United States v. Spector

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT

                                 ____________________



        No. 94-1987



                                    UNITED STATES,



                                      Appellant,



                                          v.



                                 MICHAEL R. SPECTOR,



                                 Defendant, Appellee.



                                 ____________________



                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                          FOR THE DISTRICT OF NEW HAMPSHIRE



                   [Hon. Joseph A. DiClerico, U.S. District Judge]
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                                 ____________________



                                        Before



                                Boudin, Circuit Judge,
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                           Campbell, Senior Circuit Judge,
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                      and John R. Gibson,* Senior Circuit Judge.
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            Peter E. Papps, First  Assistant United States Attorney, with whom
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        Paul M . Gagnon, United States Attorney, was on brief for appellant.
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            Douglas  J. Miller,  with whom  Hall,  Morse, Anderson,  Miller  &
            __________________              __________________________________

        Spinella, P.C. was on brief for appellee.
        ______________


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                                     May 26, 1995

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        *Of the Eighth Circuit, sitting by designation.



CAMPBELL,  Senior  Circuit  Judge.   In  the  early
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            1990s, the U.S. Department of Labor began an investigation of



            defendant  Michael Spector  and of  David Murray  and Bernard



            Mintz, suspecting them  of having submitted  false statements



            in connection with an employee  benefit plan.  The government



            notified counsel for all three men that it was conducting the



            investigation  and that it intended  to charge the three with



            criminal violations of 18 U.S.C.   1027 (1988) (ERISA) and 18



            U.S.C.      644   (1988).     Among   the  violations   under



            investigation were  a false statement  allegedly submitted to



            the   department  on  January   20,  1988,  and   an  act  of



            embezzlement allegedly occurring on February 19, 1988.  Since



            the  violations  were  subject  to  a  five-year  statute  of



            limitations, 18 U.S.C.   3282 (1988), the limitations periods



            for  the two violations above  were to expire  on January 20,



            and February 19, 1993, respectively.



                      On January 15, 1993,  defendant Spector and the two



            others  (whom   we  shall  collectively   call  "defendants,"



            although  this  appeal relates  to  Spector  only) asked  the



            government  to delay seeking  an indictment in  order to give



            them more  time to investigate and  additional opportunity to



            persuade  the government  to modify  its position  on certain



            issues.  The defendants entered into a written agreement with



            the government, under which the government agreed not to file



            an  information or to seek  an indictment before February 26,


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1993, in exchange  for the defendants'  agreement to waive  a



            statute  of limitations  defense  for charges  brought on  or



            before  March  5,  1993  (thereby  effectively  extending the



            limitations period  until March  5).  The  agreement provided



            that it would  be effective "upon execution  by all parties,"



            and was in fact signed by all parties.  The agreement went on



            to state "that  further extensions of  this agreement may  be



            agreed to subsequently, but only by a  further writing signed



            by all parties."



                      As the new March 5 deadline approached,  defendants



            again  sought  to extend  the  period  before the  government



            brought an indictment.   Defendants executed another  written



            agreement  on March  5.    Under  the  terms  of  the  second



            agreement, the government stated that  it had not yet brought



            an  indictment  against defendants  and  would  forebear from



            doing  so until April 9,  1993.  In  exchange, the defendants



            agreed to extend the limitations period until April 16, 1993.



            Like the first agreement,  the second agreement provided that



            it would be effective "upon execution  by Murray, Spector and



            Mintz,  and their respective counsel and the United States by



            its  counsel."   However,  unlike the  first agreement,  this



            second  agreement,  though  signed  by defendants  and  their



            counsel, was not signed by counsel for the government.



                      On  April  16, 1993,  the  grand  jury returned  an



            initial twenty-seven count indictment against defendants.  On


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September  1,  1993, the  grand jury  returned a  seven count



            superseding indictment.   Nearly a year later, on  August 15,



            1994,  Spector  moved  to  dismiss  the  two  counts  of  the



            indictment  that  were  based  on  the  false  statement  and



            embezzlement described above.  Spector argued that the second



            extension  of the  statute  of limitations  was not  binding,



            since  it  was not  signed by  the  government.   Without the



            extension provided by  the second agreement, Spector  argued,



            the  two counts were barred by the statute of limitations, as



            they were handed down  after March 5, 1993, the  deadline set



            by the first extension.



                      The  district court  agreed and  dismissed  the two



            counts as time-barred.  Although it found the first extension



            to be binding, the district  court determined that the second



            extension  was  ineffective,   having  been  an  offer   that



            explicitly   required   the   government's    signature   for



            acceptance,  and   not   permitting  alternative   forms   of



            acceptance.  The  court rejected the  government's contention



            that  an  oral  agreement   existed,  holding  that  such  an



            agreement would be contrary to the plain terms of the written



            agreements.     The   district   court   also  rejected   the



            government's argument based upon promissory estoppel, finding



            that any reliance  by the government on  the second extension



            was unreasonable,  given that the  first extension  expressly



            provided that any  additional extensions had to be in writing


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and  signed  by all  parties.   The  government  now appeals,



            pursuant to 18 U.S.C.   3731 (1988).



                      A  statute of  limitations  defense is  a  waivable



            affirmative defense, not a jurisdictional bar to prosecution.



            See Acevedo-Ramos  v. United States,  961 F.2d 305,  307 (1st
            ___ _____________     _____________



            Cir.), cert. denied, 113 S. Ct. 299 (1992).  Failure to raise
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            the defense in  a timely manner can result  in its waiver, as



            can an  unqualified guilty  plea or other,  similar "action[]



            obviously  constitut[ing] a waiver  of the  time limitation."



            Id. at 309.   Most relevantly  for present purposes,  several
            ___



            federal  courts of appeals have held that an individual under



            investigation may,  in order  to delay indictment,  expressly



            waive a statute of limitations defense prior to trial, indeed



            prior to indictment, so long as that waiver is made knowingly



            and  voluntarily.  See, e.g., United States v. Wild, 551 F.2d
                               ___  ____  _____________    ____



            418, 422-24 (D.C.  Cir.), cert. denied, 431 U.S. 916 (1977).1
                                      ____________



            In these cases, like the present, the defendant has typically



            entered   into  a   written  waiver   in  exchange   for  the



            government's agreement  not to indict before  a certain time,



            in hopes  that  further  discussion  may  result  in  a  more



            favorable  disposition or  prevent an  indictment altogether.


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            1.   See  also United  States v.  Del Percio, 870  F.2d 1090,
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            1093-94 (6th  Cir. 1989); United  States v. Meeker,  701 F.2d
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            685, 687-88 (7th  Cir.), cert. denied,  464 U.S. 826  (1983).
                                     ____________

            See  generally  Case  Comment,   Waiver  of  the  Statute  of
            ______________                   ____________________________

            Limitations in Criminal Prosecutions: United States v.  Wild,
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            90 Harv. L. Rev. 1550, 1555 (1977).



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The courts have  enforced such  agreements where  voluntarily



            and  knowingly made,  finding that  they  do not  violate the



            policies underlying the statute of limitations.



                      The issue  in this  appeal is whether  the district



            court  erred in  holding  that, because  of the  government's



            failure to  sign, the second  agreement was not  an effective



            waiver   of  defendant's   rights   under   the  statute   of



            limitations.  It is undisputed  that if the second  agreement



            is found binding, the defendant may not assert his statute of



            limitations  defense.   If not,  however, both  parties agree



            that  the defendant may assert  the defense and  that the two



            counts  of the  indictment were  properly dismissed  as time-



            barred, since they were handed down after the deadline set by



            the first agreement.          Reviewing the  district court's



            decision on  this issue of  law de  novo, Thrifty  Rent-A-Car
                                            ________  ___________________



            System,  Inc. v. Thrifty Cars, Inc., 831 F.2d 1177, 1181 (1st
            _____________    __________________



            Cir. 1987), we sustain the district court's  holding that the



            second  agreement was  ineffective and  did not  constitute a



            waiver  of the  defendant's statute  of  limitations defense.



            The  two agreements  carefully and  explicitly set  forth the



            conditions  under which  the  extensions  of the  limitations



            period  would become  effective.   The first  extension would



            become effective "upon execution  by all parties;" the second



            extension would  become effective "upon  execution by Murray,



            Spector,  and Mintz,  and  their respective  counsel and  the


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United  States by its counsel."   The agreements go so far as



            to  specify that acceptance by one of the defendants would be



            made  by fax.    Both agreements  limited  the extensions  to



            definite time periods.  Further extensions of the limitations



            period  were  permissible, "but  only  by  a further  writing



            signed  by all parties."  One obvious reason for spelling out



            these  requirements in such detail was to remove all doubt as



            to  the exact steps  by which  defendants' partial  waiver of



            rights and the government's agreement to forbear would become



            effective.    Creating  such a  road  map  told both  parties



            precisely what each had to do  and what each would receive in



            exchange,  thus minimizing the risk (or so it might be hoped)



            of  a future dispute over the consummation and meaning of the



            agreement.  Unfortunately, the  government failed to meet the



            explicit   condition  provided   to  effectuate   the  second



            extension:  it failed  to sign  the document.   Thus,  by the



            plain  terms of the  second agreement, the  extension was not



            effective.   Where the parties have so deliberately set forth



            in writing  the conditions necessary to  make their agreement



            effective, we  think it  inadvisable for a  court to  condone



            deviation from  one of the  explicit terms, absent  some good



            reason to do so.



                      We find unpersuasive the government's argument that



            contract or  estoppel principles warrant  enforcement of  the



            agreement,  despite the  government's failure to  comply with


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its plain language.  We assume that principles of contract or



            estoppel may sometimes be useful in analyzing agreements like



            this, cf.  United States  v. Baldacchino,  762 F.2d  170, 179
                  ___  _____________     ___________



            (1st Cir. 1985) ("Though  a matter of criminal jurisprudence,



            plea bargains are subject  to contract law principles insofar



            as  their  application  will  insure the  defendant  what  is



            reasonably  due him.").  But those principles do not help the



            government here.2  The  second agreement expressly called for



            acceptance  of the offer  in the form  of a  signature by the



            government attorney.  It  did not provide for any  other form



            of acceptance,  whether orally3 or through  performance.  See
                                                                      ___



            Restatement (Second) of Contracts   30 (1979).  The defendant



            was entitled not merely to forbearance from indictment, which



            he received, but to have  the government's binding promise to
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            forbear from indicting him,  which he did not receive.   That



            promise provided reassurance and  certainty that he would not



            be  indicted  prior  to the  time  period  set  forth in  the



                                
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            2.   As in United States v. Papaleo, 853 F.2d 16, 19 n.3 (1st
                       _____________    _______

            Cir. 1985), we need  not attempt to decide whether,  when and

            to  what  degree local  contract law  is  or may  strictly be

            applicable to such agreements, since the result here would be

            the same regardless.  



            3.   The government argues that Spector's alleged failure  to

            request  a   signed  copy  of  the   agreement  reflects  his

            understanding that an  agreement existed.   But this is  pure

            speculation.   Just as the record is devoid of any suggestion

            that  the defendant  sought return  of a  signed copy  of the

            contract,  it  is  also devoid  of  any  suggestion that  the

            government ever  informed the defendant that  it accepted the

            terms  of  the  agreement  and  was  going  to  forbear  from

            indicting him.



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agreement.  The  government's estoppel argument is  similarly



            without  merit.   The  government could  not reasonably  have



            relied upon  the defendant's offer  to extend the  statute of



            limitations  a  second  time,  in  the  face  of  the express



            language in  the second agreement conditioning  the waiver on



            the  signature of all parties and the express language in the



            first  agreement  allowing  extensions only  in  writing  and



            signed  by  all  parties.   The  government  has  provided no



            evidence of  any other statements or conduct by the defendant



            that could provide a separate basis for an estoppel.



                      Accordingly,  the second  agreement, by  its terms,



            was not  effective and the  defendant was entitled  to assert



            his  statute  of limitations  defense.    The district  court



            properly  dismissed  the  two  counts of  the  indictment  as



            untimely.  We recognize that the government's failure to sign



            the  agreement  was  likely  the result  of  some  unintended



            clerical error.   Nevertheless, where  the government reaches



            an agreement  with a potential criminal  defendant, and where



            both parties  expressly establish, in writing,4  the terms of


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            4.   We  emphasize  that  we  are  not  saying  that,  to  be

            enforced, an  agreement to extend the  statute of limitations

            must be made in writing, or must be signed by the government.

            See, e.g., United States  v. Doyle, 348 F.2d 715,  718-19 (2d
            ___  ____  _____________     _____

            Cir.)  (suggesting  that   an  implicit   agreement  may   be

            sufficient  to  waive  the statute  of  limitations defense),

            cert. denied, 382 U.S. 843  (1965).  We say only that,  where
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            the  parties themselves have chosen to set forth the terms in
            _____________________________________________________________

            writing, it makes sense  to hold them to those  terms, absent
            _______

            good reason to do otherwise.



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their  bargain and map out the conditions under which it will



            be effective, we think the parties are best held to the plain



            terms of that agreement, absent  some good reason to depart.5



            That policy  is more likely to increase  rather than diminish



            the  utility of  such  agreements.   Were  we to  accept  too



            lightly  deviations  from  the explicit  language,  we  would



            undermine the  certainty the  parties hope  to achieve.   See
                                                                      ___



            also Correale v. United  States, 479 F.2d 944, 947  (1st Cir.
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            1979) ("[T]he  most meticulous standards of  both promise and



            performance  must  be met  by  prosecutors  engaging in  plea



            bargaining.")   The  latter  is particularly  true where,  as



            here, the government  subsequently seeks specific performance



            of the defendant's agreement to waive a defense.



                      Affirmed.
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            5.   We do not see our opinion as making agreements like this

            so  difficult to enforce as to cause the government to become

            reluctant  to  enter  into  them,  thereby  possibly  harming

            defendants seeking  to postpone  an imminent indictment.   To

            the contrary, we are signaling that agreements like this will

            be enforced as written,  giving the parties more  rather than

            less control over the  situation.  All the government  had to

            do  to protect itself  in this case  was to sign  the form in

            accordance with the agreed-upon terms.



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