Billman v. State of Maryland Deposit Insurance Fund Corp.

GILBERT, Chief Judge. Prologue This appeal is an outgrowth of the savings and loan difficulties that have plagued Maryland for the past several years. It stems from an action by the Maryland Deposit Insurance Fund (MDIF) to recover depositors’ monies allegedly misused through negligence and misappropriation. The case demonstrates the wisdom of McGuirk’s Law that “any improbable event which would create maximum confusion if it did occur will occur.” 1 ³³⁵ We shall avoid recounting the myriad of facts presented to the jury in the more than four month trial of this case.

It is enough to know that the Montgomery County Circuit Court returned verdicts in favor of MDIF against Tom J. Billman, Clayton C. McCuistion, 2 James B. Beerin Jr., 3 Joseph C. Cunningham, 4 and Barbara A. McKinney, 5 Leonard Meltz Jr., 6 Epicenter Consolidated Limited, Epic Holdings Limited, and Crysopt Corporation in varying multi-million dollar amounts. Issues Billman posits a number of issues for our review, including the trial judge’s declination to declare a mistrial despite the jury’s consideration of ninety-four documents not in evidence. 7 Because of our disposition, we shall consider only that matter. ³³⁶ Motion for Mistrial A box containing documents that were not in evidence inexplicably was sent along with the jury when it retired to deliberate. The deliberations consumed approximately 5V2 days. On the evening of the fifth day, after the jurors had gone for the night, a court clerk discovered the egregious mistake and called it to the trial judge’s attention.

The next morning the judge assembled counsel and said: “I want to take these couple of issues up with you in order. I discovered last night, or I was told last night, after a telephone conference about, I don’t know what ³³⁷ time we finished, but about 6:30, I suppose, last night that about a faux pas that had occurred. There was a box of exhibits that had been put aside with the lettering on it I.D. which contained a number of exhibits which got onto the cart that was pushed into the jury room and thus has at least been in the jury room for the entire length of the deliberation in this case. Apparently ... [the court clerk] discovered that the box was not [sic] among those items which should not be in the jury room, and when the jury left last night, went into the jury room and found the box isolated by itself under the water fountain.

Whether there is any particular significance to that, I don’t know.” After considerable discussion as to the manner in which the aberration should be cured and the denial of several mistrial motions, the trial judge elected to interrogate the jury concerning whether the jurors viewed the exhibits that were not admitted into evidence. The panel was called into the courtroom where the judge inquired concerning their viewing of the box of non-admitted materials, which also included one exhibit that had been admitted. There were in the box a total of ninety-four exhibits. 8 The record discloses the following dialogue between the judge and the jury: “THE COURT: Madame Forelady, this box, and some of you may want to — please feel free, if you wish, to turn it around. It says ID on one [side] and it has some other writing on the other.

It was in the jury room underneath the water fountain. I’d like to know, Madame Forelady, if you can tell me whether or not you considered the contents of the box? Was that box one of the things that you all examined during the course of your deliberations? ³³⁸ THE FORELADY: I don’t — I didn’t really usually pull the files. (Jury inaudible.) THE COURT: Number 18?

THE FORELADY: Yes. THE COURT: Plaintiff’s exhibit 18? (Jury inaudible.) THE COURT: Now, let’s be sure about that because I want to ask specifically — the one right in front of it that someone recognized, that is — is that plaintiff’s exhibit, Billman, I mean, defendant Billman exhibit 18? THE FORELADY: Yes, sir.

THE COURT: And you did consider that? THE FORELADY: Yes. THE COURT: All right. Fine.

Thank you. Now, can you tell me as to, regarding the other exhibits in that box, whether you recall having viewed those documents? SPEAKER: 841A? (Jury inaudible.) THE COURT: Now, ladies and gentlemen, it would appear to me that you did examine, or it is likely that you examined everything that was in the room and then you didn’t make anything special one way or the other of the contents of this box.

Is that a fair statement? THE FORELADY: Yes. THE COURT: That is a fair statement. All right.

I think then, with that ladies and gentlemen, once we’ve got everything back in the box, I ask you to please return to the jury room. Thank you very much. (The jury leaves the Courtroom.)” Further discourse among the court and counsel ensued. After the rejection of additional motions for a mistrial, the judge read aloud the “informal verdict” he had received from the forelady of the jury.

The jury’s findings were described by the court as “not a formal verdict” but “simply an indication to you [counsél, press representatives, and ³³⁹ spectators] as an evidentiary matter of what their verdict would have been had I called them out to formally announce it.” 9 Upon the completion of the reading of the “informal verdict,” the jury was then escorted into the courtroom and told by the judge: “Ladies and gentlemen of the jury, as you can probably guess by now, a bit of a glitch has occurred in our proceedings, and I have used the jury verdict form for other purposes outside of your presence. I am instructing you now that it was erroneous for you to have gotten the box which is sitting on the table and the contents of that box would be acceptance of defendant Billman exhibit 18, which is the first item in there. What I am instructing you to do now is you’ll have to go back into the jury room and redeliberate and disregard the contents of that box. I am going to give you a list which we have put together of the entire contents of that box, which has been used — I will give you back, Madame Forelady, the verdict form that you passed, given to us, and I want you then to redeliberate without those documents and reach a verdict, if you will, without it.

I think, also given the fact that it’s almost twenty after one, that you may want also [to] get a lunch order in. I imagine you’re getting hungry. I know certainly, I am. So, with that ladies and gentlemen, I’m going to give you this handwritten list.

It’s one, two, three, four, five pages long, and once you’ve agreed upon your verdict, ladies and gentlemen, would you please knock on the door. Just the same procedure as you did before.” When the jury returned to the courtroom, its verdict mirrored the “informal verdict” previously announced by the trial judge. ³⁴⁰ Having set out the background, we turn now to a consideration of those non-exhibits which were nevertheless examined by the jury. In so doing, we shall focus exclusively upon the plaintiffs-appellees’ exhibits. In light of our disposition, we need not consider proposed exhibits offered by one or more defendants even though other defendants may have objected to the introduction of the exhibit.

A vetting of the plaintiffs’ exhibits examined by the jury but not in evidence reveals: 1) A plaintiffs’ proposed exhibit suggests that a cease and desist order was in process against Community Savings & Loan; 2) Another plaintiffs’ proffered exhibit was a letter from the Federal Home Loan Bank Board (FHLBB) to the effect that Community Savings & Loan’s application for account insurance should be denied because “Community/EPIC’s operations do not fit with the FHLBB/FSLIC’s [Federal Savings & Loan Insurance Corporation’s] statutory mission.” The Board’s letter referred to Billman’s sale of 30 percent of his assets to McCuistion and stated that the sale was unacceptable to FHLBB. The Board’s letter went on to refer to a $13 million negative net worth that Community had as a result of the Billman-McCuistion sale. The letter further stated, “This is completely unacceptable to FHLBB.” 3) An article from the Wall Street Journal questioning Community’s accounting methods. The article reads in part: “Community S & L is using the most liberal accounting treatments available and playing the kind of games that have gotten many thrifts into trouble over the past few years.” 4) A handwritten paper asking, “What are real liabilities?” 5) Part of the deposition of Barbara A. McKinney, together with several deposition exhibits.

(See Md.Rule 4-326(a)). 6) A resolution concerning stock dividend payments to Series A Preferred Stock totalling $977,617.39. ³⁴¹ 7) A “Nationwide Appraiser’s List.” 8) A letter to Maryland Savings-Share Insurance Corporation (MSSIC) relative to whether a letter from MSSIC constituted a cease and desist order. 9) A handwritten paper stating in part: “1) Concerns— valuations — on property is over appraised.” 10) Minutes of the Executive Committee of the Board of Directors concerning negotiations with MSSIC. 11) A 1988 letter from Management Consulting Services with enclosure of 1985 “Confidential Report” of Epic Partnership cash flow. 12) A paperwriting purporting to be a “partnership accounting” trial balance with attachments concerning Equity Programs Investment Corporation; Epic Mortgage, Inc.; and Community Savings & Loan. 13) Another partnership accounting. 14) An interoffice communication dated February 22, 1974 from the Office of the General Counsel of the FHLBB to the Office of Examinations and Supervision concerning the prohibition against having a subsidiary pay the parent corporation deferred Federal income tax liability. 15) A typewritten “Statement of Operations [by Community Savings & Loan] For the Period Ending September 30, 1984.” 16) Another Community Savings & Loan “Statement of Operations” but “For the Period Ending October 31, 1984” 17) Community’s “Statement of Operations For the Period Ending January 31, 1985.” 18) An article from Appraisal Review Journal Vol. 4, No. 3, Fall 1981, entitled, “Creative Finance and the Review Appraiser.” 19) A photocopy of pages 1, 2, 3, 4, 5, 90, and 93 of Harrison’s Illustrated Guide, copyright 1977. 20) A letter dated August 8, 1984 from the President of ESI Securities, Inc. to the President of Private Ledger ³⁴² Financial Services, Inc., concerning the former’s criticism of the latter. We think it difficult, if not impossible, for a jury, after 5V2 days of consideration of and deliberation on the 1,232 exhibits, 10 to reconsider its conclusions after first mentally subtracting 94 of the documents it had previously examined. That herculean task is made more arduous when the fact finder is furnished merely a list, with a few descriptive words, of the exhibits that are to be subtracted mentally from previous consideration. The number of exhibits improperly before the jury comprises only 8 percent of the total 1,232.

Yet, evidence is weighed, not counted. We ask: How much weight did the jurors give to the Wall Street Journal article? Was it weighed heavily or lightly? Was it a decisive factor, or was it ignored?

The same questions might be asked with respect to each of the other nineteen non-admitted exhibits. Were any exhibits the “straw that broke the ... back” of the defense or the proverbial grain of sand that tipped the scale in favor of MDIF? Even if each of the non-admitted exhibits, standing alone, is deemed harmless, who can say what cumulative effect they had on the minds of the jurors? Did the exhibits totally or individually affect the verdicts?

We are unable to answer with any degree of certainty the rhetorical questions posed. As a result, we are unable to declare that the matters improperly before the jury throughout the 5lh days of their deliberations did not in some manner influence the verdicts and deny due process to the appellants. Although it can be argued that the instruction to reconsider a verdict, after ignoring certain previously examined exhibits, is similar to being told to disregard testimony heard at trial, there