United States v. Watlington , 263 F. App'x 321 ( 2008 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-6935
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
DANIEL WATLINGTON, a/k/a Gator Slim,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Wilmington. James C. Fox, Senior
District Judge. (5:05-cr-00004-F)
Submitted: January 9, 2008 Decided: January 30, 2008
Before NIEMEYER, MICHAEL, and KING, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Daniel Watlington, Appellant Pro Se. S. Katherine Burnette,
Assistant United States Attorney, Joshua B. Royster, UNITED STATES
DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Daniel Watlington appeals the district court’s orders
denying his claim that certain trust assets were exempt from
attachment and granting a writ of execution for the United States
to satisfy the restitution judgment by levying the property in the
trust. For the reasons that follow, we affirm the orders of the
district court.
Watlington was convicted of several charges relating to
wire and bank fraud. The district court issued an injunction
freezing Watlington’s assets in anticipation of a restitution
order, including assets held in the name, “Pallie Trust.” The
district court ordered Watlington to pay $3,921,809.51 in
restitution to his victims. Watlington requested an exemption for
the Pallie Trust, claiming he was only a trustee on the account.
The United States responded that Watlington set up the trust to
hide his assets, and it could reach the trust property because
Watlington was the sole grantor and the trust was revocable.
The district court denied Watlington’s request for an
exemption from attachment of the assets held in trust. In its
collection efforts, the United States applied for and received a
writ of execution for the property held by the Pallie Trust.
Watlington argues on appeal that the district court erred
by allowing the United States access to the property in the Pallie
Trust to satisfy his restitution judgment. He contends the United
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States was time-barred from challenging the validity of the trust
and the United States “failed to provide any material facts or
evidence which would demonstrate that [he] is not an arms length
General Manager of Pallie Trust.”
Watlington contends various statutes of limitations apply
to the Pallie Trust to prevent the United States from attacking the
trust’s validity. While he relies on North Carolina’s statute of
limitations of three years for contract and civil fraud actions,
this statute does not apply to his case as the United States did
not bring a contract or civil fraud action against him. See
N.C.G.S. § 1-52 (2005). Watlington additionally relies on the
state statute prohibiting the commencement of judicial proceedings
to contest the validity of a trust that was revocable at the
settlor’s death any later than three years after the settlor’s
death. See N.C.G.S. § 36C-6-604 (2005). This statute likewise
does not apply because Watlington, the settlor of the trust,
remains living.
When the powers retained by the grantor effectively
amount to ownership of the trust estate, the grantor fails to
create a valid trust. 76 Am. Jur. 2d Trusts § 24 (2007). The
documents provided by the United States indicated that Watlington
and Karen Battershell were the two trustees of the Pallie Trust and
that the trust was revocable. As a trustee, Watlington was
responsible for administering the property of the trust. As the
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sole grantor of a revocable trust, Watlington had the power to
recall the trust at any time and effectively retained ownership of
the trust estate. Under these facts, the assets in the Pallie
Trust were properly subject to attachment to satisfy Watlington’s
restitution obligations.
Accordingly, we affirm. We dispense with oral argument
because the facts and legal contentions are adequately presented in
the materials before the court and argument would not aid the
decisional process.
AFFIRMED
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