United States v. Robert v. Steinhilber

484 F.2d 386, 1973 U.S. App. LEXIS 8151

• Court: Court of Appeals for the Eighth Circuit
• Decided: August 29, 1973
• Docket: 73-1056
• Status: Published

Opinions

ROSS, Circuit Judge.

Robert V. Steinhilber appeals his conviction, by a jury, of violating the provisions of 15 U.S.C. § 1717. The indictment alleged that Steinhilber knowingly and willfully made untrue statements of a material fact in a “Statement of Record” filed with the Department of Housing and Urban Development, an agency of the United States of America. The principal issues on appeal are whether the evidence was sufficient to prove that the statements were false, and, whether ¿the evidence was sufficient to prove that Steinhilber “knowingly and willfully” made false statements. Finding the evidence insufficient to prove that Steinhilber “knowingly and willfully” made false statements, we reverse and order the entry of a judgment of acquittal.

The two count indictment charged that on May 23, 1969, and May 25, 1969, Steinhilber made identical misrepresentations, relative to the housing development he was involved in, to the Department of Housing and Urban Development. In a “Statement of Record” filed with the Government, Steinhilber was asked to “[s]tate the availability of the water supply and whether the supply will be adequate to serve the anticipated population of the area.” Steinhilber answered, in part, “Current programming by the village calls for the installation of a water tank with a capacity of 304,000 gallons of water. This tank is being constructed and is scheduled for installation this year.”, and “In addition, the village has made arrangements for future use of Lake Winnebago as a source of water and a purification plant is now being built.” (Emphasis supplied.) The Government claims that the emphasized portions of the preceding quotations were false, and were knowingly and willfully made with knowledge of their falsity.

Steinhilber was a developer of a housing development known as Lake Winnebago. Steinhilber was also on the Board of Trustees of the incorporated Village of Lake Winnebago. On March 14, 1969, the Village of Lake Winnebago entered into a contract with Universal Tank & Iron Works, Inc., (Universal) for the construction of a 300,000 gallon above ground water tank. Thereafter “engineering function drawings” and “foundation drawings” were prepared. Steel was ordered for fabrication of the tank. The site for the tank was surveyed, and soil samples were taken and the test results were submitted to Universal. On May 5, 1969, Universal was paid the sum of $2,790. On that same day a letter was written to Universal by a Mr. Hart at the direction of Steinhil-ber which said in pertinent part:

“I am writing to inform you to place the 304,000 gallon water tank on a ‘Hold Stand-by Status’ until further notice. This is required due to labor conditions that now exist in the Kansas City area. . . ■ .

As bad as we would like to try to get the installation work done, there are certain ‘nasty’ aspects of the strike that have required almost all in the home building industry to strictly enforce this ‘shut down’. We will keep you informed as to the earliest possible date for installation.

We do desire to hold this contract in effect and as soon as the labor conditions are settled we will activate the work order for you to proceed. I will return shop drawings tomorrow with related data.”

The letter was received by Universal on May 7, 1969. On June 11, 1969, Universal advised Mr. Hart, by letter, that “with the ‘hold’ status still applicable on this contract, and with no apparent reconciliation of the problem in view, we can only allot to this project a lesser priority in our production schedule and proceed with other work that is unencumbered. . . . ”

Sometime near the 1st of April, 1969, the Village of Lake Winnebago and the Eimco Corporation entered into a contractual relationship whereby Eimco agreed to construct a water purification plant for the Village. The engineering planning of the project was then begun by Eimco. On May 7, 1969, Eimco received a letter from Jack Hart, written at the direction of Steinhilber, and dated May 5, 1969, the pertinent parts of which were almost identical with the letter to Universal quoted above.

On May 9, 1969, Eimco wrote a letter to the Village of Lake Winnebago stating that “[w]e are continuing with the drawings and this particular ‘Hold’ will not interfere with those at all . ” On May 21, 1969, and June 3, 1969, Eimco requested approval of shop drawings. On July 14, 1969, Eimco acknowledged receipt of the shop drawings as approved. Fabrication for the plant was to take approximately four and one-half months, and on September 4, 1969, Eimco directed a wire communication to its Kansas City agent inquiring relative to the Lake Winnebago project : “Please advise status of strike. Our management is anxious to ship as quickly as possible. . . . ” On October 23, 1969, a memo was directed to the Kansas City agent relative to the Lake Winnebago job: “We are waiting for your advice on this job. We now have the equipment manufactured and will be faced with storage charges if we cannot ship. Will the customer accept shipment?”

Neither the water tank nor the water purification plant, which were to work in conjunction with each other, was ever placed at the Lake Winnebago development. From approximately April 1, 1969, to October 1, 1969, there was a' construction labor strike in the Kansas City area.

Sufficiency of the Evidence

As Steinhilber properly concedes, our standard of review with regard to challenges to the sufficiency of the evidence must be that which views the evidence in the light most favorable to the Government, with all the inferences which may be properly drawn therefrom. See, e. g., Glasser v. United States, 815 U.S. 60, 80, 62 S.Ct. 457, 86 L.Ed. 680 (1942). But as we have often said:

“It is true that the government is entitled to the benefit of all reasonable inferences to be drawn from the evidence. However, where the government’s evidence is equally' strong to infer innocence of the crime charged as it is to infer guilt, the verdict must be one of not guilty and the court has a duty to direct an acquittal. . ” United States v. Kelton, 446 F.2d 669, 671 (8th Cir. 1971). Accord, United States v. Williams, 470 F.2d 1339,1343 (8th Cir. 1973).

Throughout the trial of this case both parties attached different meanings to the phrases “being constructed” and “being built”. Steinhilber argued that on the dates the statements were made the construction process had begun, while the Government contended that actual construction had not begun at the time the statements were made.

It is Steinhilber’s contention that the phrases “being constructed” and “being built” are subject to two different meanings and are therefore ambiguous. Consequently, he contends that it was incumbent upon the Government to “negative any reasonable interpretation that would make the defendant’s statement factually correct.” United States v. Dio-go, 320 F.2d 898, 907 (2d Cir. 1963). See also Johnson v. United States, 410 F.2d 38, 45 (8th Cir.), cert, denied, 396 U.S. 822, 90 S.Ct. 63, 24 L.Ed.2d 72 (1969). The Government argues, on the other hand, that the words had only one accepted meaning and therefore it was for the jury to determine whether the statements were false by applying the commonly understood meaning of the terms. See Seymour v. United States, 77 F.2d 577, 584 (8th Cir. 1935).

We note the ambiguity question because it pertains to whether Steinhilber “knowingly and willfully” made false statements. The importance of this problem was aptly pointed out in United States v. Diogo,¹ supra, 320 F.2d at 906 n. 6:

“In prosecutions for . . . false representations the problem of interpreting ambiguous statements is frequently merged into the issue of mens rea. . . . If a defendant has not intended, by his statement, to assert the proposition which the Government has proved to be false, then he cannot ordinarily, of course, be said to have ‘knowingly’ uttered a false statement. ft

It is undisputed that the Government was required to prove that Steinhilber made the statement “knowing” it to be untrue. As early as 1875 the courts in this Circuit recognized that the word “knowingly” meant that the defendant must have a “certain and clear perception of the falsity of the claim made.” United States v. Bittinger, 24 F.Cas. 1150 (No. 14,599) (W.D.Mo.1875). Mr. Justice Blackmun while a member of this Court, has reminded that “carelessness or lack of wisdom is not equivalent to [a] knowledge of falsity . . ..” Jacobs v. United States, 359 F.2d 960, 966 (8th Cir. 1966). And as this Court has emphasized:

“ ‘Often the line between honest belief and purposeful misrepresentation is fine and indistinct, between the two however lies guilt or innocence, and where the evidence is evenly balanced between guilt and innocence, a conviction cannot stand.’ ” Gay v. United States, 408 F.2d 923, 931 (8th Cir.), cert, denied, 396 U.S. 823, 90 S.Ct. 65, 24 L.Ed.2d 74 (1969), quoting Estep v. United States, 140 F.2d 40, 45 (10th Cir. 1943).

In determining whether a statement is made with knowledge of its falsity:

“[i]t is well established that we must look to the meaning intended by the [defendant], rather than to the interpretation of the statements which the . authorities did in fact make, or even to the interpretations which the authorities might reasonably have made. . . .” United States v. Diogo, supra, 320 F.2d 905-906.²

Following these principles, we hold that here the meaning of the words in question was ambiguous and the Government had the burden of negating the claim that the defendant “did not know the falsity of his statement at the time it was made, or that it was the product of an accident, honest inadvertence, or duress.” Bryson v. United States, 396 U.S. 64, 69-70, 90 S.Ct. 355, 359, 24 L.Ed.2d 264 (1969). In our opinion, this burden was not met. Without contradiction, the evidence demonstrated that Steinhilber never intimated or stated prior to making the alleged false statement that the tank and the water plant would not be placed in working order at the development. At that time money had been paid to Universal, surveys of the tank site had been made, soil samples had been taken, steel had been ordered, and engineering and shop drawings had been started. Likewise, with regard to the purification plant, it is clear that engineering and design work continued through the month of May, and significantly it appears that the water purification plant was eventually built.

Of equal significance, we think, is the testimony of the Universal and Eimco officials with regard to the meaning of the words “being constructed” and “being built”. Both officials unequivocally testified, as government witnesses, that such activities as design and engineering drawings were part of the “construction process”. But when the government counsel asked whether Universal or Eimco had actually put together the tank or the water purification plant at the time the statements were made the officials answered in the negative. This further strengthens Steinhilber’s contention that his choice of words was ambiguous, and subject to two meanings.

The Government’s ease primarily rested on the two letters placing the tank and the water purification plant on a “Hold Stand-by Status”. We do not think, however, that these letters have any tendency to prove that Steinhilber “knowingly” lied some two and one-half weeks later when he said the tank was “being constructed” and the “water purification plant” was “being built”. The letter to Universal clearly stated that the contract was not to be cancelled. And importantly the letter spoke essentially of delaying installation, and it indicated that shop drawings would be returned the next day. This evidence, coupled with the fact that Universal did not place the construction of the tank on a lesser 'production priority until June 11, 1969, leads us to the firm conclusion that the construction process could very well have been understood by Steinhilber to be under way on May 23, 1969, and May 25, 1969. Furthermore, the Eimco letter, very similar to the Universal letter, clearly did not stop the “construction process” as understood by Steinhil-ber because two days after receipt of the letter Eimco wrote that the “ ‘hold’ will not interfere” with the continued preparation of the shop drawings. And the evidence indicates that on May 23, 1969, and May 25, 1969, Eimco was continuing to work on the shop drawings.

If this were a contract action, we might be constrained to strictly construe Steinhilber’s words against him. This, however, is a criminal action. Put simply, we do not believe that the Government proved beyond a reasonable doubt that Steinhilber knowingly and willfully made false statements in his answers to the questions.

For the reasons hereinbefore expressed, the judgment of conviction is reversed, and the trial court is ordered to enter a judgment of acquittal.

1 . We are unaware of any reported decisions dealing with the false statement provisions of 15 U.S.C. § 1717. As a consequence, throughout this opinion, we have made reference to decisions based upon other false statement statutes. See, e. g., 18 U.S.C. § 1001. 15 U.S.C. § 1717 differs somewhat from other false statement statutes in that it uses the word “willfully”, but does not also use the word “knowingly”. The jury in this case was instructed that the false statement must be made both “willfully” and “knowingly”. The Government does not challenge the propriety of the instruction. In any event, we think the term “willfully” encompasses the element of “knowingly” for the purposes of this statute.

2 . We obviously do not mean that the jury must accept as conclusive the meaning suggested by the defendant at trial. Rather the inquiry is: what did the defendant mean when he uttered the words?