State v. Castile , 2014 Ohio 1918 ( 2014 )

[Cite as State v. Castile, 2014-Ohio-1918.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
State of Ohio, :
Plaintiff-Appellee, :
No. 13AP-10
v. : (C.P.C. No. 11CR-07-3857)
Isaac J. Castile, III, : (REGULAR CALENDAR)
Defendant-Appellant. :
D E C I S I O N
Rendered on May 6, 2014
Ron O’Brien, Prosecuting Attorney, and Michael P. Walton,
for appellee.
Sam B. Weiner, for appellant.
APPEAL from the Franklin County Court of Common Pleas
KLATT, J.
{¶ 1} Defendant-appellant, Isaac J. Castile, III, appeals from a judgment of
conviction and sentence entered by the Franklin County Court of Common Pleas. For the
following reasons, we reverse that judgment and remand the matter for resentencing.
I. Factual and Procedural Background
{¶ 2} On July 21, 2011, a Franklin County Grand Jury indicted appellant with
three counts of securities fraud, in violation of R.C. 1707.44(G), three counts of false
representations in the sale of securities, in violation of R.C. 1707.44(B)(4), three counts of
the sale of unregistered securities, in violation of R.C. 1707.44(C)(1), and three counts of
theft, in violation of R.C. 2913.02. The charges arose out of different transactions in
which appellant accepted money from three Ohio citizens: John Prater, Jennette Stevens,
No. 13AP-10 2
and Raymond Smith pursuant to offerings from the Metropolitan Enhancement Treasure-
Backed Investements, Ltd. ("METBI"). Appellant was one of the managers of METBI.
Appellant entered a not guilty plea to the charges and proceeded to a jury trial.
{¶ 3} At trial, Harvey McCleskey, Enforcement Attorney for the Ohio Division of
Securities ("the division"), testified about his investigation of appellant. The division's
investigation of appellant began in late 2006 or early 2007 after it received complaints
from out-of-state investors. McCleskey learned of Prater, Stevens, and Smith during the
investigation. Specifically, Stevens invested $6,000 with appellant in 2006 and received a
10 percent Convertible Subordinated Debenture from METBI, which is a security that
entitled her to receive her principal plus interest at the end of the stated term. Prater
initially invested $250,000 with appellant for a similar debenture in 2005 and rolled that
investment over for another year in 2006. Smith invested $5,000 in another similar
investment in 2008.
{¶ 4} A Private Placement Memorandum ("PPM") that went along with the
debentures contained details about the investment. The PPM provided that 100 percent
of the proceeds available after expenses of the offering would be used to purchase treasury
bills which would then be used to acquire bank guarantees. Those guarantees would be
swapped in a repurchase agreement for fixed rate commercial notes. The PPM also
warned investors that the securities were speculative and involved a high degree of risk.
McCleskey obtained bank records from appellant and METBI and looked for purchases of
treasury bills in accordance with the PPM. McCleskey could not find any evidence that
appellant purchased treasury bills with money he received from Prater, Stevens, and
Smith. Upon his review of the financial records, McCleskey concluded that appellant was
collecting money from investors and using that money to pay off other investors as well as
his own personal expenses in what McCleskey termed a Ponzi scheme. (Tr. 113-14.)
{¶ 5} Each of the three victims testified about making what they thought were
investments with appellant. Although Stevens did receive a small portion of her
investment back, neither Prater nor Smith received any of their investments back.
{¶ 6} The jury found appellant guilty of all counts except one of the theft counts.
The trial court sentenced appellant accordingly.
No. 13AP-10 3
II. The Appeal
{¶ 7} Appellant appeals and assigns the following errors:
[1.] When the trial court actively participates in plea
negotiations before trial, the fair trial rights of the accused are
violated, contra the Fourth, Fifth, Sixth, and Fourteenth
Amendments to the Constitution and Article I, Section 10 of
the Ohio Constitution.
[2.] (A) When the trial court responds to a jury question
during deliberations, that emphasizes conviction, the accused
is denied his fair trial and due process rights under the Sixth
and Fourteenth Amendments to the Constitution.
(B) The trial court directed a verdict in favor of the
prosecution when it gave an instruction in answering a jury
question, contra the Fifth, Sixth, and Fourteenth
Amendments to the Constitution.
[3.] (A) The trial court erred when it imposed consecutive
sentences without making the required findings required by
statute.
(B) The trial court erred when it failed to merge the two
securities fraud counts that involved the same conduct and a
single state of mind of the accused, contra the double jeopardy
clause of the Fifth, and Fourteenth Amendments to the
Constitution.
[4.] When the state, through the testimony of a primary
witness, introduces prejudicial inadmissible evidence, said
misconduct results in violation of the Fifth, Sixth, and
Fourteenth Amendments to the Constitution of the accused.
[5.] When the record established judicial bias, from the pre-
trial proceedings, during the course of the jury trial, and at the
sentencing hearing, the result is a structural error contra the
Fifth, Sixth, and Fourteenth Amendment rights of the
accused.
{¶ 8} For analytical clarity, we address the assignments of error out of order.
III. Appellant's First and Fifth Assignments of Error–Judicial Conduct
{¶ 9} These assignments of error focus on the trial court's conduct in these
proceedings. Specifically, appellant claims that the trial court violated his fair trial rights
No. 13AP-10 4
by actively involving himself with the plea negotiations before trial and because of his
"established judicial bias." We reject both claims.
A. Involvement in Plea Negotiations
{¶ 10} Appellant alleges that the trial court improperly participated in plea
negotiations before his trial. We disagree.
{¶ 11} Appellant supports his argument with extensive reliance on the Supreme
Court of Ohio's decision in State v. Byrd, 63 Ohio St.2d 288 (1980). Reliance on that case
is misplaced, however, because the defendant in Byrd entered a guilty plea after active
negotiations led by the trial court. The court held that:
Although this court strongly discourages judge participation
in plea negotiations, we do not hold that such participation
per se renders a plea invalid under the Ohio and United States
Constitutions. Such participation, however, due to the judge's
position in the criminal justice system presents a great
potential for coerced guilty pleas and can easily compromise
the impartial position a trial judge should assume.
As a consequence we hold that a trial judge's participation in
the plea bargaining process must be carefully scrutinized to
determine if the judge's intervention affected the
voluntariness of the defendant's guilty plea. Ordinarily, if the
judge's active conduct could lead a defendant to believe he
cannot get a fair trial because the judge thinks that a trial is a
futile exercise or that the judge would be biased against him at
trial, the plea should be held to be involuntary and void under
the Fifth Amendment and Section 10, Article I of the Ohio
Constitution.
Id. at 293-94.
{¶ 12} Byrd and its progeny address the potentially coercive effect of a trial court's
involvement in plea negotiations when determining the voluntariness of a guilty plea.
State v. Finroy, 10th Dist. No. 09AP-795, 2010-Ohio-2067, ¶ 6. Here, appellant did not
plead guilty but, instead, proceeded to trial. Thus, his argument that the trial court
violated the principle of law discussed in Byrd is misplaced. State v. Stadmire, 8th Dist.
No. 81188, 2003-Ohio-873, ¶ 16 (Byrd and similar cases inapplicable because defendant
did not enter guilty plea but went to trial).
No. 13AP-10 5
B. Judicial Bias
{¶ 13} Appellant also argues that the trial court was biased. Under R.C.
2701.03(A), when a party believes that the trial judge is biased, the proper avenue for
redress is filing an affidavit of disqualification. See Ohio Constitution, Article IV, Section
5(C). " 'An affidavit of disqualification must be filed as soon as possible after the incident
giving rise to the claim of bias and prejudice occurred or affiant becomes aware of
circumstances that support disqualification. A party may be considered to have waived its
objection to the judge when the objection is not raised in a timely fashion and the facts
underlying the objection have been known to the party for some time.' " State v. Were,
118 Ohio St.3d 448, 2008-Ohio-2762, ¶ 56, quoting In re Disqualification of O'Grady, 77
Ohio St.3d 1240, 1241 (1996). Because appellant failed to file an affidavit of
disqualification against the trial court judge, he forfeited his complaint on appeal.
{¶ 14} For all these reasons, we overrule appellant's first and fifth assignments of
error.
IV. Appellant's Fourth Assignment of Error–Prosecutorial Misconduct
{¶ 15} Appellant argues that the state engaged in a pattern of calculated
misconduct by soliciting the admission of inadmissible evidence throughout McCleskey's
testimony. We disagree.
{¶ 16} The standard of review for prosecutorial misconduct is whether the
comments and questions by the prosecution were improper and, if so, whether they
prejudiced appellant's substantial rights. State v. Treesh, 90 Ohio St.3d 460, 480 (2001).
"The touchstone of analysis 'is the fairness of the trial, not the culpability of the
prosecutor.' " State v. Gapen, 104 Ohio St.3d 358, 2004-Ohio-6548, ¶ 92, quoting Smith
v. Phillips, 455 U.S. 209, 219 (1982). Prosecutorial misconduct will not provide a basis for
reversal unless the misconduct can be said to have deprived the appellant of a fair trial
based on the entire record. State v. Lott, 51 Ohio St.3d 160, 166 (1990).
{¶ 17} Appellant first notes McCleskey's testimony regarding alleged out-of-state
victims of appellant's conduct. During the state's examination of McCleskey, the
prosecutor asked him how appellant came to the attention of the division. McCleskey
commented that the division had received complaints from out-of-state investors. (Tr.
43.) The trial court overruled appellant's objection but instructed the witness to "stay in
No. 13AP-10 6
the generality of why we're here." (Tr. 43.) During cross-examination, appellant's trial
counsel asked McCleskey if he started the investigation into appellant's conduct as the
result of a complaint filed by Prater. McCleskey replied again that he began the
investigation in 2007 as a result of complaints from out-of-state investors. (Tr. 119.) Trial
counsel then noted that McCleskey did not refer his investigation to the prosecutor's office
until 2011. On re-direct, the prosecution asked McCleskey to explain the delay that
occurred between the beginning of the investigation in 2007 and the referral in 2011.
McCleskey explained that part of the delay occurred because of the out-of-state
complaints. (Tr. 172.)
{¶ 18} Appellant also argues that the prosecutor improperly elicited McCleskey's
testimony that appellant was arrested and briefly jailed during the investigation of this
case as a result of appellant's failure to comply with a subpoena the division issued in
2007 and that appellant requested an attorney after the service of the subpoena. (Tr. 174-
75.) This testimony was elicited by the prosecutor to explain the four-year delay between
the beginning of the investigation in 2007 and the referral in 2011.
{¶ 19} In essence, appellant is claiming that McCleskey's responses to the
prosecutor's questions were improper, not that the prosecutor's questions themselves
were improper. This is not grounds for prosecutorial misconduct. The prosecutor's
questions were not improper. The prosecutor simply asked McCleskey to explain why the
division investigated appellant and why there was a delay in the investigation–a delay that
appellant's own trial counsel brought to the jury's attention. The prosecutor did not seek
to elicit any details about the out-of-state complaints, the subpoena, or appellant's arrest.
{¶ 20} Further, the trial court twice provided the jury with a limiting instruction
regarding McCleskey's testimony. The instruction regarding the out-of-state complaints
warned the jury to only consider them "as to why [McCleskey] did something. * * * They
are not before you as an issue. You're not getting any evidence on those, so the mere fact
that they have complainants in other states, you are not to take into consideration any
other factor other than, of course, why [McCleskey] did something." (Tr. 173.) Then, after
the testimony regarding appellant's arrest, the trial court instructed the jury "to disregard
testimony about the warrant and what happened in the civil proceeding. It has nothing to
do with the factual issues in this case. You are directed to disregard it. * * * [T]he fact that
No. 13AP-10 7
State Highway Patrol arrested him has nothing to do with this, had nothing to do with
your indictment and they are to disregard that fact." (Tr. 175-76.) Such a limiting
instruction reduces the risk of prejudice as the result of any alleged prosecutorial
misconduct. See Columbus v. Aleshire, 187 Ohio App.3d 660, 2010-Ohio-2773, ¶ 46-47
(10th Dist.) (rejecting claim of prosecutorial misconduct, in part because limiting
instruction would have cured any prejudicial affect of alleged improper comment); see
also State v. Wells, 5th Dist. No. 2001CA00249 (Feb. 25, 2002).
{¶ 21} Having found no prosecutorial misconduct, we overrule appellant's fourth
assignment of error.
V. Appellant's Second Assignment of Error–The Trial Court's Answer to Jury
Question
{¶ 22} Appellant argues in his second assignment of error that the trial court erred
in its response to a jury question. We disagree.
{¶ 23} Generally, a trial court enjoys discretion to determine how to respond to a
jury question. State v. Carter, 72 Ohio St.3d 545, 553 (1995). A reversal of a conviction
based upon a trial court's response to such a request requires a showing that the trial
court abused its discretion. Id.; State v. Young, 10th Dist. No. 04AP-797, 2005-Ohio-
5489, ¶ 35. Although an abuse of discretion is typically defined as an unreasonable,
arbitrary, or unconscionable decision, State v. Beavers, 10th Dist. No. 11AP-1064, 2012-
Ohio-3654, ¶ 8, we note that no court has the authority, within its discretion, to commit
an error of law. State v. Akbari, 10th Dist. No. 13AP-319, 2013-Ohio-5709, ¶ 7, citing
State v. Beechler, 2d Dist. No. 09-CA-54, 2010-Ohio-1900, ¶ 70.
{¶ 24} During its deliberations, the jury asked the trial court if "[appellant had] a
duty to disclose he was under investigation?" (Tr. 405.) The trial court provided the
following answer to the question: "If you find that he knew he was under investigation at
the time of the sale then you can consider: If it is a material factor in the investor
determination to purchase, please see the definition of 'material.' See page 7 of the
instruction." (Tr. 414.) Appellant objected to the response, arguing that the issue of this
nondisclosure was not alleged in his indictment and was never "part of the case." (Tr.
413.)
No. 13AP-10 8
{¶ 25} Appellant argues that the trial court's response "essentially instructed them
that he was guilty" and "in essence directed a verdict in favor of the prosecution."
(Appellant's brief, at 28, 30.) While the rationale for appellant's argument is not clear to
this court, it appears that appellant claims the trial court's response instructed the jury
that being under investigation was a material factor. We disagree.
{¶ 26} We first reject appellant's claim that nondisclosures were never part of this
case. Appellant faced counts of securities fraud in violation of R.C. 1707.44(G). Fraud in
that context refers to both affirmative misrepresentations as well as nondisclosures where
there is a duty to disclose. State v. Warner, 55 Ohio St.3d 31, 53-54 (1990). To address
appellant's argument, the trial court's response did not instruct the jury that the
investigation was a material factor. The response indicated that if the jury found that
appellant knew he was under investigation, then the jury could consider whether that
nondisclosure was material to the decision to purchase the investment. The response
correctly allowed the jury, as the trier of fact, to determine whether appellant's failure to
disclose that he was under investigation was material or not. Accordingly, the trial court
did not abuse its discretion in its response to the jury's question and we overrule
appellant's second assignment of error.
VI. Appellant's Third Assignment of Error–Sentencing Issues
{¶ 27} Appellant takes issue with two aspects of his sentencing. First, he argues
that the trial court failed to make the required findings in order to sentence him to
consecutive sentences pursuant to R.C. 2929.14(C)(4). Upon a review of the sentencing
hearing, we agree. Nevertheless, the state argues that the trial court did not need to make
those findings because appellant committed his offenses before the effective date of the
reenactment of that statute in 2011 and that a failure to make the findings is not plain
error. This court has previously rejected both of the state's arguments. State v. Simms,
10th Dist. No. 13AP-299, 2013-Ohio-5142, ¶ 10. Therefore, we sustain this portion of
appellant's third assignment of error.
{¶ 28} Second, he argues that the trial court erred by not merging two of his
convictions for securities fraud for purposes of sentencing. We disagree.
{¶ 29} At sentencing, appellant did not request the merger of these two offenses
and therefore has forfeited this argument on appeal absent plain error. State v.
No. 13AP-10 9
McClurkin, 10th Dist. No. 11AP-944, 2013-Ohio-1140, ¶ 51; State v. Elmore, 111 Ohio
St.3d 515, 2006-Ohio-6207, ¶ 127. A trial court commits plain error, however, when it
imposes multiple sentences for allied offenses of similar import which should have been
merged. State v. Gibson, 10th Dist. No. 10AP-1047, 2011-Ohio-5614, ¶ 47, citing State v.
Underwood, 124 Ohio St.3d 365, 2010-Ohio-1, ¶ 31.
{¶ 30} R.C. 2941.25, Ohio's multiple count statute, provides:
(A) Where the same conduct by defendant can be construed to
constitute two or more allied offenses of similar import, the
indictment or information may contain counts for all such
offenses, but the defendant may be convicted of only one.
(B) Where the defendant's conduct constitutes two or more
offenses of dissimilar import, or where his conduct results in
two or more offenses of the same or similar kind committed
separately or with a separate animus as to each, the
indictment or information may contain counts for all such
offenses, and the defendant may be convicted of all of them.
{¶ 31} To determine whether offenses are allied and of similar import and
therefore subject to merger, "the question is whether it is possible to commit one offense
and commit the other with the same conduct, not whether it is possible to commit one
without committing the other. * * * If the offenses correspond to such a degree that the
conduct of the defendant constituting commission of one offense constitutes
commission of the other, then the offenses are of similar import." State v. Johnson, 128
Ohio St.3d 153, 2010-Ohio-6314, ¶ 48, citing State v. Blankenship, 38 Ohio St.3d 116,
119 (1988); Gibson at ¶ 48-49.
{¶ 32} If the offenses can be committed by the same conduct, then "the court
must determine whether the offenses were committed by the same conduct, i.e., 'a single
act, committed with a single state of mind.' " Johnson at ¶ 49, quoting State v. Brown,
119 Ohio St.3d 447, 2008-Ohio-4569, ¶ 50. If the offenses are committed separately, or
if the defendant has separate animus for each offense, then, according to R.C.
2941.25(B), the offenses will not merge. Johnson at ¶ 51. However, if the answer to both
questions is in the affirmative, then the offenses are allied offenses of similar import and
will be merged. State v. Taylor, 10th Dist. No. 10AP-939, 2011-Ohio-3162, ¶ 38;
Johnson at ¶ 50.
No. 13AP-10 10
{¶ 33} Appellant argues that the two convictions for securities fraud involving
Prater's investment of $250,000 should have merged because the same $250,000
investment was the basis for each conviction. The state argues that the two convictions
were based on separate conduct and done with separate animus. We agree. Count one
alleges that the fraud took place on or about July 26, 2005, when Prater initially invested
the money with appellant. That investment matured on July 26, 2006. Count two alleges
that the fraud took place on or about July 26, 2006, when Prater rolled over his initial
investment for another year. The fraud appellant committed in these two counts, be it
either affirmative misrepresentations or nondisclosures, were separate and occurred on
different dates. State v. Copeland, 12th Dist. No. CA2003-12-320, 2006-Ohio-5899, ¶ 95
(separate misrepresentations in violation of R.C. 1701.44(B)(4) made to investors do not
merge for purposes of sentencing). Thus, the two offenses, committed a year apart from
each other, were not committed by the same conduct and do not meet the first test for
merger under Johnson. Accordingly, we reject appellant's claim of merger.
{¶ 34} Because the trial court failed to make the required findings to impose
consecutive sentences under R.C. 2929.14(C)(4), we sustain that portion of appellant's
third assignment of error. We overrule the remaining portions of the third assignment of
error.
VII. Conclusion
{¶ 35} In conclusion, we sustain in part and overrule in part appellant's third
assignment of error. We overrule appellant's remaining assignments of error. This case is
reversed and remanded to the Franklin County Court of Common Pleas for resentencing.
Judgment reversed;
case remanded for resentencing.
BROWN and CONNOR, JJ., concur.