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Ashmore v. Stevenson

United States District Court, D. South Carolina, Anderson/Greenwood Division

November 18, 2016

Beattie B. Ashmore, in his capacity as court-appointed Receiver for Ronnie Wilson and Atlantic Bullion & Coin, Inc., Plaintiff,
v.
Lynda Sentell Stevenson, Defendant.

          ORDER AND OPINION

         Plaintiff Beattie B. Ashmore (“Plaintiff), in his capacity as court-appointed receiver for Ronnie Gene Wilson (“Wilson”) and Atlantic Bullion and Coin, Inc. (“AB&C”), filed the instant action against Defendant Lynda Sentell Stevenson (“Defendant”) to recover grossly excessive payments received by Defendant as a return on her investment in the Wilson-AB&C Ponzi scheme.[1]

         This matter is before the court on Defendant's Motion to Certify Questions of State Law (ECF No. 36) pursuant to Rule 244 of the South Carolina Appellate Court Rules (“SCACR”), to which Plaintiff filed a Response in Opposition (ECF No. 38). Defendant filed a Reply to Plaintiff's Response in Opposition. (ECF No. 39.)

         The court finds that Defendant's proposed certified questions to the South Carolina Supreme Court are not outcome determinative. Therefore, the court DENIES Defendant's Motion to Certify Questions of State Law (ECF No. 36) for the following reasons.

         I. LEGAL STANDARD

         South Carolina Appellate Court Rule 244 provides that the South Carolina Supreme Court

[I]n its discretion may answer questions of law certified to it by any federal court of the United States . . . when requested by the certifying court if there are involved in any proceeding before that court questions of law of this state which may be determinative of the cause then pending in the certifying court when it appears to the certifying court there is no controlling precedent in the decisions of the Supreme Court.

SCACR § 244(a).

         Further, the certification order must present (1) “the questions of law to be answered”; (2) “all findings of fact relevant to the questions certified”; and (3) “a statement showing fully the nature of the controversy in which the questions arose.” SCACR § 244(b).

         Additionally, the Fourth Circuit has held that “where there is no case law from the forum state which is directly on point, the district court [must] attempt[] to do as the state court would do if confronted with the same fact pattern.” Roe v. Doe, 28 F.3d 404, 407 (4th Cir. 1994). “Only if the available state law is clearly insufficient should the court certify the issue to the state court.” Id. Further, “federal courts should take care not to burden their state counterparts with unnecessary certification requests.” Boyter v. Comm'r, 668 F.2d 1382, 1385 n.5 (4th Cir. 1981). Consequently, if the answer to the issue sought to be certified is reasonably clear, no need for certification exists.

         II. ANALYSIS

         A. Defendant's Argument

         Defendant asserts that questions related to her causes of action against Plaintiff for violation of (1) the Statute of Elizabeth and (2) principles of unjust enrichment must be certified to the South Carolina Supreme Court. (ECF No. 36-1 at 2.) Specifically, Defendant claims that “[t]he Statute of Elizabeth is intended to prevent persons from defrauding creditors by transferring their assets to third-parties, and later getting those assets returned. It was never designed to decide issues between equally innocent, defrauded creditors and the [Court] has never decided this important public policy issue.” (ECF No. 36-1 at 2.) Additionally, Defendant argues that “[t]here has never been a South Carolina Supreme Court decision holding that equally innocent investors who both made and lost money should somehow take the profits from one and give to another.” (ECF No. 36-1 at 2.) Thus, Defendant proposes the following certified questions verbatim:

1. Whether South Carolina law allows a Court to grant equitable relief, under the common law theory of unjust enrichment, against one investor in a Ponzi scheme in favor of another investor where (1) all investors took an equal risk; (2) the investors' contributions were immediately put at risk when invested and the investors recognized the time value of their money; (3) the proceeds appeared to be the very performance which was promised; (4) the investors would have received similar benefits if the scheme had been a legitimate investment; (5) the other investors were not plaintiffs in the case and were equally “at fault” in trusting an investment advisor who ran the Ponzi scheme; (6) the investors reasonably changed position in reliance on the benefit so that restitution would be inequitable; (7) the investors who reasonably changed position would be placed under significant hardship if restitution was required of them; and (8) the perpetrator of the scheme suffered no injury and had no justifiable claim to recover money from the investors to whom it made the original conveyances when the continued existence of the scheme benefited from the payments to some investors in order to attract later investors.
2. Whether South Carolina law allows a Court to require investors to disgorge the proceeds of their investments in a Ponzi scheme after (1) they became final transactions and (2) the investors had changed their position ...

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