# Reply Brief — Mugford v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 1994
- **Citation:** 510 U.S. 1070

## Text

No. 93-349

IN THE
SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1993

EDWIN W. MUGFORD, JIL,

Petitioner,

UNITED STATES OF AMERICA.

Respondent.

Petition for Writ of Certiorari
to the United States Court of Appeals
for the Eleventh Circuit

REPLY TO BRIEF IN OPPOSITION

Anton J. Stelly

William S. Smithers, Jr.

R. Paul Childress, Jr.
THOMPSON, SMITHERS,
NEWMAN & WADE

Post Office Box 6357

5911 West Broad Street
Richmond, Virginia 23230
(804) 288-4007

E COPY

~~

Counsel for Petitioner

———

LANTAGNE DUPLICATING SERVICES
80) t-ast Main Street Suite 100 Richmond. V irgimia 23219 (800) 847-0477

BEST AVAILABL

EDWIN W. MUGFORD, III v. UNITED STATES

CERTIFICATE OF INTERESTED PERSONS AND
CORPORATION DISCLOSURE STATEMENT

First Union National Bank, Successor in
interest to Florida National Bank, a
victim

Hon. Wm. Terrell Hodges, United States
District Judge

Raymond E. LaPorte, Attorney
Counsel to defendant Brian Smith

James L. Powers
Assistant United States Attorney
Trial Counsel for the United States

Susan Raab
Assistant United States Attorney
Appellate Counsel for the United States

Howard J. Shifke, Attorney
Counsel to defendants Eugene Marano and
Ralph Rodriguez

Dwight Wells, Attorney
Counsel to defendant David Roemer

D. Frank Winkles, Attorney
Susan H. Freemon, Attorney
Counselors to Royal Buick, Inc.

Tamra Phipps

Assistant United States Attorney
Reviewing appellate counsel for United
States

TABLE OF CONTENTS

TABLE OF AUTHORITIES
MISSTATEMENTS IN OPPOSITION BRIEF

THE CREDIT APPLICATIONS WERE NOT
ADMISSIBLE AS NON-HEARSAY

SIXTH AMENDMENT VIOLATIONS
THE EVIDENCE WAS INSUFFICIENT

CONCLUSION

li

17

19

ai
TABLE OF AUTHORITIES
CASES

California v. Green, 399 U.S. 149
155-56, 90 S.Ct. 1930 1934 (1970) .. 16

Ohio v. Roberts, 448 U.S. 56,
63 (1980) . «

Park v. Huff, 493 F.2d 923, 933-934
(Sth Cir. 1974), reversed on rehearing
en banc (six justices dissenting),

506 F.2d 849, cert. denied 423 0.8.
824 (1975) ‘ ee ae ae ee ee 17
State v. McGann, 132 Ariz. 296, 645

Pete Bit CASGR) Ge 6 ee lores 14, 15

Sullivan v. Louisiana, 113 S.Ct.
EUTO. (1993) 5) sees ew ek - « « 2

United States v. Adams, 446 F.2d 681,
683 (9th Cir.), cert. denied, 404 U.S.
943, 92 S.Ct. 294,

30 L.Ed.2d 257 (2914) «4s & = & A eee

United States v. Evans, 572 F.2d 455,
490 (5th Cir.) cert. denied, 439 U.S.
870 (1978) a ie oe er ee ae ll
United States v. Frady, 456 U.S. 152,

163 (1982) - ¢ © #656 Sie 2 oo) eee

United States v. Lieberman, 637 F.2d
7> (20 Cie, 3960) . i252". .o « AG

United States v. Olano, 113 S.Ct. 1770,
S730 41903) oe & ae «© Be

iii

United States v. Urbanik, 801 F.2d 692,

698 (4th Cir. 1986) .....

Federal Rules of Evidence
801(d)(2)(D)
801(d) (2) (E)

631052 ss eee ee

MISCELLANEOUS

Supreme Court Rule 15

2

1
+

I. MISSTATEMENTS IN OPPOSITION BRIEF

There are misstatements of fact in
the opposition brief. Contrary to the
government’s assertions at page 2 that
Mugford’s employment began at or about the
time of the commencement of the conspiracy
in January 1985, the evidence did not
establish his employment at Royal Buick
until the spring of 1986 (R42-pp. 5-22).

The opposition also takes out of
context testimony referred to as “other

evidence" supporting the convictions. No

evidence was presented from which it could
be reasonably inferred Mugford discussed
illegal acts with others to further the
conspiracy, falsified loan applications,
or engaged in any illegal acts (Opn.Br.,

pp- 2, 4, 8 n.3, 13, 14 & n.6).?

+ Wilkerson, Scarborough and McMillen gave

testimony which the government contends
establishes “other evidence” of Mugford’s guilt.
Although it is a well-settled legal principle that

on appeal, all reasonable inferences of fact are
to be construed in the light most favorable to the
government, the natural corollary which evolves
from that principle is that unreasonable
inferences and distortions of the record are not
perinitted. See, Supreme Court Rule 15.
Notwithstanding the government’s “spin,” the
record does not support the contentions in the
Opposition brief.

Wilkerson testified that Mugford would have
"had occasion to attend” sales meetings at which
the falsification of credit applications was
discussed, but did not place him at any of them
(R18-p.70). He further testified the meetings he
referenced might have occurred in 1985 (R19-p.42),
which pre-dated Mugford’s employment in the
Spring, 1986 (R42-pp.5-22).

Though Wilkerson could not recall the
customer or find the credit application among the
files admitted into evidence, he also claimed he
saw Mugford add a second job or income to a credit
application that he (Wilkerson) found “creative”
(R18-p.72). That testimony is incredible because
the government could not produce a single credit
application attributable to Mugford with a second
job or income.

Scarborough (a manager, not a salesman) did
not testify that he discussed a credit application
with Mugford in which Mugford said “to put a VISA
On 1t or give him some credit.” Op.Br., p. 13. A
review of Scarborough’s testimony reveals (R21l-
pp-37,38) he was discussing an application with
another salesman on the showroom floor. In the
context of the “joking” among salesman about which
Scarborough was then testifying, Mugford’s comment
was at most a casual remark of no probative value.
See, United States v. Urbanik, 801 F.2d 692, 698
(4th Cir.1986) [holding “not harmless error" to
admit under Rule 801(d)(2)(E) “casuaI aside” that
touches upon hut does not “further” conspiracy].

The testimony of McMillen (R16-pp.29,30)
also was not correctly put forth in the opposition
brief. Rather than show Mugford’s participation in
the conspiracy, McMillen’s testimony tends to
disprove it. Moreover, while acknowledging he
discussed falsification of credit applications
with other employees of Royal Buick, he

3
That this "other evidence" was not a
factor in the convictions is evident in
the exchange between the district court

and the prosecutor at the close cf the

government’s case-in-chief when the court
was considering Mugford’s Rule 29 motion
for judgment of acquittal. After hearing
the court’s summation of the evidence
against Mugford (consisting only of the
false statements appearing in the credit
applications), and its inquiry, "How could
the jury conclude ... beyond a reasonable
Goubt ... that the [false] entries

were the figments of [Mugford’s}

Specifically denied any such discussion with
Mugford.

The government’s references to the "rebates"
and other charges as being indicative of Mugford’s
guilt is misstated. The government’s evidence at
trial established the salesmen had no role in the
rebates and the “add-ons.” Rebates and other “add-
ons" to the final amount financed were by the
managers (R19-pp.7,8; R18-p.76; R21-pp.74,77; R23-
p.66), were located on the lowest part of the
credit application reserved specifically to the F
& I department, and written in a different hand
than the rest of each application.

4
imagination as distinguished from that of
the customer?", the prosecutor replied:

.+. we suggest the jury can
certainly infer that when false
information is placed on the
loan applications * * * that
the salesmen [sic] did it
pursuant to the scheme to
defraud and the conspiracy."
(R38-pp. 58-60)[{emphasis
added].

Neither during the course of this
argument to the court, nor in its closing
argument to the jury (R45-pp.12, 15-17),
did the government make reference to this
"other evidence." It relied solely on the
false entries in the credit applications
to support the charges in the indictment

against Mugford.

I. THE CREDIT APPLICATIONS WERE
NOT ADMISSIBLE AS NON-HEARSAY

The government admits there exists a
split among the circuits as to the
admission of the credit applications under

Rule 803(6). It does not refute, and

wr

5
apparently concedes, the trial court erred
in admitting the nine credit applications
pursuant to the business records exception
to the hearsay rule because the source of

the information (the customer) was not

acting in the regular course of
business.’ It also abandoned its argument
in the Court of Appeals--that the credit
applications were otherwise admissible as
hearsay exceptions under Rules
801(d)(2)(D) and 801(d)(2)(E).? The
government contends the applications were
admissible as non-hearsay because they

were not offered in evidence for the truth

* Brief in Opposition, pp. 8-9: “Petitioner

is correct that other courts of appeal have held
that documents are not admissible under the
business records exception if any participant in
the production of the record is not acting within
the regular course of the his business’s activity,
and that the business records exception does not
apply to an entire business record when some of
the information in it is based on statements of
persons not acting in the regular course of that
business.” [Citations omitted]

* Brief of Appellee, p.107. (C.A. llth Cir.).

a
6
of the matter asserted. Nothing could be
further from the truth because that was
precisely the reason the evidence was
offered, and how it was used to convict!
Supra., p. 4.

A review of the record proves the
government sought introduction of the
files and the credit applications pursuant
to the business records exception by
laying a foundation to qualify Wilkerson
as a non-custodial witness under Rule
803(6), F.R.Ev. (R17, pp. 163-172).°
Moreover, both in arguing against a

judgment of acquittal and in its final

speech to the jury, the government

. Contrary to the government’s assertion,

there was objection to the admission of the
documents on that basis. By pre-trial order and
agreement of counsel, Mr. Winkles, counsel for
Royal Buick, was designated to be lead counsel for
all defendants. The court specifically stated that
objections made by Mr. Winkles would be deemed
adopted by all other defendants unless a
particular defendant specifically made known to
the court his intent to not ally himself with the
objection. Mr. Winkles’ objection appears in the
record (Rl7?-pp.169,170).

-
referred only to the credit applications
in support of the charges subject to this
appeal, ibid., because there was no
evidence other than his name as salesman
on the credit applications to connect
Mugford to the fraud alleged in the
indictment!

Mugford does not dispute the credit
applications contained false statements.
But that fact alone does not make them
admissible as non-hearsay. The government
misplaces its reliance on that argument
(and upon the cases in recites in support)
for the simple reason that there was no
evidence demonstrating who, other than the

customer, made the false statements

contained in the eleven credit
applications. In each and every case cited
in opposition where evidence was admitted

as non-hearsay (to prove the falsity of a

statement or assertion) there was no

8

question of the identity of the declarant.

Contra, the facts of this case where
the identity of the declarant of the false
information was never proved to be the
defendant against whom they were used to
convict. Authorship of the false entries
in each of the credit applications is the
critical question the government left
unanswered at trial. The question remained
unanswered in the court of appeals, and in
the brief in opposition to this petition.
The government has not pointed to a single
decision in which an oral or written
declaration made out of court has been
deemed admissible substantive evidence
against a defendant when the identity of
the declarant has not’ first been
established because no_ such_ holding
exists.

For that reason, the testimony of the

introduction witness, Wilkerson, was

eeEeEeEeEEeeeeEEOeeeeeee

insufficient for the admissibility
purposes the government claims. Wlkerson’s
testimony was speculative on the point,
suggesting the false information in the
credit applications may have originated
from either of three sources: 1) the
customer providing the information to the
Salesman; 2) the salesman; or 3) some
other person at the dealership with access
to it.

Moreover, the presumption that the
customer was the source of the falsity is

particularly strong in Mugford’s case.

Each of the eleven "“Mugford" credit
applications was signed by the customer
attesting that the information was
accurate and complete.°® Admitted for any

purpose, on their face the applications

° Each standard application form contained

the following statement, immediately above a line
for the customer’s signature: "You certify that
the above information is accurate and complete..."

10

purport to be the declarations of the
customer, and Wilkerson’s testimony
Supports that premise. None of the
customers was indicted, and none of the
nine whose credit applications relate to
the convictions appealed were called to
testify.

It logically follows that to be
admissible as non-hearsay evidence, the
relevance of each of the credit
applications to the charges had to appear
either on the face of the credit
application itself or be shown by other
evidence. The credit applications
themselves were not sufficient for that
purpose. Neither was Wilkerson’s testimony
alone, nor the remaining documents in the

files.‘

* The government maintains the other
documents in the file were admissible under Rule
803(6). These documents were not relevant evidence
against Mugford for similar reasons as the credit

eeEeEOEOEOEOEOEeEE eee

1l

The appearance of his name as
Salesman in the nine documents was the
only link between Mugford and the false
Statements in the credit applications
forming the basis of his convictions. Had
these documents not been admitted, or
their use properly limited by the court,
it would not have been possible for the
jury to convict Mugford. Therefore, their

admission without a limiting instruction ’

applications were not. Only Mugford’s name in the
documents linked him to them, nothing else. Given
Wilkerson’s testimony that the documents were
prepared from the information on the credit
application supplied by the customer, they contain
inadmissible double hearsay.

The government’s reliance on the Similarity
of the handwriting and signatures in the various
papers to prove Mugford’s involvement is
inconsistent with its own concession that another
salesman completed the Burns application, though
the handwriting in all eleven has also been
referred to by the government as “similar” and
"distinct." Also, its own witness, Mosley, did not
identify Mugford as the salesman with whom he
dealt when afforded the Opportunity at trial.

” See United States v. Evans, 572 F.2d 455,
490 (5th Cir.), cert. denied, 439 U.s. 870 (1978),
cited at p. 8, Op.Br., holding that introduction
of large groups of exhibits at once "not unfair”

12

was not harmless, but "particularly
egregious," resulting in "a miscarriage of

justice." United States v. Olano, 113

S.Ct. 1770, 1790 (1993); United States vy.

Frady, 456 U.S. 152, 163 & n.14 (1982).
II. SIXTH AMENDMENT VIOLATIONS

The government contends no
Confrontation Clause issues exist because
the credit applications were not used to
prove the matters asserted, Mugford had
the right to cross-examine the introducing
witness, and the remaining file documents
were properly admissible under Rule
803(6). Op.Br., pp. 11-13. Its reasoning
is flawed because its Supporting case
authority does not apply to the facts of

this case.

when trial court made clear that introduction en
masse was conditioned upon defense counsel’s right
to object at a later time to the admission of any
specific document, and the jury was properly
instructed as to the weight to be given to each
such document.

a

13

First, the credit applications lacked
the requisite “indicia of reliability”
with which "firmly rooted" exceptions to
the hearsay rule are clothed. These
documents, the crucial evidence to the
convictions, were improperly admitted for
that reason.

Second, merely having the right to
confront the introducing witness does not
cure the problem raised here. Wilkerson’s
testimony did not link Mugford to the
credit applications, to the falsification
of them, or to the conspiracy itself.
Moreover, Mugford did successfully refute
Wilkerson’s testimony in significant part.
On cross examination, Wilkerson could not
identify or produce (and neither could the
government) the credit application to
which he claimed he saw Mugford add a
"creative" second job or income, nor could

he place Mugford at the sales meetings

14

falsification was discussed. The
government never referred either in
argument or in closing to Wilkerson’s
"other evidence" in ascribing guilt to
Mugford. The prosecution relied only upon
the credit applications and the implied
hearsay each contained.

This was exactly the question posed
by the admission of 57 credit cards

receipts in State v. McGann, 132 Ariz.

296, 645 P.2d 811 (1982). See, Pet., pp.
38-42, 46-47. Those credit card receipts
also were admitted for the "falsity" of
the information they contained (the
customers’ Signatures) without the
customer’s testimony. The opposition brief
avoids any reference to that holding;
per’ aps for the obvious reason that the
Arizona Supreme Court found fundamental
error affecting the defendant’s right to

confront the witnesses by the admission

eeEEEoEoEoEoEEE ————————

15

(through a third party without first-hand
knowledge of the fraud) of documents the
accused may or may not have falsified. In
McGann, as in this case, the admission was
wrongful for the hearsay implied in the
documents. In both instances, the jury was
allowed to infer improperly from the —.
combination of two unrelated factors (the
charge against the accused and the absent
customer) that the accused falsified a
document and violated the law. The result
was more egregious in Mugford’s case than
in McGann because of the lack of “other
evidence" of Mugford’s wrongdoing.*

The “application of a _ recognized
hearsay rule exception does not

necessarily evidence compliance with the

* In McGann there was testimony from a

customer that the signatures on four other credit
card receipts were not his, nor authorized by him.
No such customer testimony existed in this case.
Moreover, in this case, the two customers called
by the government dia not tie Mugford to the
falsification of their credit applications.

ee

16

Confrontation Clause." United States v.

Adams, 446 F.2d 681, 683 (9th Cir.), cert.
denied, 404 U.S. 943, 92 S.Ct. 294, 30
L.Ed.2d 257 (1971). Nor has this Court, as
the government implies, held that
admission under a well-recognized hearsay
exception satisfies Confrontation Clause
problems. In fact, this Court has
expressly rejected such a construction.’

The fact remains that given the
opportunity to cross-examine the customer
witnesses about the source of the false
informaticn ‘n their credit applications,
Mugford was able to establish his
innocence as to those transactions. His

convictions flow from the nine instances

° see California v. Green, 399 U.S. 149,

155-56, 90 S.ct. 1930, 1934 (1970), wherein it is
said, “Our decisions have never established such
a congruence; indeed, we have more than once found
a violation of confrontation values even though
the statements in issue were admitted under an
arguably recognized hearsay exception. [citations
omitted)"

ea

17

in which he was not afforded that
Opportunity by the government.?°® Under
such circumstances, the opposition’s
position that there are no Confrontation
Clause issues raised is without merit.
III. THE EVIDENCE WAS INSUFFICIENT

As stated in page 1 & n. 1, supra.,
there was no “other evidence" to Support
the convictions. The loan applications do

not prove Mugford was the salesman

*° Because the burden is on the government to
prove each and every element of the offense
charged, Sullivan _v. Louisiana, 113 s.ct.2078
(1993), requiring an accused to subpoena the
hearsay declarant if the government does not
produce him shifts the burden of proof to the
defendant and is inconsistent with the
constitution’s “preference for face-to-face
encounters at trial," Ohio v. Roberts, 448 U.S.
56, 63 (1980). It is respectfully suggested the
abuse of the business records exception in this
case vindicates Judge Coleman’s holding in Park v.
Huff, 493 F.2d 923, 933-934 (5th Cir.1974),
reversed on rehearing en banc (six justices
dissenting), 506 F.2d 849, cert. denied 423 U.s.
824 (1975), that “the burden of producing
witnesses to meet the accused’s right of
confrontation falls on the State.” Judge Coleman
sagely reasoned that is the sure way to prevent
the government from hiding a weak case and
avoiding the risk the testimony of the declarant
would exculpate the accused.

18

involved merely because his name appears

on them as the salesman. United States v.

Lieberman, 637 F.2d 95 (2d Cir.1980).
Recognizing this, the government called
Burns and Mosley to prove Mugford
falsified their credit applications and
thereby lay a foundation to argue that he
falsified the remaining nine, without
having to call the other customers to
testify.

The government admits its failure to
prove not only Mugford’s guilt on the
Burns and Mosley applications, but even
his connection to them.** Inexplicably,
while conceding another salesman completed
the Burns application, the government
still maintains that the same, distinctive
handwriting and signatures, appearing on

all eleven credit applications (including

1} See footnote 2, page 6, Brief in Opposition.

ee

|

19
Burns’), proved Mugford was the source of

the false information on the remaining

nine in which no customer testimony or
other evidence was offered linking them to
Mugford. Br.Opp., p. 14.

The contrary would appear to be
proved by that admission, for if the same
hand which wrote the Burns application
wrote the remaining nine, it follows that
Mugford did not write the nine at issue.

A reasonable jury, having found
reasonable doubt that Mugford falsified
the Mosley and Burns applications, was
required to find reasonable doubt as to
the other charges for which there was no
other evidence presented.

CONCLUSION

The opposition’s reliance on the

admissibility of the credit applications

and its contentions that "other evidence"

existed to sustain the convictions are

20

Specious, and inconsistent with the facts
and of the applicable law. Petitioner’s
convictions of conspiracy and fraud were
the result of the improper admission of
the credit applications and other
documents, the denial of his right to
confront the customers in the nine
transactions at issue, and the jury’s
impermissible inferences that were
inconsistent with the evidence presented.

As a result, an innocent man was
convicted of crimes he did not commit. For
these reasons, the petition should be
granted.

EDWIN W. MUGFORD, III

By: Atlin Sete lly

Anton Joseph Stelly

William S. Smithers, Jr.

R.Paul Childress, Jr.

THOMPSON, SMITHERS, NEWMAN & WADE
Richmond, Virginia 23230

January 3, 1994

I ST SOBEL UR LAPT OE Te CRE PP PM PURE eRe 4 TE

Vg eel ia a a ee ae SA eed Se Than oa. te er ts -

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386004_0739%3A4. Public record. Not legal advice.