United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 98-2945
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UNITED STATES OF AMERICA, *
*
Appellee, * Appeal from the United States
* District Court for the
v. * Eastern District of Missouri.
*
JOHN ELLIS CUPIT, IV, *
* [PUBLISH]
Appellant. *
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Submitted: January 12, 1999
Filed: February 25, 1999
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Before RICHARD S. ARNOLD, BRIGHT and WOLLMAN, Circuit Judges.
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PER CURIAM.
Defendant appellant John Ellis Cupit IV appeals his sentence after pleading
guilty to two counts of making a false statement in connection with a loan
application, in violation of 18 U.S.C. § 1014. We reject and dismiss the appeal on the
sentence of imprisonment, and affirm the order of restitution and the term of
supervised release.
The Government indicted Cupit for his willful submission of false documents
in support of a $150,000 loan application to the Capital Bank of Sikeston, a federally
insured financial institution. Cupit pleaded guilty to the charges under a plea
agreement. Among other conditions of the plea agreement, the Government agreed
to remain silent as to the exact sentence to be imposed by the district court, and both
the Government and Cupit agreed to waive any right to appeal.
Prior to the sentence, Cupit objected to the sentence calculations made by the
probation officer in the presentence report. As a result of the dispute between the
Government and Cupit on the amount of the loss sustained by the victims, the district
court held an evidentiary hearing to examine the guideline sentence and the amount
of restitution to be imposed. Rejecting Cupit's objections to the presentence report,
the district judge determined the total offense level to be 15, a criminal history
category of I, and a guideline sentencing range of 18-24 months. The district court
then sentenced Cupit to serve twenty-one months of incarceration concurrently on
both counts, followed by supervised release of five years, also to run concurrently on
both counts, and required Cupit to make restitution to the victims in the total amount
of $150,000.1
Cupit brings this appeal from the sentence asserting the following:
1. The broad waiver of appeal in this case does not preclude Cupit from
appealing his sentence because he did not enter into the agreement knowingly,
intelligently and voluntarily. In essence, Cupit contends that a defendant cannot
make a voluntary plea agreement prior to knowing what sentence will be imposed.
1
The Capital Bank of Sikeston sustained a loss of $150,000 when it paid that
amount in satisfaction of a letter of credit initiated by Cupit. Ultimately, guarantors
Steve Holden and Jim Lincoln each sustained an actual loss of $75,000 in
reimbursing the Capital Bank for the lost funds under the terms of a personal guaranty
agreement executed by them in favor of the Bank. The district court’s decision to
order restitution in the amount of $150,000 reflects this loss to Holden and Lincoln.
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2. The broad waiver of appeal violates Rule 11 of the Federal Rules of
Criminal Procedure and the Due Process Clause of the United States Constitution.
3. Cupit’s execution of the waiver of the right to appeal did not foreclose his
appeal of the amount of restitution imposed by the district court where, as here, the
plea agreement did not specifically refer to restitution, only to the “conviction or
sentence.”
4. The five-year term of supervised release violated the plea agreement of the
parties, which called for a three-year term of supervised release.
We refuse to consider the merits of Cupit’s appeal on issues one and two; after
reviewing the merits on three and four, we affirm the district court’s ruling on those
issues. This court first turns to the appealability of the sentence itself. Cupit asserts
that the district court violated Fed.R.Crim.P. Rule 11 and that Cupit’s waiver was not
voluntary under the circumstances of this case, because Cupit did not know the
proposed sentence at the time of the plea agreement. Cupit’s arguments must fail.
Similar issues were determined in United States v. Michelsen, 141 F.3d 867 (8th Cir.
1998), and that case requires rejection of Cupit's appeal of his twenty-one-month
sentence on these grounds. See Michelsen, 141 F.3d at 871-873.
We next turn to Cupit's claim seeking review of the amount of restitution
awarded by the district court. In United States v. Greger, 98 F.3d 1080 (8th Cir.
1996), this court disallowed an appeal from the award of restitution in which the court
stated, “[s]o long as the sentence is not in conflict with the negotiated agreement, a
knowing and voluntary waiver of the right to appeal . . . will be enforced.” Greger,
98 F.3d at 1081 (citation omitted). The waiver instrument in Greger excluded an
appeal of all issues but jurisdiction. Id. In contrast, the waiver of appeal here recites:
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The defendant has been fully apprised of his right to appeal by his
attorney and fully understands that he has a right to appeal his sentence
under 18 U.S.C. § 3742. Both the defendant and the Government hereby
mutually agree to waive all rights to appeal whatever sentence is
imposed, including any issues that relate to the establishment of the
Guideline range. The District Court's decision as to these issues shall
not be subject to appeal. However, the parties do specifically reserve
the right to appeal from an upward or downward departure from the
Guideline range that is established at sentencing.
Plea Agreement and Stipulation of Facts Relative to Sentencing at 7; App. at 17. We
recognize that the above statement constitutes a broad waiver of the parties’ rights to
appeal. But that language and the record as a whole do not clearly demonstrate
whether the parties ever agreed that the district court’s award of restitution should not
be subject to appellate review. We do not resolve the waiver of restitution issue in
this case, but instead turn to the merits.
We review the district court’s factual finding of loss relating to restitution
under a clearly erroneous standard, see United States v. Morris, 18 F.3d 562, 570 (8th
Cir. 1994), and a challenge to the district court’s application or construction of the
Guidelines de novo. See United States v. Wells, 127 F.3d 739, 744 (8th Cir. 1997).
In cases like this one involving a fraudulent loan application, § 2F1.1 of the
Guidelines governs the determination of loss for sentencing purposes. See id. at 748
(citing U.S.S.G. § 2F1.1, comment. (n.7(b)); see also Morris, 18 F.3d at 570.
Application Note 7(b) to § 2F1.1 defines loss as the greater of, the actual loss
resulting from the fraudulent conduct or the amount of loss the defendant intended
to inflict. See U.S.S.G. § 2F1.1, comment. (n.7(b)). The restitution here represents
a documented actual loss to a bank and thereafter to the victims in the total sum of
$150,000. The record indicates that the victims, as guarantors of corporate loans,
were each required to pay the lending bank $75,000. The record, therefore, supports
the district court’s finding of loss.
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Cupit asserts, however, that he has legitimate claims against the corporation.2
And further, that he is entitled to offset those claims, as to at least one of the victims,
a part owner of the corporation in question, against the amount awarded by the
district court in restitution. In support of this proposition, Cupit cites Wells, supra,
127 F.3d 739, in which this court upheld the district court’s loss calculation. The
district court had reduced the loss by the amount that the victim lender expected to
recover from a stream of lease payments that the defendants had sold to the bank in
exchange for financing. See Wells, 127 F.3d at 748-49 (quoting U.S.S.G. § 2F1.1,
comment. (n.7(b)) (a trial court should reduce the loss by the amount the victim
lender has “recovered, or can expect to recover, from any assets pledged to secure the
loan”). Cupit’s reliance is misplaced. Our decision in Wells hinged on the direct
benefit that the victim bank would receive from the stream of lease payments. In
contrast to Wells, there is no showing that Cupit’s claims will produce an actual
benefit to either of the victims. Rather, Cupit seeks to reduce the calculated loss by
the amount of monies allegedly owed to him by the corporation on entirely unrelated
claims. Under these circumstances, the district court did not err in its award of
restitution.3
Next, we consider the terms of Cupit’s supervised release. The plea agreement
set forth a term of supervised release extending for a three-year period. The
Government represents that this was an unintentional error in the writing of the
agreement which neither the district court, nor the parties to the agreement discovered
in the proceedings before the district court. The applicable term of supervised release
for a Class B felony under 18 U.S.C. § 3583(b)(1) is not more than five years. See
2
Cupit’s claims against the corporation arise from a $55,000 loan made by
Cupit to the corporation, a judgment in favor of Cupit in unrelated litigation in Texas,
and a $10,000 payment Cupit made to the corporation in that same litigation.
3
Cupit still retains his claims against the corporation and may pursue those
claims in a separate proceeding.
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18 U.S.C. § 3583(b)(1). In § 5D1.2 of the Guidelines, the length of the term of
supervised release for a Class B felony is required to be at least three years, but not
more than five years. See U.S.S.G. § 5D1.2(a). As such, according to the
government, the plea agreement should have provided a term of supervised release
of not less than three years but not more than five years.
We agree that the plea agreement misstated the maximum term of the
supervised release. Nevertheless, we remain unpersuaded by Cupit’s argument that
this misstatement provides Cupit with grounds for appeal of his sentence. See United
States v. Rutan, 956 F.2d 827, 829-30 (8th Cir. 1992) (stating that a waiver of appeal
does not preclude appeal of a sentence imposed not in accordance with the plea
agreement). The plea agreement referred to the Code and Guidelines in relating the
likelihood that the district court would impose a term of supervised release. The plea
agreement further recited that “[d]efendant understands that the sentencing court may
in appropriate circumstances extend the term of supervised release and/or modify or
enlarge its conditions.” Plea Agreement and Stipulation of Facts Relative to
Sentencing at 4; App. at 14. It is apparent from reading the plea agreement that the
term of supervised release represented a recitation and not an agreement. Thus, in
view of the specific language of the plea agreement at issue in this case, we conclude
that no breach of the agreement exists on this issue.
Accordingly, we reject Cupit’s appeal except as to restitution and the term of
supervised release. As to these issues, we affirm the sentence on the merits.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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