United States District Court, D. South Carolina
Beattie B. Ashmore, in his capacity as court-appointed Receiver for Ronnie Wilson and Atlantic Bullion & Coin, Inc ., Plaintiff,
Lucile M. Sullivan and Hewlett K. Sullivan, Defendants.
ORDER AND OPINION
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
Defendants Lucile M. Sullivan and Hewlett K. Sullivan
(“Defendants”) to recover grossly excessive
payments received by Defendants as a return on their
investment in the Wilson-AB&C Ponzi scheme.
matter is before the court on Defendants' Motion to
Certify Questions of State Law (ECF No. 39) pursuant to Rule
244 of the South Carolina Appellate Court Rules
(“SCACR”), to which Plaintiff filed a Response in
Opposition (ECF No. 41). Defendants filed a Reply to
Plaintiff's Response in Opposition. (ECF No. 42.)
court finds that Defendants' proposed certified questions
to the South Carolina Supreme Court are not outcome
determinative. Therefore, the court DENIES Defendants'
Motion to Certify Questions of State Law (ECF No. 39) for the
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
SCACR § 244(a).
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).
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
assert that questions related to the causes of action against
Plaintiffs 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. 39-1 at 2.)
Specifically, Defendants claim 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. 39-1 at 2.) Additionally,
Defendants argue 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.
39-1 at 2.) Thus, Defendants propose the following certified
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 ...