United States v. Jeffrey Perry

Case: 11-50900 Document: 00512317300 Page: 1 Date Filed: 07/23/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
July 23, 2013
No. 11-50900
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff - Appellee
v.
JEFFREY C. PERRY,
Defendant - Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 5:09-CR-562-1
Before HIGGINBOTHAM, CLEMENT, and PRADO, Circuit Judges.
PER CURIAM:*
Jeffrey Perry was convicted of ten counts of wire fraud. He contends that
the parol evidence rule requires his convictions be set aside. Because the
government is not seeking to enforce an inconsistent or prior agreement in this
criminal wire-fraud prosecution, we disagree.
I.
A federal indictment alleged that Perry “claimed to own the rights to a
process for cultured marble material he at various times called ‘Culture Pro.’”
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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No. 11-50900
It explained that Perry devised a scheme to defraud, telling his victims “that he
would use their invested money for product testing, equipment and material
purchases, marketing, business facilities, and other expenditures related to
making Culture Pro a marketable commodity.”
Following a jury trial, Perry was convicted of ten counts of wire fraud, each
a violation of 18 U.S.C. § 1343. He appeals, challenging the jury instructions and
the sufficiency of the evidence supporting his convictions. We consider each
contention in turn.
II.
Perry first argues that the district court reversibly erred by not instructing
the jury about the parol evidence rule.1 “We review challenges to jury
instructions by determining ‘whether the court’s charge, as a whole, is a correct
statement of the law and whether it clearly instructs jurors as to the principles
of law applicable to the factual issues confronting them.’”2
Perry relies on Texas law, which provides that “[w]hen parties have
concluded a valid integrated agreement with respect to a particular subject
matter, the [parol evidence] rule precludes the enforcement of inconsistent prior
or contemporaneous agreements.”3 Although that rule is “not really a rule of
evidence but rather a substantive rule from the law of contracts,” it requires the
“exclu[sion of] evidence of prior or contemporaneous negotiations and
representations that are introduced to vary, add to, or contradict the terms of a
1
Perry requested this instruction: “Under the law, it is assumed that the formal
written contract reflects the parties’ minds at a point of maximum resolution and, hence, that
duties and restrictions that do not appear in the written document, even though apparently
accepted at an earlier stage, were not intended by the parties to survive.”
2
United States v. McKinney, 53 F.3d 664, 676 (5th Cir. 1995) (quoting United States v.
Stacey, 896 F.2d 75, 77 (5th Cir. 1990)).
3
F.D.I.C. v. Wallace, 975 F.2d 227, 229 (5th Cir. 1992) (quoting Hubacek v. Ennis State
Bank, 159 Tex. 166, 170 (1958)) (internal quotation marks omitted).
2
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valid written instrument, which the rule presumes embodies the complete
agreement between the parties.”4
The parol evidence rule “is binding only between those persons who are
parties to the contract or their privies, and does not apply in this case where the
controversy is between the government and a party to the contract.”5 In a
criminal fraud prosecution, the government seeks enforcement of the United
States’s criminal code—not enforcement of an “inconsistent prior or
contemporaneous agreement[].”6
The inapplicability of the parol evidence rule in this case is sensible. The
parol evidence rule aims in part to “ensur[e] that the contracting parties,
whether as a result of miscommunication, poor memory, fraud, or perjury, will
not vary the terms of their written undertakings, thereby reducing the potential
for litigation.”7 The risk of fraud is heightened in the civil context, where parties
to a contract have a profit motive to fib—and need only convince a factfinder of
their story by a preponderance of the evidence.
Because the parol evidence rule is not applicable here, the district court
was undoubtedly correct to deny Perry’s requested jury instruction. The only
remaining question is whether sufficient evidence supports his convictions.
4
Harville Rose Serv. v. Kellogg Co., 448 F.2d 1346, 1349 (5th Cir. 1971).
5
Shale v. United States, 388 F.2d 616, 618–19 (5th Cir. 1968) (citation omitted)
(internal quotation marks omitted); see also United States v. Schmidt, 229 F.3d 1148, at *6
(5th Cir. 2000); United States v. Kreimer, 609 F.2d 126, 132–33 (5th Cir. 1980); United States
v. Martel, 792 F.2d 630, 635 (7th Cir. 1986); Mesch v. United States, 407 F.2d 1286, 1288–89
(10th Cir. 1969); Gibson v. United States, 268 F.2d 586, 589 (D.C. Cir. 1959); cf. Sanders v.
United States, 396 F.2d 221, 222 (5th Cir. 1968) (per curiam); compare United States v. Ballis,
28 F.3d 1399, 1410 (5th Cir. 1994) (discussing plea agreements).
6
Wallace, 975 F.2d at 229.
7
11 R. Lord, Williston on Contracts § 33:1 (4th ed. 2012) (footnotes omitted).
3
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III.
A false statement can support a § 1343 conviction only if the alleged victim
considered the false statement to be material.8 Perry argues that he had written
agreements with his alleged victims; that those written agreements did not
discuss purchases and testing; and that, as a result, purchases and testing were
not material to his alleged victims. He contends that the evidence supporting his
convictions is insufficient “under [the parol evidence rule’s] presumption” that
“a written agreement[] by all of the parties encompassed all their
understandings.” To the extent Perry intends to argue that misrepresentations
made to wire fraud victims can only be “material” if they would constitute
binding terms of a contract, we must reject his argument. He cites no authority
for this novel contention, nor does he provide any compelling argument for
creating such an equivalence. “Material” false statements are not limited to
those representations that could be enforced in a contract dispute; as the jury
instructions noted, “material” false statements are merely those that “[have] a
natural tendency to influence, or [are] capable of influencing, the decision of the
person to whom [they are] addressed.” In any event, Perry never disputes that
if the parol evidence rule is inapplicable in his case, sufficient evidence supports
his convictions.9 Because the rule does not apply, this argument lacks force.
***
As the parol evidence rule does not apply here, we AFFIRM.
8
Neder v. United States, 527 U.S. 1, 25 (1999).
9
Elsewhere in his brief, he explained that “[a]s with Appellant’s First Issue, central to
Appellant’s defense on the merits is the application of the Parol Evidence Rule” and contended
that“[u]nder the Parol Evidence Rule, the evidence is simply insufficient for a rational trier
of fact to have found beyond a reasonable doubt that the [purchasing and testing at issue] was
material to the investors.”
4