Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

SEC v. TOWERS FIN. CORP.

May 8, 1997

SECURITIES AND EXCHANGE COMMISSION, Plaintiff, against TOWERS FINANCIAL CORPORATION, et al., Defendants.


The opinion of the court was delivered by: PECK

 ANDREW J. PECK, United States Magistrate Judge:

 The issue before the Court is whether to allow defendant Brater to call character witnesses at trial in this civil action. For the reasons set forth below, the Court finds that Rule 404(a)(1) of the Federal Rules of Evidence precludes defendant Brater from calling character witnesses in a civil trial.

 FACTS

 The facts of the underlying action, which are not relevant to the instant motion, are familiar to Judge Knapp and myself through the related case of In re Towers Fin. Corp. Noteholders Litig., 1995 U.S. Dist. LEXIS 21147, 93 Civ. 0810, 1995 WL 57188 (S.D.N.Y. Sept. 20, 1995) (Peck, M.J.), aff'd, 936 F. Supp. 126 (S.D.N.Y. 1996) (Knapp, J.), familiarity with which is assumed. In short, the Securities and Exchange Commission sued Brater (and others) for his alleged material false representations made in furtherance of an elaborate Ponzi scheme.

 Defendant Brater's proposed pretrial order listed a number of character witnesses. The SEC has moved to preclude the admission of character evidence in this civil action.

 ANALYSIS

 Rule 404(a)(1) of the Federal Rules of Evidence provides: "Evidence of a person's character or a trait of his character is not admissible for the purpose of proving that he acted in conformity therewith on a particular occasion, except: (1) . . . "evidence of a pertinent trait of character offered by an accused, or by the prosecution to rebut the same." Fed. R. Evid. 404(a)(1). The Commission argues that one cannot be an "accused" outside of a criminal action, the present proceeding is a civil action, and, therefore, the accused's character exception does not apply. Brater argues for a more flexible definition of "accused" that includes a defendant in a "quasi-criminal" civil proceeding, such as this SEC action.

 Black's Law Dictionary defines "accused" as "the generic name for the defendant in a criminal case." Blacks Law Dictionary, at 23 (6th ed.). Webster's defines "the accused" as "the person or persons formally charged with the commission of a crime." Webster's New World Dictionary, at 9 (3d College Edition). Use of the word "prosecution" in Rule 404(a)(1) also strongly suggests that the exception is meant to be limited to criminal cases. Thus, the plain meaning of Rule 404(a)(1)'s language limits the exception to criminal cases, making it unavailable in this civil case.

 The Advisory Committee Notes to Rule 404 support the conclusion that the drafters' intent was to limit the Rule 404(a)(1) exception to criminal cases:

 
In most jurisdictions today, the circumstantial use of character is rejected but with important exceptions: (1) an accused may introduce pertinent evidence of good character . . . , in which event the prosecution may rebut with evidence of bad character. . . . This pattern is incorporated in the rule. While its basis lies more in history and experience than in logic an underlying justification can fairly be found in terms of the relative presence and absence of prejudice in the various situations. . . . In any event, the criminal rule is so deeply imbedded in our jurisprudence as to assume almost constitutional proportions and to override doubts of the basic relevancy of the evidence.
 
. . . .
 
The argument is made that circumstantial use of character ought to be allowed in civil cases to the same extent as in criminal cases, i.e., evidence of good (nonprejudicial) character would be admissible in the first instance, subject to rebuttal by evidence of bad character. . . . The difficulty with expanding the use of character evidence in civil cases is set forth by the California Law Revision Commission . . . :
 
"Character evidence is of slight probative value and may be very prejudicial. It tends to distract the trier of fact from the main question of what actually happened on the particular occasion. It subtly permits the trier of fact to reward the good man and to punish the bad man because of their ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.