IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
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No. 95-20087
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UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
WILLIAM GIBBS CAMPBELL, JR.,
Defendant-Appellant.
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Appeal from the United States District Court
for the Southern District of Texas
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January 3, 1996
Before KING, STEWART, and PARKER, Circuit Judges.
PER CURIAM:
William Gibbs Campbell, Jr. appeals his conviction for
bankruptcy fraud on the grounds that evidence was admitted in
violation of the attorney-client privilege and the hearsay rule,
and that the erroneous admission of this evidence was not
harmless error. Finding no reversible error, we affirm
Campbell's conviction and sentence.
I. BACKGROUND
After a jury trial, William Gibbs Campbell, Jr. ("Campbell")
was convicted of one count of bankruptcy fraud in violation of 18
U.S.C. § 152 and sentenced to a one-year term of imprisonment,
which was suspended, and five years of supervised release. He
was also fined $5,000 and ordered to pay $56,000 in restitution.
Campbell was the general partner of a limited partnership,
3700 WFA Limited, which owned Wakeforest Apartments ("the
Partnership"). Michael C. O'Connor ("O'Connor"), Campbell's
personal attorney, was the sole limited partner. Barbara M.
Rogers ("Rogers"), was the attorney for the Partnership. The
Partnership filed a petition for bankruptcy under Chapter 11 in
the United States Bankruptcy Court for the Southern District of
Texas on June 30, 1986. Rogers signed the bankruptcy petition,
and Campbell, as general partner, signed the verification.
On August 31, 1987, Campbell wrote a check for $96,000 to
the Partnership from the First City Bank account of Wakeforest
Management Company, a separate business entity from the
Partnership. At the time Campbell wrote the check, the First
City Bank account of Wakeforest Management Company had a balance
of $301.73. The check was deposited into the Partnership's
account at Allied Bank. Later, the $96,000 check was returned
unpaid for insufficient funds.
On the same day, Campbell arranged a wire transfer of
$56,000 from the Partnership's Allied Bank account to the
Guadalupe County Abstract Company's account at the Nolte National
Bank of Seguin ("Nolte Bank"). Campbell's accountant recorded
the $56,000 payment to the Nolte Bank account on Campbell's
personal ledger, not on the business records of the Partnership.
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Campbell used the $56,000 he had transferred from the
Partnership's Allied Bank account to pay off a $47,000 real
estate note on his personal residence at 284 Turtle Lane in
Seguin, Texas. O'Connor, the limited partner in the Partnership
and Campbell's personal attorney, learned of the origin of the
$56,000 in mid-September 1987. Upon this discovery, O'Connor
sent Campbell a letter questioning Campbell's actions, and
explaining that "as an attorney, I hope you understand that I
must avoid even the appearance that I participated in
transferring funds out of the Wakeforest bankruptcy."
On September 2, 1987, one of the Partnership's creditors
moved to convert the bankruptcy Chapter 11 reorganization
proceeding into a Chapter 7 liquidation. On October 27, 1987,
the bankruptcy court entered an order converting the petition to
Chapter 7 and appointed Lowell T. Cage ("Cage") as the Chapter 7
trustee for the Partnership.
Cage wrote a letter to Campbell on December 4, 1987,
requesting an explanation for the $56,000 transfer and asking
what, if any, authority, had the court given for making such a
transfer. Campbell never responded to Cage's letter, nor did
Cage discover an order authorizing the transfer. Cage brought
this matter to the attention of the office of the United States
Trustee and requested that appropriate action be taken. Campbell
was then indicted and prosecuted for bankruptcy fraud.
At Campbell's bankruptcy fraud trial, the government called
Rogers, the Partnership's attorney, as a witness. Campbell
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objected on the grounds of the attorney-client privilege. After
argument, the court ruled that an attorney-client relationship
had not been established between Rogers and Campbell personally
and that Rogers's contact with Campbell had been solely as the
Partnership's attorney, and the court allowed Rogers to testify,
although it reserved judgment on individual exhibits. The
government then questioned Rogers about the attorney-client
privilege, seeking to establish that Cage, the trustee for the
Partnership, had waived the attorney-client privilege on behalf
of the partnership. The government also sought to introduce a
letter from Cage to Rogers waiving the privilege. Campbell's
counsel objected to both the testimony and the letter as hearsay.
The court eventually allowed the testimony and admitted the
letter under the residual hearsay exception.
II. STANDARD OF REVIEW
"The application of the attorney-client privilege is a
question of fact, to be determined in the light of the purpose of
the privilege and guided by judicial precedents." United States
v. Neal, 27 F.3d 1035, 1048 (5th Cir. 1994) (internal quotations
omitted), cert. denied, 115 S. Ct. 1165 (1995). "The clearly
erroneous standard of review applies to the district court's
factual findings. We review the application of the controlling
law de novo." Id.
We review the district court's rulings on the admissibility
of evidence for an abuse of discretion. United States v. McAfee,
8 F.3d 1010, 1017 (5th Cir. 1993); United States v. Jardina, 747
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F.2d 945, 950 (5th Cir. 1984), cert. denied, 470 U.S. 1058
(1985). In determining whether an erroneous admission of
evidence is harmless error, the court of appeals must decide
whether the inadmissible evidence actually contributed to the
jury's verdict; we will not reverse unless the evidence had a
substantial impact on the verdict. United States v. Gadison, 8
F.3d 186, 192 (5th Cir. 1993).
III. DISCUSSION
A. Waiver of the Attorney-Client Privilege
Campbell contends that the district court erroneously
concluded that Cage, the Chapter Seven bankruptcy trustee for the
Partnership, could waive the attorney-client privilege on behalf
of the Partnership. He argues that a limited partnership is more
like an individual than a corporation; therefore, the Supreme
Court's ruling that a bankruptcy trustee may waive the privilege
on behalf of a corporation is inapplicable. See Commodity
Futures Trading Commission v. Weintraub, 471 U.S. 343, 358
(1985). In response, the government asserts that Cage, as
trustee, had authority to waive the Partnership's attorney-client
privilege. Additionally, the government points out that Rogers
at no time established a personal attorney-client relationship
with Campbell.
In Commodity Futures Trading Commission v. Weintraub, 471
U.S. 343 (1985), the Supreme Court held that "the trustee of a
corporation in bankruptcy has the power to waive the
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corporation's attorney-client privilege. . . ." Id. at 358. The
Court asserted first that, for solvent corporations, the power to
waive the privilege rests with the officers and directors. Id.
at 348. It then reasoned that control of a corporation's
attorney-client privilege in bankruptcy belongs to the party
having the most analogous duties to the solvent corporation's
officers and directors. Id. at 351. The Court concluded that
the duties of the bankruptcy trustee are most similar to the
duties of the officers and directors of a solvent corporation;
therefore, the bankruptcy trustee controls the privilege. Id. at
353.
In holding that the bankruptcy trustee may waive the
attorney-client privilege on behalf of a corporation, the Court
cautioned that a bankrupt individual presents a different
situation:
[O]ur holding today has no bearing on the problem of
individual bankruptcy, which we have no reason to
address in this case. As we have stated, a
corporation, as an inanimate entity, must act through
its agents. When the corporation is solvent, the agent
that controls the corporate attorney-client privilege
is the corporation's management. Under our holding
today, this power passes to the trustee because the
trustee's functions are more closely analogous to those
of management outside of bankruptcy than are the
functions of the debtor's directors. An individual, in
contrast, can act for himself; there is no "management"
that controls a solvent individual's attorney-client
privilege.
Id. at 356. A limited partnership, like a corporation, is an
inanimate entity that can act only through its agents.
Accordingly, the same rule that applies to corporations in
bankruptcy should apply to a bankrupt limited partnership. Thus,
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we conclude that the district court did not err in holding that
Cage, as the bankruptcy trustee of the debtor-Partnership, had
the authority to waive the attorney-client privilege on behalf of
the Partnership. See Hopper v. Frank, 16 F.3d 92, 96 (5th Cir.
1994) (stating that "there is no logical reason to distinguish
partnerships from corporations or other legal entities in
determining the client a lawyer represents" (internal quotations
omitted)); In re Bieter Co., 16 F.3d 929, 935 (8th Cir. 1994)
(reasoning that the rules regarding the attorney-client privilege
of corporations are no less instructive when applied to a
partnership or some other client entity not an individual).
B. Admission of Exhibit 90
Campbell additionally argues that the district court erred
in admitting, over his objection, the government's Exhibit 90,
which was a letter from Cage to Rogers in which Cage acknowledged
waiving the attorney-client privilege on behalf of the
Partnership. The district court admitted Exhibit 90 under the
residual exception to the hearsay rule, Federal Rule of Evidence
803(24). Campbell argues that the letter was not admissible
under the residual hearsay exception.
The government responds that, when Campbell objected to
Rogers's testimony on the basis of the attorney-client privilege,
it offered Exhibit 90 to demonstrate that any such privilege had
been waived. The government argues that the district court
properly considered the letter in determining whether Cage had
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waived the Partnership's attorney-client privilege, even if the
letter was hearsay not within any exception, because, under
Federal Rule of Evidence 104(a), the court is not bound by the
rules of evidence in determining a preliminary question such as
the existence of a privilege.
First, we agree with the government that the district court
could have admitted Exhibit 90 as evidence that the Partnership's
attorney-client privilege had been waived, without reaching the
hearsay analysis. Federal Rule of Evidence 104(a) provides:
Questions of admissibility generally. Preliminary
questions concerning the qualification of a person to
be a witness, the existence of a privilege, or the
admissibility of evidence shall be determined by the
court, subject to the provisions of subdivision (b).
In making its determination it is not bound by the
rules of evidence except those with respect to
privileges.
Fed. R. Evid. 104(a). Therefore, the court could have considered
Exhibit 90 to determine whether the attorney-client privilege had
been waived even if the letter was hearsay not within any
exception.
Second, and in the alternative, we conclude that the
district court did not abuse its discretion in admitting Exhibit
90 under the residual hearsay exception of Federal Rule of
Evidence 803(24).
Third, even if the district court had erred in admitting
Exhibit 90, such error would have been harmless. See United
States v. Pepper, 51 F.3d 469, 472 (5th Cir. 1995) (stating that
"[i]n determining whether the admission of hearsay evidence was
harmless, we must consider the other evidence in the case, and
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then decide if the inadmissible evidence actually contributed to
the jury's verdict"). Rogers testified that she requested and
received a letter waiving the Partnership's attorney-client
privilege from Cage. Additionally, the letter's only evidentiary
value was in demonstrating waiver of the attorney-client
privilege; it had no relation to Campbell's guilt or innocence.
Therefore, even had the district court erred in admitting Exhibit
90, such error would have been harmless.
IV. CONCLUSION
For the foregoing reasons, the judgment of the district
court is AFFIRMED.
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