Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-09-01766/USCOURTS-ca8-09-01766-0/pdf.json

Parties Involved:
Hollis Wayne Fincher
Appellant
United States of America
Appellee

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 09-1766

___________

United States of America, *

*

Appellee, *

* Appeal from the United States

v. * District Court for the 

* Western District of Arkansas.

Hollis Wayne Fincher, *

*

Appellant. *

___________

Submitted: December 17, 2009

Filed: February 1, 2010

___________

Before WOLLMAN, RILEY, and MELLOY, Circuit Judges. 

___________

WOLLMAN, Circuit Judge.

Hollis Wayne Fincher appeals from the district court’s1

 order requiring him to

reimburse the United States Treasury $8,357.55 for the legal services provided to him

under the Criminal Justice Act, 18 U.S.C. § 3006A. We affirm.

1

The Honorable Jimm Larry Hendren, Chief Judge, United States District Court

for the Western District of Arkansas.

Appellate Case: 09-1766 Page: 1 Date Filed: 02/01/2010 Entry ID: 3629847
I.

Fincher was charged with possessing illegal firearms, and he requested the

appointment of an attorney based on his financial inability to retain counsel. Fincher

executed a financial affidavit, wherein he stated that he owned his home and 120 acres

of real estate in Fayetteville, Arkansas, which had unknown value. Fincher did not

list certain other assets, including numerous firearms, machinery, and tools. The

district court appointed counsel, who later withdrew because Fincher had retained

other counsel. 

Fincher was convicted of one count of possession of a machine gun, in violation

of 18 U.S.C. §§ 922(o) and 924(a)(2), and one count of possession of an unregistered

sawed-off shotgun, in violation of 26 U.S.C. §§ 5841, 5861(d), and 5871. Following

his conviction, Fincher informed the district court that he no longer had counsel and

requested that counsel be appointed to represent him, which was done. 

Fincher’s conviction subjected him to a fine of up to $250,000. Before he was

sentenced, Fincher executed a quitclaim deed conveying the 120 acres of real estate

to his daughters and reserving a life estate in the property for himself and his wife. 

Fincher’s civil attorney informed the U.S. Attorney’s Office that Fincher had

transferred the property, but did not inform the court of that fact. Thereafter, Fincher

was sentenced to concurrent seventy-eight month sentences and was fined $1,000. 

The district court imposed the below-guidelines-range fine under the belief that

Fincher had no significant assets. 

After sentencing, Fincher moved for release on bond pending the designation

of the facility at which he would serve his sentence. The district court granted the

motion, setting bond at $100,000. When Fincher and his daughters pledged the 120-

acre property to secure the bond, the district court discovered that the property had

significant value and that Fincher had conveyed the property to his daughters for

-2-

Appellate Case: 09-1766 Page: 2 Date Filed: 02/01/2010 Entry ID: 3629847
consideration in the amount of “One Dollar ($1.00) and other good and valuable

consideration.” D. Ct. Order of July 27, 2007, at 4 n.2.

The district court subsequently held an evidentiary hearing to determine

whether Fincher had been eligible for court appointed counsel. Fincher testified that

real estate near his farm had sold for $2,000 to $4,000 per acre. The court appointed

an expert to appraise the property, who determined that the property was worth

$455,000, a value that was consistent with Fincher’s estimate. The district court

found that Fincher was financially able to obtain counsel and ordered Fincher to

reimburse the United States Treasury $8,357.55.

On appeal, we affirmed Fincher’s conviction and remanded the issue of his

eligibility for court appointed counsel to the district court for further inquiry. We

issued the following instructions:

[W]e remand this issue to the district court for further consideration of

whether Fincher’s wife has any ownership in the property and, if so,

whether that affects Fincher’s ownership of the property or the

application of the Arkansas Homestead Exemption. Specifically, the

district court must consider whether the entire 120 acres of real estate is

protected by the Homestead Exemption, making Fincher eligible for

court appointed counsel despite his ownership of the property, or

whether the exemption protects only a portion of the real estate. . . .

Additionally, the district court should consider whether Fincher has the

current ability to reimburse the United States Treasury for the legal

services he received in light of the transfer of real estate to Fincher’s

daughters. 

 United States v. Fincher, 538 F.3d 868, 877-78 (8th Cir. 2008) (internal citations

omitted) (Fincher I).

Following an evidentiary hearing and the submission of post-hearing briefs, the

district court held that “Fincher is not now, nor has he ever been at any time material

-3-

Appellate Case: 09-1766 Page: 3 Date Filed: 02/01/2010 Entry ID: 3629847
to this proceeding, financially unable to obtain counsel to represent him.” D. Ct.

Order of Feb. 26, 2009, at 14. The district court determined that the quitclaim deed

conveying the property to Fincher’s daughters was voidable as a fraudulent transfer,

that Mrs. Fincher had an inchoate dower interest and a homestead interest in the

property, and that the Arkansas Homestead Exemption allows one homestead per

married couple. The district court found that Fincher would be able to pay for the

legal services he received because the homestead exemption protected only eighty of

Fincher’s 120 acres. The court found that even if Mrs. Fincher refused to relinquish

her dower interest in the forty acres of non-homestead land, sale of the burdened

property would cover Fincher’s legal fees. The court also determined that Fincher

could have sold other assets to pay for his legal fees, including his firearms,

machinery, and tools, which had a total value of between $8,500 and $14,500.

II.

The Criminal Justice Act establishes the framework for ensuring that

individuals who are financially unable to afford defense counsel are provided counsel

as required by the Sixth Amendment. Fincher I, 538 F.3d at 875; United States v.

Brockman, 183 F.3d 891, 897 (8th Cir. 1999). A person is eligible for court appointed

counsel if, after an appropriate inquiry, the court is satisfied that the person is

“financially unable to obtain counsel.” 18 U.S.C. § 3006A(b). The defendant bears

the burden of establishing that he or she is financially unable to obtain counsel, but

financial inability to pay does not mean indigence or destitution. Fincher I, 538 F.3d

at 875; Brockman, 183 F.3d at 897. 

Our review of the district court’s determination is a three-step process: (1)

whether the district court conducted an appropriate inquiry into the defendant’s

financial eligibility, (2) whether the district court correctly determined the defendant’s

financial eligibility, and (3) whether the district court erred when it weighed the

interests of justice. Fincher I, 538 F.3d at 876; United States v. Parker, 439 F.3d 81,

-4-

Appellate Case: 09-1766 Page: 4 Date Filed: 02/01/2010 Entry ID: 3629847
92-93 (2d Cir. 2006). Now that the record has been fully developed, we are able to

complete the final two steps of the review process. 

A. 

Fincher argues that his only substantial asset is the life estate he holds in joint

tenancy with his wife and that the district court erred in finding that his conveyance

of the property to his daughters was fraudulent and voidable. He contends that

Arkansas law grants each spouse a personal right to a homestead exemption and thus

the entire 120 acre property is exempt from legal process. According to Fincher, even

if the conveyance is voidable and the homestead exemption protects only part of the

property, the district court erred in finding that he could sell the non-homestead land

because it is subject to Mrs. Fincher’s dower interest and it lacks legal access.

1.

The record supports the district court’s finding that Fincher acted with

fraudulent intent when he conveyed the property to his daughters and reserved a life

estate for himself and his wife. Under Arkansas law, Fincher’s transfer of the

property is fraudulent as to the creditor (1) if he made the transfer with “actual intent

to hinder, delay, or defraud any creditor” or (2) if he made the transfer “[w]ithout

receiving a reasonably equivalent value in exchange for the transfer” and reasonably

should have believed that he would incur debts beyond his ability to pay. Ark. Code

Ann. § 4-59-204. The evidence showed that Fincher was trying to divest himself of

the property so that it would be unavailable to pay a debt (a criminal fine) to a creditor

(the United States). Fincher was facing a fine that could have been as much as

$250,000, and he admitted that he wanted to get the property “out of my hands.” 

Fincher’s daughter admitted that the family discussed whether the property could be

taken to pay a criminal fine. The letter from the civil attorney explained that the

Finchers wanted to ensure that the property remained within the family. Moreover,

-5-

Appellate Case: 09-1766 Page: 5 Date Filed: 02/01/2010 Entry ID: 3629847
Fincher did not receive a reasonably equivalent value in exchange for the transfer. 

The quitclaim deed recited nominal consideration and stated “NO REVENUE

STAMPS REQUIRED. TRANSFER IS BY GIFT.” Appellant’s App. at 71. In light

of this evidence, we affirm the district court’s judgment that the conveyance was

voidable as fraudulent because it was made with the actual intent to hinder the

government from receiving payment and it was made without receiving reasonably

equivalent value at a time when Fincher reasonably should have realized that he might

incur a criminal fine that he would be unable to pay. 

2.

Fincher argues that the 120 acres of land is exempt from legal process under

Arkansas law. The Arkansas Constitution provides that “[t]he homestead of any

resident of this State, who is married or the head of a family, shall not be subject to

the lien of any judgment or decree of any court, or to the sale under execution, or other

process thereon . . . .” Ark. Const. art. 9, § 3. Arkansas code further provides,

The homestead outside any city, town, or village, owned and occupied

as a residence, shall consist of no more than one hundred sixty (160)

acres of land, with improvements thereon, to be selected by the owner. 

The homestead shall not exceed in value the sum of two thousand five

hundred dollars ($2,500), but, in no event shall the homestead be reduced

to less than eighty (80) acres without regard to value.

Ark. Code Ann. § 16-66-210(c)(1). Accordingly, if a rural homestead exceeds $2,500

in value, the debtor may claim a homestead exemption by showing that the area

claimed as exempt does not exceed eighty acres in size. Jones v. Dillard, 66 S.W. 202,

202 (Ark. 1902); see also In re Bradley, 294 B.R. 64, 70 (B.A.P. 8th Cir. 2003)

(interpreting similar language in the urban homestead exemption); Barnhart v.

Gorman, 198 S.W. 880, 881 (Ark. 1917) (same). There is no dispute that Fincher’s

120 acres of land is worth more than $2,500.

-6-

Appellate Case: 09-1766 Page: 6 Date Filed: 02/01/2010 Entry ID: 3629847
Fincher contends that Arkansas law grants each spouse a personal right to a

homestead exemption, and thus he and his wife can stack their eighty-acre exemptions

to protect the entire 120 acres of land. Our opinion in Stevens v. Pike County Bank,

829 F.2d 693 (8th Cir. 1987) (per curiam), forecloses Fincher’s argument. In Stevens,

we held that Arkansas law provides only one homestead exemption to a married

couple. Id. at 696 (citing Campbell v. Geheb, 523 S.W.2d 185, 187 (Ark. 1975)

(“[W]hile the husband and wife are not separated, but are living together as husband

and wife, there can be no such thing as a separate homestead of the wife, separate and

apart from her husband.”)). Fincher’s arguments that Stevens was wrongly decided

or distinguishable as a bankruptcy case are unpersuasive. See United States v. Moore,

572 F.3d 489, 491 (8th Cir. 2009) (“A panel of this court is bound by a prior Eighth

Circuit decision unless that case is overruled by the Court sitting en banc.” (citation

omitted)). The district court correctly concluded that Fincher and his wife may

exempt only eighty acres from legal process. 

3.

The district court’s finding that Fincher could sell the forty acres of nonhomestead property is not clearly erroneous. Mrs. Fincher holds an inchoate dower

interest in the non-homestead property, which entitles her to a life estate in one third

of the land upon Fincher’s death. See Ark. Code Ann. § 28-11-301 (extent of dower

and curtesy rights in land). We agree with the district court’s finding that Mrs.

Fincher would likely relinquish her dower right and that sale of the property would

yield sufficient funds even if she did not. See id. § 28-11-201 (wife retains dower

unless relinquished). Fincher further argues that he would be unable to sell the land

because legal access thereto is disputed. Although the access issues might diminish

the value of the land, we disagree with Fincher’s contention that he is entitled to court

appointed counsel unless he can garner a subjectively satisfactory return from the sale. 

By Fincher’s estimate, forty acres of land is worth between $80,000 and $160,000,

-7-

Appellate Case: 09-1766 Page: 7 Date Filed: 02/01/2010 Entry ID: 3629847
and it is not clearly erroneous to find that the forty acres would yield at least

$8,357.55. 

B. 

Fincher argues that being required to pay for counsel would leave his family

destitute. His brief describes the Finchers as “poor people who have nothing but their

rocky, hardscrabble farm upon which to live.” Appellant’s Br. at 37. In Fincher I, we

noted that “[g]enerally, cases in which a defendant’s ineligibility for court appointed

counsel has been affirmed are based upon the defendant’s income and cash flow, not

a requirement that the defendant sell his homestead to facilitate the payment of

defense costs.” 538 F.3d at 878 n.4. Although there is no evidence that Fincher had

the income and cash flow to pay for counsel, he had substantial assets other than his

homestead—including the forty acres of non-homestead property, firearms,

machinery, and tools—that he could have used to pay for his defense. 

Conclusion

The judgment is affirmed.

______________________________

-8-

Appellate Case: 09-1766 Page: 8 Date Filed: 02/01/2010 Entry ID: 3629847