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Ashmore v. Lucile M.

United States District Court, D. South Carolina

September 14, 2017

Beattie B. Ashmore, in his capacity as court-appointed Receiver for Ronnie Gene Wilson and Atlantic Bullion & Coin, Inc., Plaintiff,
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 this action against Defendants Lucile M. Sullivan and Hewlett K. Sullivan, Jr.[1] (“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 pursuant to Defendants' Motion to Certify and Amend the Order For Interlocutory Review Pursuant to 28 U.S.C. § 1292(b). Specifically, Defendants request that the court amend the Order denying Defendants' Motion to Reconsider (the Order Denying Defendants' Motion to Certify Questions of State Law) (ECF No. 68) that was entered on February 8, 2017, to state that the necessary conditions for interlocutory review are met. Plaintiff opposes Defendants' Motion, asserting that it should be denied. For the reasons set forth below, the court DENIES Defendants' Motion to Certify and Amend the Order for Interlocutory Review Pursuant to 28 U.S.C. § 1292(b) (ECF No. 71).

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Plaintiff is the court appointed Receiver in In Re: Receiver for Ronne Gene Wilson and Atl. Bullion & Coin, Inc., C/A No.: 8:12-cv-02078-JMC, ECF No.1 (D.S.C. July 25, 2012), a case related to this 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 this 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 denied Defendants' Motion to Certify Questions of State Law (ECF No. 46), Defendants moved for reconsideration on December 15, 2016. (ECF No. 48.) On February 8, 2017, the court entered the Order denying Defendants' Motion for Reconsideration. (ECF No. 68.)

         On February 17, 2017, Defendants filed a Motion to Certify and Amend the Order for Interlocutory Review Pursuant to 28 U.S.C. § 1292(b), asserting (1) 28 U.S.C. § 1292(a)(2) requires interlocutory appeal and (2) 28 U.S.C. 1292(b) provides an alternative ground for interlocutory appeal, which Defendants contend is met because (a) the issue presents a controlling issue of law, (b) substantial grounds for differences of opinion exist, and (c) certification would materially advance the disposition of the litigation. (ECF No. 71.)

         On February 28, 2017, Plaintiff filed an Opposition to Defendants' Motion, asserting (1) Defendants' Motion seeks relief that cannot be granted, (2) 28 U.S.C. § 1292(a)(2) does not apply, and (3) this court should not certify an appeal to the Fourth Circuit under § 1292(b). (ECF No. 80.) On March 7, 2017, Defendants filed a Reply to Plaintiff's Opposition, in large part reasserting their position they laid out in their Motion to Certify and Amend the Order for Interlocutory Review Pursuant to 28 U.S.C § 1292(b). (ECF No. 81.)

         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 Plaintiff's 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

         In civil actions, a party may only appeal from final orders and certain limited interlocutory and collateral orders of the district courts. See 28 U.S.C. §§ 1291, 1292; see also Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 545 (1949). This limitation “advances the important interest of avoiding piecemeal review of ongoing district court proceedings, ” which “would not only delay the ultimate resolution of disputes by spawning multiple appeals, ” but would also “undermine the independence of the district judge.” MDK, Inc. v. Mike's Train House, Inc., 27 F.3d 116, 119 (4th Cir. 1994) (citations omitted).

         The Courts of Appeals have authority under 28 U.S.C. § 1292 to hear certain interlocutory decisions by district courts, but only under very limited circumstances. Under 28 U.S.C. § 1292(a)(2), “the court of appeals shall have jurisdiction of appeals from interlocutory orders appointing receivers, or refusing orders to wind up receiverships or to take steps to accomplish the purposes thereof, such as directing sales or other disposals of property.” Alternatively, a district court may certify an order to the Court of Appeals for interlocutory review under 28 U.S.C. § 1292(b) when the district judge believes that the order involves “a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.”

         If a district court approves an interlocutory appeal, the only issue before the Court of Appeals is whether the district court abused its discretion in denying the motion in question. See Simpson v. Duke Energy Corp., Nos. 98-1906, 98-1950, 1991 WL 694444, at *2 (4th Cir. Sept. 8, 1999) (“We review a district court's refusal to certify a question to the state's highest court for abuse of discretion.”); see also Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974) (determining that use of certification procedure “rests in the sound discretion of the federal court”).

         IV. ...


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