FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

MAY 25, 2011

JOHN LEY

CLERK

 [PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 10-12344

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In Re: JANIS W. STEWART and other Borrower-Crime Victims,

Petitioners,

______________________________

On Petition for Writ of Mandamus to

the United States District Court for the

Middle District of Florida

______________________________

Before TJOFLAT, MARCUS and WILSON, Circuit Judges.

PER CURIAM:

I.

This case involves a residential construction scheme that had its genesis in

the Florida housing boom of the past decade. Large-scale home builders had 

hundreds of vacant lots and a variety of model homes to show prospective buyers. 

Their principal targets were first-time home buyers. A replica of any of the

models could be purchased for 90% of the model’s appraised value. The builders

had a mortgage broker standing by for the prospects who could qualify for a
permanent mortgage. The prospects who could not qualify could still have the

home; they could rent it from an investor provided by the mortgage broker. In a

year or two, after qualifying for a permanent mortgage, they could purchase the

home. Given the escalating residential market, the investor stood to be well

compensated. 

In addition to the 10% discount and the robust housing market, what

attracted the investors was that they would not have to come up with any money

until the house had been built and the builder issued a certificate of occupancy. At

that point, the investor would either take out a permanent mortgage, or otherwise

finance the purchase, and rent the property to the prospect. Even if the rental deal

fell through, the investor could sell the house at a handsome profit. 

 As described, this scheme required the investor, the mortgage broker, the

builder, and the bank providing the builder with the funds to construct the house to

enter into certain interdependent contractual arrangements. These arrangements

were necessary for the investor to avoid making any payments on the house until

the house was ready for occupancy. 

The scheme worked like this. Assume that the model being purchased was

appraised at $100,000. The investor would enter into a contract with the builder to

purchase the house and lot for $90,000. The investor would contract with the

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mortgage broker to negotiate for a fee (at least two points of the purchase price) a

$90,000 construction loan, at a specified interest rate, from a bank participating in

the scheme. The bank would then pay the $90,000 construction loan proceeds to

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the builder as the work progressed, in draws agreed to by the investor (as

borrower), the builder, and the bank (as lender). 

The investor’s contract with the builder called for the builder to pay the

construction loan closing costs, the broker’s fee, and the interest the bank charged

the investor on any advances the bank made to the builder under the construction

loan. The bank would deduct the closing costs and the broker’s fee from the

builder’s first draw and from subsequent draws the interest due from the investor. 

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The scheme worked nicely in the burgeoning housing market. As that

market collapsed, however, and the builders’ potential for making a profit

diminished, many builders ceased construction, leaving hundreds of houses

unfinished. Many of the builders went bankrupt. Investors were left with 

 The investor gave the bank a security interest in the lot acquired from the builder when

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the construction loan closed.

 The builder’s first draw would include the cost of the lot the builder had purchased for 2

the contracted-for house. Subsequent draws would be for particular items, such as the pouring of

the slab. The draw would be paid after the bank’s inspector inspected the job site and approved

the item.

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unfinished houses and demands from the bank to pay the balances due on the

construction loans. 

That is what happened in this case. Petitioners, Stewart and those similarly

situated, are investors whose builders went under and left them with unfinished

houses or vacant lots. Petitioners’ bank, Coast Bank of Florida (“Coast Bank”),3

declared petitioners’ construction loans in default and demanded payment.

Petitioners presumably have breach-of-contract claims against their builders,

which, if upheld, would mitigate their losses, but, given their builders’ effective

insolvency, their claims are essentially worthless.4

II.

Part of the investors’ indebtedness to Coast Bank consists of the broker’s

two-point (or more) fee included in the builder’s first draw and deducted by the

bank. Coast Bank’s Executive Vice-President for Mortgage Lending, Philip Coon,

 First Bank is successor in interest to Coast Bank. We refer to both as Coast Bank. 3

 Petitioners’ potential losses would be reduced to the extent of the value of the partially 4

completed houses or vacant lots, and by the value of their claims against the builders.

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received, and pocketed, 75% of one of these points under a secret kickback

arrangement he had with the broker. 

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Coon pled guilty in federal district court to depriving Coast Bank of its

honest services, in violation of 18 U.S.C. §§ 1343, 1346, by illicitly accepting

these sums. United States v. Coon, No. 8:08-CR-441-T-17MAP, 2010 U.S. Dist.

LEXIS 57257, at *19 (M.D. Fla. May 7, 2010). Claiming to be victims of Coon’s

crime, petitioners moved the district court under the Crime Victims’ Rights Act

(“CVRA”), 18 U.S.C. § 3771, for leave to appear in United States v. Coon and be

heard. The district court declared that petitioners did not qualify as CVRA victims

and denied their motion. Petitioners sought a writ of mandamus in this court, and

we granted it. In re Stewart, 552 F.3d 1285 (11th Cir. 2008). We instructed the

district court “to recognize petitioners as victims and afford them the rights of

victims under the CVRA.” Id. at 1289.

Complying with our instructions, the district court held hearings for six days

between December 7 and 28, 2009, and thereafter issued its findings of fact and

 The broker was John Miller, who was president of American Mortgage Link (“AML”). 5

Before petitioners came on the scene, AML charged the investors a one-point brokerage fee. 

Coon persuaded Miller to raise the fee to two points, and to pay him, Coon, 75% of the

additional point. Petitioners’ contracts with AML called for the payment of a two-point fee. 

Borrowers considered a poorer credit risk paid more than two points. 

 

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conclusions of law. The court described the residential construction scheme

essentially as we set it out in Part I. The court then accepted our depiction of

petitioners’ status as victims as defined by the CVRA. Nonetheless, the court 

denied their request for restitution on the ground that they suffered no loss as a

consequence of having the builder pay two points instead of one point upon

receipt of the first draw on petitioners’ lines of credit at the Coast Bank. 

Petitioners once again seek a writ of mandamus. This time, they ask that we

order the district court to require Coon to make restitution in an amount equivalent

to one point of their construction loans. Coon is the respondent; the United States

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is likewise.7

III.

As a threshold matter, we must address the standard under which we assess

the merits of petitioners’ mandamus petition. Both petitioners and respondents

have briefed us on this issue. Petitioners ask that we treat the petition as an

ordinary appeal, that “under the plain language and remedial design of the CVRA,

the borrowers are entitled to ordinary appellate review of the claims in their

 Petitioners concede that the mortgage brokerage fee as originally contemplated by AML 6

is legitimate. It is the added point they seek to recover, the point brought about by the broker’s

illicit agreement and kickback arrangement with Coon. 

 The Government seems concerned that if we issue the writ and require Coon to make 7

the restitution requested, it will alter the sentence Coon has received.

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petition.” Pet’rs’ Br. 24-27. They support their request with opinions of the

Second and Ninth Circuits; they also submit an unpublished opinion of the Third

Circuit. See In re Walsh, 229 F. App’x. 58 (3d Cir. 2007) (per curiam); Kenna v.

U.S. Dist. Court 435 F.3d 1011 (9th Cir. 2006); In re W.R. Huff Asset Mgmt. Co.,

409 F.3d 555 (2d Cir. 2005). Respondents counter that the petition is not an

appeal. Rather, they contend that, in enacting the CVRA, Congress created an

independent cause of action against the district judge that must be entertained as a

traditional petition for a writ of mandamus and thus should be “governed by 8

traditional mandamus standards, not by ordinary appellate standards.” United

States Br. 16. The United States cites opinions of the Fifth, Sixth, and Tenth

Circuits for this proposition. See In re Antrobus, 519 F.3d 1123 (10th Cir. 2008);

In re Dean, 527 F.3d 391 (5th Cir. 2008) (per curiam); In re Acker, 596 F.3d 370

(6th Cir. 2010); In re McNulty, 597 F.3d 344 (6th Cir. 2010).

In In re Stewart, we did not explicitly indicate the standard we used in

setting aside the district judge’s ruling that petitioners were not CVRA victims. 

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 Respondents’ position seems to be that this statutory petition, although not authorized 8

by the All Writs Act, 28 U.S.C. § 1651, should be governed by the standard that a petitioner has

to meet to obtain a writ of mandamus under § 1651.

 We said, “[t]he mandamus proceeding before us is a free standing cause of action, 9

brought . . . against the district judge. . . .That is, the proceeding is not an appeal of a district

court judgment, nor is it an interlocutory appeal of an intermediate order.” 552 F.3d at 1288. 

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Both petitioners and respondents disagree on what standard we employed. 

Petitioners note that the dissent in Stewart “would have applied the deferential

standard of review to affirm the district court.” Pet’rs’ Br. 26 (citing 552 F.3d at

1290 (Wilson, J., dissenting) (arguing that petitioners failed to meet the standard

required to obtain a writ of mandamus, i.e., that the writ should issue “only if the

lower court committed a ‘clear abuse of discretion’”) (citation omitted)). 

Petitioners now contend that the Stewart majority must have eschewed the abuseof-discretion standard and reviewed the district judge’s ruling de novo, for legal

error. Pet’rs’ Br. 25. Respondent Coon seems to agree, observing that “on the

borrowers’ prior mandamus petition, the majority opinion appears to have applied

an ordinary appellate standard of review without discussion of the issue, while the

dissenting judge indicated he would have applied the traditional mandamus

standard of review.” Coon Br. 15. The United States, to the contrary, claims that

“whatever this Court may have done in In re Stewart, it did not apply the ordinary

appellate standard of review.” United States Br. 22. 

In the matter at hand, it makes no difference whether we treat it as an 

appeal of a district court judgment, as if brought under 28 U.S.C. § 1291, or an

original proceeding for a writ of mandamus. If considered an appeal, we would

determine whether the district court erred in one of two ways: did the court base

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its decision on findings of fact that are clearly erroneous; if not, did it misapply the

law to such findings? If considered an original petition for a writ of mandamus,

we would determine whether the district court abused its discretion: did the court

base its decision on findings of fact that are clearly erroneous; if not, did it

misapply the law to such findings? Assuming, for sake of discussion, that the 10

CVRA gives victims a right to restitution from a convicted offender, we are

confident that, to prevail, a victim must demonstrate some injury—in this case 

monetary loss—caused by the offender’s crime. 

Here causation, the applicable principle of law, is not in dispute. Rather,

what is in dispute is whether the district court’s finding of ultimate fact is clearly

erroneous. Specifically, we must determine whether the district court’s finding

that Coon’s crime did not cause the losses petitioners suffered is clearly erroneous. 

If that finding is not clearly erroneous, the district court’s decision cannot be

disturbed—regardless of whether we reach that conclusion as an appellate court

reviewing a trial court’s judgment or as an appellate court, acting like a trial court,

entertaining a petition for a writ of mandamus in the first instance. 

 See, e.g., Klay v. United Healthgroup, Inc., 376 F.3d 1092, 1096 (11th Cir. 2004) 10

(explaining that a district court abuses its discretion if its findings of fact are clearly erroneous or

if it improperly applies the relevant law to its findings of fact).

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The district court correctly sensed that petitioners’ claimed losses were

suffered as a result of two scenarios. In one scenario, the builder walked off the

job before construction was complete and failed to pay the interest due Coast Bank

on the construction funds it had drawn, and Coast Bank declared the construction

loans in default and demanded payment from petitioners. In the other scenario,

after receiving its first draw on the construction funds, the builder performed no

work at all. In both scenarios, the builder paid the broker’s fee out of the proceeds

of its first draw. In both scenarios, therefore, the amount of Coast Bank’s demand

on petitioners included the broker’s fee, one point of which petitioners seek to

recover from Coon as restitution. 

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The district court held that petitioners suffered no loss as a result of Coon’s

crime and thus were not entitled to restitution. We agree. Petitioners approved

the builders’ first draws and thus were on notice that Coast Bank would deduct

from them the broker’s fee, along with other fixed administrative costs, giving the

builders the balance. The cause of petitioners’ loss is therefore not Coon, but the

fact that the builders became insolvent and were unable or unwilling to complete

their work. Petitioners assumed the risk that the builder might walk off the job; 

 Recall that petitioners were obligated to the broker to pay the two-point fee, but that 11

the builder agreed with petitioners to pay the fee along with the construction loan closing costs

when it made its first draw.

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that, if it did, Coast Bank would declare the construction loan in default; and that,

as the bank’s borrower, they would be liable for the draws the builder had

received, plus interest. 

The writ of mandamus is, accordingly,

 DENIED.

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