United States v. Sanchez

UNITED STATES OF AMERICA v. PEDRO SANCHEZ

Case No. 3:18-cr-83-J-34JRK

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

January 3, 2019

ORDER

THIS CAUSE is before the Court on the Defendant, Pedro Sanchez's Oral Motion for Judgment of Acquittal (Doc. 47, Motion), made on November 21, 2018. In the Motion, Sanchez asserts that the Government failed to present sufficient evidence to satisfy the interstate commerce element required by the federal arson statute, 18 U.S.C. § 844(i), under which he has been charged. See Doc. 1 at 1 (Indictment) filed May 9, 2018. Both the Defendant and the Government have submitted memoranda to the Court on the matter. See Defendant's Corrected Trial Memorandum on the Proof Required to Satisfy the Interstate Commerce Element of the Federal Arson Statute (Doc. 43, Defendant's Memorandum), filed November 16, 2018; United States' Proposed Statement of the Case and Voir Dire Examination Questions (Doc. 46, Government's Memorandum), filed November 19, 2018. Additionally, the Court heard argument from counsel on November 21, 2018. See Clerk's Minutes (Doc. 48, Clerk's Minutes), filed November 21, 2018. Therefore the matter is ripe for the Court's consideration.

I. Standard of Review

Rule 29 of the Federal Rules of Criminal Procedure (Rule(s)), governs a court's consideration of a defendant's request for a judgment of acquittal. Rule 29 directs that ". . . after the close of all the evidence, the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." Rule 29(a). In evaluating such a motion, the Court must view the evidence in the light most favorable to the Government and make "all reasonable inferences and credibility choices" in the government's favor." United States v. Gamory, 635 F.3d 480, 497 (11th Cir. 2011) (citations omitted). Ultimately, the Court must deny the motion "if a reasonable fact finder could conclude that the evidence established the defendant's guilt beyond a reasonable doubt." Id. (citing United States v. Descent, 292 F.3d 703, 706 (11th Cir. 2002)).

II. Background and Arguments of the Parties

A grand jury sitting in the Middle District of Florida returned an Indictment charging Sanchez with violating the federal arson statute, 18 U.S.C. § 844(i)¹ by "maliciously damag[ing] and attempt[ing] to damage and destroy, by means of fire, the property of REO Asset Acquisition, LLC and the structure, including an attached two car garage, located at 8579 North Lamanto Avenue, Jacksonville, Florida, used interstate commerce and in an activity affecting interstate commerce." Indictment at 1. On November 21, 2018, Sanchez waived his right to a jury trial, see Doc. 49 (Waiver to Jury Trial), and proceeded to a bench trial on stipulated facts. See Clerk's Minutes. In doing so, he entered into a stipulation of facts relating to the case. See Doc. 50 (Stipulation), filedNovember, 21, 2018. For the purposes of the bench trial, the Stipulation establishes beyond a reasonable doubt that on January 10, 2018, Sanchez maliciously damaged with the intent to destroy by fire a house located at 8579 North Lamanto Avenue, Jacksonville, FL ("Lamanto House"), which was owned by REO Asset Acquisition, LLC ("REO"). Stipulation at 1. REO is located in Golden, Colorado, and was formed in 2007. Id. REO

initially bought a portfolio of loans containing mortgages. Through acquiring the properties underlying the mortgages, the owners of REO intended to sell the portfolio of homes, however, due to the market collapse, they chose to rent the homes instead and wait for the housing market to recover. REO owned approximately 100-125 houses throughout the United States, including California, Washington, Arizona, Nevada, Texas, Delaware, Connecticut, Pennsylvania, Indiana, Missouri, Florida, and Colorado. In early 2016, REO decided to stop leasing its properties and renovate their homes for sale once the current leases in the homes expired.

Id. at 1-2.

For those properties REO owned in Jacksonville, FL, REO hired a local company, Lighthouse Property Management & Realty of Jacksonville ("Lighthouse") to oversee the rental and management of the properties, including the Lamanto House. Id. at 2. Lighthouse advertised the Lamanto House for rent through a variety of local and national websites, id., and provided REO rent for the property by direct deposit into REO's bank in Denver, Colorado. Id. For approximately seven years, the "Lamanto house was rented out to tenants." Id. at 3. The most recent lease on the Lomanto house was due to expire on July 31, 2017. Id. Before it did so, REO assigned the Lamanto House to Sanchez to renovate it for sale. Id. Beginning in August 2017, REO, through Sanchez, was working "to renovate the Lamanto House and prepare it for sale." Id. The house remained vacant as it underwent "extensive repairs." Id. During this time, the house was insured with "IRG Underwriters, now known as Landmark Insurance Group," id. at 4, through a broker inColorado. Id. The

policy covered multiple uses including rental and mere use by the property owner. At the time of the fire, REO had not informed IRG that the Lamanto House no longer had tenants. In the event the Lamanto House did not sell or did not receive a good offer, REO intended to rent the home out again as it had previously done.

Id.

To facilitate Sanchez's work, REO provided Sanchez with a credit card to use for purchases to improve the Lamanto House, as well as for other REO properties in Jacksonville. Id. REO also wired money to Sanchez from its Colorado bank to further the renovations and to pay Sanchez. Id. at 3-4. On January 10, 2018, Sanchez set the Lamanto House on fire, id., resulting in $64,000 worth of damage to the property. Id. at 4-5.

At the conclusion of the bench trial, after the Court had accepted the parties' Stipulation, Sanchez made an oral motion for judgment of acquittal. He asserted that the evidence before the Court is insufficient to convict him under 18 U.S.C. § 844(i), because the facts do not establish the required interstate commerce element of the federal felony arson statute. See Motion; Defendant's Memorandum at 2. In particular, Sanchez argues that because the Lamanto House had been unrented and unoccupied for six months prior to the fire, it cannot be considered to be "used in interstate . . . commerce." 18 U.S.C. § 844(i); Defendant's Memorandum at 2. He therefore argues that the evidence is insufficient to support a conviction for violation of the federal arson statute. Defendant's Memorandum at 24. In contrast, the Government argues the evidence is sufficient to support a finding of guilt under § 844(i). It contends that the Lamanto House was an item of inventory owned by REO and had any number of other connections to interstatecommerce sufficient to support a guilty verdict against Sanchez for setting fire to the building. Government's Memorandum at 4-10. Therefore, the Government asserts that the interstate commerce element required by § 844(i) is satisfied.

III. Discussion

The sole disputed element of the charged offense is whether the facts admitted by Sanchez are sufficient to satisfy § 844(i)'s requirement that the structure he admitted burning, the Lamanto House, was a building "used in interstate . . . commerce." Id.

As referenced above, § 844(i) commands that

[w]hoever maliciously damages or destroys, or attempts to damage or destroy, by means of fire or an explosive, any building, vehicle, or other real or personal property used in interstate or foreign commerce or in any activity affecting interstate or foreign commerce shall be imprisoned for not less than 5 years and not more than 20 years, fined under this title, or both.

18 U.S.C. § 844(i) (emphasis added). In evaluating this language, the Supreme Court has determined that the statute's terms apply only

to property that is "used" in an "activity" that affects commerce. The rental of real estate is unquestionably such an activity. We need not rely on the connection between the market for residential units and the interstate movement of people, to recognize that the local rental of an apartment unit is merely an element of a much broader commercial market in rental properties.

Russell v. United States, 471 U.S. 858, 862 (1985) (citations omitted). Examining further the language of the federal arson statute in Jones v. United States, 529 U.S. 848 (2000), the Supreme Court laid out a basic analytical framework for determining whether a burned structure fell within the scope of § 844(i). The Supreme Court explained that "the proper inquiry . . . is into the function of the building itself, and then a determination of whether that function affects interstate commerce." Id. at 854-55 (internal citations and quotations omitted). The Court went on to state that the language "used in commerce" "is mostsensibly read to mean active employment for commercial purposes, and not merely a passive, passing, or past connection to commerce." Id. Accordingly, in evaluating the question before it, specifically, whether the arson of an owner-occupied residence fell within the purview of § 844(i), the Supreme Court answered in the negative, noting that "[t]he home's only 'active employment' . . . was for the everyday living of [the defendant's cousin] and his family. . . . He did not use the residence for any trade or business." Id. at 856. As such, the Supreme Court held that § 844(i) did not apply to the arson of an owner-occupied private residence. Id. at 854.

Following the dictates of Jones and Russell, the Eleventh Circuit Court of Appeals has identified a three-part inquiry to determine whether a structure falls within the scope of § 844(i). United States v. Odom, 252 F.3d 1289, 1284 (11th Cir. 2001). A court must determine the following: "(1) What is the function of the building? (2) Is the function of the building involved in commerce? (3) Does the...