Securities & Exchange Commission v. Pension Fund of America L.C. , 379 F. App'x 832 ( 2010 )

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 09-12125 ELEVENTH CIRCUIT
MAY 13, 2010
Non-Argument Calendar
JOHN LEY
________________________
CLERK
D. C. Docket No. 05-20863-CV-KMM
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
JOSE PABLO URBINA SOLERA,
Claimant-Appellant,
versus
PENSION FUND OF AMERICA L.C.,
PFA ASSURANCE GROUP, LTD,
PFA INTERNATIONAL, LTD.,
CLAREN TPA, LLC,
LUIS M. CORNIDE,
THOMAS G. SCHULTZ,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(May 13, 2010)
Before EDMONDSON, BIRCH and CARNES, Circuit Judges.
PER CURIAM:
Jose Pablo Urbina Solera, proceeding pro se, appeals the district court’s
denial of his motion for reconsideration of the district court’s order denying his
claim against a receivership estate. Thomas G. Schultz, the receiver appointed by
the district court, has filed a motion asking us to sanction Solera under Federal
Rule of Appellate Procedure 38.
I.
In March 2005, the Securities and Exchange Commission filed an
enforcement action against the Pension Fund of America, LC, and affiliated
entities (collectively “the Pension Fund”) and its two principals. The SEC sought
to enjoin the defendants from continuing to defraud investors through the sale of
“retirement trust plans” issued by the Pension Fund in violation of the anti-fraud
provisions of federal securities laws. The SEC also moved the district court to
appoint a receiver over the Pension Fund. The district court granted that motion
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and appointed Thomas Schultz.
The district court approved a claims procedure for the receiver to follow in
distributing the Pension Fund receivership estate to defrauded investors and other
legitimate creditors of the Pension Fund. The procedure called for claimants to file
a proof of claim form with the receiver. The claim form provided that “any person
or entity submitting this proof of claim form shall submit to the exclusive
jurisdiction of the United States District Court for the Southern District of Florida.”
The approved claims procedure called for the district court to resolve in a summary
proceeding any dispute between a claimant and the receiver.
Solera, a citizen of Costa Rica, filed a proof of claim seeking to recover
$8,030,000 from the receivership estate. He claimed that he had provided five
checks to Carlos Ruiz, a Pension Fund Regional Director in Costa Rica, for
investment with the Pension Fund. Solera’s proof of claim form, like all of his
filings, was written in Spanish. The record contains the original Spanish filings
and English translations. In support of his claim, Solera attached to his proof of
claim form two “conditional receipts” bearing the Pension Fund logo and signed
by Ruiz.
The receiver filed an objection to Solera’s claim and a motion for summary
disposition seeking denial of the claim. The receiver noted that the five checks
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Solera claimed to have invested in Pension Fund were not drawn on Solera’s
account, and instead were drawn on the Clearwater, Florida, SunTrust Bank
checking account of Harlon A. Parchment. The checks were made payable to
Solera. The receiver pointed out that both of the conditional receipts submitted by
Solera stated that “[a] SunTrust Bank representative, as trustee, will replace this
conditional receipt with a definitive one, which will be sent along with the
corresponding trust once the funds become liquid in said Bank.” The receiver also
noted that Solera had produced no evidence that the checks were ever endorsed to
the Pension Fund, that they were ever cashed, or that the Pension Fund had ever
received any funds based on the checks. Four of the five checks bore stamps
stating either “unavailable funds” or “insufficient funds.” The receiver produced
bank statements for Parchment’s SunTrust checking account demonstrating that,
during the relevant period, that account never had a balance even remotely
sufficient to cover the amount listed on the checks Solera claimed to have invested
with the Pension Fund.
In support of his motion for summary denial of Solera’s claim, the receiver
attached the affidavit of Carmen Arochena, a former Pension Fund employee
familiar with the Pension Fund’s record-keeping systems and procedures. She
explained that a detailed application procedure was required before the Pension
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Fund would open an account for a new investor, and that the issuance of a
conditional receipt did not mean that a person had invested with the Pension Fund.
According to Arochena, only after a potential investor’s application was approved
and his funds cleared would the person receive a final receipt acknowledging his
status as a Pension Fund investor. She swore that there was no evidence that
Solera had ever invested with the Pension Fund, or even submitted an application
to do so, and that the records made in the normal course of the Pension Fund’s
business would have documented both of those events if they had occurred.
The receiver also submitted an affidavit from Robert de la Riva, a former
Manager of the Pension Fund. According to de la Riva, Solera gave three of the
checks, totaling $7,900,000, to Ruiz in March 2001 in an attempt to invest with the
Pension Fund. Ruiz forwarded the checks to Pension Fund’s Florida headquarters.
Upon receiving the checks, de la Riva contacted SunTrust Bank several times to
determine if there were sufficient funds in Parchment’s account to cover the
checks. Each time, he was told that the account did not contain sufficient funds.
According to de la Riva, Pension Fund’s standard operating procedure under the
circumstances would have called for the return of the three checks to Ruiz, the
Pension Fund Director. De la Riva swore that those three checks were never
invested with the Pension Fund. Parchment himself submitted an affidavit, in
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which he swore that the signature on one of the checks was not his and that he
believed Solera had forged it.
In response to the receiver’s motion seeking the denial of his claim, Solera
reiterated that he had invested in the Pension Fund. He added an accusation that
the Pension Fund did not return the SunTrust checks to him in time for him to cash
them or to allow him “to carry out legal actions.”
On September 16, 2008, the district court entered an order granting the
receiver’s motion for summary disposition and denying Solera’s claim in its
entirety. After that, Solera sent a letter to the receiver in which he rehashed the
arguments he had already made. He added, without citation, that he must submit
the checks in order to bring suit in Costa Rica against Parchment for writing bad
checks. Solera did not file that letter with the district court.
The receiver had Solera’s letter translated into English. He interpreted it as a
motion for reconsideration. On October 9, 2008, the receiver filed a response with
the district court, attaching Solera’s letter and making it part of the district court
record for the first time. On March 30, 2009, the district court issued an order
construing Solera’s letter as a motion for reconsideration and denying that motion.
On April 23, 2009, Solera filed a notice of appeal. On August 5, 2009, we
issued an order dismissing as untimely filed Solera’s appeal of the district court’s
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order summarily denying his claim. We held, however, that Solera’s notice of
appeal was timely filed as to the district court’s March 30, 2009 order denying his
motion for reconsideration. We added that this appeal was therefore “limited to a
determination of whether the district court abused its discretion in denying
[Solera’s] motion, construed as a Federal Rule of Civil Procedure 60(b) motion to
vacate the judgment, and it shall not extend to the validity of the underlying
judgment per se.”
II.
“[A] district court’s order under Rule 60(b) is reviewable only for abuse of
discretion.” Am. Bankers Ins. Co. of Fla. v. Nw. Nat’l Ins. Co., 198 F.3d 1332,
(11th Cir. 1999). In order to show that the district court abused its discretion,
Solera must “demonstrate a justification [for relief] so compelling that the court
was required to vacate its order.” Cavaliere v. Allstate Ins. Co., 996 F.2d 1111,
1115 (11th Cir. 1993) (quoting Solaroll Shade & Shutter Corp. v. Bio-Energy Sys.,
Inc., 803 F.2d 1130, 1132 (11th Cir. 1986)). Rule 60(b) lists the following
justifications for relief:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could
not have been discovered in time to move for a new trial under Rule
59(b);
(3) fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party;
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(4) the judgment is void;
(5) the judgment has been satisfied, released or discharged; it is based
on an earlier judgment that has been reversed or vacated; or applying
it prospectively is no longer equitable; or
(6) any other reason that justifies relief.
Relief under Rule 60(b)(6)’s catch-all provision “is an extraordinary remedy which
may be invoked only upon a showing of exceptional circumstances. The party
seeking relief has the burden of showing that absent such relief, an ‘extreme’ or
‘unexpected’ hardship will result.” Griffin v. Swim-Tech Corp., 722 F.2d 677, 680
(11thCir. 1984) (citations omitted).
Because Solera’s notice of appeal was timely only as to his appeal of the
district court’s denial of his motion for reconsideration, “our review on appeal is
limited to those issues raised in [Solera’s] Rule 60(b) motion.” Gulf Coast Fans,
Inc. v. Elecs. Importers, Inc., 740 F.2d 1499, 1507 (11th Cir. 1984). We therefore
confine ourselves to deciding whether the district court abused its discretion in
concluding that Solera had failed to meet the standard for reconsideration. See
Am. Bankers Ins. Co., 198 F.3d at 1338. It did not.
Solera’s motion for reconsideration failed to assert or argue any of Rule
60(b)’s enumerated justifications for relief from judgment.1 Solera does argue in
1
We give Solera’s motion for reconsideration, as a pro se filing, a liberal construction.
Mederos v. United States, 218 F.3d 1252, 1254 (11th Cir. 2000).
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his brief to us that the district court failed to consider new documentary evidence
that he submitted, including the voluminous attachments to his motion for
reconsideration. That argument fails because Solera has not made any showing
that: “(1) the evidence is newly discovered since the [summary proceeding]; (2) he
exercised due diligence to discover the new evidence; (3) the evidence is not
merely cumulative or impeaching; (4) the evidence is material; and (5) the
evidence is such that a new [proceeding] would probably produce a new result.”
Willard v. Fairfield S. Co., 472 F.3d 817, 824 (11th Cir. 2006).
Solera has attached to his appellate brief a ream of evidentiary materials,
much of which was not in the record before the district court when it ruled on the
motion for reconsideration. We do not consider those attachments that were not
before the district court, because “[i]n deciding issues on appeal we consider only
evidence that was part of the record before the district court.” Selman v. Cobb
County Sch. Dist., 449 F.3d 1320, 1332 (11th Cir. 2006).
The remaining arguments contained in Solera’s appellate brief, including his
argument regarding the possibility that he may face contempt, are beyond the
scope of this appeal, which “is limited to a determination of whether the district
court abused its discretion in denying [Solera’s Rule 60(b) motion].” Order
Dismissing Appeal in Part for Lack of Jurisdiction, No. 09-12125 (11th Cir.
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August 5, 2009). Because Solera has failed to demonstrate any of Rule 60(b)’s
enumerated justifications for relief, the district court did not abuse its discretion in
denying his motion for reconsideration. Cavaliere, 996 F.2d at 1115.
III.
The receiver has filed a motion asking us to impose sanctions on Solera
under Federal Rule of Appellate Procedure 38, which provides that, “[i]f a court of
appeals determines that an appeal is frivolous, it may . . . award just damages and
single or double costs to the appellee.” Generally, we decline to impose Rule 38
sanctions on pro se appellants. See Woods v. I.R.S., 3 F.3d 403, 404 (11th Cir.
1993); Hyslep v. United States, 765 F.2d 1083, 1084-85 (11th Cir. 1985). Despite
our general reluctance to do so, we have imposed Rule 38 sanctions on pro se
appellants in some circumstances. See United States v. Morse, 532 F.3d 1130,
1132-33 (11th Cir. 2008) (imposing sanctions on pro se litigant who had been
warned by the district court that his arguments in support of his taxpayer claim
were “wholly without merit” where we had previously declared such arguments to
be frivolous and deserving of sanctions); Stoecklin v. Comm’r of Internal Revenue,
865 F.2d 1221, 1226 (11th Cir. 1989) (imposing sanctions on pro se litigant, a
certified accountant for thirty years, who advanced “patently frivolous” arguments
in support of his taxpayer claim); Bonfiglio v. Nugent, 986 F.2d 1391, 1394 (11th
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Cir. 1993) (imposing sanctions on a pro se litigant who was also an attorney);
Pollard v. Comm’r, 816 F.2d 603, 605 (11th Cir. 1987) (imposing sanctions on a
pro se litigant who had previously brought frivolous tax claims); King v. United
States, 789 F.2d 883, 884 (11th Cir. 1986) (imposing sanctions on a pro se litigant
where the district court had pointed out to the litigant that his taxpayer claim was
directly foreclosed by absolutely unambiguous statute and prior precedent and
where litigant’s arguments to the contrary had been repeatedly declared frivolous).
None of those particular circumstances are present here, but there is another
circumstance that justifies sanctions. The overwhelming frivolity of Solera’s
appeal is coupled with facts that reek of misrepresentation. He has not the slightest
claim of right to any of the assets of the receivership. The “checks” he presented in
an attempt to get some of those assets not only do not support his attempt, but there
is also evidence that one or more of them may well have been forged. Pro se status
does not excuse misrepresentation or fraud. We conclude that Solera should be
sanctioned by being required to pay the attorney’s fees and costs incurred by the
receiver in connection with this appeal. The receiver is directed to submit to this
Court, within fourteen days, an affidavit and any supporting documents setting out
its fees and costs. If Solera wishes to object to any specific part of the fee request
or supporting documentation, he must do so within fourteen days after the receiver
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files it.
IV.
Because Solera’s motion for reconsideration failed to demonstrate any of the
justifications for relief from a judgment enumerated in Federal Rule of Civil
Procedure 60(b), the district court’s order denying Solera’s motion for
reconsideration is AFFIRMED. The receiver’s motion for sanctions is
GRANTED, and the receiver is DIRECTED to submit, within the time specified in
this opinion, any affidavit and documentation necessary for this Court to fix the
amount of the sanctions award; Solera is DIRECTED to submit, within the time
specified in this opinion, any specific objections to the amount of fees and costs
requested by the receiver.
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