Opinion ID: 195935
Heading Depth: 2
Heading Rank: 1

Heading: Improperly Excluded Evidence

Text: 12 Newman argues that the district court abused its discretion in refusing to admit into evidence a series of letters exchanged in May of 1990 between Newman and Daniel K. Jackson & Associates, an investment firm. The correspondence included a form filled out by Newman containing basic information about RPLIC and requesting investment capital. The correspondence also included a response from the company indicating it was interested in perhaps arranging financing. According to Newman, the correspondence was clearly relevant in that it corroborated his testimony at trial that he was in fact actively seeking capital investment for the continuing operation of RPLIC. It would supposedly have rebutted the government's contention that Newman had bought the company with the sole intent of diverting its assets. 13 We agree with the government that the district court did not abuse its discretion in excluding the evidence as irrelevant. The correspondence was exchanged in May of 1990, four months after Newman had purchased RPLIC and diverted its assets. Given the timing of the correspondence, the district court could reasonably have found that it said nothing about the relevant issue: Newman's state of mind at the time of the purchase and diversion of assets. The correspondence, moreover, was cumulative. Even assuming arguendo its relevance, its exclusion was unprejudicial, since Newman had already testified that he sought investment financing from Daniel K. Jackson & Associates as well as a number of other investment companies, and the government never disputed this assertion. 14 Newman next argues that the district court abused its discretion when it excluded certain proffered testimony by the director of the DBR. This testimony concerned the circumstances that led up to the consent orders entered into with RPLIC prior to Newman's purchase of the company. The district court concluded that this testimony was not relevant to whether Newman had known of the consent orders. Newman argues, however, that the testimony would have indicated that the consent orders had been entered into prior to his involvement with RPLIC and were directed primarily at RPLIC's former owner. This, Newman suggests, would have bolstered his claim that his lawyers had advised him that the consent orders did not apply to him, thereby countering the government's argument that Newman's flagrant violation of the consent orders was evidence of his intent to defraud. 15 Again, we think that this evidentiary ruling did not constitute an abuse of discretion. The district court could reasonably have concluded that the specific events that led up to the consent orders were not relevant to whether Newman was aware of the restrictions imposed by the decrees at the time he purchased RPLIC. The testimony sought by Newman concerned the events that led up to the consent order; it did not suggest that Newman was unaware of the order or the limits it imposed on the transfer of RPLIC's assets. Indeed, the consent order clearly stated on its face the restrictions imposed upon RPLIC, and it is undisputed that Newman had read the order prior to his purchase of the company. Newman, moreover, could not have been prejudiced by exclusion of this testimony since there was already considerable testimony from other witnesses concerning the history of the consent orders. 16 Finally, Newman argues that the district court abused its discretion when it excluded a DBR report from a 1987 investigation of RPLIC. The report indicated that RPLIC was in financial trouble and that RPLIC's records were in such disarray that it was difficult to determine whether RPLIC was solvent. Newman contends that an RPLIC executive first received a copy of this report in January of 1990, but failed to show it to Newman (who by then had purchased the company). Newman argues that the report is therefore relevant in that the failure to show it to him supports his claim that the same executives withheld information about the financial status of RPLIC from him before his decision to purchase RPLIC. 17 The district court did not abuse its discretion in excluding the report as irrelevant. The report was received by RPLIC after Newman had already purchased the company and thus says nothing about what information might have been withheld from him before the purchase. The report, moreover, was cumulative of other evidence and its exclusion could not have prejudiced Newman. The record shows that Newman had repeatedly been informed of RPLIC's precarious financial state prior to his purchase of the company. In particular, the $200,000 purchase price and the letter stating that RPLIC's liabilities exceeded its assets would have told Newman of RPLIC's situation.