October 21, 2009
STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
EDWARD ACQUAYE, DEFENDANT-RESPONDENT.
On appeal from an interlocutory order of the Superior Court of New Jersey, Law Division, Middlesex County, Indictment No. 06-01-00143.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 5, 2009
Before Judges Rodríguez and Yannotti.
We granted leave to the State to appeal from the interlocutory order granting defendant Edward Acquaye's petition for post-conviction relief (PCR), vacating defendant's conviction based on a guilty plea. We affirm.
These are the salient facts. In June 2006, defendant pleaded guilty to third degree Medicaid fraud, N.J.S.A. 30:4D-17(c). This charge stemmed from defendant's acceptance of kickbacks from Michael Stavitski, the owner of Belmar Pharmacy, in return for defendant steering the prescriptions of all the residents of his residential healthcare facility, Lincoln Rest Center in Jamesburg, to Belmar Pharmacy. These prescriptions were paid by Medicaid pursuant to the New Jersey Medical Assistance and Health Services Act, N.J.S.A. 30:4D-1 to -19.5. In exchange, the State agreed to recommend a non-custodial term conditioned on the payment of $1500 in restitution and a $1000 fine and to recommend "that defendant does not lose [his] license to provide [nursing/rest home] care."
At the plea hearing, defendant acknowledged reviewing and understanding the plea form, which he signed and initialed at every page. Before accepting the plea, the judge informed defendant that the State's promise to recommend that he be able to retain his New Jersey State license to operate Lincoln Rest Center was not guaranteed because the licensing authorities were independent agencies and not bound by the State's recommendation. The judge said, "I don't think anyone can guarantee or promise you that you're not going to lose your license. You understand that[,] right?" Defendant replied, "Yes." Defendant then gave an adequate factual basis for his guilty plea. The judge accepted the plea. Instead of imposing a probationary term, the judge suspended imposition of the sentence for five years with the condition that defendant pay $1500 in restitution and a $1000 fine.
Three weeks after this disposition, the United States Department of Health and Human Services, Office of Inspector General (OIG), advised defendant that, as a result of this conviction, he would be excluded from participation in all federally-funded healthcare programs for a period of five years pursuant to 42 U.S.C. § 1320a-7(a). The letter informed defendant that he had thirty days from the date of the letter to "submit any information and supporting documentation [he] want[ed] the OIG to consider before it [made] a final determination regarding [his] exclusion." A subsequent letter informed defendant that he was excluded from participating in any healthcare programming which receives federal funding. Defendant was advised of his right to a hearing to appeal his exclusion. Defendant did not request a hearing.
The OIG also notified the New Jersey Division of Medical Assistance and Health Services (Division) of this exclusion.
The Division then notified defendant that, as a consequence of OIG's decision, he was excluded from participating in any healthcare program receiving federal funding for five years. Defendant and his wife, Freda Acquaye, a fifty percent owner and Chief Operating Officer of Lincoln Rest Center, decided to voluntarily close the facility and surrender its license.
Defendant filed this PCR petition, arguing that the State and the court failed to inform him of his automatic exclusion from participating in Medicaid programming and all federally-funded healthcare programs pursuant to 42 U.S.C. § 1320a-7(a). Defendant asked the court to vacate his plea on the ground that the plea was unknowing and involuntary as a result of the State's failure to inform him of the automatic exclusion.
The same judge who accepted the plea and sentenced defendant heard oral arguments. The judge determined that there was not a meeting of the minds between defendant and the State regarding the terms of the plea agreement. The judge ruled preliminarily that failure to inform defendant that he would not be able to participate in federally-funded healthcare programs would render defendant's previous decision to enter the plea an uninformed one. The judge gave the parties a September 19, 2008 deadline to resolve the matter or, in the alternative, to proceed with an evidentiary hearing to determine what the understanding was between the parties.
On October 16, 2008, the judge held an evidentiary hearing. At this hearing, both defendant and the Deputy Attorney General who appeared at the plea hearing testified. In a supplemental brief, another Deputy Attorney General certified that the State contacted OIG and spoke to Joanne Francis, an OIG representative, to inquire if defendant had requested any appeals or hearings after receiving the letter of exclusion. Francis replied that defendant filed a response to the OIG letter, but made no request for a hearing.
The judge granted defendant's PCR petition, finding that defendant's guilty plea was not entered knowingly, voluntarily, or intelligently because the State's promise to recommend that defendant not lose his New Jersey license to operate a rest home implied, according to the judge, that defendant had a chance of continuing to operate Lincoln Rest Center. However, because defendant's debarment from federally-funded healthcare programs was a mandatory result of the guilty plea, continued operation of the business was "practically impossible." Finally, the judge reasoned that "the mandatory nature of said debarment is inconsistent with the [plea recommendation.]"
On appeal, the State contends:
THE TRIAL COURT ERRED IN FINDING THAT THE STATE WAS REQUIRED TO INFORM DEFENDANT OF THE COLLATERAL ISSUE OF HIS FEDERAL EXCLUSION FROM PARTICIPATING IN FEDERALLY FUNDED HEALTHCARE PROGRAMMING RENDERING HIS PLEA INVOLVEMENT AND UNKNOWING.
In a supplemental letter brief, the State contends that:
THE TRIAL COURT ERRED IN GRANTING [PCR]; DEFENDANT'S GUILTY PLEA SHOULD STAND BECAUSE HE RECEIVED EFFECTIVE ASSISTANCE OF COUNSEL WHEN HIS ATTORNEY INFORMED HIM ABOUT THE PENAL CONSEQUENCES OF HIS GUILTY PLEA AND DEFENDANT WAS NOT MISINFORMED REGARDING ANY PENAL CONSEQUENCE.
We disagree with the State's arguments and affirm.
We begin our analysis with a restatement of governing principles. A defendant seeking to withdraw a plea after sentencing, pursuant to Rule 3:21-1, must show that he or she is prejudiced by enforcement of the agreement, i.e., that knowledge of the consequences would have made a difference in his or her decision to plead. State v. Johnson, 182 N.J. 232, 241-42 (2005); State v. McQuaid, 147 N.J. 464, 495-96 (1997); State v. Kiett, 121 N.J. 483, 490 (1990); State v. Howard, 110 N.J. 113, 123 (1988).
It is fundamental to the practice of plea bargaining that the guilty plea must be made voluntarily, knowingly, and intelligently. Id. at 122 (citing State v. Taylor, 80 N.J. 353, 362 (1979)). For that reason, in accepting a plea of guilty, the trial court should question defendant under oath to determine that the plea is made with an understanding of "'the nature of the charge and the consequences of the plea.'" State v. Kovack, 91 N.J. 476, 484 (1982) (quoting R. 3:9-2*fn1 ). Lack of awareness of penal consequences may result in the vacating of a sentence imposed pursuant to a plea agreement. State v. Johnson, supra, 182 N.J. at 236-37. "The right of the defendant to be informed of the consequences of his plea, however, extends only to those consequences that are 'direct,' or 'penal,' but not to those that are 'collateral.'" State v. Howard, supra, 110 N.J. at 122 (citing State v. Heitzman, 209 N.J. Super. 617, 622 (App. Div. 1986), aff'd o.b., 107 N.J. 603 (1987)). However, these authorities apply to situations where the defendant is not informed of a consequence.
A defendant also has the right not to be "misinformed . . . as to a material element of a plea negotiation, which [he] has relied thereon in entering his plea." State v. Nichols, 71 N.J. 358, 361 (1976). Defendant's "reasonable expectations," grounded in the terms of the plea agreement, must be fulfilled. State v. Marzolf, 79 N.J. 167, 183 (1979) (citing State v. Thomas, 61 N.J. 314, 322 (1972)). Thus, "misinformation about a collateral consequence may vitiate a guilty plea if the consequence is a material element of the plea." State v. Jamgochian, 363 N.J. Super. 220, 225 (App. Div. 2003) (citing State v. Howard, supra, 110 N.J. at 122).
Therefore, in the context of defendant's misinformation, the distinction between direct or collateral consequences is not significant. Rather, the focus is on defendant's expectation and the inaccurate information conveyed by the plea agreement. For that reason, this case does not turn on whether defendant's exclusion from participating in federally-funded healthcare programs is a penal or collateral consequence of the plea. Clearly, such exclusion is a collateral consequence. See Manocchio v. Kusserow, 961 F.2d 1539, 1543 (11th Cir. 1992) (holding that debarment pursuant to 42 U.S.C. § 1302a-7 is remedial in nature and not punitive).
Here, the judge found that the State's failure to accurately inform defendant that his subsequent exclusion from participation in federally-funded healthcare programs rendered the guilty plea unknowing and involuntary. We agree.
We emphasize that neither the State nor the trial court were required to alert defendant to the federal exclusion prior to the entry of his guilty plea. The primary responsibility to determine this consequence was on defendant, who anticipated the possibility of losing his ability to operate Lincoln Rest Center. There would not be a reversal here if the State had simply recommended a non-custodial sentence. However, the State went further and promised to recommend that defendant's license to operate a rest home facility not be suspended. Clearly, the State had no control over the New Jersey or federal licensing bodies. But, by making the recommendation that it did, the State conveyed erroneous information that federal exclusion was not mandatory. The promise was illusory, and would never be accepted by the licensing body. Moreover, the minsinformation went to a consequence which was a material element of the plea agreement from defendant's perspective. Not losing the ability to operate Lincoln Rest Center was defendant's primary concern. As stated above, the State's recommendation had the capacity to mislead defendant. The disclaimers at the plea hearing did not resolve this misinformation.
Therefore, we agree with the judge that defendant's plea was not a knowing one. The order vacating the conviction is affirmed and the matter is remanded for trial.