Court Opinion

ID: 3065444
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:31:38.878782+00
Date Added: 2024-06-11T11:51:39.957154
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

RICHARD D. SCHULTZ,                       
                 Plaintiff-Appellee,
                v.
UNITED STATES OF AMERICA,                        No. 08-17304
                Creditor-Appellee,
THOMAS K. BOURKE,                                  D.C. No.
                                              3:87-cv-06038-MHP
   Proposed Intervenor-Appellant,
                                                   OPINION
               and
JUDGMENT RESOLUTION
CORPORATION; LESLIE H. COMBS, II,
            Defendants-Appellees.
                                          
         Appeal from the United States District Court
           for the Northern District of California
          Marilyn H. Patel, District Judge, Presiding

                 Argued and Submitted
       December 11, 2009—San Francisco, California

                     Filed February 9, 2010

   Before: Mary M. Schroeder and Consuelo M. Callahan,
  Circuit Judges, and Barbara M.G. Lynn,* District Judge.

                     Opinion by Judge Lynn

  *The Honorable Barbara M.G. Lynn, U.S. District Judge for the North-
ern District of Texas, sitting by designation.

                                2363
                     SCHULTZ v. BOURKE                 2365

                        COUNSEL

Richard M. Goldstein, Goldstein, Tanen & Trench, P.A.,
Miami, Florida, for proposed-intervenor-appellant.

Evan Jason Smith, Esquire, Brodsky & smith, LLC, Beverly
Hills, California, for the plaintiff-appellee.

Deborah F. Sanders, Esquire, Assistant U.S. Attorney, Office
of the U.S. Attorney, Columbus, Ohio, for the creditor-
appellee.
2366                  SCHULTZ v. BOURKE
                           OPINION

LYNN, U.S. District Judge:

                      I.   Introduction

   Proposed Intervenor Thomas Bourke (“Bourke”) seeks
review of the denial of his motion to intervene as of right pur-
suant to Fed. R. Civ. P. 24(a)(2). We affirm the judgment of
the district court because denial of Bourke’s motion was
proper under the Mandatory Victims Restitution Act
(“MVRA”), 18 U.S.C. § 3663A, which gives rise to Bourke’s
interest in this action. Because the remedy provided in the
MVRA is exclusive, Bourke may not use the provisions of
Rule 24 to intervene in pursuit of his interest in restitution.

          II.   Facts and Procedural Background

   The action in the Northern District of California in which
Bourke seeks to intervene (the “California litigation”) began
more than twenty years ago. Richard Schultz was an investor
in a private placement of stock in a thoroughbred horse breed-
ing farm. When the market in thoroughbreds declined and
Schultz’s stock became almost worthless, Schultz sued sev-
eral defendants in an effort to recoup his losses. One of those
defendants, Frank Bryant, was represented by Bourke. Bourke
and other defendants sought to recover their attorneys’ fees
from Schultz.

   In 1994, the California district court entered judgment in
favor of several defendants, including Bryant, who was
awarded more than a million dollars in attorneys’ fees. Bryant
transferred part of his interest in the judgment to Bourke, pur-
suant to their retainer agreement.

  Schultz appealed, and orchestrated a complex scheme to
hide his assets from various creditors, making him appear
judgment proof. During the appeal, Bourke sold his interest in
                       SCHULTZ v. BOURKE                    2367
the judgment at a discount to Judgment Resolution Corpora-
tion (“JRC”), which substituted as a party. JRC’s president
was Frank McPeak (“McPeak”).

   After remand in 1999, Schultz and JRC successfully peti-
tioned the District Court for a reduction in the principal of the
judgment. The District Court entered a consolidated final
judgment (the “Final Judgment”) awarding JRC principal of
$4,118,559.21. Sometime thereafter, JRC assigned its interest
in the Final Judgment to Gloria McPeak, McPeak’s wife.

   In 2001, the United States brought a criminal action in the
U.S. District Court for the Southern District of Ohio against
McPeak and eight other co-conspirators, alleging a conspiracy
to defraud Schultz’s creditors. McPeak pled guilty to conspir-
acy to commit wire fraud and conspiracy to impede the IRS.

   On June 1, 2007, the Ohio court entered a Restitution Opin-
ion and Order (the “Restitution Order”) identifying Bourke as
one of two victims of the conspiracy and awarding him
$744,424.66 in restitution under the Mandatory Victims Res-
titution Act, 18 U.S.C. § 3663A, which mandates that orders
of restitution be entered against defendants found guilty of
certain charges. The Ohio court found McPeak jointly and
severally liable for the restitution owed to Bourke because
McPeak had conspired with Schultz to have JRC purchase the
judgment in favor of Bourke at a reduced rate, using Schultz’s
own hidden assets, and then to obtain a reduction in the
amount of the Final Judgment. McPeak’s wife assigned the
Final Judgment to the United States in satisfaction of
McPeak’s restitution obligations.

    The United States filed a Notice of Registration of Assign-
ment of Judgment in the Ohio court on September 24, 2007.
On June 3, 2008, Bourke sought to intervene in the California
litigation as a matter of right under Fed. R. Civ. P. 24(a)(2),
for the sole purpose of addressing the collection and distribu-
tion of Schultz’s assets. As of the date of Bourke’s motion to
2368                  SCHULTZ v. BOURKE
intervene, the United States had taken at best extremely lim-
ited action to enforce the Final Judgment for the benefit of
other creditors, including Bourke, who now seeks by Rule 24
to take such action on his own behalf. The district court
denied the motion, and Bourke timely appealed.

                        III.   Analysis

   A district court’s denial of a motion for intervention as of
right is reviewed de novo, except for the issue of the timeli-
ness of the motion, which is reviewed for abuse of discretion.
See United States v. Alisal Water Corp., 370 F.3d 915, 918-19
(9th Cir. 2004) (citations omitted).

   [1] Bourke’s right to any proceeds collected from the Final
Judgment is based upon his status as a victim under the Man-
datory Victims Restitution Act, which mandates that orders of
restitution be entered against defendants found guilty of cer-
tain charges. See 18 U.S.C. § 3663A. Enforcement of the
MVRA is governed by 18 U.S.C. § 3664, which provides, in
relevant part:

    (m)(1)(A)(i) An order of restitution may be enforced
    by the United States in the manner provided for in
    subchapter C of chapter 227 and subchapter B of
    chapter 229 of this title; or (ii) by all other available
    and reasonable means.

    (B) At the request of a victim named in a restitution
    order, the clerk of the court shall issue an abstract of
    judgment certifying that a judgment has been entered
    in favor of such victim in the amount specified in the
    restitution order. Upon registering, recording, dock-
    eting, or indexing such abstract in accordance with
    the rules and requirements relating to judgments of
    the court of the State where the district court is
    located, the abstract of judgment shall be a lien on
    the property of the defendant located in such State in
                          SCHULTZ v. BOURKE                          2369
      the same manner and to the same extent and under
      the same conditions as a judgment of a court of gen-
      eral jurisdiction in that State.

   [2] The statute clearly gives victims the right to self-help
in collecting restitution ordered for their benefit under the
MVRA, via the specific mechanism described therein. At
issue here is whether methods other than the mechanism spe-
cifically described in § 3664(m)(1)(B)—such as Bourke’s
attempted intervention in this action—may be used by victims
to independently enforce a restitution order.1

   [3] Subsection A of the statute expressly authorizes the
United States to enforce a restitution order by the statutory
remedy in the Act “or by all other available and reasonable
means.” Section 3664(m)(1)(B), however, prescribes only one
method by which victims may enforce a restitution order. The
negative implication is that Congress meant to prohibit
enforcement in any other way. See, e.g., Transamerica Mort-
gage Advisors, Inc. v. Lewis, 444 U.S. 11, 19 (1979) (“[I]t is
an elemental canon of statutory construction that where a stat-
ute expressly provides a particular remedy or remedies, a
court must be chary of reading others into it.”); Botany Wor-
sted Mills v. United States, 278 U.S. 282, 289 (1929) (“When
a statute limits a thing to be done in a particular mode, it
includes a negative of any other mode.” (citations omitted)).

   [4] The Restitution Order found McPeak jointly and sever-
ally liable for restitution owed to Bourke under the MVRA.
Therefore, § 3664(m)(1)(B) allows Bourke to file an abstract
  1
    The United States cites to 18 U.S.C. § 3612(c) in its argument that
Bourke has no authority to assert any control whatsoever over the process
of collecting the Final Judgment owned by the United States. 18 U.S.C.
§ 3612(c) states that an order of restitution “does not create any right of
action against the United States by the person to whom restitution is
ordered to be paid.” However, the United States provides no legal support
—and none can be found—for characterizing this motion to intervene as
an “action against” the United States.
2370                  SCHULTZ v. BOURKE
of judgment to proceed against McPeak. But because
McPeak’s restitution obligation has been satisfied by assign-
ment of the Final Judgment to the United States, it would not
avail Bourke to proceed against McPeak in the manner pre-
scribed in § 3664(m)(1)(B). Bourke cannot collect a debt from
a debtor who has already paid that debt, albeit not directly to
Bourke himself.

  [5] The inutility of this remedy to Bourke, while unfortu-
nate, is irrelevant to the statutory analysis. Bourke’s motion
to intervene in the California litigation is an attempt to
enforce the Restitution Order in a manner outside the scope
of § 3664(m)(1)(B). Because the remedy provided under the
MVRA is exclusive, Bourke may not use the provisions of
Rule 24 to enlarge or modify his right to restitution by inter-
vening in the California litigation.

                      IV.   Conclusion

  The judgment of the district court is AFFIRMED.