Southern Management Corporation v. Charles Jewell

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2319
SOUTHERN MANAGEMENT CORPORATION RETIREMENT TRUST,
Plaintiff - Appellee,
v.
CHARLES TIMOTHY JEWELL,
Defendant – Appellant,
and
ROBERT FULTON ROOD, IV,
Defendant,
and
GARY A. ROSEN,
Trustee.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Deborah K. Chasanow, Chief District
Judge. (8:11-cv-03059-DKC; 08-17199; 09-00188)
Submitted: June 24, 2013 Decided: July 17, 2013
Before DUNCAN, KEENAN, and FLOYD, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Charles Timothy Jewell, Appellant Pro Se. Paul Sweeney, YUMKAS
VIDMAR & SWEENEY, LLC, Annapolis, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Southern Management Corporation Retirement Trust
(“SMCRT”) filed an adversary proceeding in the bankruptcy case
of Robert F. Rood, IV, alleging that Charles Timothy Jewell,
Rood, and numerous other persons and entities were liable for
fraud, civil conspiracy, fraudulent conveyance of corporate
assets under Maryland law, and had engaged in unauthorized
transfers of assets of the bankruptcy estate. The bankruptcy
court found that Jewell was liable for civil conspiracy in the
amount of $500,000, and for fraudulent conveyance of corporate
assets in the amount of $7,100. The district court affirmed
this judgment, and Jewell noted his further appeal to this
court. Finding no error and no abuse of discretion, we affirm
the judgment of the bankruptcy court.
Jewell challenged the admission into evidence of a
document dated April 2006, that proposed to award him shares in
Kore Holding, Inc., a company controlled by Rood, in exchange
for consulting services. He contends that the document was not
signed and executed, and therefore was not admissible. Because
the document was not admitted for the purpose of showing that
Jewell received the stock, but rather to refute his contention
that he had no business relationship with Kore Holding or Rood
prior to April 2008, we find no abuse of discretion by the
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bankruptcy court in admitting this evidence. See Westberry v.
Gislaved Gummi AB, 178 F.3d 257, 261 (4th Cir. 1999).
Jewell also contends that the bankruptcy court erred
by allowing Suzanne Hillman to testify as an expert in forensic
accounting, and admitting into evidence a document entitled
“Supplement to Expert Report.” The admission of the Expert
Report was stipulated, and the Supplement to the Expert Report
was admitted into evidence without objection. A party waives
appellate review of a court’s decisions concerning the admission
of evidence if he fails to timely object to those rulings at
trial. See Fed. R. Evid. 103(a); DiPaola v. Riddle, 581 F.2d
1111, 1113 (4th Cir. 1978). Here, Jewell voiced no objection to
the admission of the expert report or the supplement to the
expert report. Thus, he failed to preserve for appeal any
challenge to the admission of this evidence.
Jewell also challenges the bankruptcy court’s
qualification of Hillman as an expert in forensic accounting.
Hillman was initially so qualified during the hearing on the
motion for a preliminary injunction. Jewell failed to object at
that time to her qualifications to testify as an expert. During
the trial when SMCRT sought to present her testimony as an
expert, Jewell challenged her qualifications based on the fact
that her website did not identify her as an expert in forensic
accounting and questioning her objectivity, given her
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relationship to David Hillman, the CEO of SMCRT. Jewell also
questioned whether Hillman had prior knowledge of the loans
involved in this case. Hillman testified that she did not have
information concerning the loans until after the case began and
she received the materials in response to the subpoenas to the
banks. Hillman also explained that her function in the case was
merely to record the financial transactions: “It’s fairly black
and white. Either a check goes through the account and clears
or it does not. There’s not a lot of interpretation on that.”
This court reviews the lower court’s decision to admit
expert testimony under Fed. R. Evid. 702 for abuse of
discretion. United States v. Wilson, 484 F.3d 267, 273 (4th
Cir. 2007) (citing Kumho Tire Co. v. Carmichael, 526 U.S. 137,
152 (1999)). Here, the bankruptcy court had reviewed Hillman’s
experience and expertise during the preliminary injunction
hearing and found that she qualified to testify as an expert in
forensic accounting. Faced with the challenges to her
objectivity and the fact that her website failed to list her as
a forensic accountant, the bankruptcy court found these
objections insufficient to overcome the determination that
Hillman qualified as an expert. We find no abuse of discretion
in the bankruptcy court’s decision to qualify Hillman as an
expert. See United States v. Johnson, 617 F.3d 286, 293 (4th
Cir. 2010) (noting the process of forensic data extraction
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requires “some specialized knowledge or skill or education that
is not in the possession of the jurors”).
Jewell also contends that his defense was prejudiced
by the bankruptcy court’s decision to prohibit him from calling
Rood as a witness in his defense in accordance with the court’s
decision to preclude Rood from testifying in the adversary
proceeding due to Rood’s numerous discovery violations. This
court reviews the decision to sanction a party for discovery
violations for abuse of discretion. Mutual Fed. Sav. & Loan
Ass’n v. Richards & Assocs., Inc., 872 F.2d 88, 92 (4th Cir.
1989). Factors to consider in reviewing a discovery sanction
are whether the violations were done in bad faith, any prejudice
to other parties, the need for deterrence, and whether a less
severe sanction would be effective. Southern States Rack &
Fixtures, Inc. v. Sherwin-Williams Co., 318 F.3d 592, 597 (4th
Cir. 2003).
The relevant inquiry as applied to Jewell is whether
Jewell was prejudiced by the refusal to allow Rood to testify.
The court heard arguments from both parties, with Jewell
asserting that Rood was a necessary witness. When asked for a
proffer of what testimony Jewell sought from Rood, he asserted
that Rood could testify about the operations of Kore Holdings,
his interactions with Jewell, and the timing of when Jewell
started working with Kore and Rood. Jewell also sought Rood’s
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testimony concerning “what happened with Bay Capital and Ben
Lyons since [Jewell] wasn’t involved in any of that.”
The bankruptcy court noted that Jewell had personal
knowledge of and would be able to testify as to all of the areas
for which he sought Rood’s testimony. Thus, the bankruptcy
court adhered to its ruling prohibiting Rood from testifying.
Jewell then rested his defense case without testifying. We
conclude that Jewell has not shown any prejudice from the
bankruptcy court’s refusal to allow him to call Rood as a
witness. As the court noted, Jewell had personal knowledge of
and could testify concerning all of the areas for which he
sought to present Rood’s testimony — with the exception of “what
happened with Bay Capital and Ben Lyons.” However, Jewell was
not held accountable for any fraudulent conduct that occurred
with respect to Bay Capital, and therefore he was not prejudiced
by not being able to present this evidence. Because Jewell
cannot show he was prejudiced by the disallowance of Rood’s
testimony, we find no abuse of discretion by the bankruptcy
court’s refusal to allow Jewell to call Rood as a witness. See
Camper v. Home Quality Mgmt., Inc., 200 F.R.D. 516, 518 (D. Md.
2000).
Jewell also challenges whether there was sufficient
evidence from which the court determined that he was liable for
fraud and civil conspiracy. To uphold the determination that
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Jewell was involved in civil conspiracy, the evidence must
establish that Jewell agreed with one or more other persons “to
accomplish an unlawful act or to use unlawful means to
accomplish an act not itself illegal” and that the act or means
employed resulted in loss or damage to the plaintiff. Mackey v.
Compass Mktg., Inc., 892 A.2d 479, 485 (Md. 2006). Jewell’s
conviction may also be upheld upon a finding that he knew of a
violation of law and gave substantial assistance or
encouragement to the persons engaging in the conduct. See
Alleco, Inc. v. Harry & Jeannette Weinberg Found., Inc., 665
A.2d 1038 (Md. 1995).
We have reviewed the evidence in light of these
standards and have determined that the bankruptcy court did not
err in finding Jewell liable for civil conspiracy in the amount
of $500,000. See Fed. R. Bankr. P. 8013; Loudoun Leasing Dev.
Co. v. Ford Motor Credit Co. (In re K & L Lakeland, Inc.), 128
F.3d 203, 206 (4th Cir. 1997). Accordingly, we affirm the
district court’s order upholding the bankruptcy court’s
judgment. We dispense with oral argument because the facts and
legal contentions are adequately presented in the materials
before this court and argument would not aid the decisional
process.
AFFIRMED
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