United States v. $670,706.55

Case: 09-20154 Document: 00511034305 Page: 1 Date Filed: 02/24/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
February 24, 2010
No. 09-20154 Charles R. Fulbruge III
Summary Calendar Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
$670,706.55 (Six Hundred Seventy Thousand Seven Hundred Six Dollars and
Fifty Five Cents); ET AL,
Defendants
RHONDA FLEMING
Claimant-Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:05-cv-00718
Before KING, STEWART, and HAYNES, Circuit Judges.
PER CURIAM:*
Rhonda Fleming appeals from the order entered by the district court on
February 24, 2009, denying her Motion for Temporary Restraining Order that
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
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sought to enjoin the Government from seizing the defendant properties. We
AFFIRM.
I. FACTUAL AND PROCEDURAL BACKGROUND
On March 5, 2005, the Government filed a Verified Complaint for Civil
Forfeiture In Rem in district court. The Government alleged that the defendant
properties were subject to forfeiture under 18 U.S.C. § 981(a)(1)(C) as proceeds
traceable to wire fraud, health care fraud, or a conspiracy to commit either
offense; and under 18 U.S.C. § 981(a)(1)(A) as property involved in money
laundering violations. The Government further asserted that 18 U.S.C. § 984applied since the funds were seized within one year of the criminal offenses.
According to the forfeiture complaint, Fleming, through her businesses
Hi-Tech Medical Supply and Advanced Medical Billing Specialist, Inc., received
approximately $3.7 million from the Medicare Program as a result of fraudulent
billing. Advanced Medical Billing filed back-dated, fraudulent claims
representing that Hi-Tech provided services and medical equipment in 2003 that
were not provided. The defendant properties were payments by Medicare to
Hi-Tech in 2004 that were derived from the fraudulent claims. Fleming
subsequently conducted a number of financial transactions with the amounts
fraudulently obtained from Medicare, including making deposits of funds into
her personal bank accounts and into accounts held in the name of third parties.
Fleming and her attorney were personally served with a copy of the civil
forfeiture complaint. Fleming never filed a claim or answer to assert an interest
in the defendant properties. Rather, on April 29, 2005, she filed, through her
attorney, a sworn and notarized waiver of any interest in the defendant
properties. The Government then filed a Motion for Default on July 29, 2005. A
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copy of the motion was served on Fleming’s attorney. On October 4, 2005, the
district court granted the Government’s Motion for Default and ordered the
forfeiture of the defendant properties to the Government.
Over three years after the default judgment was entered, on January 29,
2009, Fleming filed a pro se Motion to Set Aside Forfeiture, requesting that the
district court set aside the 2005 default judgment and final order of forfeiture.
The Government filed an opposition, addressing Fleming’s motion under Federal
Rule of Civil Procedure 60. On February 9, 2009, the district court denied
Fleming’s Motion to Set Aside Forfeiture because it was time barred by Rule
60(c) and because Fleming failed to show excusable neglect or advance a
meritorious defense pursuant to Rule 60(b).
Thereafter, on February 12 and 17, 2009, Fleming filed several motions:
a Motion for Temporary Restraining Order, an additional Motion for Emergency
TRO, and a Verified Amended Motion to Set Aside Forfeiture, essentially raising
the same arguments presented in her initial Motion to Set Aside Forfeiture. On
February 24, 2009, the district court denied Fleming’s February 12 Motion for
Temporary Restraining Order as a successive motion under Rule 60(b), for the
same reasons set forth in its February 9 order. The district court subsequently
denied Fleming’s remaining two motions on March 4, 2009, treating these
motions as successive Rule 60 motions as well.
Fleming appealed from the February 9 order denying her Motion to Set
Aside Forfeiture and from the February 24 order denying her Motion for
Temporary Restraining Order. The appeal of the February 9 order was dismissed
for want of prosecution; the appeal of the February 24 order is presently before
this court. In addition to the appeals, Fleming filed with this court a Motion for
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Preliminary Injunction, requesting that the Government return funds seized
from two accounts. She also subsequently filed a Motion for Summary Ruling,
arguing that the Government failed to timely file a response brief to her appeal.
II. DISCUSSION
A. Construing the Motion for Temporary Restraining Order as a
Rule 59 Motion
Generally, a post-judgment motion which challenges the underlying
judgment and requests relief, other than correction of a purely clerical error, is
treated under Rule 60 if it is filed more than ten days after the judgment is
entered. Harcon Barge Co. v. D & G Boat Rentals, 784 F.2d 665, 667-69 (5th Cir.
1986) (en banc). The filing of a successive Rule 60(b) motion does not extend the
time for filing a notice of appeal from the first Rule 60(b) motion where both
raise similar arguments, and dismissal of an appeal from the second motion is
proper if untimely under Federal Rule of Appellate Procedure 4(a). Latham v.
Wells Fargo Bank, 987 F.2d 1199,1203-04 (5th Cir. 1993) (per curiam). This
court, however, may treat a second post-judgment motion, which is filed within
ten days of the denial of Rule 60(b) relief, as a request for reconsideration under
Rule 59. Eleby v. Am. Med. Sys., Inc., 795 F.2d 411, 412-13 (5th Cir. 1986).
Under such circumstances, this court has permitted review of the ruling on the
Rule 59 motion for the limited purpose of determining whether the district court
erroneously denied reconsideration of Rule 60(b) relief. Id.Here, Fleming’s February 12 Motion for Temporary Restraining Order
presented the same arguments and requested the same relief as the January 29
Motion to Set Aside Forfeiture. Additionally, although the February 12 motion
did not refer to the district court’s order denying the January 29 motion, it was
filed within ten days of the order. Therefore, it may be construed as a Rule 59
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motion requesting reconsideration of the district court’s ruling on the January
29 motion. Latham, 987 F.2d at 1205; Eleby, 795 F.2d at 412-13; see also United
States v. One 1988 Dodge Pickup, 959 F.2d 37, 41 (5th Cir. 1992). If we treated
the February 12 motion simply as a successive Rule 60(b) motion, it would be
untimely under Federal Rule of Appellate Procedure 4(a) because, like appeals
from final civil judgments, appeals from denials of Rule 60 motions must be filed
“within 30 days after the judgment or order appealed from is entered.” F ED. R.
A PP. P ROC. 4(a)(1)(A). Accordingly, we treat Fleming’s February 12 motion under
Rule 59 and thus Fleming timely filed notice of appeal in accordance with
Federal Rule of Appellate Procedure 4(a).
B. Standard of Review
Addressing the denial of Fleming’s February 12 motion under Rule 59, our
review is limited to whether the district court abused its discretion in refusing
reconsideration of its previous order denying Rule 60 relief. Eleby, 795 F.2d at
413-14.
C. Waiver of Arguments on Appeal
As a threshold matter, Fleming now raises numerous arguments on appeal
that were not set forth in her January 29 or February 12 motions. These
arguments include: (1) the default judgment is void under Rule 60(b)(4) because
service of process was not perfected; (2) the Government committed fraud,
misrepresentation and or misconduct in violation of Rule 60(b)(3) by using a
conditional waiver in the forfeiture proceeding; (3) Fleming’s waiver of defendant
properties was not knowingly or intelligently given; and (4) the district court
lacked subject matter jurisdiction over the defendant funds since they were
seized in violation of the tracing requirements in 18 U.S.C. § 981. Although pro
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se pleadings are treated liberally, United States v. Robinson, 78 F.3d 172, 174
(5th Cir. 1996), Fleming could have raised these arguments in the district court.
This Court will not review issues for the first time on appeal that were not
presented to the district court, absent extraordinary circumstances. Benson v.
St. Joseph Reg’l Health Ctr., 575 F.3d 542, 548 (5th Cir. 2009). Extraordinary
circumstances exist when the issue involved is a purely legal question of law and
a miscarriage of justice would result from the failure to consider it. Id. As
neither factor applies here, Fleming has failed to allege or show extraordinary
circumstances. We therefore proceed to address only those arguments properly
raised by Fleming before the district court.
D. Motion to Set Aside Forfeiture Time Barred by Rule 60(b)
Fleming’s January 29 motion sought to set aside the default judgment and
final order of forfeiture, claiming that Fleming’s waiver of interest in the
defendant properties had been conditioned upon the Government bringing no
criminal charges against her, or offering her deferred prosecution for the
criminal violations underlying the forfeiture action in return for her cooperation.
Because no agreement was reached in the criminal case and these events did not
materialize, Fleming argued that she should be permitted to withdraw her
waiver and contest the forfeiture. Fleming also asserted that she never received
notice of a forfeiture hearing in violation of her due process right.
To merit relief under Rule 60(b), a movant must show:
(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, . . . 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.
F ED. R. C IV. P. 60(b). Relief under subsection (6) is not available if the type of
relief sought is covered by the other subsections in Rule 60(b), and is available
only if extraordinary circumstances exist. Hess v. Cockrell, 281 F.3d 212, 216
(5th Cir. 2002).
For subsections (1)-(3), a movant must file her Rule 60(b) motion within
one year of the judgment. F ED. R. C IV. P. 60(c). Motions under subsection (6) are
not subject to the one-year time limitation, but they must be brought within a
reasonable time. Travelers Ins. Co. v. Liljeberg Enter., Inc., 38 F.3d 1404, 1410
(5th Cir. 1994). What constitutes a reasonable time depends on the facts of each
case, taking into consideration the interest in finality, the reason for delay, the
practical ability of the litigant to learn of the grounds relied upon, and prejudice
to other parties. Id.As the district court properly determined, Fleming’s January 29 motion,
appropriately treated under Rule 60(b), was time-barred whether Fleming’s
motion was treated under Rule 60(b)(1) or (6). The motion, filed over three years
after the default judgment and final order of forfeiture were entered, was not
filed within a reasonable amount of time. See Anglin v. Local Union 1351, 102
F. App’x 367, 370 (5th Cir. 2004) (“this was not a case where the deadline was
barely missed by a day or so due to unforeseen circumstances or the like”).
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Fleming knew there were pending forfeiture proceedings, as she filed a waiver
in the forfeiture case, and she has not shown good cause for such a lengthy delay.
E. Failure to Show a Meritorious Defense
Even addressing Fleming’s arguments on the merits, the district court
properly found that Fleming failed to show a meritorious defense under Rule
60(b). A district court has the discretion to refuse to set aside a default judgment
if the defendant fails to present a meritorious defense sufficient to support a
finding on the merits for the defaulting party. Jenkens & Gilchrist v. Groia &
Co., 542 F.3d 114, 120 (5th Cir. 2008) (citing Lacy v. Sitel Corp., 227 F.3d 290,
293 (5th Cir. 2000)). Fleming merely stated in her Motion to Set Aside Forfeiture
that she owned the defendant properties and that they were earned through
legitimate businesses. However, a jury has now convicted her of the criminal
offenses which formed the basis for the civil forfeiture. The conclusory
allegations in the Motion to Set Aside Forfeiture are insufficient to establish a
probability of success on the merits if the forfeiture order were set aside. One
1988 Dodge Pickup, 959 F.2d at 42; One 1979 Piper Navajo, 748 F.2d at 319.
Under these circumstances, the district court did not abuse its discretion
by refusing to set aside the default judgment and denying Fleming’s January 29
motion, and thereafter denying Fleming’s February 12 motion.
III. CONCLUSION
For the reasons discussed, the denial of Fleming’s February 12 Motion for
Temporary Restraining Order is affirmed. For the same reasons, Fleming’s
Motion for Preliminary Injunction before this court is denied, and her Motion for
Summary Ruling is also denied.
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