Opinion ID: 397401
Heading Depth: 2
Heading Rank: 1

Heading: Errors in the Charge to the Jury

Text: 95 Appellant Global claims as an additional ground of appeal error in the trial court's alter ego instruction to the jury. At the time the trial judge admitted the Underhill grand jury testimony, he instructed the jury that the evidence was admissible only against defendant Thevis. Later in the trial the government presented the testimony of Rodney Smith, a former Thevis employee and cellmate, to the effect that in 1977 Thevis claimed he still controlled Global. The court ruled that this evidence was inadmissible to prove that an agency relationship existed between Global and Thevis, and until other evidence proved the agency relationship, the Smith testimony constituted inadmissible hearsay as to Global. Nevertheless, in his final charge to the jury the judge instructed that if the jury found beyond a reasonable doubt that an agency relationship existed between Thevis and Global, or that Global was the alter ego of Thevis, it could consider against Global the acts, declarations, or knowledge of Thevis. 33 Global objected to this instruction at the charge conference, but failed to preserve its objection after the court delivered its charge. Global now contends that the charge constituted reversible plain error. We disagree. 96 Under Fed.R.Crim.P. 30, objections to jury instructions not timely made are waived unless the instruction constitutes plain error. E. g., United States v. Varkonyi, 645 F.2d 453, 459 (5th Cir. 1981). The obvious purpose of this provision is to inform the trial judge of possible errors so that he may have an opportunity to correct them. 8A J. Moore, Moore's Federal Practice P 30.04 at 30-14 to 30-15. The plain error exception will not be invoked unless the charge, considered as a whole, is so clearly erroneous as to result in a likelihood of a grave miscarriage of justice, Varkonyi, supra, or seriously affects the fairness, integrity, or public reputation of judicial proceedings. United States v. Adams, 634 F.2d 830, 836 (5th Cir. 1981). 97 In our judgment the charge did not constitute plain error under this standard. The Fifth Circuit has held that the trier of fact may disregard the corporate entity when the controlling shareholder uses the corporation purely as a conduit for personal business. Baker v. Raymond International, Inc., 656 F.2d 173, 179 (5th Cir. 1981). Whether to disregard the corporate entity for that reason is a question of fact. See Talen's Landing, Inc. v. M/V Venture, Inc., 656 F.2d 1157, 1160 (5th Cir. 1981). The challenged instruction substantially conveyed this circuit's substantive law of alter ego. See Baker, supra, at 180-81. 34 98 Nevertheless, Global argues that the instruction constituted plain error for three reasons. First, Global asserts that the challenged instruction confused the jury as to what evidence was admissible against Global, in light of the trial court's earlier admonition not to consider the Underhill evidence against the corporation. While we agree that the charge may have been more precise, we do not think that the charge as given resulted in a likelihood of a grave miscarriage of justice, especially when any ambiguity in the charge could have been corrected had an objection properly been made. 99 Global's second plain error argument is more complex. Global asserts that without the Underhill testimony admitted against the corporation as substantive evidence of guilt, the corporation's conviction on the RICO charges would have to be reversed due to insufficient evidence. The Underhill testimony, however, was admitted against Thevis only under the theory that he had waived his sixth amendment confrontation rights and his hearsay objection by killing Underhill. For the evidence to be admissible against Global, a similar waiver would be necessary; without it, considering the Underhill testimony against Global would violate Global's confrontation rights. 35 100 In his order denying Global a judgment of acquittal or a new trial, the trial judge conceded that the instruction permitted the jury to consider the Underhill testimony against Global if it found that an agency or alter ego relationship existed between Thevis and Global. In its opinion relating to the admission of the Underhill testimony, however, the trial court specifically stated that no evidence connected Global to the Underhill murder; hence Global did not directly waive its confrontation rights. United States v. Thevis, 84 F.R.D. 57, 72 (N.D.Ga.1979). The only other way in which Global's rights could be deemed waived is if Thevis' waiver could have been imputed to Global under an agency or alter ego theory; for one to have imputed Thevis' waiver to Global, however, the evidence would have had to show that an agency or alter ego relationship existed at the time of the Underhill murder. Global asserts that because the instruction failed to focus on the proper time frame, it permitted the jury to convict without having first found a proper waiver, thus violating its confrontation rights. Global contends, moreover, that no evidence existed to connect Thevis with Global at this crucial time. 101 While we agree that the trial judge's failure to specifically pinpoint the crucial time at which the alter ego relationship had to exist rendered the instruction objectionable, 36 this deficiency did not constitute plain error. A fair interpretation of the instruction is that it required the jury to determine whether during the entire period Global was the alter ego of Thevis. Thus the jury's guilty verdict against the corporation amounted to a finding that Thevis at no time properly observed the separate corporate identity. The evidence, moreover, supported the jury's finding. Viewing Thevis' sham sale of the pornography corporations to his secretary, his boast to Smith that he controlled the business from jail after this sale, and the pattern of Thevis' criminal activity on behalf of the business revealed by various government witnesses 37 in the light most favorable to the government, Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942), the jury was entitled to infer that Thevis historically had disregarded the corporate entity and continued to do so throughout the period in question, including the Underhill murder. Hence we hold that the instruction, while objectionable, was not so erroneous as to require reversal under the plain error standard. 102 Global's final plain error argument is that the instruction, by permitting the jury to consider as substantive evidence of guilt evidence which the trial court initially excluded as to the corporation, unfairly surprised the corporation and denied it effective confrontation of witnesses and due process. We find this argument specious. The alter ego theory of liability was pursued by the government throughout the trial, and Global's counsel was well aware of the potential impact of the theory on the admissibility of evidence. 38 Hence the instruction neither unfairly surprised Global nor denied it any constitutional rights. 103
104 In its final instructions, the court charged the jury to deliberate first on Count Ten, the Underhill-Galanti murder count; if and only if they found Thevis guilty on that count, could they then consider the truth of the Underhill statements against Thevis as to Counts One and Two. Appellants requested this instruction, yet nevertheless contend on appeal that the instruction constituted plain error by giving the jury an artificial incentive to convict on Count Ten. According to appellants, the evidence of Thevis' guilt on Counts One and Two was plainly insufficient without Underhill's testimony. Thus, they continue, if the jury desired to convict Thevis on Counts One and Two, it could not do so unless it first found him guilty of Count Ten. 105 We find this assertion highly speculative. The instruction, moreover, actually served to benefit the defendants by providing a doublecheck on the trial court's earlier waiver ruling. 39 We therefore need not decide if the instruction constituted error; 40 we are satisfied that it did not constitute reversible plain error under the precedents cited above.