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Ashmore v. Sullivan

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

February 8, 2017

Beattie B. Ashmore, In His Capacity as Court-Appointed Receiver for Ronnie Gene Wilson and Atlantic Bullion and Coin, Inc., Plaintiffs,
v.
Lucile M. and Hewlett K. Sullivan, Jr., Defendants.

          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 Defendants Lucile M. Sullivan and Hewlett K. Sullivan, Jr.[1] (together “Defendants”) to recover grossly excessive payments received by Defendants as a return on their investment in the Wilson-AB&C Ponzi scheme.[2]

         This matter is before the court on Defendants' Motion to Reconsider Order Denying Defendants' Motion to Certify Questions (ECF No. 48). Specifically, Defendants seek reconsideration of the Order that was entered by the court on November 28, 2016 (the “November Order”), denying Defendants' Motion to Certify Questions of State Law (ECF No. 39). (ECF No. 46 at 5.) Plaintiff opposes Defendants' Motion asserting that it should be denied. (ECF No. 61 at 1.) For the reasons set forth below, the court DENIES Defendants' Motion to Reconsider.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiff is the court appointed Receiver in In Re: Receiver for Ronnie Gene Wilson and Atlantic Bullion & Coin, Inc., C/A No. 8:12-cv-02078-JMC, ECF No. 1 (D.S.C. July 25, 2012), a case related to the instant matter. Plaintiff alleges that “[o]n August 24, 2001, Defendants made an initial ‘investment' [in the Wilson-AB&C Ponzi scheme] of $21, 750.00.” (ECF No. 1 at 4 ¶ 24.) “Subsequently, Defendants made additional ‘investments' of $211, 350.00 between September 8, 2003 and February 3, 2009 for a total investment of $239, 100.00.” (Id. at ¶ 25.) Plaintiff further alleges that “Defendants withdrew a total of $3, 448, 110.00 [from the Wilson-AB&C Ponzi scheme] between September 2002 and February 2012 resulting in a profit of $3, 209, 010.00.” (Id. at ¶ 26.)

         Based on his appointment as Receiver tasked with “locating, managing, recouping, and distributing the assets of the Wilson-AB&C investment scheme, ” Plaintiff commenced the instant action against Defendants on February 6, 2015, asserting claims for fraudulent transfer (in violation of the Statute of Elizabeth, SC Code Ann. § 27-23-10 (2014)) and unjust enrichment. (ECF No. 1 at 1 ¶ 1 & 6 ¶ 38-7 ¶ 52.) On August 30, 2016, Defendants filed a Motion to Certify Questions of State Law (ECF No. 39) seeking certification to the South Carolina Supreme Court of seven questions “that may be determinative of the cause of this case when it appears that there is no controlling precedent in the decisions of the Supreme Court.” (Id. at 3.) Plaintiff filed a Response in Opposition (ECF No. 41) on September 16, 2016, to which Defendants filed a Reply on September 26, 2016. (ECF No. 42.) After the court entered the November Order, Defendants moved for reconsideration on December 15, 2016. (ECF No. 48.)

         II. JURISDICTION

         The court has jurisdiction over this matter under 28 U.S.C. § 1331 pursuant to Plaintiff s allegation that the Complaint “is so related to the In Re Receiver, 8:12-CV-2078-JMC case and the underlying criminal case, United States v. Wilson, et al, 8:12-cr-00320[, ]” cases in which the court has jurisdiction, “that it forms part of the underlying case or controversy.” (ECF No. 1 at 1 ¶ 3.) The court may properly hear Plaintiffs state law claims for fraudulent transfer and unjust enrichment based on supplemental jurisdiction since these claims “are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy 28 U.S.C. § 1367(a).

         III. LEGAL STANDARD AND ANALYSIS

         In the November Order, the court made the following observations in denying Defendants' Motion to Certify:

Defendants fail to demonstrate how answers to their fact-specific questions will absolve them from liability as a “net winner.” Moreover, the court is unconvinced by Defendants' presumption that the victims of the Wilson-AB&C Ponzi Scheme are classified as “equally innocent investors.” South Carolina has sufficient controlling precedent regarding Ponzi schemes under the Statute of Elizabeth and the doctrine of unjust enrichment, which allows Plaintiff to recover “profits” from net winners in this case. Therefore, the court finds that it is unnecessary to certify Defendants' proposed questions to the South Carolina Supreme Court.

(ECF No. 46 at 5.) Although Defendants seek reconsideration of the November Order pursuant to Rule 59(e) of the Federal Rules of Civil Procedure (ECF No. 48 at 2), the court agrees with Plaintiff (ECF No. 61 at 2) that Rule[3] 54(b) provides the only appropriate avenue for the relief Defendants seek at this time. See Fayetteville Inv'rs v. Commercial Builders, Inc., 936 F.2d 1462, 1469 (4th Cir. 1991); see also Retractable Techs., Inc. v. Int'l Healthcare Worker Safety Ctr., Misc. No. 3:11-mc-28, 2011 WL 3555848, at *2 (W.D. Va. Aug. 11, 2011) (“Rules 59(e) and 60(b) govern reconsideration of final orders.”).

         A. Applicable Standard under Rule 54(b)

         Rule 54(b) provides the following:

When an action presents more than one claim for relief-whether as a claim, counterclaim, crossclaim, or third-party claim-or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay. Otherwise, any order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or ...

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