Civil LITIGATION, Claims Settlement AND THE impact on criminal proceedings Presented by Kyson Johnson, TDI Fraud Prosec

1. Civil LITIGATION, Claims Settlement AND THE impact on criminal proceedingsPresented by Kyson Johnson, TDI Fraud Prosecutor How to avoid rejection of your case by prosecutors

2. Famous Cases with both Criminal and Civil Litigation Components Not unusual for a set of facts to have both criminal and civil litigation components or implications. Here are a few famous ones you may recall: O.J. Simpson IMB Chief Dominique Strauss-Kahn Michael Jackson Kobe Bryant Ben Roethlisberger Rodney King

3. Agenda Criminal versus Civil Parties Victim�s Rights Lawsuit/Settlement Before Indictment Malicious Prosecution Lawsuit/Settlement After Indictment Examples

4. Caveat � Presentation Is/Is Not WHAT IT IS NOT� Not legal advice Not intended to guide you in your civil settlements Not an expert in civil Law WHAT IT IS�. Is intended as general information about prosecutor�s views of civil lawsuits/settlements in relation to criminal prosecutions Is intended to give you an overview in this area of the law

5. Criminal versus Civil Standards of Proof Criminal Prosecutions = Beyond a reasonable doubt (highest standard of proof) Termination of Parental Rights = Clear and convincing evidence Civil Lawsuits (i.e., insurance lawsuits) = Preponderance of the evidence (51%) Arrest = Probable cause Detention = Reasonable suspicion

6. Litigation Parties Civil Cases Typically Plaintiff versus Defendant Texas is not a direct action state (injured 3rd party cannot sue insurance companies directly) May have a variety of parties, including: cross claimants, counter-claims, intervenors, etc. Information/evidence is normally made available via discovery process to all parties Criminal Case State of Texas versus Defendant Not Victim versus Defendant Right to information not a two way street (for victim) State ex rel. Hillbig v. McDonald, 839 S.W.2nd 854 (Crime victim doesn�t have a constitutional or statutory right to evidence in a pending criminal action contained in a prosecutor�s file).

7. Texas Crime Victims� Rights Texas Constitution � Article I, � 30 On request a crime victim is entitled to: Notification of court proceedings Presence at proceedings (with some limitations) Conference with prosecutor�s office Restitution Information regarding the outcome (plea, sentence, release, restitution ordered, etc.)

8. Texas Crime Victims� Rights Code of Criminal Procedure � Art. 56.01 et seq. Defines victims� rights in criminal cases Only applies to victims of violent crimes (defined) However, sections frequently utilized in all cases (similar to those provided by Texas Constitution): Right to information about the case General information about plea negotiation, restitution, court proceedings Right to provide information as part of Pre-Sentence Investigation (PSI) Parole information Prompt return of property held by law enforcement

9. Lawsuit Before Indictment Instigation of a public prosecution to aid in the collection of a debt is �improperly motivated conduct.� 26 A.L.R.4th 565 Lawyers may not threaten to present criminal charges to a prosecuting authority to obtain advantage in a civil matter. ABA Disciplinary Rule 7-105 Suit before criminal proceedings not a bar to prosecution, just a consideration Prosecution on charges is sole discretion of District Attorney. Kalyanaram v. Univ. of Tex. Sys., 2009 Tex. App. LEXIS 3783

10. Lawsuit Before Indictment Defendant may be entitled to stay of civil proceedings if criminal action pending or instituted. 33 A.L.R Fed. 2d 111, Ashworth v. Albers Medical, Inc. 229 F.R.D. 527(S.D. W. VA 2005) No Constitutional requirement of stay Not unconstitutional to force litigant to choose to answer questions or plead 5th Amendment Five factor test on decision to stay civil case (State dependent)

11. Lawsuit Before Indictment Factors considered by court for stay: 1. Private interest of plaintiffs in proceeding expeditiously balanced against prejudice if delayed; 2. Private interest of and burden on defendant; 3. The interests of the court; 4. The interests of those persons not parties to litigation; and 5. The public interests

12. Lawsuit Before Indictment Civil lawsuit can be helpful to prosecutor: Government doesn�t always have best resources Information obtained in civil case used in criminal case: Generally no meaningful �investigative� discovery in criminal proceeding Interrogatories, Admissions, Request for Production, Depositions Discovery obtained in civil case can be utilized in criminal prosecution. Admissions in civil case may be admissible in criminal case either as a Statement of a party opponent or as confession Documents obtained by RFP may be admissible as evidence

13. Lawsuit Before Indictment Can be harmful to prosecution: Civil litigation instituted and plaintiff threatens criminal action to induce settlement (motivation, bias of witnesses, credibility issue) Settlement is reached and contains a mutual release of any and all claims (not dispositive) Provides defense with a cross examination material Provides defense with a jury nullification argument

14. Settlement Before Indictment Fewer complications than Lawsuit, however: Several factors prosecutors will/should consider Settlement language What have the parties agreed to in the release of claims What loss remains after payment of settlement Prosecutorial resources Equity to defendant (prosecutors job is to seek justice not convictions) Judicial economy Victims� motivation/wishes

15. Why so serious?

16. Malicious Prosecution �No one can invoke the criminal law to merely have decided any civil question affecting the indebtedness due from one citizen to another, or other civil right. If defendant knows that plaintiff did not steal or embezzle, but his object in instigating the criminal prosecution is to obtain the payment to him by plaintiff of a debt owed to defendant, the defendant is liable to plaintiff in damages for malicious prosecution. Sebastian v. Cheney, 25 S.W. 691 (1894) Likewise if the motivation is to avoid payment of a legitimate debt

17. Malicious Prosecution Elements for MP: Commencement of a criminal action; Caused or aided by the defendant; Terminated in favor of the plaintiff; Plaintiff was innocent; There was no probable cause for such proceeding; Done with malice; and Resulted in damage to plaintiff Ellis v. Sinton Sav. Asso., 455 S.W.2d 834 (1970 Tex App)

18. Malicious Prosecution All facts known to the prosecutor and acted upon in good faith will be examined to determine whether there is sufficient evidence to maintain an action for malicious prosecution. Sebastian v. Cheney, infra Thus, prosecutor needs to know of any settlement agreement If not, argument may be made that prosecutor did not know all of the material facts prior to proceeding with prosecution

19. Malicious Prosecution However, as a defense, �Any person knowing of an offense against the law is authorized to state the facts to the district or county attorney, whose duty it is to determine whether or not an offense against the law has been committed�� �It is a duty common to all good citizens to report to the constituted authorities every infraction of the law to the end that the law may be enforced, which is a service to the public; and it will by reason of the imperfection of human laws sometimes happen that some innocent men will be accused with honest intentions. Sebastian v. Cheney, infra

20. Lawsuit After Indictment State/prosecutor cannot prevent victim from exercising their civil remedies Discovery process may provide additional information for use in criminal case However, State/prosecutor may not attempt to direct civil case to obtain criminal evidence that would otherwise be unobtainable (using suit as mechanism for violation of constitutional right against unlawful search and seizure Malicious prosecution less likely, but still possible, apply the previously listed factors for malicious prosecution

21. Settlement After Indictment Always notify law enforcement who investigated the case and the prosecutor in charge of prosecution Is not the end of the criminal case Will be considered as a factor in a just resolution to the criminal case Victim cannot agree to dismiss criminal charges, but courts might consider this in a malicious prosecution suit for a prosecution that continues following a settlement with dismissal language (courts split)

22. Example No. 1 Defendant purchased insurance policy following accident and insurer paid for damages that shouldn�t have been covered. Case investigated and referred to DA for prosecution. Prior to referral for prosecution, insurer refers case to collection agency who enters written settlement agreement with defendant. Subsequent to referral for prosecution, defendant pays back all money to collection agency. Defense attorney is kind enough to point out that defendant paid back all money as requested.

23. Outcome No. 1 No language in settlement regarding criminal case Collection agent did not promise dismissal Defendant repaid all restitution Criminal case proceeded to conclusion Defendant pleaded guilty to reduced charge of attempted insurance fraud and received deferred adjudication

24. Example No. 2 Defendant settled claim with insurance company and received check. Subsequently notified ins. co. that check was not received and requested 2nd check to issue. Cashed both checks. Case referred to DA for prosecution. During investigation, ins. co. referred to collection agent. Collection agent (from NY) told defendant (and his attorney) that he would have criminal case dismissed if defendant paid restitution.

25. Outcome No. 2 Interference with criminal proceeding? Is victim responsible for actions of agent? Malicious prosecution? Defendant paid restitution, what if the case is dismissed due to actions of collection agent?

26. Conclusion No set rule Communicate intention and actions to investigator and/or prosecutor Don�t expect to receive �advice� on how you should proceed Do expect to have all of your documents subpoenaed by the state and probably defense Act in good faith