Opinion ID: 2995730
Heading Depth: 2
Heading Rank: 1

Heading: Tape Recorded Conversations

Text: Gajo first argues that the district court erred in admitting the tape recorded conversations between Baumgart and Smith because those conversations do not fall within the definition of nonhearsay related to statements made by a coconspirator. Federal Rule of Evidence 801(d)(2)(E) provides that a statement is admissible and not hearsay if it is made by a coconspirator of a party during the course and in furtherance of the conspiracy. To justify admission of coconspirator statements under FRE 801(d)(2)(E), the government must present evidence that a conspiracy was in progress at the time of the conversation and that the statements were made in furtherance of the conspiracy. United States v. Curtis, 37 F.3d 301, 307 (7th Cir. 1994). Gajo contends (1) that there was no conspiracy in progress at the time the recordings were made because the conversations took place approximately 10 months after the fire, (2) that the statements made on the tape recordings were not in furtherance of the conspiracy because the conversations’ content was not related to obtaining insurance proceeds, and (3) that Smith’s statements should not have been admitted in any event because he was never a member of the conspiracy. In response, the government maintains that Gajo’s counsel waived any objection to the admission of the tape recorded conversations. In the alternative, the government argues that sufficient evidence existed to establish that the conspiracy was ongoing and that Baumgart made the statements in furtherance of that conspiracy. The government’s waiver argument requires further explanation. In pre- trial motions, the parties disputedwhether the tape recorded conversations were admissible. The government submitted a written Santiago proffer, in which it set forth the facts supporting the admission of the tape recorded conversations pursuant to Rule 801(d)(2)(E). After extensive briefing, the district court issued a written order finding the tapes admissible. At trial, the government moved to admit the tape recorded conversations between Baumgart and Smith, the district court inquired whether Gajo had an objection, and defense counsel responded no. The government now argues that defense counsel’s affirmative response constitutes waiver on appeal. Resolution of this issue depends upon whether the district court’s written order was a definitive ruling. In Wilson v. Williams, we considered whether an objection at trial always is necessary after an adverse ruling on a motion in limine. We concluded that a definitive ruling in limine preserves an issue for appellate review, without the need for later objection--but this is just a presumption, subject to variation by the trial judge, who may indicate that further consideration is in order. 182 F.3d 562, 563 (7th Cir. 1999); see also Fed. R. of Evid. 103 (2002) (Once the court makes a definitive ruling on the record admitting or excluding evidence, either at or before trial, a party need not renew an objection or offer of proof to preserve a claim of error for appeal.). Williams defined a definitive ruling as one that does not require further consideration and that does not depend on how the trial proceeds. 182 F.3d at 566. In contrast, Williams described a conditional ruling as one that has effect only after a certain condition is satisfied. Id. at 565. As an example, we cited a situation where the district court states that if a litigant testifies, then the adverse party will be entitled to cross-examine in such-and- such a way. Until the condition has been satisfied by the testimony, the ruling has no effect. Id. In this case, the government maintains that the district court’s decision was conditional because the tape recorded conversations were only admissible if the government met the foundational requirements of FRE 801(d)(2)(E), i.e., only if the government proved that a conspiracy existed, and Baumgart and Smith made the statements in furtherance of the conspiracy. We disagree. Under the government’s reasoning, all pre-trial decisions would be considered conditional, rendering the reasoning of Williams and Rule 103 inapposite. A district court always decides motions in limine based upon representations made by the parties concerning what the evidence at trial will be, and every decision depends--at least to some degree--on how the evidence at trial unfolds. As a result, a more appropriate inquiry is whether the district court’s written order in this case definitively settled the issue of admissibility, and we believe that it did. Indeed, after finding the tape recorded conversations generally admissible, the district court held a subsequent hearing to determine whether any portions should be redacted and whether the statements were unduly prejudicial under Federal Rule of Evidence 403. Thus, the district court prepared the transcripts for admission--a decision that depended on the government’s evidence at trial only in the sense that the evidence be the same as that set forth in the Santiago proffer. We therefore find that Gajo preserved the issue for appellate review. With respect to the merits, we believe the district court properly admitted the tape recorded conversations between Baumgart and Smith. As discussed above, a statement is not hearsay and admissible under FRE 801(d)(2)(E) if it is made by a coconspirator during the course and in furtherance of the conspiracy. To be admissible, then, the government must establish by a preponderance of the evidence two requirements: (1) a conspiracy existed at the time of the statements between the defendant and the declarant, and (2) the statements contributed to the ultimate goal of the conspiracy. Bourjaily v. United States, 483 U.S. 171, 175 (1987); United States v. Hunt, 272 F.3d 488, 497 (7th Cir. 2001). In this case, Gajo challenges whether a conspiracy existed after the fire at Cragin Sausage and whether the statements were in furtherance of the conspiracy’s ultimate criminal objective. We first address whether the conspiracy existed at the time of the tape recorded conversations. By the time Smith contacted Baumgart at the behest of an ATF agent, ten months had passed since the fire at Cragin Sausage. Relying on Grunewald v. United States, 353 U.S. 391, 405 (1957), and its progeny, Gajo argues that the time lapse between the fire and the statements rendered the conspiracy to commit arson complete at the time of the Baumgart-Smith conversations. Grunewald held that the act of concealment typically is not part of a conspiracy’s primary criminal objective. Once the coconspirators achieve the goals of the conspiracy, statements concerning acts of concealment (or to avoid punishment) are generally inadmissible. Id. at 405-06. However, this principle does not extend easily to the arson-for-profit context. In United States v. Xheka, 704 F.2d 974, 986 (7th Cir. 1983), we held that the primary goal of a conspiracy involving arson is not only to destroy a building by fire, but also to obtain the insurance proceeds. In other words, unlike most other criminal conspiracies, concealment is actually one of the main criminal objectives of an arson-for-profit scheme, because it facilitates the primary objective of fraudulently acquiring insurance proceeds. Id. at 986 (The conspiracy continues until defendants obtain the insurance money or abandon their quest.); see also United States v. Doyle, 771 F.2d 250, 255-56 (7th Cir. 1985); United States v. Zabic, 745 F.2d 464, 473 (7th Cir. 1984). Based on the foregoing, resolution of this issue would be clear except for one additional factor. The record in this case does not reveal when Gajo’s insurance company denied his claim or whether the claim remained pending at the time of the Baumgart-Smith statements. Despite this absence, there was sufficient evidence to find that the conspiracy to obtain insurance proceeds was ongoing 10 months after the fire. First, in August 1996, Gajo gave deposition testimony in a civil lawsuit related to the fire at Cragin Sausage and Gajo’s insurance claims. Second, Baumgart made at least one statement in October 1996--it looks like the fuckin’ case is still going on--that suggests the conspiracy was ongoing. Third, there is no dispute that at the time of the October 1996 conversations, Gajo had not yet received [the] insurance proceeds. United States v. Gajo, No. 98 CR 100, at 5 (N.D. Ill. May 20, 1999) (R. 38 at 5). In contrast, the only evidence that the conspiracy had ended was the parties’ stipulation that the insurance company had denied Gajo’s claim sometime after he submitted a proof of loss on July 3, 1996./3 But this stipulation lacked a specific date, rendering it irrelevant to the question of whether the conspiracy existed at the time of the tape recorded conversations. From this evidence, the district court was within its discretion to conclude that a conspiracy still existed at the time of the Baumgart-Smith conversations. We next address whether Baumgart’s statements were in furtherance of the conspiracy--an inquiry that requires examination of the statements’ content. We consider statements to be in furtherance of the conspiracy when they promote the conspiracies objectives, Bourjaily, 483 U.S. at 175, i.e., when the statements are part of the information flow between conspirators to help each perform a role. Hunt, 272 F.3d at 495 (quoting United States v. Johnson, 927 F.2d 999, 1002 (7th Cir. 1991)). In this case, Gajo objects to the admission of two statements, each of which relates to Baumgart’s attempts to instruct Smith to remain quiet about the meeting between Baumgart, Smith and Gajo. Gajo submits that although the conversations reveal an attempt to cover what had transpired at the meeting, there is no indication that Baumgart was part of the conspiracy to obtain insurance proceeds. We decline to accept Gajo’s contention that the specific mention of insurance proceeds is a necessary condition for admissibility of a coconspirator’s statements in this context. In our view, Gajo’s assertion ignores one of the primary objectives of the crime in this case. As we have already discussed, an arson-for-profit scheme has two criminal objectives: the destruction of a building by fire and the attainment of insurance proceeds. However, a necessary corollary to the insurance scam is that the co- conspirators must conceal their illegal conduct from law enforcement and insurance investigators. See Zabick, 745 F.2d at 472-73; Xheka, 704 F.2d at 986. Thus, Baumgart’s statements advanced the conspiracy’s goal of falsely acquiring insurance proceeds, but only in the sense that concealment was a necessary predicate to achieving that criminal objective. Because Baumgart’s statements reflect an attempt to avoid detection, he was furthering one of the conspiracy’s goals. See United Sates v. Kaden, 819 F.2d 813, 820 (7th Cir. 1987). Finally, Gajo submits that the district court abused its discretion in allowing the jury to hear Smith’s statements. Gajo argues that because Smith was never a member of the conspiracy, his statements were not admissible under FRE 801(D)(2)(E). After ruling the Baumgart- Smith conversations admissible, the district court acknowledged the problems associated with admitting Smith’s declarations: . . . given that the conversations in question were instigated by a non- conspirator cooperating with the government and given that many subjects not clearly germane to the objectives of the conspiracy were discussed (such as Smith’s questions about whether anyone was harmed), the court will hear argument on the issue of whether any portions of the conversations should be redacted . . . . United States v. Gajo, No. 98 CR 100 at 7-8. At this subsequent hearing, the district court redacted significant portions of the conversation between Baumgart and Smith, leaving the jury to hear only those statements that provided context to Baumgart’s responses. As a general proposition, the statements of a non-conspirator are not admissible under Rule 801(d)(2)(E). See Xheka, 704 F.2d at 986 n. 6 (As [the informer] was acting on behalf of the government there is no question that his statements cannot be admitted under Rule 801(d)(2)(E).); United States v. Williamson, 53 F.3d 1500, 1519 (10th Cir. 1995) (the statements of the witness (the person to whom the out-of-court statements were made) are not admissible under this rule, but only the statements of the declarant/ coconspirator that were made to the witness). However, this is not a case where the district court admitted Smith’s statements as non-hearsay, but rather to provide context to a coconspirator’s statements properly admitted under Rule 801. It is well settled that such an approach is appropriate because statements are not hearsay to the extent they are offered for context and not for the truth of the truth of the matter asserted. See United States v. Davis, 890 F.2d 1373, 1380 (7th Cir. 1989); see also United States v. Gutierrez-Chavez, 842 F.2d 77, 81 (5th Cir. 1988) (statements on tape recording admissible for the limited purpose of putting the responses of the appellant in context and making them ’intelligible to the jury and recognizable as admissions.’) (quoting United States v. Lemonakis, 485 F.2d 941, 948 (D.C. Cir. 1973)); United States v. Price, 792 F.2d 994, 997 (11th Cir. 1986) (statements admitted to make understandable to the jury the statements made by the defendant); United States v. Whitman, 771 F.2d 1348, 1352 (9th Cir. 1985) (no hearsay problem when tape recorded statements introduced to aid jury in understanding defendant’s statements); United States v. Williams, 604 F.2d 1102, 1108 (8th Cir. 1979) (the tape-recorded conversation was not hearsay because it was admitted to provide context for [the defendant’s] end of the conversation.). Thus, while it is true that a district court should exercise great caution when admitting a non-conspirator’s statements to provide context to admissible declarations, we find that the district court did not abuse its discretion in this case. The district court included only those statements necessary to provide meaning to Baumgart’s responses and redacted the non-germane and unduly prejudicial aspects of the Baumgart-Smith conversations.