Court Opinion

ID: 3174076
Source: CourtListenerOpinion
Date Created: 2016-02-05 08:30:16.03552+00
Date Added: 2024-06-11T07:38:51.052606
License: Public Domain

Case: 15-12022    Date Filed: 02/03/2016   Page: 1 of 8

                                                           [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT
                         ________________________

                                 No. 15-12022
                             Non-Argument Calendar
                           ________________________

                  D.C. Docket No. 1:09-cr-00499-RWS-CCH-1

UNITED STATES OF AMERICA,

                                                                 Plaintiff-Appellee,
versus

J. L. MENEFEE, II,
a.k.a. J. L. Menefee,
a.k.a. JL Menefee,
a.k.a. JL Menefee, II,
a.k.a. James L. Menefee,

                                                            Defendant-Appellant.

                           ________________________

                  Appeal from the United States District Court
                     for the Northern District of Georgia
                        ________________________

                               (February 3, 2016)

Before WILSON, MARTIN, and ANDERSON, Circuit Judges.

PER CURIAM:
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         J. L. Menefee, II stands convicted of uttering false statements in violation of

18 U.S.C. § 1001 when he made fraudulent statements in a loan application for a

$1.8 million loan from the victim, Branch Bank & Trust Company (BB&T). He

appeals the district court’s order crediting against his $1.8 million restitution

judgment a total of $1.375 million for collateral property received by the victim;

crediting against the judgment $75,000 plus $1,953.74 in interest for a Certificate

of Deposit (CD) seized by the victim; denying his requested credit of $200,000 for

a cash injection made at the loan closing; and directing garnishee, SunTrust Bank

(SunTrust), to turn over all of his property, including the contents of his

companies’ accounts.

         On appeal, Menefee first argues that the district court erred in applying the

credits to his restitution judgment. He should have been credited $1.6 million for

the collateral property received by the victim and $200,000 for a cash injection he

made at closing. In addition, the interest calculated on the CD was incorrect.

Second, the government violated his Brady 1 rights, as it had access to two

appraisals of the collateral property at sentencing but did not disclose them. Third,

the district court incorrectly upheld a garnishment, despite an insufficient showing

that his companies’ accounts were used for personal expenses.

1
    Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194 (1963).
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                              I.     Restitution Credit

      “We review the legality of a restitution order de novo and the factual

findings underlying the order for clear error.” United States v. Cavallo, 790 F.3d

1202, 1238 (11th Cir. 2015). The Mandatory Victims Restitution Act (MVRA)

states that if the property at issue cannot be returned to the owner, then the

defendant should pay the value of the property minus “the value . . . of any part of

the property that is returned.” 18 U.S.C. § 3663A(b)(1)(B). The restitution award

must be based on the loss the victim actually suffers, so the court must deduct as an

offset any value the victim might have derived. Cavallo, 790 F.3d at 1239.

      Menefee argues that the district court erred in crediting the restitution

amount because it (i) improperly valued the subject property, (ii) failed to give

credit for a $200,000 cash injection paid at closing, and (iii) improperly calculated

interest on a CD. We address each argument in turn.

      First, Menefee argues that the district court improperly valued the foreclosed

property and that the offset should be based on the highest appraisal, $1.6 million.

In Robers v. United States, Robers, who also submitted fraudulent loan

applications, argued that because the banks sold the collateral properties in a

falling real estate market, they were worth more when the banks took title and

restitution should be credited with this higher value. 572 U.S. ___, ___, 134 S. Ct.

1854, 1857 (2014). The Supreme Court found that “property . . . returned” under

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the MVRA referred to the money that the banks lent to Robers and subsequently

lost, not the collateral property the banks received in foreclosure. Id. (internal

quotation marks omitted). Therefore, the Court held that “a sentencing court must

reduce the restitution amount by the amount of money the victim received in

selling the collateral, not the value of the collateral when the victim received it.”

Id. at 1856.

         The Supreme Court also acknowledged that the statute has a proximate

cause requirement, which turns on “whether the harm alleged ha[d] a sufficiently

close connection to the conduct at issue.” Id. at 1859 (internal quotation marks

omitted). Menefee, like Robers, argues that the delay in the sale of the property

caused a lower sale price and broke the causal connection necessary for proximate

cause. However, the Supreme Court held in Robers that fluctuation in property

values is common and its existence is foreseeable. See id. at 1859. Therefore, the

fact that property values were lower when BB&T sold the property did not break

the causal connection, and Menefee failed to point to any compelling facts in the

record that would definitively break the causal connection required for proximate

cause.

         In light of the above, it was not clearly erroneous for the district court to find

that Menefee was entitled to a credit of $1.375 million for the collateral received

by the victim, an equitable sum considering the property only sold for $550,000.

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       Second, the district court did not clearly err in denying Menefee’s request

that the $200,000 cash injection qualify as an offset. By Menefee’s own

admission, this sum did not constitute a direct payment to the loan principal.

Rather, it served as a prerequisite payment for closing costs that did not reduce the

actual amount of the loan and therefore should not be credited towards any

restitution amount owed on the loan principal.

       Finally, while the district court did not clearly articulate its $1,953.75

interest calculation on the $75,000 CD seized by BB&T, Menefee has failed to

meet his burden of proving this was clear error. See United States v. Sheinbaum,

136 F.3d 443, 449 (5th Cir. 1998) (“Logically, the burden of proving an offset

should lie with the defendant.”).2

                                  II.    Brady Violation

       We review de novo an alleged Brady violation. United States v. Jones, 601

F.3d 1247, 1266 (11th Cir. 2010). Menefee argues that the government’s failure to

disclose two prior appraisals of the subject property at sentencing constitutes a due

process violation pursuant to Brady. See 373 U.S. at 87.

        Under Brady, “the defendant must prove that (1) the government possessed

evidence favorable to him; (2) the defendant did not possess the evidence and

2
  Because the CD originated at BB&T, Menefee’s argument rests on the assumption that BB&T
would continue to pay out interest on the CD to itself after seizure from Menefee. Not only is
this a questionable assumption, but Menefee has failed to cite any law in support.
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could not have obtained it with reasonable diligence; (3) the government

suppressed the favorable evidence; and (4) the evidence was material.” LeCroy v.

Sec’y, Fla. Dep’t of Corr., 421 F.3d 1237, 1268 (11th Cir. 2005). Therefore, if a

defendant “had within [his] knowledge the information by which [he] could have

ascertained the alleged Brady material, there is no suppression by the government.”

Maharaj v. Sec’y for the Dep’t of Corr., 432 F.3d 1292, 1315 (11th Cir. 2005)

(internal quotation marks omitted). The materiality requirement is “satisfied if

there is a reasonable probability that, had the evidence been disclosed to the

defense, the result of the proceeding would have been different.” Allen v. Sec’y,

Fla. Dep’t of Corr., 611 F.3d 740, 746 (11th Cir. 2010) (internal quotation marks

omitted).

      Here, Menefee did not prove a violation of his Brady rights, as he could

have obtained the $1.6 million appraisal with reasonable diligence prior to

sentencing. That appraisal was appended to a motion BB&T filed in the

bankruptcy proceedings for Menefee’s company, a motion which Menefee

references in his brief to this court. See LeCroy, 421 F.3d at 1268 (finding no

Brady violation where defendant’s counsel could have obtained the relevant

evidence by exercising “reasonable diligence”).

      Moreover, while Menefee may not have received the $1.375 million

appraisal, missing such evidence would not be material here. Since the court

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accorded that precise amount in restitution offset for the collateral property, there

would be no change to the ultimate result. See Allen, 611 F.3d at 746.

                                     III.    Garnishment

       Under 28 U.S.C. § 3205(a), “[a] court may issue a writ of garnishment

against property . . . in which the debtor has a substantial nonexempt interest.”

After the garnishee files an answer, the judgment debtor can object, stating the

grounds for the objection while carrying the burden of proving such grounds. 28

U.S.C. § 3205(c)(5).

       Menefee has failed to carry his burden of proving the grounds of his

objection to the answer filed by the garnishee, SunTrust. Specifically, Menefee

had the burden of proving that his accounts were subject to a statutory exemption,

and he has failed to make any such arguments both at the district court and on

appeal. See id. At a hearing regarding restitution (during which garnishment

issues were formally addressed) and in his post-hearing brief, Menefee failed to

articulate and prove why his accounts were exempt from garnishment. Therefore,

there was no statutory rationale for an additional hearing and the district court did

not err in holding the accounts subject to garnishment. 3

3
 Menefee also claims that the government seized money from his minor child’s account, but
points to nothing in the record for support, and the court’s order does not appear to address any
such account.
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                                  IV.    Conclusion

      We find no error as to the district court’s findings that (i) restitution would

be offset by $1.375 million for the subject property but not the $200,000 cash

injection; (ii) the CD interest credited as an offset amounts to $1,953.75; (iii) the

government did not commit a Brady violation with respect to the two property

appraisals; and (iii) garnishment of Menefee’s SunTrust accounts were proper.

Thus, we affirm.

      AFFIRMED.

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