Opinion ID: 165851
Heading Depth: 3
Heading Rank: 1

Heading: Bitu Bhalla's testimony

Text: 42 Bitu Bhalla represented Naylor in his London action to recover the 3,500-metric ton certificate Arne Lundh supposedly stole. As a result of the proceedings, a British court issued an order requiring Lundh to return the certificate. Naylor introduced the court's order (but not the transcript of the proceedings) at trial. In addition, Naylor sought to introduce a videotape deposition of Bhalla discussing Bhalla's representation of Naylor in the action against Lundh. 43 Although the district court allowed the deposition to be shown, it excluded a portion of Bhalla's testimony regarding his recollection of the British judicial proceedings. The excluded testimony consisted of Bhalla's statements that during the London trial (1) Naylor was in the courtroom and became quite animated when Lundh testified he had found an expert who could authenticate the 3,500-metric ton gold certificate and (2) Lundh testified he used the certificate to obtain a line of credit from a bank. The district court concluded this testimony was hearsay and not relevant to whether the 3,500-metric ton gold certificate was genuine. 44 We find the district court erred in excluding this testimony as hearsay. We agree with Naylor that he did not offer the testimony for the truthfulness of Lundh's statements, but rather for the nonhearsay purpose of showing a basis for Naylor's belief in the authenticity of the certificate. See Hernandez v. United States, 608 F.2d 1361, 1364 (10th Cir.1979) (evidence properly admitted where offered to show lack of knowledge rather than truth of matter asserted). We also find the evidence was relevant because whether Naylor heard someone attest to the certificate's authenticity had some bearing on whether he had a good faith belief in its authenticity. See Miller v. United States, 120 F.2d 968, 970 (1941) (defendant can show lack of fraudulent intent by introducing statements of third persons). 45 Although the testimony was not excludable on hearsay or relevancy grounds, to establish constitutional error Naylor must also show the evidence was material to the extent its exclusion violated his right to present a defense. See Richmond, 122 F.3d at 872. To determine materiality, we examine the record as a whole and inquire as to whether the evidence was of such an exculpatory nature that its exclusion affected the trial's outcome. Id. at 874 (citing United States v. Valenzuela-Bernal, 458 U.S. 858, 868, 102 S.Ct. 3440, 73 L.Ed.2d 1193 (1982)). Two queries inform our analysis: first, whether the proffered testimony was the type that if believed would have, by necessity, exculpated the defendant; and second, whether the proffered testimony, even if admitted, would have created a reasonable doubt that did not exist without the evidence. Id. 46 The excluded testimony does not satisfy either query. Initially, Bhalla's testimony would not have necessarily exculpated Naylor even if believed. Naylor's reaction at trial upon hearing Lundh's testimony could have been due to many things aside from a good faith belief in the 3,500-metric ton certificate's authenticity. Second, Naylor's belief regarding the validity of one of several gold certificates at issue in the trial would not by itself exculpate him from the overall scheme. The excluded testimony related to the 3,500-metric ton certificate, which itself did not figure prominently in any of the investment pitches described during trial. Rather, the testimony of investors suggests that Naylor primarily relied on the 1,000 metric ton certificate during the time period in question. In addition, even if Naylor did believe in the authenticity of the gold certificate, such a belief would not preclude a jury from finding that he nonetheless used fraudulent solicitations to obtain investor funds, for example by falsely indicating that the gold certificates would generate large returns in a short period of time or that Dowlin was a CPA. 47 The next inquiry, then, is whether the excluded testimony would have created a reasonable doubt as to Naylor's culpability. It would not. Naylor presented extensive evidence, through Bhalla and others, of the sincerity of his efforts to recover the gold certificate from Lundh in the British court proceedings. Naylor, Bhalla, Miles, and an FBI agent all testified about the British trial. Naylor even introduced the court order. Further, the FBI agent testified Naylor informed him that during the British court proceedings a witness testified to the authenticity of the 3,500-metric ton certificate. Naylor also presented substantial evidence of his good faith belief in his investment programs through the testimony of other witnesses who confirmed that Naylor appeared to honestly believe in the authenticity of the certificates. Finally, Naylor personally testified regarding all of these events. Nonetheless, after hearing hours of testimony and viewing considerable evidence purportedly demonstrating Naylor's belief in the certificates' authenticity, the jury convicted Naylor on all counts. 48 In light of the substantial evidence of guilt in the record, we find the district court's exclusion of portions of Bhalla's deposition testimony did not violate Naylor's right to present a defense. 6