STATE OF NEW JERSEY VS. LETICIA GARDNER (15-12-2841, ESSEX COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0041-17T2
STATE OF NEW JERSEY,
Plaintiff-Appellant,
v.
LETICIA GARDNER and
YVONNE STRICKLAND1,
Defendants-Respondents.
_____________________________
Argued February 15, 2018 – Decided July 20, 2018
Before Judges Rothstadt and Gooden Brown.
On appeal from Superior Court of New Jersey,
Law Division, Essex County, Indictment No.
15-12-2841.
Tiffany M. Russo, Special Deputy Attorney
General/Acting Assistant Prosecutor, argued
the cause for appellant (Robert D. Laurino,
Acting Essex County Prosecutor, attorney;
Tiffany M. Russo, of counsel and on the
brief).
David J. Bruno and Robert A. Bianchi, argued
the cause for respondent Leticia Gardner (The
Bianchi Law Group, LLC, and Einhorn, Harris,
Ascher, Barbarito & Frost, PC, attorneys;
1
Respondent Yvonne Strickland has not filed a brief.
David J. Bruno and Matheu D. Nunn, of counsel
and on the brief).
PER CURIAM
On December 3, 2015, defendants Leticia Gardner and Yvonne
Strickland were charged in an Essex County indictment with second-
degree conspiracy, N.J.S.A. 2C:5-2; second-degree theft by
deception, N.J.S.A. 2C:20-4(a); and fourth-degree falsifying or
tampering with records, N.J.S.A. 2C:21-4(a). The indictment
stemmed from allegations that, in 2011, defendants submitted false
closing documents to the Department of Housing and Urban
Development (HUD) in connection with Gardner's purchase of a house
in Avenel. By leave granted, the State appeals from a May 1, 2017
Law Division order granting Gardner's motion to sever defendants
for purposes of trial and a July 20, 2017 order denying the State's
motion for reconsideration. We affirm.
According to the State's theory of the case, Gardner was
required to sell her previous residence in East Orange before
closing on the loan to purchase the Avenel house. On October 25,
2011, Strickland submitted an application for HUD financing,
signed by Gardner, falsely reporting that Gardner had sold her
East Orange home when, in fact, the house was in foreclosure.
During the investigation, Gardner made statements to investigators
in which she referred to Strickland as her "associate" and alleged
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that Strickland assisted in preparing the mortgage application.
Strickland allegedly sent the false documents to her "business
partner," Louis Charles, from "her email account on letterhead of
'DCAPS, LLC,' which [was] a company formed and owned by
Strickland." Charles, a licensed mortgage broker, forwarded the
documents to HUD, and, as a result, Gardner successfully closed
on the Avenel house.
Prior to indicting defendants, the State charged Charles in
a complaint-warrant with fourth-degree securing the execution of
documents by deception, N.J.S.A. 2C:21-16, and third-degree
forgery, N.J.S.A. 2C:21-1(a)(3). During a proffer session,
Charles professed innocence and incriminated defendants, claiming
he met Gardner in February 2011 through Strickland, who introduced
her as "one of [her] best friend[s] and business partner." Charles
claimed he agreed to help Gardner complete an application for a
mortgage loan to purchase a new home at Strickland's request. He
alleged he did not know the documents he forwarded to the mortgage
lender were false, nor did he have any reason to think they were.
To support his claims, Charles provided incriminating documents,
including a 2009 civil consumer fraud complaint filed by the New
Jersey Attorney General charging Strickland and several others
with mortgage fraud. After receiving this information, the State
administratively dismissed the criminal complaint against Charles
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and pursued the criminal prosecution of Strickland and Gardner,
leading to the return of the joint indictment.
Strickland moved to sever, arguing that Gardner's statements
to investigators implicated her and were the "functional
equivalent of and tantamount to an interlocking confession
prohibited by . . . State v. Young, 46 N.J. 152 (1965) and Bruton
v. United States, 391 U.S. 123 (1968)." On February 14, 2017, the
motion judge denied severance, concluding that although Gardner's
statements "may create hostility between co-defendants, it [did]
not rise to the level [of] prejudice . . . sufficient to sever a
trial," and "mere antagonism [was] not sufficient grounds for
severance." Additionally, the judge distinguished State v.
Weaver, 219 N.J. 131, 157 (2014), because, unlike the co-defendants
in Weaver who "each named the other as the shooter, the co-
defendants here [had] yet to blame the other for any wrong doing."
The judge acknowledged Strickland's "fear of possible prejudice"
if additional "inculpatory evidence [was] produced," but believed
"carefully worded jury instructions" could properly address her
concerns.
While Strickland's motion to sever was pending, the State
moved pursuant to N.J.R.E. 404(b) to admit a September 12, 2011
consent judgment Strickland had entered into with the Attorney
General to resolve the 2009 mortgage fraud case against her. In
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the consent judgment, "without admission of any liability or
wrongdoing of any kind," Strickland agreed to "comply fully with
all [f]ederal and [s]tate laws, including but not limited to the
New Jersey [Consumer Fraud Act, N.J.S.A. 56:8-1 to -210], the New
Jersey RICO statute, [N.J.S.A. 2C:41-1 to -6.2], and the Licensed
Lenders Act."2 She further agreed not to "engage in any unfair or
deceptive acts or practices in the conduct of any business," to
pay $22,000 in "[s]ettlement of the [a]ction," to face increased
penalties if she were to engage in any mortgage fraud related
activities, and to abide by strict reporting requirements.
On April 7, 2017, following oral argument, the judge denied
the State's motion, finding that the consent judgment failed to
meet the third and fourth prongs of the test for admissibility set
forth in State v. Cofield, 127 N.J. 328, 338 (1992).3
Acknowledging that the consent judgment was not the result of an
adjudication or trial and did not require Strickland to admit
2
Prior to 2009, both mortgage lending and consumer loans were
subject to the New Jersey Licensed Lenders Act. L. 1996, c. 157.
However, mortgage lending is now subject to the New Jersey
Residential Mortgage Lending Act, N.J.S.A. 17:11C-51 to -89.
3
Under the four-prong Cofield test, other-crimes evidence is
admissible only if: (1) relevant to a material issue; (2) similar
in kind and reasonably close in time to the offense charged; (3)
supported by clear and convincing evidence; and (4) its prejudice
does not outweigh its probative value. 127 N.J. at 338.
5 A-0041-17T2
liability or wrongdoing of any kind, the judge explained that
admitting the judgment
would have the exact effect and result of
attributing criminal intent, wrongdoing, or
liability to Strickland. It would have the
effect of a prior conviction, when it is not.
In addition, any discussion about the
three separate 2008 transactions [embodied in
the Attorney General's civil mortgage fraud
complaint] would certainly enhance the
possibility of confusion with the issues to
be resolved in this case by the jury.
After the judge denied the State's N.J.R.E. 404(b) motion,
Gardner moved to sever in order to pursue a third-party guilt
defense based on the 2009 mortgage fraud complaint and 2011 consent
judgment. On May 1, 2017, during oral argument on the motion,
Gardner argued she was entitled to present, in her defense, the
2011 consent judgment as well as a potential victim identified in
the 2009 civil complaint whom, like Gardner, Strickland allegedly
"took advantage of." Gardner asserted that because the court had
already barred the evidence as unfairly prejudicial to Strickland,
separate trials were necessary. The State objected and, contrary
to its prior position, argued the consent judgment did not meet
even the lesser burden for a defendant's use of 404(b) evidence
because "it would mislead and confuse the jury" and was "unfairly
prejudicial" to the State.
6 A-0041-17T2
After oral argument, the judge issued an oral decision,
determining that, although the evidence did not "survive the
Cofield test, it [did] pas[s] the less rigorous balancing test of
[N.J.R.E.] 403." As a result, the judge granted severance to
allow "Gardner the opportunity to mount the defense that she [was]
[c]onstitutionally entitled to present" and "to allow [her] the
full exercise of her due process rights." The judge declined,
however, to "address the issue of . . . antagonistic defense[s],"
noting that it was "not relevant" at that point, and entered a
memorializing order to sever defendants on the same date.
The State moved for reconsideration of the May 1, 2017
severance order, distinguishing Weaver, where "the evidence that
was sought to be admitted was supported by a Judgment of
Conviction," from this case, where "the [c]onsent [j]udgment
verbatim [did] not admit any liability or wrong doing of anything."
According to the State, the consent judgment did "not negate the
guilt of . . . Gardner" or "nullify any of the other acts,"
including Gardner's purchase of a BMW "within days of the closing
of the [Avenel] property," Strickland's use of the BMW,
Strickland's addition to Gardner's insurance policy, or the
"payment arrangements [for the insurance policy] between the two
individuals." The State asserted that the evidence linked
defendants "in a way that show[ed] that Ms. Gardner was not
7 A-0041-17T2
completely innocent and was not completely [naïve] as to what was
going on."
On July 20, 2017, the judge issued an order and written
decision, denying the State's motion and upholding his initial
decision. He determined the State only sought reconsideration "to
reargue the motion for severance," and because it "did not agree
with the outcome of the court's balancing of [the N.J.R.E. 403]
factors," which were impermissible grounds for reconsideration
under State v. Puryear, 441 N.J. Super. 280, 294 (App. Div. 2015).
Noting that "[t]he factual distinctions (or similarities) between
the Weaver . . . [and Gardner] cases [were] irrelevant" to his
ruling, the judge acknowledged the Weaver Court's general
proposition that "[a]n accused is entitled to advance in his
defense any evidence which may rationally tend to refute his guilt
or buttress his innocence of the charge made." Thus, the judge
"concluded that the prejudice to Gardner's due process rights and
her ability to present her defense outweighed the needs of judicial
efficiency . . . and any prejudice that could accrue to the [S]tate
by having to try the cases separately." This appeal followed.
On appeal, the State raises the following single point for
our consideration:
8 A-0041-17T2
POINT I
THE TRIAL JUDGE ERRED BY, AFTER CORRECTLY
DENYING DEFENDANT STRICKLAND'S MOTION FOR
SEVERANCE AND DENYING THE STATE'S MOTION TO
ADMIT [N.J.R.E.] 404(B) EVIDENCE, GRANTING
DEFENDANT GARDNER'S MOTION FOR SEVERANCE.
"The decision whether to grant severance rests within the
trial court's sound discretion and is entitled to great deference
on appeal." State v. Brown, 118 N.J. 595, 603 (1990); see also
State v. Sterling, 215 N.J. 65, 73 (2013) ("A court must assess
whether prejudice is present, and its judgment is reviewed for an
abuse of discretion."). A court may try two or more defendants
together "if they are alleged to have participated in the same act
or transaction or in the same series of acts or transactions
constituting an offense or offenses." R. 3:7-7. Indeed, there
is a "general preference to try co-defendants jointly," State v.
Robinson, 253 N.J. Super. 346, 364 (App. Div. 1992), particularly
when "much of the same evidence is needed to prosecute each
defendant," Brown, 118 N.J. at 605. In some circumstances, a
joint trial is "'preferable' because it serves judicial economy,
avoids inconsistent verdicts, and allows for a 'more accurate
assessment of relative culpability.'" Weaver, 219 N.J. at 148
(quoting Brown, 118 N.J. at 605).
"Nevertheless, a single joint trial, however desirable from
the point of view of efficient and expeditious criminal
9 A-0041-17T2
adjudication, may not be had at the expense of a defendant's right
to a fundamentally fair trial." State v. Sanchez, 143 N.J. 273,
290 (1996) (quoting United States v. Echeles, 352 F.2d 892, 896
(7th Cir. 1965)). Thus, if the court finds that permissible or
mandatory joinder will prejudice one or both defendants, it may
"grant a severance of defendants[] or direct other appropriate
relief." R. 3:15-2(b). However, "[t]he test for granting
severance . . . is a rigorous one." Brown, 118 N.J. at 605-06.
"The danger by association that inheres in all joint trials is not
in itself sufficient to justify a severance, provided that by
proper instructions to the jury, the separate status of co-
defendants can be preserved." Id. at 605. Nonetheless, "[i]t is
possible that the level of antagonism between co-defendants,
despite the absence of mutually exclusive defenses, can become so
intense as to justify a severance." Id. at 608.
One such basis for severance arises when restrictions on the
admissibility of exculpatory evidence, such as proof of a co-
defendant's prior bad acts under N.J.R.E. 404(b), would unfairly
prejudice a defendant at a joint trial, but the restrictions would
be unnecessary in separate trials. See Weaver, 219 N.J. at 157-
58. Generally, evidence of other crimes or bad acts is
inadmissible "to prove the disposition of a person in order to
show that such person acted in conformity therewith" on another
10 A-0041-17T2
occasion. N.J.R.E. 404(b). However, a defendant "may use other-
crimes evidence in support of his [or her] defense 'if in reason
it tends, alone or with other evidence, to negate his [or her]
guilt of the crime charged.'" Weaver, 219 N.J. at 157 (quoting
State v. Garfole, 76 N.J. 445, 453 (1978)).
Such defensive use of other crimes or bad acts evidence,
"sometimes referred to as 'reverse 404(b)' evidence," is not
subject to the more stringent test of N.J.R.E. 404(b) admissibility
set forth in Cofield, 127 N.J. at 338, "because 'an accused is
entitled to advance in his [or her] defense any evidence which may
rationally tend to refute his [or her] guilt or buttress his [or
her] innocence of the charge made.'" Weaver, 219 N.J. at 150
(quoting Garfole, 76 N.J. at 453). Instead, "[a]dmissibility of
this evidence is governed by N.J.R.E. 401, not N.J.R.E. 404(b)."
Weaver, 219 N.J. at 157. Thus, "simple relevance to guilt or
innocence" is sufficient, as "prejudice to the defendant is no
longer a factor." Id. at 150 (quoting Garfole, 76 N.J. at 452-
53). Evidence is relevant if it has "a tendency in reason to
prove or disprove any fact of consequence to the determination of
the action." N.J.R.E. 401.
In addition to relevance, this "more relaxed standard" still
requires the court to "determine that the probative value of the
evidence is not substantially outweighed by any of the [N.J.R.E.]
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403 factors" for exclusion. Weaver, 219 N.J. at 151; see also
N.J.R.E. 403. Under this standard, "the question . . . is not
relevance as such, but the degree of relevance balanced against
the counter considerations expressed in [N.J.R.E. 403] of undue
consumption of time, confusion of the issues[,] and the misleading
of the jury." Garfole, 76 N.J. at 451. "This determination is
[also] highly discretionary." Weaver, 219 N.J. at 151.
Another basis for severance arises "when a defendant's and a
co-defendant's defenses are not simply at odds, but are
'antagonistic at their core,' meaning that they are mutually
exclusive and the jury could believe only one of them." Id. at
149 (quoting Brown, 118 N.J. at 605-07). Conversely, "[i]f the
jury can return a verdict against one or both defendants by
believing neither, or believing portions of both,
or . . . believing both completely, the defenses are not mutually
exclusive." Brown, 118 N.J. at 606. A court should not grant
severance merely because "one defendant seeks to escape conviction
by placing guilt on his or her co-defendant." Ibid.Here, we discern no abuse of discretion in the judge's
decision that Gardner's defensive use of the evidence constitutes
12 A-0041-17T2
sufficient grounds for severance.4 Strickland's 2011 consent
judgment is relevant to Gardner's case because it rationally
supports her defense that she "was a mere dupe of a sophisticated
individual versed in mortgage fraud." Indeed, the State admitted
as much in its N.J.R.E. 404(b) motion to introduce the consent
judgment in its case in chief, where it argued the "conduct that
was relevant to the civil judgment in . . . 2011 is substantially
similar to the conduct . . . charged in this indictment."5
According to the State, not only was the conduct substantially
similar, it was "sophisticated" because "there are
institutions, . . . mechanisms, and procedures in place that are
more complex than what perhaps a normal layperson may understand."
This type of evidence, standing alone or in combination with other
evidence, may refute Gardner's guilt or buttress her claim of
innocence. See Weaver, 219 N.J. at 150. Reverse 404(b) evidence
4
We note the judge's ruling is entirely consistent with his prior
ruling denying the State's application to admit the 2011 consent
judgment under N.J.R.E. 404(b) based on, among other things, its
prejudice to Strickland outweighing its probative value.
5
We note the State's contrary argument in its merits brief that
"[t]he consent judgment was the result of litigation that involved
an entirely different scheme" and "is proof of no fact of
consequence to this case." On the contrary, the compelling nature
of the evidence is demonstrated by its role in the State's decision
to dismiss the criminal complaint against Charles once his proffer
session revealed the existence of the 2009 complaint and inevitably
led to the discovery of the 2011 consent judgment.
13 A-0041-17T2
does not have to refute a defendant's guilt on its own in order
to be admissible; a defendant can use it in conjunction with other
evidence. See Weaver, 219 N.J. at 150; see also Garfole, 76 N.J.
at 453. Thus, the judge reasonably concluded the consent judgment
met the simple relevance standard for admissibility of reverse
404(b) evidence.
Likewise, turning to the N.J.R.E. 403 factors, the judge
properly concluded the factors did not outweigh the probative
value of the evidence. Garfole, 76 N.J. at 453-54; see also
Weaver, 219 N.J. at 157. Although the judgment did not require
Strickland to admit any wrongdoing, it prohibited her from engaging
in "any unfair or deceptive acts or practices in the conduct of
any business" and imposed a sanction. As the State alleged in its
own N.J.R.E. 404(b) motion, Strickland allegedly "engaged in
criminal behavior of the exact same nature six weeks later," which
was "contrary to [her] affirmative obligations in [the consent
judgment]." The judge expressed his intent to limit the scope of
inquiry into the underlying facts of the 2009 mortgage fraud case
in order to avoid any potential confusion of issues or misleading
of the jury. Under these circumstances, we agree with the judge's
determination that any applicable N.J.R.E. 403 factors did not
outweigh Gardner's right to due process and to present a defense.
14 A-0041-17T2
We also find no error in the judge's denial of the State's
motion for reconsideration. See Puryear, 441 N.J. Super. at 294.
Because we discern no abuse of discretion in either of the judge's
decisions, like the judge, we need not address whether Gardner's
and Strickland's positions were antagonistic and mutually
exclusive as an alternative basis for severance.
Affirmed.
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