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AB&M Enterprises, Inc. v. State (9/2/2016) ap-2518

AB&M Enterprises, Inc. v. State (9/2/2016) ap-2518

                                                                                         NOTICE
  

               The text           of   this opinion can be corrected before the opinion is published in the                                         

               Pacific Reporter                  .   Readers are encouraged to bring typographical or other formal                                           

               errors to the attention of the Clerk of the Appellate Courts:    



                                                          303 K Street, Anchorage, Alaska  99501  

                                                                             Fax:  (907) 264-0878  

                                                                E-mail:  corrections@ akcourts.us  



                                 IN THE COURT OF APPEALS OF THE STATE OF ALASKA                                                                 



AB&M  ENTERPRISES,  INC.,  

                                                                                                                                                                   

                                                                                                                   Court of Appeals No. A-12014  

                                                                                                                                                                                   

                                                             Appellant,                                         Trial Court No. 3AN-12-2437 CR  



                                             v.  

                                                                                                                                  O  P  I  N  I  O  N  

                                                                                                                                                                   

STATE  OF  ALASKA,  



                                                             Appellee.                                            No. 2518 - September 2, 2016  

                                                                                                                                                                             



                              Appeal   from  the   Superior   Court,  Third  Judicial                                                               District,  

                                                                                                                                                   

                              Anchorage, Michael R. Spaan, Judge.  

                                                                                                



                              Appearances:   Kevin T. Fitzgerald, Ingaldson Fitzgerald, P.C.,  

                                                                                                                                                            

                              Anchorage,   for   the   Appellant.                                            James   Fayette,   Assistant  

                                                                                                                                                 

                              Attorney General, Office of Special Prosecutions & Appeals,  

                                                                                                                                                    

                              Anchorage, and Craig W. Richards, Attorney General,  Juneau,  

                                                                                                                                                      

                              for the Appellee.  

                                                                     



                              Before:  Mannheimer, Chief Judge, Allard, Judge, and Suddock,  

                                                                                                                                                   

                               Superior Court Judge.*  

                                                                                 



                                             

                              Judge MANNHEIMER.  



                              AB&M Enterprises, a business corporation, ran theRumrunners Old Towne                                                                                  



Bar and Grill in downtown Anchorage.                                                    The corporation was convicted of fourth-degree                                



        *      Sitting    by   assignment   made   pursuant   to   Article   IV,   Section   16   of   the   Alaska  



Constitution and Administrative Rule 24(d).                                      


----------------------- Page 2-----------------------

                                                                                                                         

assault based on the conduct of two of its security personnel.  The State's case against  



                                                                                                                            

the corporation was based on the following evidence (presented here in the light most  



                                     

favorable to the State):  



                                                                                                                 

                    An unruly patron named Johnny Brown assaulted one of the Rumrunners  



                                                                                                                       

security guards,  Murville Lampkin.                       Various members of the security staff subdued  



                                                                                                                       

Brown  and  handcuffed  him.                     At  this  point,  Lampkin  and  his  supervisor,  George  



                                                                                                                        

Damassiotis (the head of security for Rumrunners) decided to take Brown to the security  



                                                     

office in the basement of the bar.  



                                                                                                                         

                    As  they  boarded  the  elevator  for  the  trip  down  to  the  security  office,  



                                                                                                                                 

Damassiotis said to Lampkin either "Go for it," or "There are no cameras in here; he is  



                                                                                                                        

all yours."  Lampkin then "sucker-punched" Brown - punching him in the face without  



                                                                                                                                 

warning.  This punch fractured the orbital bone surrounding Brown's left eye; repair of  



                                                            

this injury required a surgical implant.  



                                                                                                                               

                    Lampkin, Damassiotis, and AB&M Enterprises were all charged with this  



                                                                                                                        

assault - Lampkin because he was alleged to have personally committed the assault,  



                                                                                                                         

Damassiotis because he was alleged to have encouraged Lampkin to commit the assault,  



                                                                                                                               

and  AB&M  Enterprises  under  the  theory  that  the  corporation  was  responsible  for  



                                                                                             

Damassiotis's and Lampkin's conduct under AS 11.16.130.  



                                                                                                       

          The law defining when a corporation can be convicted of a crime  



                                                                                                                        

                    Under AS 11.16.130(a)(1), a corporation can be convicted of a criminal  



                                                                                                                 

offense if the offense was committed through the conduct of an agent of the corporation,  



                                                                                                                              

and either (A) the conduct at issue was within the scope of the agent's employment and  



                                                                                                                

was done in behalf of the corporation; or (B) the conduct was solicited, subsequently  



                                                              

ratified, or subsequently adopted by the corporation.  



                                                              - 2 -                                                          2518
  


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                     Subsection (b) of this statute declares that,  for these purposes,  "agent"  



                                                                                                                               

means a director or officer of the corporation, or any employee of the corporation, or any  



                                                                                           

other person authorized to act in behalf of the corporation.  



                                                                                                         

          The potential ways in which this statute applied to this case  



                                                                                                                         

                    Under AS 11.16.130, the jury in this case could theoretically find AB&M  



                                                                                             

guilty of the assault on Brown under three distinct theories.  



                                                                                                                         

                    First, the jurors could find that Lampkin assaulted Brown and that AB&M  



                                                                                                                                 

Enterprises was accountable for Lampkin's conduct under clause (A) of the statute -  



                                                                                                                          

i.e., under the theory that Lampkin was an employee of the corporation, that the assault  



                                                                                                                              

on  Brown was within the scope of Lampkin's employment, and that this assault was  



                                          

committed in behalf of the corporation.  



                                                                                                                    

                     Second, the jurors could find that Damassiotis was Lampkin's accomplice  



                                                                                                                                 

because Damassiotis  abetted the assault on Brown (i.e., by encouraging Lampkin to  



                                                                                                                         

punch Brown), and that AB&M Enterprises was accountable for Damassiotis's conduct  



                                                                                                                      

under clause (A) of the statute - i.e., under the theory that Damassiotis was an employee  



                                                                                                                                 

of the corporation, that Damassiotis's act of abetting this assault was within the scope of  



                                                                                                                             

Damassiotis's employment, and that Damassiotis's act of abetting the assault was done  



                                            

in behalf of the corporation.  



                                                                                                                       

                    Third and finally, the jurors could find that Damassiotis solicited Lampkin  



                                                                                                                            

to commit the assault, and that AB&M Enterprises was accountable for this assault under  



                                                                                                                                

clause (B) of the statute - i.e., the clause that makes a corporation criminally liable for  



                                                                                           

conduct of its agents if the corporation solicits the conduct.  



                                                               - 3 -                                                          2518
  


----------------------- Page 4-----------------------

                                                                                    

          The problems with the jury instructions in this case  



                                                                                                                          

                    Although the jury was instructed on both clauses (A) and (B) of the statute,  



                                                                                                                           

the jury was not asked to specify which clause their verdict was based on.  This means  



                                                                                                                           

that if there is a problem with the jury instructions regarding either clause (A) or clause  



                                                                                                                        

(B), we must reverse AB&M Enterprises' conviction - because we can not tell whether  



                                                                            

the jury based its decision on the flawed theory.  



                                                                                                                              

                    In the  present case,  we conclude that there are fatal flaws in the jury  



                                                                                                              

instructions relating to both clause (A) and clause (B) of AS 11.16.130.  



                                                                                                   

                The flaw relating to clause (A) of AS 11.16.130(a)(1)  



                                                                                                                                  

                    To the extent that the jurors may have relied on clause (A) of the statute to  



                                                                                                                           

find  that  AB&M  Enterprises  was  criminally  responsible  for  the  conduct  of  either  



                                                                                                                                 

Lampkin or Damassiotis,  the jurors would have had to conclude that Lampkin's or  



                                                                                                                                  

Damassiotis's conduct was "within the scope of [their] employment" and "was done in  



                                           

behalf of the corporation".  



                                                                                                                             

                    Jury Instruction 18 contained specific instructions on how the jurors were  



                                                                                                                                      

to determine whether an employee's conduct was within the scope of their employment.  



                                                                                                                               

However, the final paragraph of Jury Instruction 18 incorrectly told the jurors that it was  



                                                                                                                               

the State's burden to prove this element  by  a preponderance of the evidence  - not  



                                                                                                          

beyond a reasonable doubt.  Here is the concluding paragraph of the instruction:  



                      

                                                                                                          

                               If  you  decide  that  it  is  more  likely  than  not  that  

                                                                                                        

                    Murville  Lampkin's  or  George  Damassiotis's  acts  were  

                                                                                                             

                    within the reasonable scope  of  what Murville Lampkin or  

                                                                                                             

                    George Damassiotis reasonably believed he was asked to do  

                                                                                                     

                    by AB&M Enterprises, Inc. and agreed to do, then AB&M  



                                                               - 4 -                                                          2518
  


----------------------- Page 5-----------------------

                                                                                                     

                     Enterprises, Inc. is legally responsible for the acts of Murville  

                                                                                                         

                     Lampkin          or     George         Damassiotis.              Otherwise,          [the  

                                                                                                        

                     corporation] is not legally responsible for those acts under  

                                              

                     this instruction.  



                                                                                                                                

                     AB&M Enterprises has not raised this error on appeal.  Nevertheless, this  



                                                                                  

error is so fundamental that we can not overlook it.  



                                                                                                                      

                     When we brought this error to the attention of the parties at oral argument,  



                                                                                                                           

the State's  attorney did not argue that the error was harmless.                                       Rather,  the State's  



                                                                                                                                

attorney suggested that any error was waived because AB&M's attorney was the one  



                                                                                                                                 

who requested this instruction.  But on re-examination of the record, this turned out not  



                   

to be true.  



                                                                                                                           

                     Because  this  jury  instruction  misstated  the  State's  burden  of  proof,  



                                                                                                                                 

AB&M's conviction is improper to the extent that the jury may have relied on clause (A)  



                        

of the statute.  



                                                                                           

                The flaw relating to clause (B) of AS 11.16.130  



                                                                                                                                   

                     To the extent that the jurors may have relied on clause (B) of the statute to  



                                                                                                                             

find that AB&M Enterprises was criminally responsible for the assault on Brown, based  



                                                                                                                                 

on the evidence that George Damassiotis solicited Lampkin to commit this assault, the  



                                                                                                                               

jurors would have had to conclude that Damassiotis's act of soliciting this assault was  



                                                                                                                            

equivalent to the corporation's having solicited the assault. This is because, under clause  



                                                                                                                               

(B) of the statute, the government was required to prove that the criminal conduct was  



                                

solicited by AB&M Enterprises.  



                                                                                                                                 

                     The jurors in the present case were never directly instructed on what the  



                                                                                                                               

phrase "solicited by the corporation" meant. Instead, they were told in a roundabout way  



                                                               - 5 -                                                          2518
  


----------------------- Page 6-----------------------

                                                                                                                                 

(through a combination of the initial jury instructions and the trial judge's answers to the  



                                                                                                                             

jury's mid-deliberation questions) that a corporation is deemed to have solicited a crime  



                                                                                                      

if any officer or employee of the corporation solicited that crime.  



                                                                                                                                  

                     This is an incorrect statement of law.  As Professor LaFave explains in his  



                                                                                                                                   

treatise  Substantive Criminal Law,  corporate liability based on the solicitation of a  



                                                                                                                          

criminal act is typically restricted to instances where the solicitation is made by a director  



                                   

or a "high managerial agent":  



                       

                                                                                                             

                     [U]nder  the  Model  Penal  Code[,]  a  corporation  may  be  

                                                                                                           

                     convicted of  the  commission of an offense only if it was  

                                                                                                              

                     "authorized, requested, [or] commanded ... by the board of  

                                                                                                             

                     directors or by a high managerial agent acting in behalf of the  

                                                                                                                   

                     corporation within the scope of his office or employment."  

                                                                                                         

                     Many modern recodifications contain a provision along these  

                                                                                                      

                     lines.     "High  managerial  agent"  is  defined  in  the  [Model  

                                                                                                         

                     Penal] Code as "an officer of a corporation or ... any other  

                                                                                              

                     agent of a corporation ... having duties of such responsibility  

                                                                                                         

                     that his conduct may fairly be assumed to represent the policy  

                                                                                                               

                     of the corporation."   Some modern  codes contain such a  

                                                                                                 

                     definition,        while      others       include       a    broader        definition  

                                                                                                            

                     encompassing both those who have  responsibility as to the  

                                                                                                              

                     formulation   of   policy   and   those   who   supervise   in   a  

                                                                                                      

                     managerial   capacity.                 Absent       such       legislation,       courts  

                                                                                            

                     sometimes take a somewhat broader approach encompassing  

                                                                                               

                     at  least  some  corporate  employees  below  the  supervisory  

                                                                       

                     level [if they are in a position of responsibility].  



                                                                                                                               

Wayne R. LaFave, Substantive Criminal Law (2nd ed. 2003),  13.5(c), Vol. 2, pp. 388- 



                    

 89 & n. 63.  



                                                                                                                                  

                     The provision of AS 11.16.130 that deals with corporate liability based on  



                                                                                                                       

the solicitation of a criminal act - subsection (a)(1)(B) - does not speak of directors,  



                                                                                                                              

officers, or high-level managers.   Rather, the statute declares that the solicitation must  



                                                               - 6 -                                                          2518
  


----------------------- Page 7-----------------------

                                                                                                                      

be made "by the organization",  without further explanation.                                    But even this language  



                                                                                                                              

suggests that corporations are not liable for any and all criminal acts  solicited by any  



                                                                                                         

corporate "agent" - that is, solicited by any employee whatsoever.  



                                                                                                                         

                    We  find  it  extremely  unlikely  that  our  legislature,  by  using the  phrase  



                                                                                                                         

"solicited ...  by the organization",  intended corporations to be held liable for  crimes  



                                                                                                                         

solicited by filing clerks and maintenance staff.                             Rather,  the wording of our statute  



                                                                                                                           

implicitly requires that the solicitation be done by someone who can reasonably claim  



                                                                                                                                 

some degree of managerial authority or responsibility within the corporation (even if  



                                                                                               

they are not officially designated as a manager or supervisor).  



                                                                                                                                 

                    We  need  not  decide  precisely  what  amount  of  managerial authority  is  



                                                                                                                               

required before a person's act of soliciting a crime can be deemed the corporation's act  



                                                                                                                               

of soliciting a crime under clause (B) of the statute - because, in the present case, the  



                                                                                                                    

jury was told that a solicitation made by any employee should be viewed as a solicitation  



                                                                   

made by the corporation.  This was wrong.  



           Conclusion  



                                                                                                                              

                     The  jury  was  wrongly  instructed  with  regard  to  both  clause  (A)  and  



                                                                                                                               

clause (B) of AS 11.16.130(a)(1).                       Accordingly,  AB&M Enterprises' conviction  for  



                                                          

fourth-degree assault is REVERSED.  



                                                              - 7 -                                                          2518
  

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