FI LED U.S. COURT OF APPEALS ELEV ENT H CI RCUI T MAY 2 5, 20 11 J OHN LEY CLERK [PUBLIS H] IN TH E UNIT ED STATE S COURT OF APPEALS FOR THE ELEVE NTH CI RCUIT

__ __ __ __ __ __ __ __ __ __ __ __ __ __ _ No. 1 0- 12 34 4

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ InRe: JANIS W. STEWART an d o th er Bo rro wer-C rime Victi m s, Pet it io ne rs ,

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ On Pe ti ti on forWritof M an da m us to th e Uni te d S ta te s Di stric t Co urt fo r th e Mi dd le Dis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ Befo re TJ OFLAT, MARCUS an d WILSON, Circu itJu dg es . PER CURI AM: I. Thi s ca se in vo lv es a res id en ti al co ns tru ct io n s ch em e th atha d i ts ge ne si s i n th e Fl or id a h ou si ng bo om of t he pa stde cad e. Larg e-s cal e h om e b ui ld ers ha d hu nd red s o f va can t l ot s an d ava rie ty of m od el ho m es to sh ow p ro sp ect iv e b uyers. The ir p rin ci pa l t arg et s wer e fi rs t-t im e h om e b uyers. A rep li ca o f an y of t he
m od el s co ul d b e p ur ch as edfor90 % of t he m od el ’s app rai se d v al ue . The b ui ld ers ha d am ortg ag e b ro ke r st an di ng by for the pro sp ect s wh o c ou ldqu al ify for ape rm an en t m ortg ag e. The p ro sp ect s wh o c ou ldno t qua li fy co ul d s ti ll ha ve th e ho m e; th ey

co ul d re ntitfro m

anin ve st orpro vi de d b y

th e m ortg ag e b ro ke r. In a y ear o r two , aft er qua li fy in g fo r a p erm an en t m ortg ag e, th ey co ul d p ur ch as e th e ho m e. Giv en th e es cal at in g re si de nt ia l m ark et , th e in ve st or st oo d t o b e wel l
co m pe ns at ed
. Inad di ti on to th e 1 0% d is co un t an d t he rob us t h ou si ng m ark et , what at tra ct edth e in ve st or s was th atth ey wou ldno t h av e to co m e up wi th an y m on ey un ti l t he ho us e h adbe en bu il t an d t he bu il de r is su eda cert ifi cat e o f oc cupa nc y . At th atpo in t, t he in ve st orwou ldeit he r ta ke ou t a p erm an en t m ortg ag e, orothe rwis e fin an ce t he pu rch as e, an d re ntth e p ro pe rty to t he pro sp ect . Even if t he ren ta l d eal fel l t hr ou gh , th e in ve st orco ul d s el l t he ho us e ata ha nd so m e p ro fit
. As d es cri be d, t hi s s ch em e req ui redth e in ve st or , th e m ortg ag e b ro ke r, th e bu il de r, an d the ba nkpro vi di ng th e b ui ld er wi th th e fu nd s t o c on stru ctth e h ou se to en te r in to cert ai n i nt erd ep en de ntco nt ractua l arran ge m en ts . Thes e arr an ge m en ts were n eces sa ry

forth e in ve st orto av oi d m ak in g a ny paym en ts on th e h ou se un ti l th e h ou se was re ady

foroc cupa nc y . The sch em e worke d l ik e th is . Ass um e th atth e m od el be in g p ur ch as edwas ap pr ai se d a t $ 10 0,0 00 . The i nv es to r wou lden te r in to a co nt ractwit h t he bu il de r to pu rch as e th e h ou se an d l otfor$9 0,0 00 . The i nv es to r wou ldco nt ractwit h the 2m ortg ag e b ro ke r to ne go ti at e fo r a fee (atlea sttwo po in ts of t he pu rch as e p ric e) a

$9 0,0 00 co ns tru ct io n l oa n, ata sp eci fie d i nt eres t ra te , fro m a ba nkpa rti ci pa ti ng in th e sc he m e. The b an k wo ul d t he n p ay th e $ 90 ,00 0 c on st ru ct io n l oa n p ro ceed s t o 1 th e b ui ld er as th e work p ro gr es se d, i n d raws ag reedto by the in ve st or(as bo rro wer), t he bu il de r, an d the ba nk(as len de r). The in ve st or ’s con tra ctwit h t he bu il de r cal le d fo r th e b ui ld er t o p ay th e co ns tru ct io n l oa n c lo si ng co st s, t he bro ke r’s fee, an d t he in te res t the ba nkch arg ed th e in ve st oron an y

adva nc es th e b an k m ad e to th e b ui ld er u nd er t he co ns tru ct io n lo an . The b an k wo ul d d educ t t he clo si ng co st s an d t he bro ke r’s fee fr om th e bu il de r’s fir stdra w an d fr om subs eque ntdra ws t he in te res t due fro m th e in ve st or . 2 The sch em e worke d n ic el y in th e b ur ge on in g h ou si ng m ark et . As th at
m ark etco ll ap se d, h owe ve r, an d t he bu il de rs ’ po te nt ia l fo r m ak in g apro fit di m in is he d, m an y

bu il de rs ceas edco ns tru ct io n, l eav in g h un dr ed s o f ho us es un fin is he d. Ma ny of th e b ui ld ers wentba nk rupt . Inv es to rs were l eftwit h

The investor g ave the bank a se curity interest in the lot acquir ed fr om the builder whe n 1 the construc tion loan closed. The builder’ s first drawwould include the c ost of the lot the builder had pur chase d for 2 the contra cted- for house . Subsequent draw s would be for particula r items, such as the pouring of the slab. The dr aw would be paid af ter the ba nk’s inspector inspe cted the job site a nd approve d the item. 3un fin is he d h ou se s an d d em an ds fro m th e b an k t o p ay

th e b al an ces du e o n t he
co ns tru ct io n l oa ns . Tha t i s wh athapp en edin th is cas e. Pet it io ne rs , Ste wartan d t ho se si m il arl y si tu at ed , are i nv es to rs who se bu il de rs wentun de r an d l eftth em wit h u nf in is he d ho us es or v acan t l ot s. Pet it io ne rs ’ ba nk , Coa stBan k o f Fl or id a (“ Co as t Ba nk ”), 3 de cl aredpe ti ti on ers ’ co ns tru ct io n l oa ns inde fau ltan d d em an de d p aym en t. Pet it io ne rs pre su m ab ly hav e b reac h- of -co nt ractcla im s ag ai ns t t he ir b ui ld ers , whi ch , if uph el d, wo ul d m it ig at e th ei r lo ss es , bu t, g iv en th ei r bu il de rs ’ effe ct iv e in so lv en cy , th ei r cl ai m s ar e es se nt ia ll y wort hl es s. 4

II. Partof t he in ve st or s’ in de bt edne ss to Co as t Ba nkco ns is ts of t he bro ke r’s two -p oi nt(orm or e) fe e in cl ud edin th e b ui ld er’s fi rs t d raw an d d educ te d b y th e ba nk . Coa stBan k’s Ex ecu ti ve Vice -Pre si de ntforMo rtg ag e Len di ng , Phi li p C oo n,

First B ank is succe ssor in interest to Coast Ba nk. We refe r to both as Coast Ba nk. 3 Petitioners’ potential losses would be re duced to the e x tent of the va lue of the pa rtially 4 completed house s or vac ant lots, and by the value of

their cla ims ag ainst the builders. 4rece iv ed , andpo ck et ed , 75 % of o ne of the se po in ts un de r a s ecre t k ic kb ack

arra ng em en t h e h adwit h t he bro ke r. 5 Co on pl edgu il ty in fe de ral di st ric t co urt t o d ep riv in g C oa stBan k o f it s ho ne stservi ces , in vi ol at io n o f 18 U.S.C. §§ 13 43 , 13 46 , by il li ci tl y acce pt in g th es e su m s. Un it edSta te s v . Coo n, No . 8: 08 -CR- 44 1- T-17 MAP, 2 01 0 U.S. Di st . LEXIS 57 25 7, at*1 9 (M .D. Fla. Ma y 7, 2 01 0) . Clai m in g t o b e v ic ti m s o f Co on ’s cri m e, pe ti ti on ers m ov edth e d is tri ctco urt u nd er t he Cri m e Vic ti m s’ Rig ht s Act (“ CVRA”) , 18 U.S.C. § 3 77 1, fo r le av e to ap pe ar i n Un it edSta te s v . Coo n a ndbe he ard . The d is tri ctco urt d ecl aredth atpe ti ti on ers di d n otqu al ify as CVRA v ic ti m s an d d en ie d t he ir m ot io n. Pe ti ti on ers so ug hta writof m an da m us in th is co urt, an d we gr an te d i t. In re St ewart , 55 2 F .3d12 85 (11 th Cir . 20 08 ). W e in st ru ct edth e di st ric t co urt “ to reco gn iz e p et it io ne rs as v ic ti m s an d a ffo rdth em th e ri gh ts of vi ct im s u nd er t he CVRA.” Id . at 1 28 9. Co m pl y in g wi th ou r in st ru ct io ns , th e d is tri ctco urt h el d h eari ng s fo r si x d ay s be twee n Dec em

be r 7 a nd28 , 20 09 , andth erea fte r is su edit s fi nd in gs of f actan d

The broke r wa s J ohn Miller, who was pr esident of Ame rica n Mortg ag e L ink (“AML ”). 5 Be fore petitioners ca

me on the sce ne, AML

char g ed the investors a

one-point broke rag e fe e. Coon persuade d Miller to raise the f ee to two points, and to pay him, Coon, 75% of the additional point. Petit ioners’ c ontrac ts with AMLcalled f or the pa y ment of a two- point fee. Bor rowe rs consider ed a poor er c redit risk paid more than two points.

5co nc lu si on s o f la w. The co urt d es cri be d the res id en ti al co ns tru ct io n s ch em e

es se nt ia ll y

as we setitou t i n P artI. The co urt t he n a ccep te d o ur de pi ct io n o f pe ti ti on ers ’ st atus as v ic ti m s as de fin edby the CVRA. Non ethe le ss , th e co urt de ni edth ei r reque stforres ti tu ti on on th e g ro un d t ha t t he y su ffer edno lo ss as a co ns eque nc e o f ha vi ng th e b ui ld er p ay two po in ts in st eadof o ne po in t upo n rece ip t o f th e fi rs t d raw o n p et it io ne rs ’ li ne s o f cre di t atth e Co as t Ba nk
. Pet it io ne rs on ce ag ai n s eeka writof m an da m us . This ti m e, th ey

askth atwe or de r th e d is tri ctco urt t o re qu ire Co on to m ak e res ti tu ti on in anam ou ntequi va le nt to on e p oi ntof t he ir c on st ru ct io n l oa ns . Coo n i s t he res po nd en t; th e Uni te d S ta te s 6 is li ke wis e. 7 III. As a t hr es ho ldm at te r, we m us t ad dr es s the st an da rdun de r whi chwe as se ss th e m eri ts of p et it io ne rs ’ m an da m us pe ti ti on . Bot h p et it io ne rs an d re sp on de nt s ha ve bri efedus on th is is su e. Pet it io ne rs askth atwe tre atth e p et it io n a s an or di na ry ap pe al , th at“ un de r th e p la in lan gu ag e an d re m ed ia l d es ig n o f th e CVRA, th e b orro wers are en ti tl edto ord in ary ap pe ll at e rev ie w of t he cla im s i n t he ir
Petitioners conce de that the mortg ag e broke rag e fe e as origina lly contemplated by

AML 6 is leg itimate. I t is the added point they seek to re cover , the point brought about by the broke r’s illicit agr eeme nt and kickbac k arr ang ement with Coon. The Gove rnment see ms conce rned that if we issue the writ and re quire Coon to make 7 the re stitut ion reque sted, it will alter the sentenc e Coon has re ceive d. 6pe ti ti on .” Pet ’rs’ Br. 24 -2 7. Th ey supp ort t he ir r eque stwit h o pi ni on s o f th e Seco ndan d Ni nt h C irc ui ts ; t he y als o s ub m itanunpubl is he d o pi ni on of t he Thi rd Ci rcu it . See In re Walsh , 22 9 F . App ’x. 58 (3dCir . 20 07 ) (p er cu ria m ); Ke nn a v . U.S. Dis t. Co urt 4 35 F.3d10 11 (9t h C ir. 2 00 6) ; In re W. R. Huf f Ass etMg m

t. Co ., 40 9 F .3d55 5 (2 d C ir. 2 00 5) . Res po nd en ts co un te r th atth e p et it io n i s n otan ap pe al . Rath er, the y

co nt en d t ha t, i n e na ct in g t he CVRA, Co ng res s cr eat edan in de pe nd en t caus e o f act io n a ga in stth e d is tri ctjud ge th atm us t b e en te rta in edas a tra di ti on al pe ti ti on fora writof m an da m us an d t hu s s ho ul d b e “ go ve rn edby 8 tra di ti on al m an da m

us st an da rd s, n otby ord in ary ap pe ll at e st an da rd s.” Un it ed St at es Br. 1 6. Th e Uni te d S ta te s ci te s o pi ni on s o f th e Fi fth , Six th , andTenth Ci rcu it s fo r th is pro po si ti on . See In re An tro bu s, 5 19 F.3d11 23 (10 th Cir . 20 08 ); Inre Dean , 52 7 F .3d39 1 (5 th Cir . 20 08 ) (p er cu ria m ); I n re Acke r, 59 6 F .3d37 0 (6 th Cir . 20 10 ); I n re McNu lt y , 59 7 F .3d34 4 (6 th Cir . 20 10 ). InIn r e St ewart , we di d n otex pl ic it ly ind ic at e th e st an da rdwe us edin
se tt in g a si de th e d is tri ctjud ge ’s rul in g tha t p et it io ne rs were n otCVRA v ic ti m s. 9
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 g overne d by the standar d that a petitioner ha s to meet to obtain a wr it of mandamus under § 1651. We said, “[t] he manda

mus procee ding be fore us is a fre e standingcause of ac tion, 9 brought . . . ag ainst the district judge . . . .That is, the proc eedingis not an appea l of a district court judg ment, nor is it an interlocutory appea l of an interme diate orde r.” 552 F .3d at 1288. 7Bo th pe ti ti on ers an d re sp on de nt s d is ag ree o n wh atst an da rdwe em pl oyed. Pet it io ne rs no te th atth e d is se ntin Ste wart“ wou ldha ve ap pl ie d t he de fere nt ia l st an da rdof r ev ie w to affi rm th e d is tri ctco urt.” P et ’rs’ Br. 26 (ci ti ng 55 2 F .3dat 12 90 (W il so n, J ., di ss en ti ng ) (arg ui ng th atpe ti ti on ers fai le d t o m eetth e st an da rd requi redto ob ta in a writof m an da m us , i.e., th atth e wri t s ho ul d i ss ue “ on ly if th e lo wer co urt co m

m it te d a‘ cl ear abu se of d is cret io n’”) (ci ta ti on om it te d) ). Pet it io ne rs no w con te ndth atth e St ewartm ajor it y m us t h av e es ch ewedth e ab us eof -d is cret io n s ta nd ardan d re vi ewedth e d is tri ctjud ge ’s rul in g d e n ov o, fo r le ga l
erro r. Pet ’rs’ Br. 25 . Res po nd en t Co on see m s t o a gr ee, o bs erv in g t ha t “ on th e bo rro wers ’ pr io r m an da m us pe ti ti on , th e m ajor it y

op in io n app ears to ha ve ap pl ie d
an ord in ary ap pe ll at e st an da rdof r ev ie w witho utdi sc us si on of the is su e, whi le th e di ss en ti ng jud ge in di cat edhe wou ldha ve ap pl ie d t he tra di ti on al m an da m us st an da rdof r ev ie w.” Coo n B r. 15 . The Un it edSta te s, t o t he co nt rary, clai m s t ha t

“ wha te ve r th is Co urt m ay ha ve do ne in In r e St ewart , itdi d n otap pl y th e o rd in ary ap pe ll at e st an da rdof r ev ie w.” Uni te d S ta te s B r. 22
. Inth e m at te r atha nd , itm ak es no di ffer en ce wh ethe r we tr eatitas an ap pe al of adi st ric t co urt ju dg m en t, as if b ro ug htun de r 28 U.S.C. § 1 29 1, o r an or ig in al pro ceed in g fo r a wri t o f m an da m us . If co ns id eredanap pe al , we wou ld de te rm in e whe th er t he di st ric t co urt erredin on e o f two way s: di d t he co urt b as e 8it s d eci si on on fin di ng s o f fac t t ha t ar e cl earl y erro ne ou s; if n ot , di d i t m is ap pl y th e la w to su ch fin di ng s? If co ns id eredanori gi na l p et it io n fo r a wri t o f m an da m us , we wou ldde te rm in e whe th er t he di st ric t co urt ab us edit s d is cret io n: di d t he co urt ba se it s d eci si on on fin di ng s o f fac t t ha t ar e cl earl y erro ne ou s; if n ot , di d i t
m is ap pl y th e la w to su ch fin di ng s? Ass um in g, fo r sa ke of d is cu ss io n, t ha t t he 1 0 CVRA g iv es vi ct im s a r ig htto res ti tu ti on fro m a co nv ic te d o ffen de r, we are co nf id en t t ha t, t o p rev ai l, a v ic ti m m us t d em on st rat e so m e in

jury—in th is cas e m on et ary lo ss —caus edby the off en de r’s cri m e. Here caus at io n, t he ap pl ic ab le pri nc ip le of l aw, is no t i n d is pu te . Rath er, wha t i s i n d is pu te is whet he r th e d is tri ctco urt’s fi nd in g o f ul ti m at e fac t i s cl earl y erro ne ou s. Sp eci fic al ly, we m us t d et erm in e whe th er t he di st ric t co urt’s fi nd in g th atCo on ’s cri m e d idno t caus e th e lo ss es pe ti ti on ers su ffer edis cle arl y erro ne ou s. If tha t fi nd in g i s n otcle arl y erro ne ou s, t he di stric t co urt’s d eci si on can no t b e di sturbe d—reg ard le ss of wh ethe r we rea chth atco nc lu si on as a n app el la te co urt rev ie win g atri al co urt’s jud gm en t o r as anap pe ll at e co urt, ac ti ng li ke a tr ia l co urt, en te rta in in g ape ti ti on for a writof m an da m

us in th e fi rs t i ns ta nc e.

See, e.g ., Klay

v. United Hea lthgr oup, Inc., 376 F .3d 1092, 1096 (11th Cir. 2004) 1 0 (explaining that a

district court abuse s its dis cre tion if its findi ng s of fa ct ar e cle arly err oneous or if it improperly

applies the re levant law to its finding s of fa ct). 9The di stric t co urt co rrec tl y sen se d tha t p et it io ne rs ’ cl ai m edlo ss es were su ffer edas ares ul t o f two sce na rio s. In on e sc en ari o, the bu il de r wal ke d o ff the job be fo re co ns tru ct io n was co m pl et e an d fa il edto pa y

th e in te res t due Co as t Ba nk
on th e co ns tru ct io n fu nd s i t h addra wn, an d C oa stBan k d ecl aredth e co ns tru ct io n lo an s i n d efau ltan d d em an de d p aym en t fr om pe ti ti on ers . In t he othe r sc en ari o, aft er re cei vi ng it s fi rs t d raw o n t he co ns tru ct io n fu nd s, t he bu il de r pe rfo rm edno work a t al l. In bo th sce na rio s, t he bu il de r pa idth e b ro ke r’s fee o utof t he pro ceed s of it s fi rs t d raw. Inbo th sce na rio s, t he refo re, the am ou ntof C oa stBan k’s d em an d
on pe ti ti on ers in cl ud edth e b ro ke r’s fee, o ne po in t o f whi ch pe ti ti on ers see k t o reco ve r fro m

Co on as r es ti tu ti on . 1 1 The di stric t co urt h el d tha t p et it io ne rs su ffer edno lo ss as ares ul t o f Co on ’s cri m e an d t hu s wer e n oten ti tl edto res ti tu ti on . W e ag ree. Pet it io ne rs ap pr ov ed th e b ui ld ers ’ fir stdra ws an d thu s wer e o n n ot ic e th atCo as t Ba nkwou ldde du ct fro m th em th e b ro ke r’s fee, al on g wi th ot he r fi xe d a dm in is tra ti ve co st s, g iv in g t he bu il de rs th e b al an ce. Th e cau se of p et it io ne rs ’ lo ss is th eref or e n otCo on , bu t t he factth atth e b ui ld ers be cam e in so lv en t an d wer e unabl e o r un wil li ng to co m pl et e th ei r work. Pe ti ti on ers ass um edth e ri skth atth e b ui ld er m ig htwalkoff th e job ;
Reca ll that petitioners were obligated to the broke r to pay the two-point fee , but that 1 1 the builder a g ree d with petitioners to pay the fe e alongwith the construction loan c losing c osts when it made its first dra

w. 10th at , if i t d id , Coa stBan k wo ul d d ecl are t he co ns tru ct io n l oa n i n d efau lt ; an d t ha t,

as th e b an k’s b orro wer, th ey wou ldbe li ab le forth e draws th e b ui ld er h ad
rece iv ed , pl us in te res t. The writof m an da m

us is , acco rd in gl y , DENIED.

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