UNITED STATES of America, Appellee, v. Michael CAPANEGRO, Defendant-Appellant.
No. 729, Docket 77-1425
United States Court of Appeals, Second Circuit
Decided May 15, 1978
576 F.2d 973
Because the statement was volunteered, because there was no element of improper police tactics, because the evidence was uncontradicted that Wolfrath‘s condition, though perhaps weakened by his ordeal, was nonetheless strong and that he was alert and responsive, we hold that Wolfrath failed to substantiate his claim that the admission into evidence of his St. Vincent‘s confession denied him due process of law.
In sum, ten years after the facts out of which his claim arose, and solely on the testimony of a doctor who had neither seen nor heard of the petitioner at the time in question, Wolfrath has attempted to overturn the state judicial processes by challenging their fairness as to him.
We hold that Wolfrath has failed to shоw that he is entitled to relief; he was not denied due process of law.
Therefore, we reverse.
Henry Putzel, III, New York City (Donna M. Zerbo, Law Student Asst., Michael J. Capanegro, pro se, of counsel), for defendant-appellant.
Before FRIENDLY, MULLIGAN and MESKILL, Circuit Judges.
MULLIGAN, Circuit Judge:
This is an appeal by Michael Capanegro from a judgment of conviction entered on October 23, 1977 in the United States District Court for the Southern District of New York, after a 10 day trial before Hon. Thomas P. Griesa, United States District Judge, sitting without a jury. An indict
In early 1971 appellant represented without fee Ricky Carnivale, who was challenging the incumbent for the presidency of the Local. The campaign was successful and a Carnivale slate of officers was certified in April, 1971. From that point through December, 1972 Michael Capanegro was retained as attorney for the Union at a $25,000 annual retainer. In June, 1971 the members of the Union voted to pay the legal fees of 18 members who had been arrested for actions committed during a 13 day wildcat strike. The membership further voted to pay the legal fees of any member arrested for strike activities in the future. On July 14, 1971 the Local went on strike against the New York Telephone Company; the strike lasted until February 18, 1972. During that period about 45 Union members were arrested for strike-related crimes. Although a few were arrested for the felony of assault, the vast majority were charged with such state misdemeanors or offenses as disorderly conduct or harassment. As each arrest occurred the Local‘s officers either referred the mеmber to Capanegro or advised the attorney of the incident. Capanegro then submitted legal bills to the Union for his alleged representation. These bills were paid from the Local‘s Defense Fund which was in part financed by the parent union C.W.A. Between October 21, 1971 and February 29, 1972, in addition to his regular fees under the Retainer Agreement, Capanegro received 45 checks totalling $113,025 from the Local‘s Defense Fund. Capanegro‘s bills for alleged legal services were sent directly to Carnivale; no copy was sent to the individual member allegedly represented. Carnivale signed all of the checks; indeed, over $100,000 of the Defense Fund checks were actually written out by Carnivale instead of by the “check writers” of the Defense Fund Committee, the usual practice. After the strike, the extent of Capanegro‘s billings eventually became known to the parent union as well as the Local. An audit was conducted and Capanegro‘s bills were brought to the attention of the Department of Labor in 1973. As the result of a criminal investigation, this indictment followed.
I
Each of the 24 counts of the indictment related to Capanegro‘s billing and subsequent receipt of payment for alleged legal fees incurred while representing individual Union members. In finding Capanegro guilty on 17 counts of embezzling, stealing, willfully abstracting or converting to his own use the funds of the Union in violation of
Appellant argues that the evidence failed to support the guilty verdicts. Under the familiar rubric the evidence must be viewed in the light most favorable to the Government. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942). In this light, or almost any other form of illumination, the appellant‘s argument on this point is, at best, unconvincing.
An examination of the findings below reveals that in case after case Capanegro‘s bills were knowingly false. Each bill purported to provide a description of the services which he had rendered a particular member of the Local. In some cases appellant submitted bills for services to members whom he never saw or consulted. At least twice Capanegro‘s only service was to speak on the phone and advise the member to file a complaint with the police department. Yet in both cases he billed for appearances
On appeal it is argued that the Government offered no evidence that Capanegro‘s bills were so outrageously high as to constitute fraud. In support of this we are told that the law is “a profession which lacks any real standards concerning the amount of money it bills its clients.” The obvious answer, of course, is that an attorney under any standard cannot bill a client for services neither performed nor ever intended to be perfоrmed.
Capanegro did testify in his own behalf, generally maintaining that his bills were a good faith estimate of services rendered. Appellant now claims that Judge Griesa‘s acquittal of Capanegro on seven counts rendered the verdict of guilty on 17 others inconsistent, thus requiring reversal. The point is totally frivolous. Judge Griesa carefully weighed the Government‘s evidence with respect to each count and found that in some the Government‘s case did not persuade him beyond a reasonable doubt. The convictions here were amply supported, indeed, compelled by the evidence. That the trial judge saw fit to acquit appellant on seven counts attests to a careful wеighing of the testimony and other evidence on each count rather than to any inconsistency.1
II
The principal issue on this appeal2 is whether Capanegro was employed by the Union within the language of
Any person who embezzles, steals, or unlawfully and willfully abstracts or converts to his own use, or the use of another, any of the moneys, funds, securities, property, or other assets of a labor organization of which he is an officer, or by which he is employed, directly or indirectly, shall be fined not more than $10,000 or imprisoned for not more than five years, or both.
(Emphasis supplied).
Capanegro was clearly “employed” by the Union. The retainer agreement of June 10, 1971 provided in part:
The client does hereby employ and retain the attorney [Capanegro] as its attorney for and during a period commencing on the 1st day of April, 1971 and shall continue for as long as Ricky Carnivale, President, shall remain in office. - The attorney accepts such employment and retainer and agrees to render and perform all legal services necessary or proper for the protection of the interests and property of the client whenever and to the extent required by such client.
Carnivale or other Union officers either referred members to Capanegro for legal assistance or advised him that a member had been involved in some incident related to the strike. Appellant‘s fees were not paid by Uniоn members referred to him but by his employer, the Union. In the only legal papers submitted by Capanegro to courts in his representation of the strikers, affidavits for adjournment, he described himself as “Chief Counsel to the Communications Workers of America, Local 1101.” Appellant‘s relationship with the Union was not casual or happenstance. His affidavit indicates that he was at the Local‘s office “daily and working on union business.” He spoke at Union gatherings. For the year 1972, 76% of his gross professional income was derived from the Union.
In sum, Capanegro by express agreement and in fact was employed by the Union. We have no difficulty therefore in holding that Capanegro was employed by the Union within the meaning of
Appellant‘s argument to the contrary is that Capanegro was not an “employee” of the Union (i. e., he was not on the Union payroll and no usual employee deductions were taken from his fees by the Union). Rather, he argues, as attorney he was an “independent contractor” and hence not within
However, the common law distinction between these classifications is irrelevant to the question in this case. The issue hеre is not the vicarious tort liability foisted upon a master by virtue of the unauthorized activity of his servant. Such liability is based on familiar respondeat superior concepts which lead to exculpation where the person employed performs the work without being subject to the control of his employer. The lawyer, like the physician, is a professional and if he is guilty of malpractice it may well be that under common law doctrine his employer will not be responsible in damages to one injured as the result of the lawyer‘s
The failure of Congress to use the word “employee” in
Thus, in setting forth in
In our view, the choice of language here is sufficiently flexible to include Capanegro‘s employment as Chief Counsel to the Union. We have heretofore affirmed the convictions under
Appellant also contends that it was the congressional intent to limit the reach of
Aside from the dubious factual postulate that Capanegro was not an insider in a rather choice position to loot the Union‘s funds, the legal argument is devoid of merit. Section 501(c) is not limited to the common law crime of embezzlement, which involves a misappropriation by one entrusted with funds. Indeed, the section, by its very terms, includes оther forms of theft, stealing and converting. United States v. Silverman, 430 F.2d 106, 127 (2d Cir.), modified per curiam on other grounds, 439 F.2d 1198 (2d Cir.), cert. denied, 402 U.S. 953, 91 S.Ct. 1619, 29 L.Ed.2d 123 (1971) (Friendly, J.), United States v. Sullivan, 498 F.2d 146 (1st Cir.), cert. denied, 419 U.S. 993, 95 S.Ct. 303, 42 L.Ed.2d 265 (1974) and Colella v. United States, 360 F.2d 792 (1st Cir.), cert. denied, 385 U.S. 829, 87 S.Ct. 65, 17 L.Ed.2d 65 (1966), relied upon by appellant, are also contrary to his position. In Sullivan the court commented:
Though common law embezzlement “carries with it the concept of breach of fiduciary relationship,” . . . neither “stealing,” “abstraction,” nor “conversion” do. We see no reason grounded in policy or logic to extend to these terms a requirement of breach of fiduciary responsibility.
498 F.2d at 149 n. 4. Neither do we.
The fact that Capanegro‘s bills had to be passed upon by the Union is not at all pertinent. As Judge Friendly observed in Silverman, “the ‘union’ presumably would have objected if it had been able to speak freely.” 430 F.2d at 127. In United States v. Dibrizzi, 393 F.2d 642 (2d Cir. 1968) which also involved a
Appellant reminds us that in construing a criminal statute we should not enlarge its reach beyond the language employed by the statute. Morissette v. United States, 342 U.S. 246, 263, 72 S.Ct. 240, 96 L.Ed. 288 (1952). We agree. But the statute, in our view, clearly provides that a person employed by the Union under the circumstances we have set forth is unambiguously within its coverage. The Supreme Court has recently noted,
It is true that “ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity . . .” But here the Congress has conveyed its purpose clearly, and we decline to manufacture ambiguity where none exists.
United States v. Culbert, 435 U.S. 371, 98 S.Ct. 1112, 1116, 55 L.Ed.2d 349 (1978).
Judgment affirmed.
FRIENDLY, Circuit Judge, dissenting:
Judge Griesa was abundantly justified in concluding that Capanegro had been a party to a plan for embezzling, abstracting and converting the funds of Local 1101 of the Communication Workers of America. If the Government had procured an indictment charging that Carnivale had violated
Although the majority concedes that “Capanegro as retained counsel of the Union was not its ‘employee’ in the common law sense of a servant as distinguished from an independent contractor,” it is worth emphasizing how well-advised the concession is. Neither the retainer agreement quoted ante at pages 976-977, nor Capanegro‘s references to himself as the Union‘s chief counsel, nor any other aspect of the relationship between Capanegro and the Union removes him from the common law description of an independent contractor аs a person “who contracts with another to do something for him but who is not controlled by the other nor subject to the other‘s right of control with respect to his physical conduct in the performance of the undertaking.” Restatement Second of Agency § 2(2) (1958); see Logue v. United States, 412 U.S. 521, 527, 93 S.Ct. 2215, 37 L.Ed.2d 121 (1973); Radio City Music Hall Corp. v. United States, 135 F.2d 715 (2 Cir. 1943) (L. Hand, J.). In Avis Rent a Car System, Inc. v. United States, 503 F.2d 423, 429 (2 Cir. 1974), we laid out some of the other applicable criteria: whether the person rendering service has a substantial investment in his own tools or equipment; whether he undertakes a substantial cost, as by employing his own laborers; whether he has an opportunity to profit depending on his management skill; whether the relationship between the person rendering the service and the person receiving it is permanent; and whеther the person rendering the service works in the ordinary course of the recipient‘s business rather than in an ancillary capacity. See also NLRB v. United Insurance Co., 390 U.S. 254, 259, 88 S.Ct. 988, 19 L.Ed.2d 1083 (1968); Restatement Second of Agency § 220. The evidence here was that Capanegro maintained his own office and employed a secretary, and that he possessed a “special skill” upon which his opportunity to profit depended. It is of no moment that services like Capanegro‘s could equally well have been rendered by house counsel. That was not the relationship here.
As I understand it, the majority would agree that Capanegro would not fall within
In the absence of any legislative history to support such a conclusion,1 this is attributing altogether too much significance to what on its face appears to be only a draftsman‘s choice. When Congress meant to go beyond officers and employees in imposing criminal liability for the misapplication of funds, it has not left the matter to ambiguous inference. See
The conclusion that Congress would have given a much clearer signal if it had intended
An “employee“, according to all standard dictionaries, according to the law as the courts have stated it, and according to the understanding of almost everyone, with the exception of members of the National Labor Relations Board, means someone who works for another for hire. But in the case of National Labor Relations Board v. Hearst Publications, Inc., (322 U.S. 111, 64 S.Ct. 851, 88 L.Ed. 1170 (1944)), the Board expanded the definition of the term “employee” beyond anything that it ever had included before, and the Supreme Court, relying upon the theoretic “expertness” of the Board, upheld the Board. In this case the Board held independent merchants who bought newspapers from the publisher and hired people to sell them to be “employees“. The people the merchants hired to sell the papers were “employees” of the merchants, but holding the merchants to be “employees” of the publisher of the papers was most far reaching. It must be presumed that when Congress passed the Labor Act, it intended words it used to have the meanings that they had when Congress passed the act, not new meanings that, 9 years later, the Labor Board might think up. In the law, there always has been a difference, and a big difference, between “employees” and “independent contractors“. “Employees” work for wages or salaries under direct supervision. “Independent contractors” undertake to do a job for a рrice, decide how the work will be done, usually hire others to do the work, and depend for their income not upon wages, but upon the difference between what they pay for goods, materials, and labor and what they receive for the end result, that is, upon profits. It is inconceivable that Congress, when it passed the act, authorized the Board to give to every word in the act whatever meaning it wished. On the contrary, Congress intended then, and it intends now, that the Board give to words not farfetched meanings but ordinary meanings. To correct what the Board has done, and what the Supreme Court, putting misplaced reliance upon the Board‘s expertness, has approved, the bill excludеs “independent contractors” from the definition of “employee“.
H.R.Rep.No.245, 80th Cong., 1st Sess. 18 (1947). While Congress did not repeat the express exclusion of independent contractors in the definition of “employee” in
What is ultimately dispositive is that
The spirit of the doctrine which denies to the federal judiciary power to create crimes forthrightly admonishes that we should not enlarge the reach of enacted crimes by constituting them from anything less than the incriminating comрo-
nents contemplated by the words used in the statute. And where Congress borrows terms of art in which are accumulated the legal tradition and meaning of centuries of practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken and the meaning its use will convey to the judicial mind unless otherwise instructed. In such case, absence of contrary direction may be taken as satisfaction with widely accepted definitions, not as a departure from them.
Cf. United States v. Ferrara, 451 F.2d 91, 95 (2 Cir. 1971), cert. denied, 405 U.S. 1032, 92 S.Ct. 1291, 31 L.Ed.2d 489 (1972); and United States v. Ottley, 509 F.2d 667, 672 & n. 7 (2 Cir. 1975) (applying Morissette in interpreting criminal provisions of LMRDA). The wisdom of this statement is illustrated by the consequences of ignoring it. Instead of being able to refer to a wеll-developed body of law which provides a basis on which criminal liability can be determined, trial judges and juries must now minutely scrutinize the relationships of independent contractors to unions to determine if they are close enough for the statute to apply. The majority supplies no real clue as to when “employee” in
I would reverse the conviction with instructions to dismiss the indictment on the ground that Capanegro was not a person employed by a union as required by
Notes
(f) “Employee” means any individual employed by an employer, and includes any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice or because of exclusion or expulsion from a labor organization in any manner or for any reason inconsistent with the requirements of this chapter.
The term “employee” shall include any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not include any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any individual employed as a supervisor, or any individual employed by an employer subject to the Railway Labor Act, as amended from time to time, or by any other person who is not an employer as herein defined.
(Emphasis supplied.)