Court Opinion

ID: 171296
Source: CourtListenerOpinion
Date Created: 2010-08-14 18:31:24+00
Date Added: 2024-06-11T17:25:12.812191
License: Public Domain

FILED
                                                                United States Court of Appeals
                                                                        Tenth Circuit

                      UNITED STATES COURT OF APPEALS                   October 8, 2008
                                                                    Elisabeth A. Shumaker
                             FOR THE TENTH CIRCUIT                      Clerk of Court

    SECURITIES AND EXCHANGE
    COMMISSION,

                Plaintiff-Appellee.

                                                           No. 08-4073
    ALLEN Z. WOLFSON,                           (D.C. No. 2:03-CV-00914-TS-DN)
                                                            (D. Utah)
                Appellant,

    v.

    DAVID K. BROADBENT,

                Receiver-Appellee.

                             ORDER AND JUDGMENT *

Before HARTZ, BALDOCK, and GORSUCH, Circuit Judges.

         The district court denied Allen Z. Wolfson leave to intervene in this civil

enforcement action brought by the Securities and Exchange Commission (SEC)

*
       After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
against a number of defendants including his son, David M. Wolfson. He appeals.

We affirm.

      The facts of this case are detailed in our decision on Mr. Wolfson’s

previous appeal, Wolfson v. Clayton, 253 F. App’x. 752 (10th Cir. 2007). We

repeat only the essentials here.

      Mr. Wolfson, who is not a party to this enforcement action, filed a plethora

of pleadings in it. He contended that a court-appointed receiver had improperly

seized and disposed of assets belonging solely or primarily to him (“Purported

Wolfson Assets”). He stated he gave David Wolfson power of attorney over the

assets in order to manage them while Mr. Wolfson was in prison, but never

transferred ownership of them to David Wolfson.

      The district court struck Mr. Wolfson’s pleadings because he was not a

party to the action and had never moved to intervene in it. Our review of his

pleadings, however, persuaded us that two of his filings did represent attempts to

intervene. We therefore remanded to the district court to determine whether

intervention should be permitted. Id. at 756. Upon consideration, the district

court denied intervention.

      I. Timeliness of Motion to Intervene

       “Under [Fed. R. Civ. P.] 24(a), an applicant may intervene as a matter of

right if (1) the application is timely, (2) the applicant claims an interest relating to

the property or transaction which is the subject of the action, (3) the applicant’s

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interest may be impaired or impeded, and (4) the applicant’s interest is not

adequately represented by existing parties.” Elliott Indus. Ltd. v. BP Am. Prod.

Co., 407 F.3d 1091, 1103 (10th Cir. 2005). 1 Addressing these factors, the district

court determined on remand that (1) Mr. Wolfson’s motions for intervention were

untimely; (2) he failed to substantiate his claim of sole ownership of the

Purported Wolfson Assets; (3) in light of the findings already made concerning

his ownership and his other avenues for redress that would not prejudice the

parties to this action, his interest would not be impaired or impeded; and

(4) although his rights were not adequately represented as a non-party, the other

factors weighed against him and he was therefore not entitled to intervention as a

matter of right. Because we conclude that the district court permissibly denied

Mr. Wolfson’s motions as untimely, we need not consider its other bases for

denying intervention.

      We review the district court’s order denying a motion to intervene as

untimely for an abuse of discretion. Utah Ass’n of Counties v. Clinton, 255 F.3d

1246, 1249 (10th Cir. 2001). “The timeliness of a motion to intervene is assessed

in light of all the circumstances, including the length of time since the applicant

1
       Rule 24(a)(2) provides in relevant part that “[o]n timely motion, the court
must permit anyone to intervene who . . . claims an interest relating to the
property or transaction that is the subject of the action, and is so situated that
disposing of the action may as a practical matter impair or impede the movant’s
ability to protect its interest, unless existing parties adequately represent that
interest.”

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knew of his interest in the case, prejudice to the existing parties, prejudice to the

applicant, and the existence of any unusual circumstances.” Id. at 1250

(quotation omitted). “The analysis is contextual; absolute measures of timeliness

should be ignored.” Id. (quotation omitted). “The requirement of timeliness is

not a tool of retribution to punish the tardy would-be intervenor, but rather a

guard against prejudicing the original parties by the failure to apply sooner.” Id.

(quotation omitted).

             A. Length of Time Since Mr. Wolfson Knew of His Interest

      In February 2004, the receiver requested that the receivership be expanded

to include assets that Mr. Wolfson now claims as his own. The receiver provided

evidence that David Wolfson and others had transferred a large amount of funds

from defrauded investors into the Purported Wolfson Assets, making them a

proper subject of the receivership. The receivership was expanded to include

these assets on February 23, 2004.

      The district court entered a consent judgment against David Wolfson on

December 21, 2004. That judgment noted that David Wolfson had already

satisfied his obligation to disgorge wrongfully-obtained profits by transferring to

the receiver his interest in various assets, including the Purported Wolfson Assets.

Mr. Wolfson does not argue that his son failed to communicate with him the facts

of the disgorgement. He only states that it was his impression that the Purported

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Wolfson Assets would not be included because David Wolfson had notified the

receiver that he only had a power of attorney over them.

      Mr. Wolfson did not file his first colorable motion to intervene until

November 29, 2005, nearly a year later. Well prior to filing this motion to

intervene, he was on notice of the receivership’s actions, evidenced by the fact

that he began filing non-intervention pleadings in this action as far back as June

2005. Thus, Mr. Wolfson had notice of the receivership’s effect on his alleged

interest in the Purported Wolfson Assets long before he moved to intervene.

             B. Prejudice to the Receiver

      In the meantime, the receiver relied upon the receivership orders in

carrying out his duties of marshaling and liquidating assets for the benefit of

defrauded investors and creditors. A number of these assets have already been

sold, some prior to the filing of Mr. Wolfson’s first colorable motion to intervene.

The receiver would be greatly prejudiced if forced to attempt to undo the steps he

has taken to marshal and to liquidate these assets.

             C. Prejudice to Mr. Wolfson

      Mr. Wolfson has failed to substantiate his allegation that his own interests

would be unduly prejudiced if he were denied permission to intervene. Although

he claims that he merely granted his son power of attorney because he was going

to prison, the evidence of record shows that David Wolfson assumed control and

purported ownership of the operations, accounts, and assets of the Purported

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Wolfson Assets. He then used them as a conduit for money stolen from investors.

As the receiver has explained, the claims procedure and distribution process will

permit Mr. Wolfson to make a claim and to dispute the receiver’s proposed

distribution. 2 If he does file a claim, the district court should of course supply

him with any notice and hearing in connection with that claim necessary to

comport with due process. See SEC v. Elliott, 953 F.2d 1560, 1570-71 (11th Cir.

1992).

               D. Existence of Unusual Circumstances

         Mr. Wolfson points to no unusual circumstances that would excuse the

untimely filing of his motions to intervene. His incarceration has not prevented

him from filing numerous pleadings in this action.

               E. Conclusion

         The district court did not abuse its discretion in determining that

Mr. Wolfson’s motions to intervene were untimely. We therefore affirm the

denial of these motions.

         II. Pendency of Rule 60(b) Motion

         Mr. Wolfson also complains that the district court has ignored his other

filings regarding this matter, including a motion he filed under Fed. R. Civ. P.

2
       Although Mr. Wolfson asserts that the receiver has improperly disposed of
his properties for pennies on the dollar, he points us to no evidence establishing
any actual discrepancy between the market value of the properties and the prices
obtained by the receiver.

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60(b) after our remand but prior to the entry of the order denying his motion to

intervene from which this appeal is taken.

      If the district court denies [a motion to intervene], the proper
      procedure is to pursue an immediate appeal, and not to file repetitive
      motions pestering the district court. This is true regardless of how
      the motions are labeled where the substance of the motions and
      purported justification for intervention remain unchanged.

Plain v. Murphy Family Farms, 296 F.3d 975, 980 (10th Cir. 2002).

Mr. Wolfson’s latest notice of appeal referenced only the denial of his motions to

intervene. He has not sought mandamus relief to compel the district court to

decide his Rule 60(b) motion. Given the availability of this direct appeal from a

final order denying intervention, we will not construe his notice of appeal to

include a request for mandamus relief.

      The order of the district court denying intervention is AFFIRMED.

Mr. Wolfson’s motion for an injunction pending appeal is DENIED.

                                                    Entered for the Court

                                                    Bobby R. Baldock
                                                    Circuit Judge

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