Insurance Fraud Charges Against Defense Counsel Does Not Result in Reversal for Ineffective Counsel
Barry Zalma
Sep 8, 2023
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While Jesse Steven Castro’s case was pending, his attorney was charged with two insurance fraud felony offenses. Castro’s case proceeded to trial, and a jury convicted him of continuous sexual abuse of a child. Castro filed a motion for new trial claiming that he received ineffective assistance of counsel because his attorney failed to disclose and was distracted by her pending charges and in so doing, prioritized her financial interest in representing him above a fiduciary duty to disclose her pending charges.
In Jesse Steven Castro v. The State Of Texas, No. 14-19-00679-CR, Court of Appeals of Texas, Fourteenth District (August 31, 2023) the Court of Appeals resolved the dispute.
BACKGROUND
Castro hired Jana Lewis-Perez to represent him. Lewis-Perez was then indicted for two felony insurance fraud offenses. Castro’s case proceeded to trial. After the jury returned its guilty verdict, it assessed punishment at 38 years’ confinement. The trial court overruled Castro’s motion for new trial.
EFFECTIVENESS OF COUNSEL
On appeal, Castro argued that Lewis-Perez was unconstitutionally ineffective because she had a conflict of interest between a fiduciary duty to her client to disclose her pending charges and her financial self-interest. According to Castro, Lewis-Perez’s conduct amounted to fraud by nondisclosure, resulting in denial of Castro’s “right to counsel of his choice.”
A trial court abuses its discretion in denying a motion for new trial only when no reasonable view of the record could support the trial court’s ruling. The Sixth Amendment to the United States Constitution guarantees in all criminal prosecutions that the accused shall have the right to reasonably effective assistance of counsel. The Sixth Amendment also guarantees a defendant the right to “conflict-free” representation.
A defendant demonstrates a violation of his right to reasonably effective assistance of counsel based on a conflict of interest if he can show that:
1 his counsel was burdened by an actual conflict of interest; and
2 the conflict had an adverse effect on specific instances of counsel’s performance.
An actual conflict of interest exists if counsel is required to make a choice between advancing her client’s interest in a fair trial or advancing other interests (perhaps counsel’s own) to the detriment of her client’s interest. A potential conflict of interest is insufficient to reverse a conviction.
On appeal, Castro contends that Lewis-Perez provided ineffective assistance of counsel because she had a conflict of interest, i.e., a fiduciary duty to disclose her criminal fraud indictments to Castro. In Texas, a fiduciary relationship exists between attorneys and clients as a matter of law. As a fiduciary, an attorney is obligated to render a full and fair disclosure of facts material to the client’s representation. However, this duty to inform does not extend to matters beyond the scope of representation.
Although Castro attested that Lewis-Perez seemed distracted and unprepared, he points to no specific examples of this behavior in the record and merely speculates that the cause of any alleged distraction was his attorney’s pending cases.
Castro does not cite, nor did the Court of Appeals find, any authority to support his proposition that Lewis-Perez’s failure to inform him of her pending felony indictments was an “actual conflict of interest.”
The court was not persuaded that Castro established that Lewis-Perez was burdened with an “actual conflict of interest” that required her to make a choice between advancing Castro’s interest in a fair trial or advancing her own interest. Absent a showing that a potential conflict of interest became an actual conflict, the court refused to speculate about a strategy an attorney might have pursued, but for the existence of a potential conflict of interest.
The record did not demonstrate that Lewis-Perez’s alleged failure to inform Castro of her pending insurance fraud charges, unrelated to Castro’s continual sexual abuse of a child charges, was so outrageous that no competent attorney would have engaged in it. During trial Lewis-Perez made numerous objections, cross-examined witnesses, called three witnesses for the defense, and was successful in asking the jury to sentence Castro toward the lower end of the punishment range.
The Court of Appeals concluded that Castro failed to show a reasonable probability that, but for trial counsel’s presumptively deficient performance, the result of the trial would have been different. Having concluded that the trial court did not abuse its discretion in denying Castro’s motion for new trial based on ineffective assistance of counsel.
ZALMA OPINION
Insurance fraud is a serious crime. However, a charge of insurance fraud is nothing more than that, the lawyer charged is presumed to be innocent. In addition, the Court of Appeals recognized that she effectively and aggressively defended Castro and successfully got the jury and trial judge to sentence Castro at the lower end of the punishment range even after he was convicted of the heinous crime of continuous sexual abuse of a child.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
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When I finished my three year enlistment in the US Army as a Special Agent of US Army Intelligence in 1967, I sought employment where I could use the investigative skills I learned in the Army. After some searching I was hired as a claims trainee by the Fireman’s Fund American Insurance Company. For five years, while attending law school at night while working full time as an insurance adjuster I became familiar with every aspect of the commercial insurance industry.
On January 2, 1972 I was admitted to the California Bar. I practiced law, specializing in insurance claims, insurance coverage and defense of claims against people insured and defense of insurance companies sued for breach of contract and breach of the implied covenant of good faith and fair dealing. After 45 years as an active lawyer, I asked that my license to practice law be declared inactive ...
