United States v. Litten ( 1999 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 98-4741
SAMUEL C. LITTEN,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Maryland, at Greenbelt.
Peter J. Messitte, District Judge.
(CR-97-409-PJM)
Submitted: September 30, 1999
Decided: November 18, 1999
Before MURNAGHAN and WILLIAMS, Circuit Judges,
and BUTZNER, Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
James Wyda, Federal Public Defender, Michael T. CitaraManis,
Assistant Federal Public Defender, Greenbelt, Maryland, for Appel-
lant. Lynne A. Battaglia, United States Attorney, Steven M. Dettel-
bach, Assistant United States Attorney, Jan Paul Miller, Assistant
United States Attorney, Greenbelt, Maryland, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Samuel Litten was convicted of one count of bank fraud, 18 U.S.C.
§ 1344 (1994), six counts of bankruptcy fraud, 18 U.S.C. § 152(1994), and one count of criminal contempt, 18 U.S.C. § 401 (1994),
and sentenced to thirty-seven months imprisonment, followed by
three years of supervised release, and restitution of $129,800. Litten
appeals from two of the bankruptcy fraud counts and the criminal
contempt conviction and raises two claims regarding the calculation
of his sentence. For the reasons that follow, we affirm.
Litten was a successful real estate developer in Southern Maryland.
In 1991, he became involved in a dispute with First National Bank of
Maryland over a $1.2 million loan. On July 12, 1993, the day before
First National's suit against him was to go to trial, Litten filed volun-
tary petitions under Chapter 11 of the bankruptcy code, personally
and on behalf of his wholly-owned corporation, Litten Builders, Inc.
Litten operated Litten Builders, Inc. as a debtor in possession until
May 1994, when Waring Justis was appointed by the bankruptcy
court as co-manager of the bankruptcy estates.* The order appointing
Justis provided that all business decisions had to be agreed to by both
Litten and Justis. A trustee was appointed in July 1994. The reorgani-
zation plan, which was confirmed in July 1995, called for liquidation
of most of Litten's real estate assets.
The Government produced evidence of numerous acts of bank-
ruptcy fraud committed by Litten over an extended period; however,
Litten challenges the sufficiency of the evidence only with respect to
Counts Two and Seven. In Count Two, Litten was charged with
_________________________________________________________________
*Upon filing a petition under Chapter 11 of the Bankruptcy Code, a
debtor obtains the title of "debtor-in-possession." 11 U.S.C. § 1101(1)
(1994).
2
defrauding the bankruptcy estate by selling property to his daughter
at below market price. Specifically, the property--located at 721
Mills Way, Annapolis, Maryland--was owned by Keyser Homes,
another of Litten's wholly-owned corporations. Keyser sold the prop-
erty, valued at $212,500, to Litten and his daughter on August 20,
1993, for $170,000. Litten did not notify the bankruptcy court or any
of his creditors of the sale.
Count Seven arose out of the sale of another property located at
10309 Lord Nelson Street in Upper Marlboro, Maryland. Although
Litten entered into the sales contract while he was debtor in posses-
sion, the closing took place one day after Justis was appointed co-
manager of the estate. Litten never notified Justis of the sale nor did
he obtain bankruptcy court approval.
Finally, Count Nine arose out of Litten's conduct during the trust-
ee's attempt to sell another of the estate's assets, Massum Eyrie, a
220-acre farm and historic house located on the Chesapeake Bay in
St. Mary's County, Maryland. The order confirming the plan of reor-
ganization required Litten to cooperate with the liquidating trustee in
the sale of the property. Later orders issued by the bankruptcy court
also required Litten to cooperate in the showing of the property and
prohibited him from interfering with the liquidating trustee's attempts
to sell any assets. Nevertheless, at the auction on November 13, 1996,
Litten blockaded the entrance road to the property and handed out fly-
ers stating that the auction was illegal and asking potential buyers not
to bid on the property.
Litten was convicted by a jury of seven of the eight counts in the
indictment. He noted a timely appeal.
Litten first claims that the evidence was insufficient to establish
bankruptcy fraud in Count Two because the property at issue did not
belong to the estate but to Keyser Homes, Inc. However, the Bank-
ruptcy Code clearly provides that the bankruptcy estate is comprised
of "all legal or equitable interests of the debtor in property as of the
commencement of the case." 11 U.S.C. § 541 (1994). Litten owned
100% of the stock in Keyser Homes, Inc., which, in turn, owned 721
Mills Way. Accordingly, the property became property of the estate
3
by virtue of Litten's ownership of Keyser Homes, Inc., and, therefore,
the evidence was sufficient to convict him on Count Two.
Second, Litten challenges the sufficiency of the evidence with
respect to Count Seven because the sales contract for 10309 Lord
Nelson Street was entered into during the ordinary course of business
while he was debtor in possession. However, the evidence clearly
established that the closing took place after the bankruptcy court
appointed Justis as co-manager of the estate and that the sale violated
the terms of that order.
Next, Litten claims that Count Nine was constructively amended at
trial. However, we find that Count Nine was not constructively
amended, nor did a variance occur that prejudiced Litten. See United
States v. Fletcher, 74 F.3d 49, 53 (4th Cir. 1996) (holding that vari-
ance violates defendant's rights only if he can prove he was preju-
diced by variance); United States v. Floresca , 38 F.3d 706, 710 (4th
Cir. 1994) (en banc) (holding that for constructive amendment to have
occurred, the court's jury instruction must have exposed defendant to
criminal "charges that are not made in the indictment itself").
Litten next challenges the two-level adjustment in his sentence for
abuse of a position of trust. See U.S. Sentencing Guidelines Manual
§ 3B1.3 (1997). The district court's decision to apply the adjustment
is reviewed for clear error. See United States v. Helton, 953 F.2d 867,
869 (4th Cir. 1992). As debtor in possession, Litten held a position
of trust. See United States v. Levy, 992 F.2d 1081, 1084 (10th Cir.
1993) (applying adjustment to debtor in possession in bankruptcy
fraud proceeding). Accordingly, the district court did not clearly err
in applying the two level enhancement for abuse of a position of trust.
In his reply brief, Litten additionally contends that the adjustment was
improper because it was already taken into account in his base offense
level and therefore constituted double-counting. This court ordinarily
will not address new arguments raised for the first time in the reply
brief. See Hunt v. Nuth, 57 F.3d 1327, 1338 (4th Cir. 1995). Accord-
ingly, we grant the Government's motion to strike this portion of Lit-
ten's reply brief.
Finally, Litten contends that the district court erred in calculating
the amount of loss to be attributed to him with respect to the sale of
4
721 Mills Way under USSG § 2F1.1(b)(1). The government need
only establish the amount of financial loss by a preponderance of evi-
dence. See United States v. Harris, 882 F.2d 902, 907 (4th Cir. 1989).
The amount of loss under § 2F1.1 need not be determined with preci-
sion; rather, the district court need only make a reasonable estimate
given the available information. See USSG§ 2F1.1, comment (n.8).
The district court's finding in this regard is reviewed for clear error.
See United States v. Castner, 50 F.3d 1267, 1274 (4th Cir. 1995). The
property at issue was valued at $212,500. The district court deter-
mined that, because the property was subject to a mortgage of
$170,000, the actual loss suffered by the estate was $42,500 (i.e., the
value of the property less the mortgage amount). We find that the dis-
trict court's calculation--based on testimony and documentary evi-
dence establishing the value of the property--was a reasonable
estimate of the loss given the available information. Therefore, the
court did not clearly err in determining the amount of loss with
respect to the sale of 721 Mills Way.
We therefore affirm Litten's convictions and sentence. We dis-
pense with oral argument because the facts and legal contentions are
adequately addressed in the materials before the court and argument
would not aid in the decisional process.
AFFIRMED
5