STATE OF NEW JERSEY VS. STEVEN W. TURNER (13-10-1391, MERCER COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0268-19
STATE OF NEW JERSEY,
Plaintiff-Respondent,
v.
STEVEN W. TURNER,
Defendant-Appellant.
_______________________
Submitted December 2, 2020 – Decided February 22, 2021
Before Judges Alvarez and Mitterhoff.
On appeal from the Superior Court of New Jersey, Law
Division, Mercer County, Indictment No. 13-10-1391.
Law Offices of Jef Henninger, attorneys for appellant
(Jef Henninger, on the brief).
Angelo J. Onofri, Mercer County Prosecutor, attorney
for respondent (Ryan William Sundstrom, Assistant
Prosecutor, of counsel and on the brief).
PER CURIAM
Defendant Steven W. Turner appeals the August 23, 2019 denial of his
petition for post-conviction relief (PCR) based on claims of ineffective
assistance of counsel. We now reverse and remand, finding defendant
established facts constituting a prima facie case, thereby requiring an
evidentiary hearing. See R. 3:22-10(b).
As set forth in our unpublished opinion affirming the conviction on direct
appeal, on April 29, 2016, defendant was convicted of third-degree failure to
pay taxes with intent to evade, N.J.S.A. 54:52-9. State v. Turner, No. A-5279-15
(App. Div. Apr. 23, 2018).
Defendant worked for United Parcel Service (UPS) for over thirty years
prior to his retirement as comptroller. He testified that, beginning in 1978, he
acquired stock, against which he would routinely borrow. In 2007, when the
stock market began to experience a downturn, his shares began to drop below
the loan-to-value ratio, which triggered a margin call. Consequently, he was
forced to liquidate his portfolio, amassing capital gains of $1.8 million.
The State displayed defendant's tax returns either on a video screen or an
overhead while he explained, "at the end of [2008], there was no stock and there
were no loans and a huge capital gain because I had accumulated that stock since
1978." Defendant went on to explain that a margin call is when you are forced
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to sell stock to pay a loan collateralized by that stock when the stock price dips
below a certain threshold and threatens your ability to cover the full value of the
outstanding obligation. He further testified that at that point he also owed
approximately four years' worth of alimony, or $400,000, and $176,331 in 2008
state taxes.
The following year, he filed "married, filing separately," despite having
previously filed jointly with his new wife. When they married in 2002, they
entered into a prenuptial agreement calling for each to continue to own their
individual premarital assets. Defendant's wife owned the home in which they
lived.
The Division of Taxation obtained a $72,265.83 judgment against
defendant's wife's home for the 2007 tax debt triggered by his stock activities,
based on their "married, filing jointly" return for the year. Defendant satisfied
that judgment.
At trial, defendant acknowledged the $176,331 debt but said he lacked the
means to pay. He further acknowledged that his wife's New Jersey home was
valuable and had been sold, netting her a substantial profit. The parties then
relocated to Pennsylvania, eventually living in another home his wife purchased
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in her name only. Defendant also discussed the various businesses he had
unsuccessfully attempted to start after his retirement in order to earn income.
During defendant's cross-examination, he was repeatedly pressed about
the absence of documents corroborating his testimony. We set forth the relevant
portions:
Q So you tell the story about the margin call,
et cetera.
A Yes.
Q Let's look at this line, Line 14.
A Yes.
Q Bring it up. $363,000 in salary. And you
paid nothing in tax on that, right?
A Correct so far.
Q So far?
A I mean -- I'm sorry.
Q So you didn't withhold anything, right?
A There was --
Q Yes?
A There was --
Q Sir, simple question.
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A No.
Q You didn't -- you got the money, right,
$363,000, right?
A Not all of it because it's a gross number and
federal taxes are withdrawn from the number. I earned
it.
Q So your federal withholdings were made?
A Yes. And it was a supplemental payment so it
was probably about --
Q Did you get a tax refund from the federal
government that year?
A I don't think so, no, I don't.
Q Well, you don't have the -- where are your
documents to prove that one way or the other?
A Well, I didn't get a tax refund because the
previous year I had to pay.
Q Okay. So there's a withholding from the
federal government. And there was no withholding
made to the State?
A That's correct.
....
Q This margin call -- these margin calls, do
you have any documents with you today that support
this?
A Not with me, but --
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Q Well, you knew you were going to trial
today, right, sir?
A Yes, sir.
Q And you knew that this is serious, right?
A Yes.
Q And you knew that what -- you knew
exactly what the State was going to put up, right? You
had received all the discovery in this case from the
State, right? Yes?
A I didn't know everything you'd put up.
Q Every document that's been provided and
placed in front of this jury was provided to you and your
counsel, right?
A I suppose. Well, I say it because -- yes, I'm not
trying to evade the question.
....
Q Well, we're talking about 2008, but we're
also talking about in 2008, you conceded that you
received $300,000 in-your-pocket money.
A Yes. And --
Q And during --
A Sorry.
Q And in 2008, $300,000 in your pocket.
A Right.
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Q And you used that and spent it in your life,
right?
A I used it to pay the property -- the federal taxes
required from 2007 off the 1.2 million that I also had
the margin call on. Same situation that I explained for
2008, there was a segment in 2007, so my 2008 income
paid the federal responsibility for 2007.
Q Where is any documents to back what --
back up what you're saying? Where are the documents
to back them up?
A (No audible response).
Q You said that you came -- you knew you
were coming to trial today, right, sir?
A Yes, sir.
Q And you said that you have these
documents, right?
A (No audible response).
Q Where are they?
A Well, when I paid my federal taxes in 2007, I --
when I filed my return, I paid my taxes. And it was a
significant amount due as a result of the fact that I had
to do the margin call routine in 2007.
Q Mr. Turner, you have provided no
documents to this jury to back up anything that you
have just said, correct?
A Well, that is correct.
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Q And you knew you were coming to trial
today, correct?
A Yes.
Q And you didn't even bring those documents
to this jury can see whether anything that you're saying
makes any sense.
A That's correct. I don't have them with me.
....
A -- I followed -- I just followed the path of the
documentation that I received.
Q Sir –
A Including the information with Mr. Thomas. Is
he part of his group?
Q No.
A Okay.
Q Do you have any documentation from Mr.
Thomas?
A Yes, I do. Not with me though.
Q Okay. How about the other person that you
mentioned, do you have any documentation from him?
A Not with me.
Q Okay. In that letter, you provide no formal
proposal to the Division of Taxation to pay your tax?
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A That's correct. It is an approach to arrive at a
solution so that I could pay the entire tax.
....
Q That's [defendant's wife's] tax return,
right?
A Yes it is.
Q It says she has total gross income of
$1,200, correct?
A That's correct.
Q So if the taxes were $23,000 a year, $1,200
is not enough to pay the taxes, wouldn't you agree?
A That's correct. But she also gets a distribution
from her settlement from her divorce that comes
through a life insurance policy which is not taxable.
Q You have any documents supporting that,
sir?
A Not with me.
Q So just so we're clear, you specifically
decided to file your tax return differently in 2008 so
that you protected the marital home from being able to
be attached to satisfy the tax?
A Yes, I did. And we filed separately thereafter,
more driven by the fact that we should have filed
separately to begin with because we were dealing with
two sets assets that came into the marriage and we
should have done it from Day 1 to be honest with you.
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Q But you would have owed more tax if you
did that.
A That doesn't matter. The fact is, it was --
....
A But that wasn't the driving factor behind it.
Q No, the driving factor was that you were
trying to protect the marital home.
A I was.
Q From the New Jersey taxes.
A Not really. Well, we weren't planning on moving
to start with. In 2008, we weren't moving anywhere. I
did it to protect -- to honor the marital agreement so that
our assets would be kept separate. And that's why
we've filed separate ever since.
Q Because there were judgments attached to
that property, right?
A I didn't know that. Honestly, I didn't know it. I
didn't see the documents and the taxes were paid. So
I'm not saying they weren't there, I just never saw it.
Seriously.
....
Q Sir, your testimony is that UPS started
dropping in its value -- the stock started dropping in its
value in 2007, correct, that's your testimony?
A Yes.
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Q You have no evidence of that, right?
A (No audible response).
Q So if we were to do a look up on the value
of the UPS stock in 2007 and see that it didn't fall in
2007, that would be -- that would undermine what you
just said, wouldn't it?
A Yes. I don't think you'll find that to be the case
or I would not have been in the margin call scenario.
Q Well, you -- we have nothing here saying
that you were in a margin call situation, do we?
A The brokerage reports --
Q They're not here.
A They're not here, but they have been reviewed in
the past. And since I haven't heard a single thing about
that issue since 2014, I believe that it was accepted that
that -- that what I was saying was true because it hasn't
been part of any [of] our conversations since I started
walking this courtroom. I mean that's just me -- that's
an assumption on my part.
....
Q But you're living in a $500,000 house,
right?
A But my mother -- my mother, sorry. It's my
wife's house. She's working full time and she is
supplying all of our living expenses right now to her
pain actually. But she is the one that's supporting my
family. I am surviving enough to keep my credit cards
paid and frantically working to get the rest done so that
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she no longer carries that burden. She bought the house
with her money. It's her mortgage. She pays it. And
everything that we've done in the last two years has
been through her. It's been very difficult. And I'm still
working on this solution so that everybody -- so that the
State can be paid fully, 100 percent, interest, everything
because I'm an honest person and I want to do it
correctly.
Q And yet, you didn't bring any of the
documents that you claim support everything that you
said. You didn't bring one of those documents to put
before this jury so that they could review and
corroborate what you just said, right?
A That's correct. And I --
[(emphasis added).]
In closing, trial counsel only touched upon the lack of documentation
developed during cross-examination to make the point that the State bears the
burden of proof. The prosecutor attacked defendant's credibility because of the
lack of documentation—corroboration—of his statements:
Thank you, Your Honor. Good afternoon, ladies
and gentlemen. First of all, I'd like to apologize to you.
I raised my voice when I talked to my colleague Mr.
Turner. I didn't mean to do that. But sometimes when
you hear things from the witness stand, it evokes
reaction. The reaction, it's an interesting reaction. I
think maybe you might have caught it. Mr. Turner got
up here and told you a whole bunch of things.
And His Honor's going to instruct you that with
regard to credibility, one of the things that you have to
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consider is corroboration. The burden is not being
shifted from the State. The State has the burden of
proof in this case and we welcome that. Our
constitution demands it and it's our job to give you
evidence that supports a finding of guilt in this case.
But when you hear testimony and you have one
witness who provides document after document after
document and can back up everything that he says with
documents, you have another witness who is on trial for
a serious offense and says, oh, I don't have anything. I
didn't think I would need it, you can weigh that in
determining the credibility of each of those witnesses.
And that's your job as jurors, to weigh the credibility.
There was something very telling about what Mr.
Turner said in his testimony. He said, oh, my wife
could cover the taxes for the property of 9 Runyan
Place. Remember that? And I showed him her 2008
tax return that she only had $1,200 of reported income.
He said, oh, no, no, no, there's some non-taxable funds
that would support paying the taxes. Right? Remember
that he made a big to-do about that?
One thing you might have caught, he said well,
we had to sell the house because we couldn't pay the
taxes. Really? First he says, oh, no, it wasn't -- I didn't
need to separate the house from my wife because she
could cover the taxes herself to oh no, we had to sell
the house for taxes, and oh, we weren't paying the taxes.
Which is it? That's a tell. That's a tell that somebody
is not being straight with you about what's really going
on.
And let's take a step back. Mr. Turner gets in
front of you and he tells you that oh, I had $3 million in
loans out. $3 million in loans, that's a lot of money. It's
a lot of money. He doesn't give you any explanation.
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He says it's for his [kids'] college. Okay, for those of
you who have kids in college, you realize that that could
be a lot of money. $3 million, it's not. That money had
to have been used for something during the marriage.
And now when the piper comes to call, assuming
he's telling you -- because we have no corroboration of
what he's telling you. Nothing.
We noted in our earlier decision that defendant claimed his attorney did
not ask him for documents verifying his anticipated testimony, nor prepare him
for cross-examination. Turner, slip op. at 12. Indeed, over the eight and one-
half hours billed by trial counsel, only one hour and forty minutes were spent
outside the courtroom in trial preparation. Ibid. Acknowledging that defendant
had raised a "colorable claim," we nonetheless deferred addressing the issue of
ineffective assistance of counsel to a petition for post-conviction relief (PCR).
Ibid. We did so for the obvious reason—in order to afford defense counsel the
opportunity to explain her strategy, and to ensure that defendant actually had the
documentary evidence available to support his statements. Ibid. Certainly,
defendant's production of documents to corroborate his statements, and perhaps
even the testimony of other witnesses, such as a financial expert, would have
aided the jury in its factfinding function. The thrust of the relevant section of
our prior opinion was that the prosecutor effectively challenged defendant's
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credibility—a technique that may have been less so if defendant had paperwork
to back up what he said. Id. at 12-13.
The judge denied defendant's PCR petition because, despite the fact he
was only billed for an hour and forty minutes of trial preparation, the standard
was not the length of time spent in trial preparation, but the development of trial
strategy and exercise of reasonable professional judgment. Additionally, the
trial judge had asked defendant if he intended to testify and felt prepared, to
which he responded in the affirmative.
Furthermore, the court did not consider the failure to produce any
documents to corroborate defendant's testimony to have affected the outcome.
Since there was no dispute that defendant owed the taxes, failed to pay them,
and changed his filing status from married filing jointly to married filing
separately, he considered the State's proofs to be overwhelming. He further
concluded it was not error for counsel to have failed to call an expert with regard
to defendant's tax status, as the State did not dispute the tax consequences of the
status change, but "the intention of [defendant] by filing in that manner."
Now on appeal, defendant contends the court erred in failing to grant an
evidentiary hearing as follows:
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POINT I
DEFENDANT RECEIVED INEFFECTIVE
ASSITANCE [sic] OF COUNSEL AND AS A
RESULT DEFENDANT'S RIGHTS WERE
PREJUDICED UNDER THE STRICKLAND V.
WASHINGTON TEST AND THE TRIAL COURT
ERRED IN NOT GRANTING AN EVIDENTIARY
HEARING INTO THE MATTER.
a. Trial counsel failed to adequately consult with
Petitioner prior to trial and failed to inquire about
documents which Petitioner had in his possession
which supported his claims.
b. Trial counsel was ineffective by failing to obtain
an expert in taxation to support his change in tax filing
status.
c. Trial counsel was ineffective for failing to
adequately consult with Petitioner regarding his
potential testimony at trial and for failing to adequately
prepare him for said testimony.
I.
We apply the familiar two-prong Strickland test, adopted in State v. Fritz.
Strickland v. Washington, 466 U.S. 668, 685 (1984); State v. Fritz, 105 N.J. 42,
58 (1987). The first question is whether counsel's performance fell below an
objective standard of reasonableness. Strickland, 466 U.S. at 688. We presume
that trial counsel acted reasonably and evaluate counsel's performance without
the benefit of hindsight. State v. Pierre, 223 N.J. 560, 579 (2015). Next, we ask
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whether the alleged ineffectiveness would have "materially affected the jury's
verdict." State v. Marshall, 148 N.J. 89, 234-35 (1997). In order to satisfy the
Strickland second prong, a "convicted defendant 'must show there is a
reasonable probability that, but for counsel's unprofessional errors, the result of
the proceeding would have been different. A reasonable probability is a
probability sufficient to undermine confidence in the outcome.'" Pierre, 223
N.J. at 583 (quoting Strickland, 466 U.S. at 694).
We view the evidence in the light most favorable to defendant when
deciding whether he has established a prima facie case of ineffective assistance
of counsel. State v. Porter, 216 N.J. 343, 354 (2013). Such a showing is made
where "the PCR claim has a reasonable probability of being meritorious." State
v. Jones, 219 N.J. 298, 311 (2014).
Because the judge did not conduct oral argument, rendering a decision just
on the briefs, we do not know what documentary evidence he considered. The
judge's decision made no mention of our discussion of defendant's request for
PCR. Essentially, the judge reasoned that if defendant was not denying his
failure to pay the tax, no document would have helped him to convince the jury
of his innocence. We disagree.
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The jury, according to the judge who decided the petition, found that
defendant changed his return to married filing separately for the purpose of tax
evasion, not for a legitimate reason. Had defendant produced the prenuptial
agreement, and an expert, the jury may have declined to convict. The jury may
have found that defendant's decision to file as married filing separately was a
means of implementing his contractual commitment to his wife.
As we also noted in our earlier decision, the prosecutor's questioning of
defendant, entirely legitimate, effectively destroyed his credibility. We said,
"left unchallenged, defendant's uncorroborated testimony, much of which was
arguably based on hearsay evidence, could have created reasonable doubt in the
State's case. Of course, it is for just that reason that defendant's ineffective
assistance claim may have merit if such documentation exists." Turner, slip op.
at 13.
The PCR judge did not explain why even if the jury found defendant to be
a credible witness, it would not have affected the verdict. If the jury considered
defendant to be a credible witness, a view that would have been significantly
bolstered by documentation, it may have "materially affected the jury's verdict."
Marshall, 148 N.J. at 234.
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Defendant's testimony was his only proof. His credibility was absolutely
key. He is therefore entitled to an evidentiary hearing in order to explore
counsel's decision not to produce written corroboration of his claims and an
expert witness.
In the absence of a hearing, counsel's preparation is not clear. Certainly,
an hour and forty minutes in trial preparation does not seem like enough where
the amounts in question were so substantial and arguably relate to circumstances
beyond the ken of the average juror.
Reversed and remanded for a hearing.
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