Rendelman v. State

DEBORAH S. EYLER, J. Scott Lewis Rendelman mailed a letter to William Elmhirst threatening to sue him for damages if he did not pay a $100,000 “settlement demand.” Rendelman’s threat was made in bad faith, with actual knowledge that he had no factual or legal ground for the threatened suit. A jury in the Circuit Court for Montgomery County convicted Rendelman of one count of extortion by economic threat and one count of extortion in writing by economic threat. 1 On appeal, Rendelman challenges the legal sufficiency of the evidence to support his convictions. Finding merit in this contention, we shall reverse. 2 ⁴²⁶ FACTS AND PROCEEDINGS In 1981, Elmhirst hired Rendelman to work as a bookkeeper for his company, Solarquest. 3 Rendelman’s duties included reconciling the books of account and paying bills. He was not a financial planner or a certified public accountant, and his job did not involve making investments or handling financial matters other than straight bookkeeping.

Three years 'later, in 1984, Kevin P. Fay, Elmhirst’s lawyer, became suspicious that Rendelman might be embezzling money from the company. Fay reviewed Solarquest’s books of account and found 22 checks made out to Rendelman, and ostensibly signed by Elmhirst. The checks totaled $246,000. All the reference lines on the checks bore the notation, “Loan.” As it turned out, Elmhirst knew nothing about the checks and had not authorized any of the so-called “loans.” Fay and Elmhirst immediately reported the theft to the authorities, and obtained a court order that, among other things, froze certain of Rendelman’s accounts.

On December 20, 1984, Rendelman wrote Elmhirst a long, conciliatory letter, admitting that he had taken the money but explaining that he had invested it in gold coins, mortgages, and notes that (in his opinion) were sound investments for Elmhirst. Rendelman acknowledged that his conduct technically constituted theft but tried to excuse it, saying he had been prescient about the expanding economy and simply had taken it upon himself to make investments for Elmhirst that would be to Elmhirst’s benefit. He promised to assign the notes and mortgages to Elmhirst. He offered his resignation and attached a check for $93,496.20. 4 The letter said nothing ⁴²⁷ to suggest that Rendelman thought that Solarquest or Elmhirst owed him money.

The next day, December 21, 1984, Elmhirst, through Fay, filed a civil action for conversion against Rendelman, in the Circuit Court for Montgomery County. On January 14, 1985, Rendelman brought his own civil action for “return of property” against Elmhirst and Fay, also in the Circuit Court for Montgomery County. By then, his conciliatory tone was gone, and he began sending letters to Elmhirst that were crude and accusatory. The court consolidated the civil cases.

Eventually, Rendelman and Elmhirst entered into a settlement agreement. (The terms of the agreement are not reflected in the record in the instant case.) In December of 1986, Rendelman moved to set aside the settlement agreement. When that motion was denied, he noted an appeal to this Court. His appeal was dismissed administratively, on March 1,1988, for failure to file a brief.

In the meantime, Rendelman was prosecuted on the felony theft charges in the Circuit Court for Montgomery County. On September 10,1986, he was convicted on 15 counts. About six weeks later, he was sentenced to 10 years’ incarceration, all but 18 months suspended, in favor of three years’ supervised probation. In late 1986, Rendelman stepped up his letter-writing campaign.

He sent vitriolic and profane letters to Elmhirst, blaming him for the fact that his wife had divorced him and he was estranged from his young children. He also blamed Elmhirst for the physical and emotional pain he claimed he was suffering in prison. In some of the letters, Rendelman called Elmhirst a liar and a thief, and alleged that Elmhirst owed him $20,000. Over time, Rendelman’s letters grew increasingly vulgar and included wishes that Elmhirst and his entire family would die. ⁴²⁸ All told, Rendelman sent one letter to Elmhirst in 1986; twelve in 1987; and four in 1988.

In his third letter in 1988, he announced that he had decided to “play it safe” and stop writing, so he would not jeopardize an early release date. In March 1988 (apparently after being transferred into federal custody), Rendelman sent one more letter to Elmhirst, claiming that he had been raped in prison. Rendelman also made Fay an object of his letter writing campaign. He sent Fay three letters in 1987 and one in 1988.

These letters also were exceedingly vulgar and profane. They included threats to drive Fay’s wife and children away from him. Rendelman finished serving his sentence in the felony theft case in February of 1988. He was released to federal authorities on a pending federal detainer, and began serving a federal sentence. 5 On December 21, 2001, Rendelman finally was released from prison and began his three year period of supervised probation.

Exactly three years and one day later, on December 22, 2004, Rendelman sent a letter to Elmhirst, the first since 1988. The letter is typed and bears a letterhead with Rendelman’s name and an address in Sacramento, California. Rendelman mailed a copy of the letter to Fay. The December 22, 2004 letter (“Letter”) is the basis for the extortion convictions in the case at bar. ⁴²⁹ One only can fully appreciate the contents and flavor of the Letter by reading it in its entirety.

We set it forth with the most exceptionally profane vulgarities deleted: William K. Elmhirst, you filthy [expletives], I’ve waited 20 years to write this letter. It was December 24, 1984, almost exactly 20 years ago, when you froze my bank accounts, ruined my Christmas with my family, and started the process that would put me in prison for 17 years. You’re a [expletives] piece of dog shit. Thanks to you, my kids grew up without a father and my wife (or should I say my ex-wife) is a widow. [Expletives] I hate your guts.

You will NEVER be able to give me back my lost years, reton me to father my 6 and 2 year old kids, or give me back my wife. My life is ruined and it’s all your doing. You made false claims against me, stole my money, and you don’t give a shit. The only thing you could do is give me back my money.

That won’t make everything right again, but it’s the best you can do. It’s the only thing you can do. I was released on December 21, 2001, and I’ve been on three years parole. During that time I was not allowed to contact you, I was not allowed to travel, and I couldn’t change my residence.

But now I am off of parole. Now there is nothing stopping me from coming back there. NOTHING!! You stole about $22,000 from me.

It was actually a little more, and yes, I still have the exact amount in my records which have been sent to a third party who has kept them for me all these years. I can look it up if it becomes necessary, but for the purpose of settlement, let’s just say it was $22,000. Twenty years at 9% compounded interest makes the current amount due $123,297.04. I will settle for $100,000 even.

This is the amount I want. You give me back my money, and I swear, you will never see or hear from me again. I will take the money and leave this stinking fucking country and the United Fucking States can kiss my ass goodbye. This country breaks up families, puts innocent people in prison without fair trials, and no one cares.

Well, fuck all you people. This is the wrong country ⁴³⁰ to marry in and raise a family in. My son is in the army and is in Iraq and the government mil probably have him killed and I never knew him beyond the age of 6 years old. Fuck all of you.

Give me my money and I’m gone. But if you don’t give me my money, I swear, I will come back there and I will knock on your front door. I will demand my money, and if you refuse, I will sue you, and I will sue you for the entire $123,297.04. I will make your remaining years of your life miserable.

I will sue you, I -will file liens on your property, I will have the sheriff seize your assets. Don’t think the statute of limitations will help you. I remember from my legal research that the time of the statute of limitations is tolled while I am involuntarily out of the state, and I have been involuntarily out of the State of Fucking Maryland since 1988. The statute didn’t start running again until today.

The way I figure, I still have another year to file on you, but I’m not going to wait that long. I will give you one, maybe two months, and if I don’t have my money back, I will come back. I will quit my dead end job and move out of my one room studio and I will come back. I will find you.

If I have to hunt for you door to door, I will find you, and when I find you, I will sue you. How old are you now, about 76? 77? I don’t even know if you’re still alive, but if you are, I WILL find you. If you’re dead, I will search for your heirs, and when I find them, I will demand my money from them, because they did not inherit your money.

It was MINE!!!! I will demand my money from them, and if they refuse, I will sue them. I will sue them and get my money, and then I will leave this stinking country and never come back. [Expletives]. I want my money sent to me at the above address.

If I do not hear from you, I will return. I will come to your house and look you in the eye. Don’t think this is over. Far from it.

It’s just starting. All these years, you got away with it because I was locked up. I lost cases because I could not print copies of my appeal brief, I could not research State of Fucking Maryland issues in federal prisons on the other side of the fucking country, and I did not ⁴³¹ have access to my records. Well, all that changes.

Now, you will never again win a case by my default. I will prosecute all my cases fully and to the end. You will not win by default. You will either give me back my money, or you will spend at least as much in legal fees trying to illegally keep it.

Either way, God will not let you profit from what you did to me and my family. [Expletives]. How can you sleep at night and look yourself in the mirror in the morning? ? ? You don’t care. You ruined a man’s life for what was a puny $22,000 which made no difference in your lifestyle at all.

You did it just for the fun of it, didn’t you? ? I stole nothing from you. YOU are the thief. YOU are the menace to society.

Its [sic] people like you who make society the shit that it is. You break up families and [expletives]. You [expletive]. All you had to do was come to my sentencing and say a few words on my behalf like Kevin P. Fucking Fay said you would do to get me to settle the civil suit with you.

If you had done it, you would never have heard from me again. But you didn’t, and you cost me 20 years of my life. Now, it’s not over. Now I want my money back, and if you don’t give it to me, I will make you wish you had come to my sentencing like you promised.

I will sue you, I will file liens on your house and Solarquest property, and I will have the sheriff seize your assets. You will pay. You will pay $100,000 or your remaining years will be spent paying legal fees and going to court when I sue you for $123,297.04. By the way, Merry Fucking Christmas you [expletives].

I’m sending a copy of this letter to Kevin Fay. I may sue him too for being a fucking piece of shit. (Emphasis in original.) The appellant signed the Letter. In fact, Elmhirst still was alive, but had moved to England.

He never received the Letter (or any letters sent by Rendelman subsequent to that date). ⁴³² On February 8, 2005, Rendelman wrote another letter rife with vulgarities to Elmhirst, also copied to Fay. Finally, on March 14, 2005, Rendelman wrote to Fay directly. On April 19, 2005, Rendelman appeared, unannounced, at Fay’s law office in Montgomery County. He identified himself to the receptionist and asked to speak to Fay.

The receptionist told him that Fay was not in at the moment, but he was welcome to wait. Rendelman took a seat in the reception area. Fay and his office workers, apparently concerned that Rendelman might come to the office and cause trouble, had devised an emergency plan, in case Rendelman appeared. In accordance with the plan, the receptionist notified Fay’s secretary, who called 911; and the receptionist also activated a silent alarm under her desk.

Fay, unaware of Rendelman’s presence, arrived at the office from a lunch meeting. He walked into the reception area and saw Rendelman. He greeted Rendelman and said he would speak to him in a moment. Rendelman agreed.

Shortly thereafter, the police arrived and arrested Rendelman on an outstanding warrant. (The record does not reflect the nature of the warrant.) On June 17, 2005, Rendelman was indicted on eight counts of extortion. In counts I and II, he was charged with extortion of Elmhirst, by means of the Letter. Count I charged extortion by written threat of economic harm; and count II charged extortion generally, by threat of economic harm and damage to property.

In the other counts, all of which were either disposed of on a motion for judgment, or resulted in not guilty verdicts, Rendelman was charged with extortion of Fay, by the Letter and others that followed it. 6 ⁴³³ The extortion charges were tried to a jury on October 31 and November 1, 2005. The State called two witnesses: Fay and his receptionist. Rendelman did not testify on his own behalf and did not introduce any evidence. As we have explained above, the jury convicted Rendelman on counts I and II, extortion by writing and extortion generally of Elmhirst, based upon the Letter.

DISCUSSION Maryland Law of Extortion The word “extortion” has its root in the Latin “torquere,” which means to wrench or twist. Merriam Webster Collegiate Dictionary at 444 (11th ed.2003). See also Random House Dictionary of the English Language, at 1998 (2d ed.1987) (noting that the word “torque” also has the Latin root torquere, but is derived more recently from the French); Stanley S. Arkin, Blackmail and the Practice of Law — Part I, N.Y.L.J., Feb. 7, 1995, at 3 (observing that the derivation of “extortion” is the French word “torque”). 7 Common law extortion, a misdemeanor, was a first cousin of the crimes of bribery and misconduct in office. Rollin M. Perkins & Ronald N. Boyce, Criminal Law 538 (3d ed.1982) (stating that “[t]he dividing line between bribery and extortion is shadowy.” (emphasis in original)).

It was a limited crime that prohibited the corrupt collection by an officer of an unlawful fee, under color of office. Iozzi v. State, 5 Md.App. 415, 418-19 , 247 A.2d 758 (1968). Beginning in the 19th century, many states enacted extortion statutes to criminalize conduct that was extortionate but did not fall within the ambit of the narrow crime of common law extortion. Generally, “statutory extortion,” which may be committed by private people as well as by public officials, is “[t]he act or practice of obtaining something or compelling some action by illegal means, as by force or coercion.” ⁴³⁴ Black’s Law Dictionary 628 (8th ed.2004). “Blackmail,” which is the act of obtaining money or something of value upon threat of disclosing incriminating or embarrassing information, even if true, is a subset of extortion.

Arkin, supra, at 3. 8 In the late 1800’s, the Maryland General Assembly enacted two extortion statutes. 9 In 1972, a third statute, prohibiting coercing or intimidating another to contribute or donate money or property to a social, economic, or political association or organization, was enacted. Ch. 721, Laws of 1972. Maryland’s general extortion statute, presently codified at Md.Code (2002, 2006 Supp.) section 3-701 of the Criminal Law Article (“CL”), was enacted in 1978, and remains substantively unchanged. 10 See “Revisor’s Note” to CL ⁴³⁵ § 3-701; see also Ch. 449, Laws of 1978. It punishes the extortive threat, not the actual attainment of money (or thing of value).

See Iozzi v. State, supra, 5 Md.App. at 419 , 247 A.2d 758 (construing former Art. 27, section 562, governing verbal threats); see also 3 Wayne R. Lafave, Substantive Criminal Law § 20.4 (2d. ed.2003). It provides, at subsection (b): A person may not obtain or attempt to obtain money, property, or anything of value from another person with the person’s consent, if the consent is induced by wrongful use of actual or threatened force or violence, or by wrongful threat of economic injury. The statute excepts “legitimate efforts by employees or their representatives to obtain certain wages, hours, or working conditions.” CL § 3-701(a). No Maryland appellate case has interpreted or applied the phrase “wrongful threat of economic injury.” CL section 3-706 more specifically prohibits “Extortion by written threat.” Presently (and when Rendelman mailed the Letter), that statute states, in pertinent part: (b) A person, with intent to unlawfully extort money [or thing of value] ... may not knowingly send or deliver ... a writing threatening to: (1) accuse any person of a crime or of anything that, if true, would bring the person into contempt or disrepute; or (2) (i) cause physical injury to a person; (ii) inflict emotional distress on a person; (Hi) cause economic damage to a person; or (iv) cause damage to the property of a person.

(Emphasis added.) This statute, like CL section 3-701, criminalizes the making of the threat; it is not necessary that the ⁴³⁶ extortionist have obtained the money or thing of value to have committed the crime. The crime is complete upon the sending or delivery of the threatening writing. Lafave, supra, at § 20.4. The predecessor statute to CL section 3-706, prior to the 2002 recodification, was Article 27, section 561.

The word “unlawfully” was added to subsection (b) of CL section 3-706 by Acts of 2004, ch. 117, § 1, effective October 1, 2004. In the immediately prior version of subsection (b), which took effect on October 1, 2002, the mens rea of the crime was the “intent to extort money ...” The 2004 amendment inserted the word “unlawfully” to “clariffy] that the crimes of extortion by false accusation or threat of verbal or written extortion requires the extortion to be ‘unlawful.’ ” Senate Judicial Proceedings Committee, Floor Report on Senate Bill 353 (2004). Another amendment in 2004 added subsections (b)(2)(iii) and (iv). Before then, the actus reus of the crime was broadly described in subsection (b)(2) as threatening to “injure the person or property of anyone.” The Criminal Law Article Review Committee noted that it was not clear whether “injur[y to] the person or property” included economic injury to the victim.

Ch. 26, Laws of 2002 at 297. The 2004 amendments answered this question by specifying that threatening to cause economic damage to a person is an act of extortion. 11 CL section 3-706(a)(2) includes an exception, for “good faith reasonable notice of dishonor and warning of criminal prosecution under Title 8, Subtitle 1 of this article given by a holder of an instrument to the maker of the instrument.” 12 ⁴³⁷ There likewise are no Maryland appellate cases interpreting CL subsections 3 — 706(b)(2)(iii) or (b)(2)(iv). Moreover, none of the reported cases about convictions for extortion under the Maryland predecessor statutes are directly relevant to our inquiry. Federal Hobbs Act When the General Assembly enacted the Maryland general extortion statute in 1978, it patterned the legislation after the Hobbs Act, 18 U.S.C. § 1951 (2000), according to a memorandum in the bill file.

The Hobbs Act, enacted in 1946, makes it a federal crime to affect commerce “by robbery or extortion,” or by attempting or conspiring to do so. 18 U.S.C. § 1951 (a). As pertinent to the case at bar, “extortion” under the Hobbs Act is, the obtaining of property from another, with his consent, induced by wrongful use of actual or threatened force, violence, or fear.... 18 U.S.C § 1951(b)(2)(emphasis added.) 13 To convict a defendant of extortion under the Hobbs Act, the government must show that he engaged in one of the statutorily identified means to obtain or attempt to obtain property: actual or threatened force, violence, or fear; and that his conduct affected, or was intended to affect, interstate commerce. Stirone v. United States, 361 U.S. 212, 218 , 80 S.Ct. 270 , 4 L.Ed.2d 252 (1960); Center Cadillac, Inc. v. Bank Leumi Trust Co. of New York, 808 F.Supp. 213, 231-37 (S.D.N.Y. 1992), aff'd, 99 F.3d 401 (2nd Cir.1995). ⁴³⁸ The word “wrongful” in subsection 1951(b)(2) modifies all of the language that follows it, not just the phrase “actual or threatened force.” United States v. Enmons, 410 U.S. 396, 399 , 93 S.Ct. 1007 , 35 L.Ed.2d 379 (1973). Thus, in a Hobbs Act extortion prosecution based upon threats that would instill fear, the defendant must have engaged in the wrongful use of fear or threats that would place the victim in fear.

Also, the word “wrongful” in the statute “limits [its] coverage to those instances where the obtaining of the property would itself be ‘wrongful’ because the alleged extortionist has no lawful claim to that property.” Id. at 400 , 93 S.Ct. 1007 . See U.S. v. Buffey, 899 F.2d 1402, 1403 (4th Cir.1990) (including the wrongful use of actual or threatened force, violence, or fear, or under color of official right, as an element of extortion under the Hobbs Act). Federal courts have interpreted the Hobbs Act to mean that the “fear” element of extortion can be satisfied by proof of acts by the defendant that were designed to put the victim in fear of economic loss. See, e.g., DeFalco v. Bernas, 244 F.3d 286 , 313 (2nd Cir.2001), cert. denied, 534 U.S. 891 , 122 S.Ct. 207 , 151 L.Ed.2d 147 (2001); United States v. Sturman, 49 F.3d 1275, 1281 (7th Cir.1995); United States v. Bucci, 839 F.2d 825, 827-28 (1st Cir.1988).

In this type of prosecution, the government’s burden of proof is satisfied by evidence that the victim was put in fear of economic harm and that the fear was reasonable under the circumstances. United States v. Billups, 692 F.2d 320, 330 (4th Cir.1982), cert. denied, 464 U.S. 820 , 104 S.Ct. 84 , 78 L.Ed.2d 93 (1983); United States v. Iozzi 420 F.2d 512, 515 (4th Cir.1970), cert. denied, 402 U.S. 943 , 91 S.Ct. 1607 , 29 L.Ed.2d 111 (1971). See also United States v. DeLuca, 17 F.3d 6, 9-10 (1st Cir.1994); United States v. Garcia, 907 F.2d 380, 381 (2nd Cir.1990). Regardless of the type of extortion alleged under the Hobbs Act, specific intent must be proven, i.e., it must be shown that the defendant acted with the intent to compel the victim to part with his property.

United States v. Boylan, 898 F.2d 230, 253 (1st Cir.1990); United States v. Smith, 631 F.2d ⁴³⁹ 103 (8th Cir.1980) (per curiam,). When the charge is attempted extortion under the Hobbs Act, the proof required is that the defendant have acted with the specific intent to instill fear in the victim that would compel him to part with his property. United States v. Marsh, 26 F.3d 1496, 1500-01 (9th Cir.1994). Several federal courts of appeal have considered the question whether a threat to file a lawsuit if a settlement demand is not paid is “extortion” under the Hobbs Act.

Some of these cases are appeals of criminal convictions under the Hobbs Act. See United States v. Pendergraft, 297 F.3d 1198 (11th Cir. 2002). Most are appeals in civil actions under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. section 1961 et seq. Section 1962(c) of RICO prohibits “racketeering activity,” for which the crime of extortion can be a predicate.

See 18 U.S.C. § 1961 (1)(A) (defining racketeering activity “to include extortion”). It is clear, and the cases so hold, that when the threat of litigation has some legitimate basis, i.e., the person making the threat has a colorable legal claim of entitlement to damages, the conduct is not extortion. See United States v. Kattar, 840 F.2d 118, 123 (1st Cir.1988) (stating that, when one person threatens to sue another in an effort to persuade the other to honor a contract the first person believes has been breached, there is no Hobbs Act violation); see also United States v. Sturm,, 870 F.2d 769, 773 (1st Cir.1989) (holding that use of “legitimate economic threats” to obtain property to which one has a claim of right cannot be wrongful under the Hobbs Act). Even when the threat of litigation absent settlement is made in bad faith (that is, when the threatener knows that he has no legal claim or entitlement to damages), a strong majority of federal courts have held that the threat likewise is not “extortion” under the Hobbs Act.

United States v. Pendergraft, supra, is most instructive. In Pendergraft , the defendant/doctor operated an abortion clinic in Marion County, Florida. He sued the sheriffs department and the county, in federal court, alleging that they ⁴⁴⁰ had violated certain laws by denying his request to hire off-duty police officers to protect the clinic. The county asked the doctor to voluntarily dismiss it from the case, because it had not participated in the decision to disallow the request.

The doctor refused, and instead threatened to amend his complaint to add a count alleging that a county official had threatened violence against the clinic, in violation of federal law; and to seek actual and punitive damages and fees and costs for the violation. The doctor then offered not to so amend his complaint if the county would pay a monetary settlement. The doctor alleged that the threat of violence had been made in a telephone call that took place when his business partner and the county official were in negotiations (ultimately unsuccessful) to sell the clinic building. In support, he furnished unsigned affidavits by those claiming to have personal knowledge that the county official had threatened violence in these calls.

The doctor did so without knowing, however, that during the negotiations the FBI had been called in and had recorded the telephone calls. The FBI recordings established conclusively that the county official had not made any threats whatsoever. Thus, the affidavits submitted by the doctor were demonstrably false. The doctor was charged, inter alia, with extortion under the Hobbs Act.

In essence, he was accused of using interstate commerce in an effort to “shake down” the county by threatening to sue it for damages (by amending his complaint), unless the county paid a settlement. The doctor was convicted. The Eleventh Circuit reversed. It held that to prove extortion under the Hobbs Act the government must show that the defendant used, or attempted to use, a wrongful means to achieve a wrongful end.

The court determined that, although the government had