Opinion ID: 683548
Heading Depth: 1
Heading Rank: 2

Heading: Lacy Thomas' Additional Claims

Text: 22 Lacy Thomas also claims that the district court erred in refusing to instruct the jury as he desired, in refusing to admit into evidence a tax form he proffered, and in refusing to grant his Rule 59 motion for a new trial. Jury Instructions 23 When reviewing jury instructions, we must look to the instructions as a whole, in a common sense manner, avoiding fastidiousness, inquiring whether the correct message was conveyed to the jury reasonably well. Wilk v. American Medical Ass'n, 719 F.2d 207, 219 (7th Cir.1983), cert. denied, 467 U.S. 1210, 104 S.Ct. 2398, 2399, 81 L.Ed.2d 355 (1984). One or more flawed instructions will not persuade us to order a new trial unless the flaws seriously affected the jury's understanding of the issues to the prejudice of Mr. Thomas. Id. 24 Mr. Thomas argues that the district court erred in refusing to modify Jury Instructions Nos. 8 and 13 to his liking. Instruction No. 8 defines the term responsible person broadly, as not limited to the person who actually prepares the payroll checks or the tax returns. Mr. Thomas complains that this language improperly focused the jury on preparing payroll checks and tax returns as meaningful factors which indicate liability. He argues that the language suggests that preparing payroll checks and tax returns constitutes enough responsible activity to create liability and that such a suggestion is an incorrect statement of the law. Mr. Thomas objects to Jury Instruction No. 13 because it describes some factors indicating willfulness but does not describe others more favorable to Mr. Thomas. 25 Any flaw in the implication of Instruction No. 8 that one who does nothing more than prepare payroll checks and tax returns can be liable is cured by a broad view of the instructions. Instruction No. 10, for example, states that signing checks and completing tax forms are by themselves insufficient to create liability. Because preparing payroll checks logically constitutes a less significant step toward responsibility than signing the checks, Instruction No. 10 effectively rectifies any subtly inaccurate statements of Instruction No. 8. 26 Furthermore, the context of the instruction indicates that the district court was actually directing the jury's attention away from payroll check signing authority and tax preparation authority and toward larger conceptions of responsibility. The sentence preceding the contested language speaks of the power to pay taxes, the power to make financial decisions, and the power to determine which creditors are to be paid. The sentence following it refers to liability based on significant power to decide who will receive corporate funds. The court wanted the jury to focus on whether Mr. Thomas had significant control over corporate funds, apart from any ability to prepare checks or tax returns. Accordingly, we find to be without merit Mr. Thomas' argument that the district court's refusal to modify Jury Instruction No. 8 constitutes error. 27 Jury Instruction No. 13 defines willfulness as recklessness, stating that the defendant should be found willful if he (1) clearly ought to have known that (2) there was a grave risk that withholding taxes were not being paid and if (3) he was in a position to find out for certain very easily. Mere negligence, the instruction informs, is not enough. Mr. Thomas argues that the instruction ought to have included other factors in describing willfulness, such as voluntariness, consciousness, intent, good faith, and whether another person strictly controlled the payment of taxes. On this point Mr. Thomas was remiss in not examining Instruction No. 8 beyond its discussion of responsibility. Instruction No. 8 also describes willfulness, using the very terms Mr. Thomas desires: voluntariness, consciousness, and intent. As such, it satisfies any need for those terms to be used in defining willfulness for the jury. Furthermore, Instruction No. 8 instructs the jury that good faith does not transform one's otherwise willful posture into inadvertence. It is inconsistent for Mr. Thomas to decline to object to this portion of Jury Instruction No. 8 when he argues that the district court should have added a good faith excuse to Instruction No. 13 and should have accepted Lacy Thomas Instruction No. 8 (asserting that Mr. Thomas' good faith excused him from liability). Whatever the reason for Mr. Thomas' inconsistency, the district court properly instructed the jury that good faith is not an excuse which negates willfulness. See Domanus, 961 F.2d at 1326. And the court properly refused to insert any language to the contrary in Jury Instruction No. 13 and to accept Lacy Thomas Instruction No. 8. 28 The district court also properly refused to instruct the jury that another person's strictly controlled authority to pay other creditors might negate Mr. Thomas' liability. The court instructed the jury how to treat concomitant responsibility and willfulness in Jury Instruction No. 11, which reasonably conveys the law that more than one person may be liable and that persons with varying degrees of culpability may all be liable under section 6672. It was reasonable for the district judge to refuse to instruct the jury that Mr. Cantrell's heavy hand could shield Mr. Thomas from liability. 29 Mr. Thomas again raises this argument when he insists that the jury should have been instructed (via Lacy Thomas Instruction No. 4) that if they found that Cantrell made all significant financial decisions and controlled the payment to creditors they would also have to find Mr. Thomas not liable. This assertion reveals Mr. Thomas' attempt to avoid the scope of existing law. One person's liability does not negate the liability of others. Bowlen, 956 F.2d at 727. Mr. Thomas attempts to rely on Jay and Graunke to establish exactly the opposite proposition. As discussed earlier in this opinion, however, we reject the argument that those cases shield anyone's underlings from liability as a matter of law. Mr. Thomas attempts to stretch the reasonable, though inaccurate, proposition that section 6672 does not require one to disobey superiors into the assertion that, if those superiors are liable, the underlings cannot be liable. This assertion, of course, contradicts the established authority of this circuit. 30 The district court also refused to accept Lacy Thomas Instruction No. 6, which states: 31 It is Lacy Thomas' theory of defense that he is not a responsible party because he did not have significant control over the finances of Mile Square Health Center and did not have the authority to determine which creditors would be paid. It is also Lacy Thomas' defense theory that he was not required to disregard the president's checkwriting instructions. 32 The district court did not err in refusing the final sentence of this instruction; the instruction does not present a viable theory of defense. The remainder of the instruction, while presenting a viable defense theory, merely reiterates Instruction No. 8: Lacy Thomas' liability depends upon whether he had significant control of the finances of Mile Square and the authority to determine which Mile Square creditors would be paid. The district court's refusal to accept Lacy Thomas Instruction No. 6 was reasonable and proper. Exclusion of Lacy Thomas Exhibit No. 5 33 Lacy Thomas left Mile Square after the third quarter of 1987. At trial he testified that he left for three reasons: he felt he could no longer influence Cantrell, he felt Mile Square was drifting along an irreversible course toward financial ruin, and he felt he could do nothing to help Mile Square financially. During cross examination, the government asked several times whether Mr. Thomas quit because he was afraid of incurring liability for Mile Square's unpaid taxes. Rather than straightforwardly rejecting this suggestion, Mr. Thomas repeatedly referred the government to the three reasons listed above. During its closing, the government argued that all of the evidence demonstrated that Lacy Thomas had been less than candid about his reasons for leaving Mile Square and that one of the reasons he left was that he was afraid of the tax liability. The government based its argument on the testimony of Fred Ross, Mile Square's Director of Legal Affairs from 1973 until 1988. Ross testified that Mr. Thomas expressed his fear about liability for the unpaid taxes in July or August of 1987. (Mr. Thomas left Mile Square at the end of September 1987.) 34 Based on the government's questions of Mr. Thomas about his reasons for leaving Mile Square, Mr. Thomas proffered IRS form 4180, dated June 26, 1990. The form included a statement by Lacy Thomas that described his reasons for leaving Mile Square, including Mile Square's declining financial position and other employment opportunities available to Mr. Thomas. The district court refused to admit the document, concluding that it constituted inadmissible hearsay. Mr. Thomas argued that it was admissible under FED.R.EVID. 801(d)(1)(B) because the declarant (Mr. Thomas) was available for cross examination regarding the statement, the statement was consistent with his testimony at trial, and Mr. Thomas was offering it to rebut an implied charge of recent fabrication. The district court rejected the notion that there had been a charge, express or implied, of recent fabrication against Mr. Thomas. 35 We will order a new trial based on erroneously excluded evidence only if we determine that the district court abused its discretion in excluding the evidence and that such error prejudiced substantial rights of the appellant. Taylor v. National R.R. Passenger Corp., 920 F.2d 1372 (7th Cir.1990); see 28 U.S.C. Sec. 2111; FED.R.CIV.P. 61; FED.R.EVID. 103. 36 Hearsay, as Rule 801 defines it, includes statements, other than those offered by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted. Hearsay generally is not admissible. FED.R.EVID. 801(c), 802. However, Rule 801 also states that various prior statements of declarants who are present at the trial or hearing and who are subject to cross examination are not hearsay, including statements consistent with declarant's testimony that are offered to rebut an express or implied charge of recent fabrication. FED.R.EVID. 801(d)(1)(B). In order to meet this latter requirement, the examining party must charge, either implicitly or explicitly, that the declarant recently fabricated his testimony, and the declarant must have made the proffered statement before the motive to fabricate arose. United States v. Patterson, 23 F.3d 1239, 1247 (7th Cir.1994). 2 37 The government argues that it did not charge that Lacy Thomas had recently fabricated his reasons for leaving Mile Square. Instead, the government argues that its questions regarding his reasons for leaving were designed to question his credibility as a witness. The district court agreed with the government and excluded Lacy Thomas Exhibit No. 5 specifically because it found that the government had made no charge of recent fabrication. The issue is the extent to which questions which impeach a witness for lack of credibility also imply a charge of recent fabrication. If these two notions are coextensive, the district court may have erred in excluding Lacy Thomas Exhibit No. 5. We hold, however, that they are not coextensive. Rather, a charge of recent fabrication is a narrow subset of impeachment for credibility. One may impeach for lack of credibility without going so far as to charge recent fabrication. As we noted in Christmas v. Sanders, 759 F.2d 1284, 1288 (7th Cir.1985), [i]mpeachment on cross-examination is designed to attack the credibility of the witness, and often it can be construed as a charge that the witness is a liar as well as a charge that the witness is making up a new story. (Emphasis added.) We will not find abuse of discretion where, as here, the impeachment is susceptible of either interpretation. Id. The district court quite reasonably concluded that the government was only impeaching Thomas in that they were not charging that he fabricated the reasons he gave for leaving. Rather, the line of questioning was intended to show that Thomas was not telling the whole story, that an additional reason for his leaving was his fear that he would be liable for the unpaid taxes. 38 Furthermore, in this circuit the witness must have made the prior consistent statement before the motive to fabricate arose; otherwise, the statement is nothing more than cumulative evidence and does not logically disprove the cross-examiner's charge. See United States v. Harris, 761 F.2d 394, 399 (7th Cir.1985). In this case Lacy Thomas' motive to fabricate arose as soon as the government assessed him for Mile Square's unpaid payroll taxes on June 9, 1990. Therefore, his statement regarding his reasons for leaving Mile Square, which he made on June 26, 1990, possesses no qualitative difference from his consistent statements on the stand. There was no intervening motive which Thomas' prior statement would have rebutted. The district court did not abuse its discretion in excluding Lacy Thomas Exhibit No. 5. 39