Court Opinion

ID: 2814830
Source: CourtListenerOpinion
Date Created: 2015-07-07 16:01:54.589407+00
Date Added: 2024-06-11T11:30:33.395943
License: Public Domain

FILED
                                                         United States Court of Appeals
                                                                 Tenth Circuit

                                                                 July 7, 2015
                                   PUBLISH                   Elisabeth A. Shumaker
                                                                 Clerk of Court
                   UNITED STATES COURT OF APPEALS

                                TENTH CIRCUIT

 UNITED STATES OF AMERICA,

       Plaintiff S Appellee,

 v.                                                    No. 13-2138

 ELIZABETH D. KUPFER,

       Defendant S Appellant.

                 Appeal from the United States District Court
                        for the District of New Mexico
                       D.C. No. 1:10-CR-03383-WJ-2)

Todd A. Coberly, Santa Fe, New Mexico, for Defendant-Appellant.

Tara C. Neda, Assistant United States Attorney (Damon P. Martinez, United
States Attorney, and Laura Fashing, Assistant United States Attorney, on the
brief), Office of the United States Attorney, Albuquerque, New Mexico, for
Plaintiff-Appellee.

Before BRISCOE, Chief Judge, BALDOCK, and BACHARACH, Circuit
Judges.

BACHARACH, Circuit Judge.
      Ms. Elizabeth Kupfer and her husband jointly filed federal income taxes for

2004-2006, but failed to report over $790,000 in gross income. The government

charged Ms. Kupfer with three counts of tax evasion, one for each tax year. See

26 U.S.C. § 7201. She admitted that she had failed to report a substantial amount

of gross income, but denied that her under-reporting was willful. The jury

disagreed and found Ms. Kupfer guilty on each of the three counts. Convicted and

sentenced to three years in prison, Ms. Kupfer appeals based on three issues.

I.    The Three Issues on Appeal and our Conclusions

      The first issue involves the jury instructions. The district court instructed

the jury that it could find guilt only if the under-reporting had been willful. Ms.

Kupfer contends that the court should have gone further, telling the jury that the

under-reporting would not have been considered “willful” if it had been merely

negligent, inadvertent, accidental, mistaken, or reckless. We conclude that the

district court acted within its discretion in declining to give the additional

instruction.

      The second issue involves a juror’s reference to unrelated charges. After

the trial ended, Ms. Kupfer submitted an affidavit stating that a juror had

commented on other charges during jury deliberations. The district court declined

to conduct a hearing or to grant a mistrial. We conclude that these rulings fell

within the district court’s discretion because the court could reasonably conclude

that a hearing was unnecessary and that the improper remarks were harmless.

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      The third issue involves Ms. Kupfer’s sentence. In deciding on the

sentence, the district court increased the offense level for obstruction of justice

based on Ms. Kupfer’s failure to reveal her under-reporting of income. The

government concedes error, and we agree that the district court should not have

increased the offense level. A defendant does not commit obstruction of justice,

for purposes of an increase in the offense level, by failing to disclose her crime.

II.   The Jury Instructions

      The district court instructed the jury on willfulness, stating that it

      !      was required for a finding of guilt and

      !      referred to “the voluntary intent to violate a known legal duty.”

R., vol. IV, at 1224. Conceding that this instruction was correct as far as it went,

Ms. Kupfer argues that the court should have also included her proposed language

on mental states, short of willfulness, that would have required acquittal:

negligence, inadvertence, accident, mistake, and recklessness. Id. at 1194.

According to Ms. Kupfer, this language was necessary to adequately present the

theory of her defense.

      We reject this argument because the district court (1) correctly instructed

the jury that it could find guilt only if Ms. Kupfer had willfully failed to report

the income and (2) correctly defined the term “willfully.” Id. at 1224. With this

instruction, Ms. Kupfer was able to obtain consideration of her defense theory.

                                           3
      Our scrutiny is limited, for we consider the refusal to give a requested jury

instruction under the abuse-of-discretion standard. United States v. Moran, 503

F.3d 1135, 1146 (10th Cir. 2007). In assessing the district court’s exercise of

discretion, we recognize Ms. Kupfer’s right to jury instructions on her defense

theory as long as it was supported by the evidence and the law. United States v.

Visinaiz, 428 F.3d 1300, 1308 (10th Cir. 2005). For the sake of argument, we can

assume evidentiary and legal support for Ms. Kupfer’s defense theory. With this

assumption, we must determine whether “without [Ms. Kupfer’s proposed

language], the district court’s instructions were erroneous or inadequate.” United

States v. Wolny, 133 F.3d 758, 765 (10th Cir. 1998). We conclude that the

instructions were correct and adequate for consideration of Ms. Kupfer’s defense.

      In instructing the jury, the court correctly identified the elements of the

charge and defined the term “willfully.” R., vol. IV, at 1224. Indeed, Ms. Kupfer

does not question the correctness of the definition. Instead, she contends the

instructions were inadequate for the jury to consider her defense theory. We

disagree.

      She points out that we have sometimes upheld jury instructions because

they included language stating what would have fallen short of willfulness.

Defendant’s Opening Br. at 17-18 (citing United States v. Bowling, 619 F.3d

1175, 1184 (10th Cir. 2010); United States v. Rothbart, 723 F.2d 752, 754-55

(10th Cir. 1983); United States v. Abramson S Schmeiler, 448 F. App’x 837, 843-

                                          4
44 (10th Cir. 2011) (unpublished)). But there is a difference between the

adequacy of instructional language and its necessity. See United States v. Guidry,

199 F.3d 1150, 1156 (10th Cir. 1999) (explaining that our statement in a prior

case—that a jury instruction on “willfulness . . . was adequate”—was “a far cry

from deeming [the willfulness instruction] necessary” (citing United States v.

Winchell, 129 F.3d 1093, 1096-97 (10th Cir. 1997)).

      In telling the jury that willfulness was required for guilt and defining the

term “willfully,” the court implicitly told the jury that any mental state short of

willfulness would not have sufficed for a finding of guilt. In similar

circumstances, other courts have rejected similar challenges to jury instructions

based on a failure to describe mental states falling short of willfulness. E.g.,

United States v. Collins, 685 F.3d 651, 655-56 (7th Cir. 2012); United States v.

Colacurcio, 514 F.2d 1, 8 (9th Cir. 1975).

      We did the same in United States v. Guidry, 199 F.3d 1150, 1156 (10th Cir.

1999). There the defendant was convicted of willfully filing a false tax return,

arguing on appeal that the district court had failed to adequately define

willfulness. Guidry, 199 F.3d at 1153, 1156. The district court instructed the jury

that “‘the term ‘willfully’ means to voluntarily and intentionally violate a known

legal duty.’” Id. (quoting the district court’s jury instructions). The defendant

contended that the court should have gone further by incorporating her proposed

instruction that negligent conduct was insufficient to constitute willfulness. Id.

                                           5
We rejected this contention, holding that the district court had correctly stated the

law and had not needed to refer to negligent conduct. Id.

      Guidry is controlling. In our case, as in Guidry, the district court correctly

instructed the jury on the meaning of willfulness. See p. 3, above. The district

court did not give examples of what would have fallen short of willfulness. But

we said in Guidry that the district court could decline to give the proposed

example (negligent conduct). See pp. 5-6, above. Our holding in Guidry would

eliminate the need for similar examples in Ms. Kupfer’s case (negligence,

inadvertence, accident, mistake, or recklessness). The jury was told what the term

“willfully” meant, and anything short of that definition would have been

inadequate for a finding of guilt. Under Guidry, that was enough.

      In her two appellate briefs, Ms. Kupfer attempts to distinguish Guidry for

different reasons. Both attempts are unconvincing.

      In her opening brief, Ms. Kupfer asserts that Guidry is different because

there the defendant “did not present any type of good faith defense.” Appellant’s

Opening Br. at 19 n.3. This assertion is unsupported, for our opinion in Guidry

did not say what the trial defenses had been. We did say, however, that the

defendant had argued that “‘willfulness [could not] be inferred from a mere

understatement of income.’” Guidry, 119 F.3d at 1157. Ms. Kupfer’s argument on

willfulness is virtually identical.

                                          6
       In her reply brief, Ms. Kupfer argues that Guidry differed because there the

defendant had argued that the instruction on willfulness was erroneous (rather

than inadequate to convey a defense of good faith). Appellant’s Reply Br. at 5-6.

This argument rests on a misreading of Guidry. There we stated that the defendant

had argued that the district court “inadequately defined the term ‘willfully’ as it

pertain[ed] to the crime of filing a false tax return.” Guidry, 199 F.3d at 1156. We

explained that the defendant had based this argument on the failure to include her

requested language on what would have been inadequate for a finding of

willfulness. Id. Ms. Kupfer’s argument is virtually identical to the one

unsuccessfully pursued in Guidry.

       Under Guidry, we conclude that the district court acted within its discretion

by declining to use Ms. Kupfer’s proposed language in the jury instruction.

III.   Juror’s Remarks About Uncharged Misconduct

       After the trial, both sides presented affidavits from a single juror, Ms.

Isabel Blea. In the affidavit submitted by Ms. Kupfer, Ms. Blea stated that another

juror had said during deliberations that

       !     Armando Gutierrez and Associates were on the news,

       !     the matter involved a big scandal,

       !     there were other indictments connected to the Kupfers, and

       !     the case was big.

                                           7
R., vol. I, at 432. Based on this affidavit, Ms. Kupfer asked for a hearing and

moved for a mistrial. In response, the government submitted a second affidavit by

Ms. Blea. Id. at 444. In this affidavit, she said that the other juror had twice made

improper comments but had not made any additional statements in the presence of

Ms. Blea. Based on the two affidavits, the district court declined the request for a

hearing and denied the motion for a mistrial. Ms. Kupfer contends that the district

court erred in both respects. We reject these contentions.

      A.     Denial of a Hearing

      The threshold issue is whether the district court erred in declining to

conduct a hearing. On this issue, we review the district court’s decision under the

abuse-of-discretion standard. United States v. Davis, 60 F.3d 1479, 1483 (10th

Cir. 1995). Applying this standard, we conclude that the district court acted

within its discretion in declining to order a hearing.

      When extraneous information is injected into jury deliberations, we

ordinarily require a hearing to ferret out what was said and how it might have

resulted in prejudice. See United States v. Hornung, 848 F.2d 1040, 1045 (10th

Cir. 1988) (“When a trial court is apprised of the fact that an extrinsic influence

may have tainted the trial, the proper remedy is a hearing to determine the

circumstances of the improper contact and the extent of the prejudice.”). But this

requirement is not inflexible. See Davis, 60 F.3d at 1482-83 (“[W]hile a hearing

might be prudent or otherwise appropriate, we have never held it was absolutely

                                          8
mandatory.”). Thus, we have held that a district court can decline a hearing when

it would not provide additional relevant information. See United States v.

McVeigh, 153 F.3d 1166, 1186 (10th Cir. 1998) (stating that “on rare occasions it

is within the district court’s discretion to refuse to hold a hearing” when there are

extraneous influences on the jury and “it can clearly be established that a hearing

would not be useful or necessary”). That holding applies here, for the district

court implicitly concluded the hearing would not prove beneficial. 1

      In district court, Ms. Kupfer did not (1) expressly request a hearing in her

opening brief or (2) suggest any facts that could be developed in a hearing.

Though she urged a need for an investigation into what had taken place, she

acknowledged that “[w]here the fact of extraneous information ha[d] been

established to the district court by way of affidavit, . . . a court [could] exercise

its discretion and not hold an evidentiary hearing.” Appellant’s App., vol. I, at

1
       The district court did not explicitly state this conclusion, but it is implicit
in the ruling. The district court stated that the juror’s reference “to the state court
case [had been] short and [had been] curtailed upon the juror being told to stop.”
R., vol. I, at 460. Thus, the court distinguished an Eighth Circuit case recognizing
the need for a hearing to determine how long the extraneous information had been
available to the jury, whether it had been discussed, and whether it had been
reasonably likely to affect the verdict. Id. (discussing United States v. Hall, 85
F.3d 367 (8th Cir. 1996)).

                                           9
424-25. 2 Ms. Kupfer’s initial position supplied little reason to think a hearing

would be useful.

      Even without a hearing, the court already had two affidavits from the same

juror, stating precisely what had been said. With these affidavits, the district court

could reasonably conclude that it had all of the material information that might

have been ascertained in a hearing. See United States v. Davis, 60 F.3d 1479,

1482-84 (10th Cir. 1995) (upholding the denial of a hearing when the district

court had an affidavit providing undisputed evidence that jurors had watched

news reports of the trial in violation of the court’s admonition). In these

circumstances, the court could reasonably conclude that a hearing would not have

provided additional relevant information. 3

      The remaining issue involved prejudice. To determine whether the

extraneous influence was prejudicial, the district court had to analyze what had

2
       Ms. Kupfer changed her approach in her reply brief. There she argued that
the affidavits had not shown the number of jurors exposed to the extraneous
information, when in the deliberations the extraneous information had been
mentioned, whether a subset of jurors had discussed the extraneous information,
and whether the other juror had responded candidly during voir dire. R., vol. I, at
453-54. But in the District of New Mexico, arguments omitted in the opening
brief are generally considered waived. See Brubach v. Albuquerque, 893 F. Supp.
2d 1216, 1237 n.6 (D. N.M. 2012) (“The Court declines to consider an argument
raised for the first time in a reply.”).
3
      The court also reasoned that the juror’s comments had not triggered a
presumption of prejudice. R., vol. I, at 459. For the sake of argument, we can
assume that this reasoning was incorrect. Apart from the absence of a
presumption of prejudice, the court declined to conduct a hearing because it
would not have provided additional relevant information. See p. 9 n.1, above.

                                         10
been said and compare it to the information properly before the jury. United

States v. Hornung, 848 F.2d 1040, 1045 (10th Cir. 1988). For this inquiry,

however, the court might have been skeptical about the usefulness of a hearing.

The district court already had two affidavits identifying the juror’s statements

about the uncharged misconduct. See United States v. McVeigh, 153 F.3d 1166,

1186-88 (10th Cir. 1998) (upholding the denial of a hearing in part because the

district court already knew from an alternate juror’s report who had made the

statement, what had been said, and what the surrounding circumstances were).

      The court could not have known the impact of those statements, but that

would have remained true even after a hearing. See United States v. Simpson, 950

F.2d 1519, 1521 (10th Cir. 1991) (stating that an evidentiary hearing would have

been futile because Fed. R. Evid. 606(b) prohibited juror testimony on the effect

of extraneous information in the jury’s deliberations). Thus, the court could

reasonably conclude that a hearing would have added little useful information.

      In urging an abuse of discretion, Ms. Kupfer relies largely on Stouffer v.

Trammell, 738 F.3d 1205 (10th Cir. 2013). In Stouffer, we held that the state trial

court had abused its discretion by declining to order a mistrial (1) with undisputed

evidence of jury tampering through nonverbal communication and (2) without any

explanation about why the jury tampering would have been harmless. Stouffer,

738 F.3d at 1217, 1219 n.10. Though we regarded the trial court’s inadequate

inquiry as an abuse of discretion, we did not suggest that a hearing would have

                                         11
been necessary even if the court could reasonably conclude that it had all the

material information about the nature and impact of the extraneous influence.

Indeed, any such suggestion would have contradicted our existing precedents.

See, e.g., United States v. Davis, 60 F.3d 1479, 1483 (10th Cir. 1995) (“[T]he

decision whether to grant or deny a hearing on a claim that a juror was improperly

exposed to extraneous information is vested in the broad discretion of the district

courts, and we will review the denial of a request for such a hearing only for an

abuse of discretion.”).

      Under these precedents, the district court had the discretion to decide the

motion for a mistrial without conducting a hearing.

      B.     Denial of a Mistrial

      The remaining issue is whether the district court erred in denying this

motion. Our scrutiny is limited, for we can reverse only if the district court

abused its discretion. United States v. Robertson, 473 F.3d 1289, 1294 (10th Cir.

2007). We conclude that the district court did not abuse its discretion.

      The court reasonably regarded the extraneous influence as harmless. The

affidavits reflected two comments about other charges, describing the scandal and

the case as big and referring to other indictments and news reports. See pp. 7-8,

above. But the evidence against Ms. Kupfer on the tax charges was

overwhelming.

                                         12
      For a conviction, the government had to convince the jury of three

elements:

      1.    a substantial tax liability,

      2.    willfulness, and

      3.    an affirmative act constituting evasion of the tax.

United States v. Farr, 701 F.3d 1274, 1285 (10th Cir. 2012) (citing 26 U.S.C.

§ 7201).

      Ms. Kupfer essentially admitted the first and third elements in opening

statements, conceding that she had failed to report substantial income on her tax

returns. With this concession, Ms. Kupfer relied solely on a defense that she had

not acted willfully. But the government’s evidence of willfulness was

overwhelming, showing that Ms. Kupfer had failed to report over $790,000 in

gross income, had personally deposited a check for $140,000 without reporting

this income, and had obtained substantial experience in accounting and finance.

      In the face of that evidence, Ms. Kupfer defended on the ground that her

failure to report over $790,000 in income was a mistake. In support of this

argument, Ms. Kupfer offered evidence of her consensual participation in an

informal audit. But the informal audit was based solely on the tax information

provided voluntarily by the Kupfers, and there was no evidence suggesting that

the auditors were aware of the unreported income.

                                           13
      Ms. Kupfer also offered evidence that she had relied on the services of a

tax preparer. But Ms. Kupfer did not disclose the unreported income to the tax

preparer, and the preparer’s engagement letter stated that

      !      the client bore the “responsibility to provide all of the information
             required for the preparation of complete and accurate returns,” and

      !      his services were not “designed to discover thefts or other
             irregularities should any exist.”

Appellant’s App., vol. IV, at 658, 683.

      In these circumstances, the district court could reasonably conclude that the

extraneous information would have been harmless. As a result, the court acted

within its discretion in declining to grant a mistrial. See United States v. Hornung,

848 F.2d 1040, 1045-46 (10th Cir. 1988) (upholding the denial of a mistrial based

on harmlessness because the evidence of guilt was overwhelming).

IV.   Calculation of the Offense Level for Sentencing

      The remaining issue involves the sentence. To impose the sentence, the

district court started with the sentencing guidelines. In calculating the guideline

range, the court increased the offense level based on § 3C1.1. This provision

provides for an increase in the offense level if the defendant willfully obstructed

the investigation. U.S.S.G. § 3C1.1. Ms. Kupfer challenges the application of

§ 3C1.1, and the government concedes error. We agree with the parties that the

court erred in increasing the offense level.

                                          14
      We have held that § 3C1.1 does not apply when defendants simply tell

investigators that they did not commit a crime. United States v. Urbanek, 930

F.2d 1512, 1515 (10th Cir. 1991). Ms. Kupfer did even less than that because her

sin was one of omission rather than commission. She simply failed to speak up

and disclose the unreported income as authorities investigated. Her failure to

speak up cannot serve as the basis for an increase in the offense level under

§ 3C1.1. See United States v. Pelliere, 57 F.3d 936, 939 (10th Cir. 1995) (stating

that “refusals to talk cannot serve as the basis for an obstruction of justice

enhancement” under § 3C1.1). As a result, the district court should not have

increased the offense level based on § 3C1.1.

      In light of the error, the government concedes that we should vacate the

sentence and remand for resentencing. We agree.

V.    Conclusion

      Accordingly, we (1) affirm the conviction and (2) remand to the district

court with directions to resentence Ms. Kupfer consistently with this opinion.

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