal jurisdiction. And an Assistant United States Attorney testifie d there was "no question" had petitioner been available for cooperation before his methamphetamine trial, their o ffice would have appealed to stat e prosecutors advocating petitioner receive favor able treatment for his exten sive cooperation in the Perez investigation.

In conclusion, we hold that regar dless whether an attorney reco gnizes an actual conflict of interest, if the conf lict adversely affected the at torney's performance, the applicant has established his entitlement to relief. According ly, we find the Court of Appeals erred as a matter of l aw in determining that because trial counsel failed to recognize the actual conflict of interest, petitioner could not show he was adversely affected, and that he therefore failed to meet his bu rden of proof.

CONCLUSION

For the foregoing reasons, we reverse the decision of the Court of Appeals.

BEATTY, C.J., KITTR EDGE, HEARN and FEW, JJ., concur.