Court Opinion

ID: 4275107
Source: CourtListenerOpinion
Date Created: 2018-05-14 22:45:07.990786+00
Date Added: 2024-06-11T14:33:48.973705
License: Public Domain

05/14/2018
               IN THE COURT OF APPEALS OF TENNESSEE
                           AT NASHVILLE
                              September 5, 2017 Session

   FAMILY TRUST SERVICES, LLC, ET AL. v. REO HOLDINGS, LLC,
                           ET AL.

               Appeal from the Chancery Court for Davidson County
                   No. 15-780-BC     Ellen H. Lyle, Chancellor
                     ___________________________________

                           No. M2016-02524-COA-R3-CV
                       ___________________________________

This appeal of a conviction for criminal contempt arises out of a civil suit brought by
business owners against the owners and employees of a competing business for fraud in
the use of the tax-sale and redemption process for real property. The trial court issued a
temporary injunction, prohibiting defendants from, inter alia, recording deeds in real
estate transactions without an authentic notary seal on the documents and requiring
defendants to notify the court and opposing counsel of any documents they intended to
record in the Register’s Office. Appellant, the owner of the business which was the
subject of the injunction, subsequently formed a trust in which Appellant retained the
right to direct the distribution of income and principal and to amend, revoke, or terminate
the trust. The trustee of the trust was conveyed real property in trust and recorded the
deed without the notice required by the injunction. The property was subsequently sold,
and, at Appellant’s instruction, a portion of the proceeds of sale used to pay Appellant’s
legal fees for a related proceeding; the trial court held that, in so doing, the Appellant
willfully and for a bad purpose violated the injunction, and held him in contempt. On
appeal, Appellant argues that the evidence is insufficient to support the conviction. We
have reviewed the record and conclude that there is evidence to support the contempt
conviction beyond a reasonable doubt and accordingly affirm the judgment.

 Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

RICHARD H. DINKINS, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and FRANK G. CLEMENT, JR., P.J., M.S., joined.

William T. Ramsey, Thomas H. Dundon, and J. Isaac Sanders, Nashville, Tennessee, for
the appellant, Charles Edward Walker.
Eugene N. Bulso and Paul J. Krog, Nashville, Tennessee, for the appellees, Family Trust
Services, LLC, Steven D. Reigle, Regal Homes, Co., Billy G. Gregory, John R. Sherrod,
III.

Herbert H. Slatery, III, Attorney General and Reporter; Andrée S. Blumstein, Solicitor
General; and Alexander S. Rieger, Deputy Attorney General, for the Office of the
Attorney General and Reporter.

                                                OPINION

    I.      FACTUAL AND PROCEDURAL HISTORY

        This appeal arises out of a suit filed by Family Trust Services, LLC, and Billy
Gregory, who are in the business of buying and/or redeeming real property sold at
delinquent tax sales. The Plaintiffs filed suit against a competitor, REO Holdings, LLC,
its owners Charles Walker and Jon Paul Johnson, and its employees Julie Coone, Merdan
Ibrahim, and Nationwide Investments, LLC. Plaintiffs asserted claims for violations of
the Racketeer Influenced and Corrupt Organizations Act and the Tennessee Consumer
Protection Act; slander of title; fraud; violation of Tennessee Code Annotated section 30-
2-712 (recording false affidavits); liability pursuant to Tennessee Code section 66-22-113
(failure to discharge the duties and obligations of a notary public); trespass and
ejectment; and civil conspiracy.1 The Plaintiffs sought injunctive and declaratory relief,
compensatory and punitive damages, and relief from judgments finalizing redemptions
and quieting title to properties that were obtained by Defendants’ alleged fraud.

        The trial court granted Plaintiffs a temporary injunction on July 24, 2015, stating
in pertinent part:

                The Plaintiffs have accused the Defendants of engaging in criminal
         acts of facilitating, assisting and/or forging signatures of notaries;
         committing perjury about the authenticity of real property documents; and
         aiding, abetting and/or committing fraud as to chain of title to real property.

         ***

                Before the Court is clear, unrebutted evidence that in the space of the
         year and one half Defendant REO has been acquiring tax sale redemption
         properties, signatures and notary seals on at least 10 instruments (quitclaim
         deeds, affidavits of heirship and assignments of lien) were forged on 5

1
  In the course of proceedings, Plaintiffs asserted additional causes of action for unfair competition, unjust
enrichment, intentional interference with advantageous business relations, malicious prosecution, and
theft of the right of redemption.
                                                      2
property transactions involving REO and its principals, Defendants Walker
and Johnson. The five notaries, whose names and seals appear on property
documents in this case, have filed declarations that these are forgeries.

       The forgeries involve different notaries in different states, properties
in various locations in Tennessee, with various grantors. The only common
element in all the forgeries is that all of these various transactions involve
Defendants REO, Walker and Johnson.

       The Defendants do not dispute or contest the forgeries. Instead, they
assert that they were unaware and were not involved in the forgeries and
were recipients of forged documents.

***

       . . .[T]he Court finds that the record in this case demonstrates a
substantial likelihood of success on the merits by the Plaintiffs that the
Defendants are not complying with the statutory electronic filing
requirements of real property documents in conducting their business of
acquiring tax sale properties; that noncompliance gives Defendants an
advantage over their competition, the Plaintiffs, in the tax sale property
marketplace; and that noncompliance poses substantial risk to the public
welfare of the registration of forged real estate documents in the public
record.

      It is therefore ORDERED that upon the Plaintiffs posting a $5,000
bond, Defendants REO Holdings, LLC; Charles E. Walker; Jon Paul
Johnson and their employees and agents, including but not limited to,
Defendant Julie Coone and Merdan Ibrahim, are enjoined from:

       (1) Recording, whether electronically or in person, any document
with any Register of Deeds in the state of Tennessee until the Defendants
have completed the two actions of (a) Defendants having in their
possession a “wet seal” color coded notary seal and/or an embossed notary
seal on the document they intend to file and (b) Defendants having filed a
Notice, with this Court and copy to counsel, with appended thereto every
document, from this day forward, the Defendants intend to record with any
Register of Deeds in the State of Tennessee;
       (2) Transferring or encumbering the real property identified in their
Response to Plaintiffs’ Interrogatory No. 3 and in Exhibit A to their
Response to Plaintiffs’ Interrogatory No. 3 without first obtaining leave
from this Court;

                                      3
              (3) Withdrawing from the registry of any Court or from any Clerk &
        Master in the State of Tennessee funds paid to redeem any real property
        without leave of this Court; and
              (4) Disposing of any documents, including any electronically stored
        information, relevant to this action.

       The order was amended once by the court and once by agreed order to provide that
the restrictions did not apply to documents recorded by “Team Title, Inc. or the Law
Office of Charles Walker except to the extent that any such document transfers or assigns
any interest in real property to any defendant . . .”

       On March 3, 2016, the Plaintiffs moved the court to set an evidentiary hearing to
determine whether Mr. Walker should be held in criminal contempt. Pertinent to this
appeal, the motion alleged:

               3. It appears that, from the time this Court filed its Temporary
        Injunction to the present, Mr. Walker and at least two of the other
        defendants, Jon Paul Johnson and Julie Coone, have been involved in a
        scheme to purchase real property in Davidson County in the name of at
        least two nominees, Joshua Lugo and Jamaal Boykin, rather than in Mr.
        Walker’s name, in an effort to circumvent this Court’s Order.

        ***

               8. Similarly, on December 14, 2015, Jamaal L. Boykin, as trustee for
        something called the “For the All Amp Trust” purchased via Substitute
        Trustee’s Deed property located at 4229 Laurenwood Drive, Antioch,
        Tennessee, 37013 for $96,000.[2] See Exhibit 8. This property is currently

2
  The deed conveying the Laurenwood Drive property to Mr. Boykin, as trustee, is titled “Substitute
Trustee’s Deed.” The deed recites that the original trustee for the real property was Cumberland Title
Company, which was conveyed a Deed of Trust to secure the payment of an indebtedness secured by the
property; when the debtor defaulted in payment of the indebtedness, Shapiro & Ingle, LLC, was
appointed as Substitute Trustee and proceeded to foreclose on the property in accordance with the terms
of the Deed of Trust. The Substitute Trustee’s Deed recites that at the foreclosure sale on December 10,
2015:

                . . . the property was sold at public outcry to the highest and best bidder for cash
        at which time the said property was struck off and sold to Jamaal L. Boykin as Trustee
        For the All Amp Trust for the sum of $96,000.00, that being the highest and best bid
        offered; and,

               WHEREAS, the purchaser, Jamaal L. Boykin as Trustee for the All Amp Trust,
        has complied with the terms of the sale by paying into the hands of the undersigned
                                                     4
      listed for sale by defendant Jon Paul Johnson. Mr. Boykin, a licensed
      attorney, is believed to be the son of counsel for REO Holdings, LLC,
      Sheila Stevenson. On October 14, 2015, Mr. Boykin received a discharge in
      a Chapter 7 bankruptcy case (See Exhibit 9), making it unlikely that he had
      $96,000 of personal funds just two months later to purchase this property.

             9. The record, thus, demonstrates that Mr. Walker electronically
      recorded one document (Exhibit 1) in violation of this Court’s Temporary
      Injunction, and if he is the real party interest with respect to the other
      transactions listed above, he has recorded an additional seven (7)
      documents through various agents without providing the notice specified in
      this Court’s July 24, 2015, Temporary Injunction. . . .

      After a telephonic hearing on March 7, the court entered an order granting the
motion, setting a hearing for May 16, 2016, and asserting that Mr. Walker willfully
disobeyed the injunction by:

      …(a) recording a Substitute Trustee’s Deed with the Davidson County
      Register of Deeds on October 29, 2015, in violation of the Court’s
      Memorandum and Order; (b) purchasing and selling real property in the
      names of third parties, including but not limited to Joshua Lugo and Jamaal
      Boykin, for the purpose of evading compliance with the Court’s Order; and
      (c) recording, directly or through his agents, the documents listed below
      without first having complied with the Court’s Memorandum and Order.

Specific to this appeal, the order characterized the following as “[t]he essential facts
constituting the criminal contempt charge”:

      On December 14, 2015, Jamaal L. Boykin, as trustee for the All Amp Trust
      purchased via Substitute Trustee’s Deed property located at 4229
      Laurenwood Drive, Antioch, Tennessee, 37013 for $96,000. This property
      is currently listed for sale by defendant Jon Paul Johnson. Mr. Boykin, a

      Substitute Trustee the expenses of the sale, the balance being applied upon said
      indebtedness for which property was sold.

               NOW, THEREFORE, in consideration of the premises and the payment by
      Jamaal L. Boykin as Trustee For the All Amp Trust the sum of money so paid, receipt of
      which is hereby acknowledged, the undersigned, Shapiro & Ingle, LLP, a Tennessee
      limited liability partnership, as Substitute Trustee, does hereby grant, bargain, sell and
      convey to the said Jamaal L. Boykin as Trustee For the All Amp Trust, his/her/their/its
      successors and assigns, in fee simple forever, the property above mentioned and now
      further described as being in Antioch, County of Davidson, State of Tennessee[.]

                                                  5
          licensed attorney, is the nephew of counsel for REO Holdings, LLC, Sheila
          Stevenson. On October 14, 2015, Mr. Boykin received a discharge in a
          Chapter 7 bankruptcy case. No notice was filed with this Court regarding
          this transaction.

By separate order, the court ordered Plaintiff’s counsel to prosecute the charge of
criminal contempt.

       Prior to the hearing, Defendant REO Holdings, LLC, which had filed a petition
under Chapter 11 of the Bankruptcy Code on February 29, 2016, filed a notice removing
the case to bankruptcy court, and all proceedings in the business court were stayed; on
Plaintiffs’ motion, the bankruptcy court remanded the contempt proceedings for final
disposition on June 15, 2016.

        Following a hearing on July 26,3 the trial court entered an order finding Mr.
Walker guilty beyond a reasonable doubt of one count of criminal contempt; Mr. Walker
was sentenced to two days in jail and fined $50.00. The court subsequently awarded
attorney’s fees of $23,821.00 and $2,049.00 in costs relating to the prosecution of the
proceeding. Mr. Walker appealed to this court, and the trial court stayed Mr. Walker’s
jail sentence pending the resolution of the appeal; he challenges the sufficiency of the
evidence to establish that he violated the injunction, or, alternatively, whether the
evidence establishes that his violation was willful.

    II.      ANALYSIS

          The order holding Mr. Walker in contempt stated:

                 [T]he Court finds beyond a reasonable doubt that in December of
          2015, to purposefully evade compliance with the July 24, 2015 Order,
          Defendant Walker established the All Amp Trust. Defendant Walker
          entered into the All Amp Trust Agreement on December 2, 2015 as the
          Settlor, with Jamaal L. Boykin serving as Trustee.

                 The evidence at the July 26, 2016 trial established that as Settlor of
          the All Amp Trust, Defendant Walker was granted the rights: (1) to
          distribute income or principal to any person or organization as he directed;
          (2) to pay such amounts or dispose of the net income and principal of the
          Trust as he directed the Trustee from time to time; (3) to reserve the right at
          any time and from time to time to amend, alter, revoke or terminate the

3
  The record contains an excerpt of the transcript of the July 26 hearing; the only testimony in the excerpt
is that of Mr. Boykin.

                                                     6
       Trust, in whole or in part, or any provisions, by an instrument in writing
       signed by Defendant Walker and delivered to the Settlor within the lifetime
       of Defendant Walker; and (4) on the revocation of the Trust, the Trustee
       was to pay or transfer to Defendant Walker, or as Defendant Walker may
       direct in the instrument of revocation, all of the trust funds.

              Trial Exhibit 23 is a copy of a Substitute Trustee’s Deed. It
       establishes that Jamaal Boykin, as Trustee for the All Amp Trust,
       purchased the 4229 Laurenwood Drive, Antioch, Tennessee property in
       December of 2015. As Trustee for the All Amp Trust and agent for
       Defendant Walker, Jamaal Boykin recorded a Substitute Trustee’s Deed
       conveying the Laurenwood Property to Jamaal Boykin as Trustee for the
       All Amp Trust.

              In connection with the recording of Trial Exhibit 23 by his agent,
       Defendant Charles E. Walker did not comply with paragraph 1 of the July
       24, 2015 Order. Defendant Walker did not notify the Court or opposing
       Counsel of the recording of the Substitute Trustee’s Deed. Trial Exhibit 5
       establishes that the All Amp Trust, directed by Defendant Walker, sold the
       Laurenwood Property in March 2016 with the All Amp Trust receiving
       $137,760.68 from the sale.

              The Court additionally finds from the undisputed testimony of
       Attorney Jamaal L. Boykin, the Trustee, that the All Amp Trust consisted
       of approximately $137,760.68 from the sale of 4229 Laurenwood Drive,
       Antioch, TN 37013. Additionally, the testimony of Attorney Boykin
       established that subsequently Defendant Walker directed approximately
       $10,000 to be withdrawn from the Trust for the payment of legal fees
       related to Defendant Walker’s bankruptcy.

              From the foregoing evidence the Court finds beyond a reasonable
       doubt that through his role as Settlor of the All Amp Trust, Defendant
       Walker used the Trust to evade the July 24, 2015 Order, and the evidence
       establishes that Defendant Walker, beyond a reasonable doubt, violated the
       July 24, 2015 Order willfully and for a bad purpose.

       Mr. Walker does not contend that the injunction was unlawful or ambiguous; he
asserts that the evidence is insufficient to establish that he violated the injunction, or
alternatively, that he did so willfully. Specifically, he argues that there is insufficient
proof to establish beyond a reasonable doubt that the Substitute Trustee’s Deed was
recorded by an agent of Mr. Walker because “Mr. Boykin’s testimony did not establish,
beyond a reasonable doubt, that he directed the recording of the Substitute Trustee’s
Deed, and the prosecution presented no other evidence on this point.”
                                             7
        The record shows that the injunction was issued on July 24, 2015, and Mr. Walker
established the trust on December 2, in an instrument titled “Trust Agreement All Amp
Trust,” which identified himself as Settlor and Jamaal L. Boykin as Trustee. No other
beneficiary is identified, and Mr. Walker and Mr. Boykin are the only parties to the
agreement. Article I of the Trust Agreement states that the “Settlor is transferring the
property described in Schedule A to Trustee, in Trust, as the initial trust principal.”
Article III is titled “Distributions During Settlor’s Lifetime” and states that the “Trustee
shall distribute income or principal to any person or organization as directed by Settlor.”
In Article IV, Mr. Walker reserves the right to amend, alter, revoke, or terminate the trust
at any time; the article provides that “On the revocation of this trust in its entirety, the
Trustee shall pay or transfer to the Settlor, or as the Settlor may direct in the instrument
of revocation, all of the trust fund.” The trust agreement bears Mr. Walker’s signature as
Settlor, and then reads as follows:

                                  TRUST AGREEMENT All Amp Trust

                              Schedule A Property Transferred to Trust

                                                 ___________

                                                   $250 Cash

                                                  [next page:]

                                                 Schedule “A”

                              4229 Laurenwood Drive, Antioch TN 37013

        Mr. Boykin testified that, although the Substitute Trustee’s Deed conveying
ownership of the Laurenwood Drive property (“the property”) recited that he purchased
the property, he was not the purchaser, and did not know who purchased the property or
where the purchaser got the funds to purchase the property. He testified that he received
the substitute trustee’s deed via a commercial delivery service and, while he could not
recall the specifics surrounding the recording of the deed, he caused it to be recorded.4
He also testified that he received a check for $14,000 from the substitute trustee, which
he “guess[ed was] an overpayment of some sort.” He testified that the property was a
“fixer upper”; that trust funds were used to improve the property; and that after the
4
  Mr. Walker contends that Mr. Boykin “testified that he had absolutely no recollection regarding how the
Substitute Trustee’s Deed came to be recorded.” However, Mr. Boykin testified that he “got the deed
through FedEx, I believe, with the check. . . . I don’t know who I handed it off to, but it would have been
handed off to someone in the office to go record,” as was his typical practice, and that “[i]t could be
Stephanie; it could be Jennifer[; and] Maxine works with us as well.”
                                                    8
property was sold in March 2016 and the proceeds deposited in the trust’s bank account,
he was directed to use some of the funds to pay Mr. Walker’s bankruptcy attorney’s fees.

        The willful disobedience of a lawful court order is punishable as criminal
contempt. Tenn. Code Ann. § 29-9-102(3).5 “[I]n criminal law, “willfully” connotes a
culpable state of mind. In the criminal context, a willful act is one undertaken for a bad
purpose.” Konvalinka v. Chattanooga-Hamilton Cty. Hosp. Auth., 249 S.W.3d 346, 357
(Tenn. 2008) (citing Bryan v. United States, 524 U.S. 184, 191 (1998); State v. Braden,
867 S.W.2d 750, 761 (Tenn. Crim. App. 1993) (upholding an instruction stating that
“[a]n act is done willfully if done voluntarily and intentionally and with the specific
intent to do something the law forbids”)). The person accused of criminal contempt is
presumed to be innocent, and the prosecution bears the burden of proving guilt beyond a
reasonable doubt. Cottingham v. Cottingham, 193 S.W.3d 531, 538 (Tenn. 2006) (citing
Shiflet v. State, 400 S.W.2d 542, 544 (Tenn. 1966)). “A guilty verdict removes the
presumption of innocence, and it is replaced with a presumption of guilt.” Black v.
Blount, 938 S.W.2d 394, 399 (Tenn. 1996). On appeal, we consider the evidence in the
light most favorable to the prosecution to determine whether any trier of fact could have
found the essential elements of the crime beyond a reasonable doubt. Cottingham, 193
S.W.3d at 538.

       As we consider the issue in this case, we are guided by the instruction in Davidson
County v. Randall, a 1957 case in which our Supreme Court was called upon to
determine whether the proof was sufficient to support the trial court’s finding of criminal
contempt when a property owner was enjoined from selling dirt from his residential
property but continued to let a contractor remove the dirt with heavy equipment. The
Court observed:

       ‘The matter is to be determined, not from a contemporaneous verbal
       construction of the decree given by the judge, but from the injunction itself,
       construed in the light of the pleadings and the subject matter of the suit.’ 28
       Am. Jur., p. 507, Sec. 333. . . .

       ‘But, while the injunction must be implicitly obeyed, it is the spirit and not
       the strict letter of the mandate to which obedience is exacted, and
       complainant failing to prove a violation of this to the satisfaction of the
       court, the rule for an attachment for contempt will be discharged.’ High on
       Injunctions, 4th Edition, Sec. 1419.

5
 The maximum sentence for each act of criminal contempt is ten days of confinement in jail, and the
maximum fine is $50. Tenn. Code Ann. § 29-9-103.

                                                9
        In Section 1433 of this work this very reasonable and logical statement is
        made:

        ‘But where the mandate of the court has been violated in spirit as well as in
        letter, the court will not permit the general terms of the writ to be controlled
        or restricted by reference to the particular nature of the grievance. Nor will
        the court permit defendants to evade responsibility for violating an
        injunction by doing through subterfuge that which, while not in terms a
        violation, yet produces the same effect by accomplishing substantially that
        which they were enjoined from doing.’ (Emphasis ours).

        And at Section 1446 on page 1455, this author very aptly makes the
        statement which is particularly appropriate in this case.

        ‘In deciding whether there has been an actual breach of an injunction it is
        important to observe the objects for which the relief was granted, as well as
        the circumstances attending it. And it is to be observed that the violation of
        the spirit of an injunction, even though its strict letter may not have been
        disregarded, is a breach of the mandate of the court.’ (Emphasis ours).

        The author then notes that the opposite of this statement is likewise true, in
        these contempts for breach of the injunction, to the effect that even though
        literally an injunction might have been breached if it is not done so in spirit
        then there is no violation. . . .

300 S.W.2d 618, 620, 621 (Tenn. 1957)

       The injunction was issued in this case to ensure that every deed the Defendants
filed complied with the statutory filing requirements pertaining to real property
documents; the court found that Defendants’ registration of forged real estate documents
posed substantial risk to the public welfare. The evidence is clear that, after the
injunction was issued, Mr. Walker established the All Amp Trust, a revocable trust in
which he retained the right to direct the accumulation and distribution of trust assets, and
in which Mr. Boykin was named trustee. The corpus of the trust was $250 cash and the
Laurenwood Drive property which was conveyed to Mr. Boykin “as Trustee for the All
Amp Trust.” Pursuant to his positon as trustee, Mr. Boykin was bound to follow Mr.
Walker’s directions relative to the trust property, including recording the deed conveying
that property to the trust and, upon its subsequent sale in March 2016, distributing a
portion of the proceeds to pay Mr. Walker’s legal fees.6

6
 The derivation clause of the March 2016 deed states that the property is “the same property conveyed to
JAMAAL L. BOYKIN AS TRUSTEE FOR THE ALL AMP TRUST, by deed from SHAPIRO &
                                                  10
       Recording the Substitute Trustee’s Deed without adhering to the notice
requirement of the injunction demonstrated “willful disobedience or resistance” to the
injunction, and is directly attributable to Mr. Walker. Tenn. Code Ann. § 29-9-102(3).
Taken in its entirety and in context, the proof is beyond a reasonable doubt that Mr.
Walker, as settlor of the trust and its sole beneficiary, sought “to evade responsibility for
violating an injunction by doing through subterfuge that which, while not in terms a
violation, yet produces the same effect by accomplishing substantially that which [he]
w[as] enjoined from doing,” Randall, 300 S.W.2d at 621, i.e., causing a deed to be
recorded without adhering to the terms of the injunction. This willful conduct violated
the injunction and supports Mr. Walker’s conviction of criminal contempt.

   III.   CONCLUSION

       For the foregoing reasons, we affirm the judgment of the trial court.

                                                   RICHARD H. DINKINS, JUDGE

INGLE, LLP, A TENNESSEE LIMITED LIABILITY PARTNERSHIP, AS SUBSTITUTE TRUSTEE,
of record in instrument No. 20160112-0003357, dated December 14, 2015, said Register’s Office.”

                                              11