Court Opinion

ID: 2667041
Source: CourtListenerOpinion
Date Created: 2014-04-04 13:06:48.564334+00
Date Added: 2024-06-11T12:04:14.798199
License: Public Domain

UNITED STATES DISTRICT COURT §jj z § 4
FOR THE DISTRICT OF COLUMBlA § ‘ l~ ' '

) DL`T g '/`t`~§;s
UNITED STATES OF AMERICA, ) RKAKCY m z
Piainriff, §    c iii
v. § Criminal Action N0. 06-193 (RBW)
TERRY DAVIS, §
Defendant. §
)

Memorandum Opini0n

On May 3, 20()7, the defendant was convicted of ten United States and District of
Columbia criminal offenses: eight counts of bank fraud, one count of theft in the first degree,
and one count of fraud in the first degree. On August 7, 2007, as a consequence of these
convictions, the defendant was sentenced to a prison term of fifty-one months and five years of
supervised release for his United States Code offense convictions and a prison tenn of twenty-
four months and three years of supervised release for his District of Columbia Code offense
convictions. Both the prison terms and the supervised release terms were designated to run
concurrently Subsequently, on August 21, 2007, the defendant filed an appeal of his
convictions and sentences with the District of Colombia Circuit. Then, on April 29, 2009, the
defendant filed the motion which is the subject of this Order, requesting that he be released on
bond pending the resolution of his appeal pursuant to 18 U.S.C, §§ 3141(b) and 3143(b),
asserting "that the Court erroneously admitted evidence in violation of Federal Rule of Evidence
408 that he offered to settle amounts that Phi Beta Sigma (PBS) claimed he had embezzled."
Defendant Terry Davis’s Motion for Release Pending Appeal ("Def.’s l\/Iot.") at l. The

government opposes the defendant’s request. Government’s Opposition to Defendant’s Motion

for Release Pending Appeal ("Gov. Opp’n") at l. For the following reasons, the defendant’s
motion for release pending the resolution of his appeal is denied.
I. Factual Background

As indicated, the defendant argues in his appeal that this Court improperly admitted into
evidence a conversation between him and Jimmy Hammock, the defendant’s successor as
treasurer of the fraternity from which he was convicted of misappropriating funds, during which
Mr. Hammock testified he asked the defendant about cancelled checks of the fraternity totaling
$29,000 and made payable to cash. Def.’s Mot. at 3. Mr. Hammock testified that the defendant
told him the checks were used to transfer funds to the fraternity’s payroll account. id Mr.
Hammock then testified that he told the defendant, "‘Teriy, that cash did not make its way to our
payroll account."’ lgl_. at 3-4. The defendant responded asking, "‘[c]an we just split this
$29,000.00 and make this situation go away?"’ Ld. at 4. Mr. Hammock then told the defendant
that he had discovered more than $100,000.00 in checks made payable to cash, to which the
defendant responded, "‘I can’t afford to pay that amount."’ lcL Mr. Hammock replied, "‘Terry,
if you want to do some-negotiate some kind of settlement, you need to talk to our legal counsel
or our international president."’ Li_. Over the defendant’s objection, the Court ruled this
testimony admissible to show consciousness of guilt and to show an ongoing effort on the part of
the defendant to conceal his illegal behavior. Ld.

II. Legal Standard of Review

The United States Code requires that a federal criminal defendant "who has been found
guilty of an offense and sentenced to a tenn of imprisonment" be detained during the pendency
of his appeal, unless the Court finds (l) that the person does not pose a flight risk or a danger to

the community; _a_rid (2) "that the appeal is not for the purpose of delay and raises a substantial

question of law or fact likely to result in . . . reversal[] [or] an order for a new trial." 18 U.S.C. §
3143(b)(1) (2006).

In United States v. Perholtz, 836 F.2d 554 (D.C. Cir 1999), the District of Columbia

Circuit held that an issue is "substantial" for the purposes of § 3143(b) if it "is a ‘close’ question
or one that very well could be decided the other way." l_d_. at 555 (intemal quotation marks and
footnote omitted); see, ggh., United States v. Dav, 433 F. Supp. 2d 54, 55 (D.D.C. 2006)
(applying the   standard); United States v. Quinn, 416 F. Supp. 2d 133 (D.D.C. 2006)
(same).’ In so holding, the   Court considered "[t]wo differing standards for determining
substantiality [that had] been adopted in the various circuits," choosing to adopt the "more
demanding" of the two standards "because it appears better [in] accord with the expressed
congressional intent to increase the required showing on the part of the defendant."z Ber_h@,
836 F.2d at 555-56. Further, the court noted that "[t]he law has shifted from a presumption of
release to a presumption of a valid conviction." l_d_. at 556. And the defendant bears the burden
of rebutting this presumption in order to demonstrate that he is entitled to release pending

appeal. United States v. Libby, 498 F. Supp. 2d 1, 3 (D.D.C. 2007); § United States v. Colon

’ 1n Quinn, a member ofthis Court concluded that the § 3 l43(b)’s substantiality test is satisfied "where a
defendant challenges the Court’s ruling on a novel question oflaw and provides a rationale for a contrary
interpretation that is supported by arguably applicable legal authority . . .  Quinn, 416 F. Supp. 2d at 136; § As_o
§ (stating that "the Court cannot say that the question for appeal is insubstantial or not susceptible to a different
answer."). The Quinn Court provides no legal support for its interpretation of the Perholtz standard, which appears
to this Court to be somewhat less "demanding" than contemplated by Perholtz. Perholtz, 836 F.2d at 555. The plain
language of Perholtz seemingly rejects the proposition that a question is "substantial" for the purposes of§ 3 l43(b)
merely because the issue raised is novel and there is a contrary interpretation ofthe law that is "arguably apglicable.”
Quinn, 416 F. Supp. 2d at 136 (emphasis added); §gc_ Perholtz, 836 F.2d at 555 (holding that an issue is substantial if
it "is a ‘§1_<_)§’ question or one that vei_'y well could be decided the other way.") (emphases added) (intemal quotation
marks and footnote omitted). Indeed, it is not difficult for this Court to envision "novel" questions of law, which
after a careful examination, nevertheless leads to only one clear answer, even ifthe questions might possibly be
"susceptible" to differing "arguably applicable" interpretations. Quinn, 416 F. Supp. 2d at 136. Such questions
would not, in this Court’s view, be considered "substantial" under Perholtz.

2 The ij demanding of the two standards considered by the Perholtz Court provides that "a substantial
question is one that is ‘fairly debatable,’ ‘fair1y doubtful,’ or ‘one of more substance than would be necessary to a
finding that it was not frivolous."’ Perh0ltz, 836 F.2d at 555 (footnote omitted). Only the Third and Ninth Circuits
have adopted this standard, § i_cL at 555 n.2 (citing cases).

Berrios, 791 F.2d 21 1, 214 n.4 (1stCir. 1986) (stating that "[i]n enacting § 3143[(b)], Congress
placed the burden as to all elements bearing on whether to grant bail pending appeal on [the]
defendant[].") (emphasis in original) (citations omitted). Accordingly, if the Court cannot
conclude that the defendant raises "a ‘close’ question or one that could very well be decided the
other way," Perholtz, 836 F.2d at 555 (internal quotation marks and footnote omitted), it is
obligated to order the defendant’s detention. 18 U.S.C. § 3143(b)(2). On the other hand, if the
Court finds that the defendant does raise a substantial question of law or fact, it must release the
defendant while he pursues his appeal. 18 U.S.C. § 3143(b)(1); se_e Def.’s l\/Iot. at 2 (observing
that "bail pending appeal is mandatory, not discretionary," once the requirements of § 3143 are
found to have been met). The govemment argues that the defendant is unable to satisfy either
prong of 18 U.S.C. § 3143(b)(1). The Court agrees.
III. Legal Analysis

A. Has the Defendant Demonstrated That He Does Not Pose a Flight Risk'?

The defendant claims that he has satisfied the first prong for release by referring the
Couit to his actions and behavior while the case was pending before this court. Def.’s Mot. at 2.
Specifically, the defendant states:

Throughout the trial and preceding the announcement of the verdict in this case,

Mr. Davis was on pretrial release for nearly one year. In that time, his presence

was required in this Court more than half a dozen times. Mr. Davis never failed

to appear and never appeared late. On the contrary, he was always punctual and

obedient to the orders of this Court. Additionally, Mr. Davis was always in

complete compliance with the conditions set by this Court and monitored by the

Pre-trial Services Agency (PSA) while on release. l\/lr. Davis maintained a stable

residence in Memphis, Tennessee, where his wife continues to reside. He never

failed to abide by his weekly requirement to check-in with PSA. Also, l\/Ir. Davis

continues to have strong ties to his community. He has lived the majority of his
life in l\/lemphis, Tennessee where he is now incarcerated.

I_d. at 2-3. In addition, the defendant asserts that he has a good reputation in his community and
extended family in the community. Ld. at 3. All these factors, the defendant contends, support
his request for release pending the resolution of his appeal.

The govemment argues in response that despite the defendant’s behavior preceding the
announcement of the verdict and his connections to the community, he nonetheless poses a
significant risk of flight. The government references incidents that occurred during the trial that
it contents led to his "immediate confinement following the jury’s verdicts," Gov. Opp’n at 3-4,
alleging that the defendant’s behavior displayed desperation worthy of "immediate and
continued detention." Ld. at 4. Specifically, the govemment asserts that the defendant
consistently lied concerning the purported authorization he had been accorded by the fratemity
conceming its bank accounts. I_d; Furthenriore, the govemment contents that the defendant
subjected his wife to potentially dire legal ramifications by allowing her to testify on his behalf.
I_L The govemment contends that the defendant’s behavior was sufficiently desperate that "the
Court later stated, the defendant’s willingness to expose his wife to such potentially grave legal
peril demonstrated a level of desperation sufficient to merit his detention following the jury’s
guilty verdicts." I;d. Finally, the govemment asserts that the defendant has not demonstrated
that he currently is anymore less a flight risk than he was a the time of the verdict, and that his
failure to take responsibility for his actions, which is apparent from his denial of the theft and
fraud charges, is persuasive in categorizing him as a flight risk. Ld. at 5. Therefore, given that
two years of the defendant’s sentence still remain, the government asserts that he has "sufficient
motivation to engage in additional desperate measures," given that he is unlikely to succeed on

appeal. Ld.

Despite the defendant’s contentions to the contrary, the Court agrees with the
government. The defendant’s disregard for his wife’s welfare in the face of overwhelming
evidence of his guilt illustrated his desperation to avoid being convicted and potentially
incarceration. And given the amount of time remaining on the defendant’s sentence, the Court is
not convinced that the defendant will not flee to avoid serving the remainder of his sentence.
Therefore, because the defendant is unable to demonstrate through "clear and convincing
evidence" that he is unlikely to flee while his appeal is pending resolution, the defendant has
failed to carry his burden on the initial prong of 18 U.S.C. § 3 l43(b).

Although this ruling is dispositive of the defendant’s motion, the Court will also address
the second prong of the test for release pending appeal: whether the defendant’s appeal raises a
substantial question of law.

B. Has the Defendant Demonstrated That His Appeal Raises a Substantial Ouestion of Law?

The defendant argues that his appeal raises a substantial question of law because his
conversation with Mr. Hammock amounted to a settlement negotiation and should have been
excluded by the Court under Federal Rule of Evidence 408. Def.’s Mot. at 3-4. Specifically, the
defendant argues that his offer to "split" the $29,000.00 was a settlement offer. Def.’s Mot. at 4-
5. The defendant argues that his statements to Mr. Hammock fall within the scope of Rule 408
because he was offering to fumish valuable consideration in compromising or attempting to
compromise a claim, and that his liability for the amount owed was in dispute. I;d. at 4-5. The
defendant argues that if the issue is decided in his favor, his conviction will be reversed because
his statements amounted to a confession that he committed the crime charged and "his ability to

establish that he had no criminal liability was irreparably shattered." I;d. at 5.

The government contends that the defendant’s appeal does not raise a substantial
question of law. Gov. Opp’n at 5. According to the government, Rule 408 does not apply to Mr.
Hammock’s testimony because l\/Ir. Davis did not offer valuable consideration in compromising
or attempting to compromise a claim. I_c_l_. at 6. The government maintains that offering to repay
the fraternity’s money did not constitute valuable consideration because the defendant had a
legal obligation to repay the money he misappropriated. I;d. Furthennore, the govermnent
contents that agreeing to perform a preexisting legal duty that is not in dispute does not
constitute valuable consideration. l_cL at 7. The government further argues that Rule 408 does
not apply to Mr. Hammock’s testimony because the discussion between Mr. Hammock and the
defendant cannot be characterized as a settlement negotiation. Ld. at 8. According to the
govemment, the purpose of the discussion was for l\/Ir. Hammock to confront the defendant
regarding his statements that he had transferred funds into the fraternity’s account. Li_. Mr.
Hammock told the defendant during this discussion that any intent to engage in compromise
negotiation should be directed at the fratemity’s legal counsel or international president. §
Thus, the government argues that these statements demonstrate a lack of intent by Mr. Hammock
to engage in negotiations with the defendant, and that both parties must assent to settlement
discussions for Rule 408 to require exclusion of the defendant’s statements. Ld. Finally, the
government argues that Mr. Hammock’s testimony was admissible under Rule 408 because it
was offered for a purpose other than to prove the validity, invalidity, or amount of a disputed
claim. I;d. Rather, the government posits that the testimony was admissible because it was
relevant and probative of the defendant’s consciousness of guilt, and that the testimony was also
probative of his continuing efforts to mislead the fraternity of the nature and scope of his

fraudulent conduct. id

Rule 408 excludes evidence of offers to furnish valuable consideration in an attempt to
compromise a claim and statements made during compromise negotiations offered to prove the
liability, invalidity, or the amount of a disputed claim. Fed. R. Evid. 408. Evidence of offers to
compromise, however, may be admitted when offered for purposes other than proving liability
for, invalidity of, or amount of a disputed claim. ld_. For Rule 408 to require exclusion, there
must be an actual dispute between the parties as to the validity of the claim. § Dallis v. Atena
Life Ins. Co., 768 F.2d 1303, 1307 (11th Cir. l985) (citing 2 Jack B. Weinstein & Margaret A.
Berger, Weinstein's Evidence ‘ll 408[01] (1982)); Deere & Co. v. Int’l Harvester Co., 710 F.2d
1551, 1556-57 (Fed. Cir. 1983) (holding that Rule 408 applies only to actual disputes). The rule
applies to both subsequent civil and criminal litigation.i Fed. R. Evid. 408 advisory committee’s
note, 2006 amendment.

First, the Court concludes that the defendant has not shown the existence of a dispute
regarding the validity of the fraternity’s eventual claim that he owed it the $29,000 that was first
mentioned by l\/Ir. Hammock. When confronted by Mr. Hammock about the $29,000 in checks
written to cash from the fraternity’s account, the defendant first lied, stating that the money had
been deposited into the fratemity’s payroll account. Gov. Opp’n at 7. When confronted with
the falsity of his representations, the defendant then offered to pay some of what was owed in
order to "‘make [the] situation go away,"’ and when immediately thereafter confronted with
additional sums missing from the fraternity’s accounts, he responded that he could not afford to

pay the greater amount. Def.’s Mot. at 4. At no point during the conversation did the defendant

3 The govemment does not challenge whether Rule 408 applies to subsequent criminal litigation. However,
the District of Columbia Circuit has questioned whether Rule 408 applies to offers of compromise offered as
evidence in subsequent criminal litigation. § United States v. Graham, 91 F.3d 213, 218-19 (D.C. Cir. 1996)
(questioning whether the policy of promoting compromise behind Rule 408 extends to protect statements made by
criminal defendants). But the advisory committee’s note following the 2006 amendments to the Federal Rules
clearing indicate that Rule 408 is intended to apply to criminal as well as civil litigation. Fed. R. Evid. 408 advisory
committee’s note, 2006 amendment.

dispute the amount or validity of the sums represented by Mr. Hammock. Further, at the point
when Mr. Hammock confronted the defendant, the fraternity was not asserting a claim against
the defendant; Mr. Hammock was merely investigating the status of funds he suspected were
missing from the fraternity’s accounts. Given that the defendant has not shown that there was a
dispute regarding the validity or amount of a claim that was being made against him when he
was speaking to Mr. Hammock, his statements to Mr. Hammock were properly admitted into
evidence. Da_llis, 768 F.2d at 1307.

Second, even assuming for the sake of argument that there was a dispute over the
validity or amount of funds Mr. Hammock was alleging the defendant owed the fratemity when
Mr. Hammock confronted him, the Court finds that Lee Middleton Original Dolls, Inc. v.
Seymour Mann, Inc., 299 F. Supp. 2d 892 (E.D. Wis. 2004), provides a compelling argument
for why the defendant’s statements to Mr. Hammock do not qualify as compromise
negotiations. In that case, the court admitted testimony of a discussion between the plaintiff s
president and the defendant’s CEO during which the defendant’s CEO inquired if the dispute
could be "resolved between [the] two businessmen." I;d. at 895. The court explained that the
testimony was admissible since both sides had not assented to engage in settlement discussions,
noting that one party cannot make another party privy to settlement negotiations against the
other party’s will. I_CL The discussions between the defendant and Mr. Hammock resemble the
facts in Lee Middleton Orilginal Dolls, and this Court likewise concludes that the defendant
could not make Mr. Hammock, on behalf of the fraternity, party to settlement negotiations
without the fraternity’s consent. Ld. And since Mr. Hammock did not engage the defendant

with the fraternity’s authorization for the purpose of attempting to monetirly resolve his

concerns, his discussions with the defendant did not amount to settlement negotiations and
accordingly they were properly admitted into evidence. I;d.

Finally, the Court reiterates its conclusion as to admissibility of the statements between
the defendant and Mr. Hammock expressed during the trial_the testimony was admitted to
allow the govemment to demonstrate the defendant’s consciousness of guilt and his continuing

efforts to conceal his crimes. § C & E Servs., Inc. v. Ashland, Inc., 539 F. Supp. 2d 316, 320-

21 (D.D.C. 2008) (admitting a settlement offer in order to show the defendants’
"misrepresentation, half truths, and deception[] . . . "). In other words, Mr. Hammocl<’s
testimony was not admitted to prove the validity, invalidity, or the amount of the fraternity’s
claims against the defendant, but rather to show that the defendant knew he had
misappropriated the fraternity’s funds and to expose his efforts to prevent the fraternity from
discovering the crimes he had committed. The testimony of Mr. Hammock was, therefore,
admitted for purposes not prohibited by Rule 408. I_d_. at 321.

At bottom, the defendant has provided no support for his argument that his
conversations with Mr. Hammock were improperly admitted. He does not address the Court’s
ruling to admit the evidence for the purpose of demonstrating his consciousness of guilt and to
show his efforts to conceal his crimes from the fraternity, purposes not prohibited by Rule 408.
The defendant bears the burden of rebutting the presumption of a valid conviction, 135 498
F. Supp. 2d at 3, and he has failed to do so. Therefore, the defendant’s motion for release
pending appeal must also be denied because he has not satisfied the second prong of 18 U.S.C.

§ 3143(b)(1), having failed to raise a substantial question of law". l;d.

" Even if the defendant could have show that the Court improperly admitted his statements to Mr.
Hammock, the error was harrnless. As noted earlier, the evidence ofthe defendant’s guilt was nothing short of
overwhelming, and this would have been the case even without the admissions of his statements to Mr. Hammock.
§ Unites States v. johnson , 519 F.3d 478, 484 (D.C. Cir. 2008) (holding that for the defendant to be prejudiced
the erroneously admitted evidence must have affected the outcome of the trial).

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IV. Conclusion
for all the reasons set forth above, the defendant’s motion for release pending appeal is
DENIED.

SO ORDERED this 16th day of October, 2009.

    

' ¢/
R GIE B. WALTON
United States District Judge

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