Court Opinion

ID: 9349304
Source: CourtListenerOpinion
Date Created: 2022-12-21 18:00:45.294525+00
Date Added: 2024-06-11T16:46:35.856061
License: Public Domain

Appellate Case: 22-6038        Document: 010110787390   Date Filed: 12/21/2022   Page: 1
                                                                                FILED
                                                                    United States Court of Appeals
                         UNITED STATES COURT OF APPEALS                     Tenth Circuit

                                FOR THE TENTH CIRCUIT                    December 21, 2022
                            _________________________________
                                                                        Christopher M. Wolpert
                                                                            Clerk of Court
  UNIVERSITAS EDUCATION, LLC,

         Petitioner/Judgment Creditor -
         Appellee,

  v.                                                        No. 22-6038
                                                    (D.C. No. 5:14-FJ-00005-HE)
  AVON CAPITAL, LLC,                                       (W.D. Okla.)

         Respondent/Judgment Debtor,

  ASSET SERVICING GROUP, LLC,

         Respondent/Garnishee,

  and

  SDM HOLDINGS, LLC,

         Respondent/Garnishee - Appellant.

  ------------------------------

  AVON CAPITAL, LLC, a Wyoming
  limited liability company,

         Intervenor.
Appellate Case: 22-6038    Document: 010110787390         Date Filed: 12/21/2022       Page: 2

                          _________________________________

                              ORDER AND JUDGMENT*
                          _________________________________

 Before BACHARACH, PHILLIPS, and MORITZ, Circuit Judges.
                  _________________________________

       Purporting to act on behalf of SDM Holdings, LLC (“SDM”), attorney Jeffrey

 Sandberg appeals the district court’s order requiring that he have SDM’s permission

 to file motions and make court appearances in support. Attorney Sandberg contends

 that he has filed an interlocutory appeal of a district-court order imposing filing

 restrictions on SDM. But Attorney Sandberg assumes that he continues to represent

 SDM, despite the district court’s having appointed SDM a receiver, which has led to

 SDM having a new manager.

       Before accepting Attorney Sandberg’s filings on SDM’s behalf, the court

 reasonably required him to obtain authorization from the newly constituted SDM to

 continue to represent it in court. The district court permitted Attorney Sandberg to

 continue representing SDM if he obtained the new manager’s permission. The court

 also allowed Attorney Sandberg to represent other interested parties if they appeared

 in the case. But Attorney Sandberg did not receive permission to continue his

 representation from SDM’s new manager. We reject Attorney Sandberg’s argument

       *
         After examining the briefs and appellate record, this panel has determined
 unanimously that oral argument would not materially assist in the determination of
 this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). 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.
                                             2
Appellate Case: 22-6038    Document: 010110787390        Date Filed: 12/21/2022       Page: 3

 that he has presented a proper appeal under 28 U.S.C. § 1292(a). In fact, we lack

 appellate jurisdiction under either 28 U.S.C. §§ 1291 or 1292, so we dismiss the

 appeal.

                                    BACKGROUND

 I.    Preceding Legal Battles

       This appeal challenges the district court’s order disallowing Attorney

 Sandberg from contesting garnishment rulings in the Western District of Oklahoma

 until he assured the court that he received his purported client’s permission to

 represent it. These garnishment rulings stem from a years-long, multi-jurisdictional

 legal battle.1 Though unimportant to this appeal, the litigation history generally

 includes federal criminal convictions of Daniel Carpenter, who organized a scheme in

 which he defrauded millions of dollars of life-insurance proceeds from the named

 beneficiary, Universitas Education, LLC (“Universitas”). Carpenter, 190 F. Supp. 3d

 at 293–301. He routed these proceeds through various shell entities for his own

 benefit. Id. For a portion of the proceeds, about $6 million, Carpenter routed the

 money to one of his shell companies, Avon Capital, LLC (“Avon”). Universitas

 Educ., LLC v. Nova Grp., Inc. (“Universitas I”), No. 11CV1590-LTS-HBP, 2014 WL

 3883371, at *3 (S.D.N.Y. Aug. 7, 2014).

       1
        For a complete account of the associated litigation, see United States v.
 Carpenter, 190 F. Supp. 3d 260 (D. Conn. 2016), and Universitas Education, LLC v.
 Avon Capital, LLC (“Universitas II”), No. 14-FJ-05-HE, 2020 WL 8768520 (W.D.
 Okla. Oct. 20, 2020).
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        In 2009, using the misdirected life-insurance proceeds, Avon purchased SDM.

 Universitas II, 2020 WL 8768520, at *9. In a 2014 suit brought in the United States

 District Court for the Southern District of New York, the court ruled that Avon had

 received some of the life-insurance proceeds owed to Universitas through fraudulent

 conveyance. Universitas I, 2014 WL 3883371, at *11, *13. The court entered a

 nearly $6 million judgment for Universitas against Avon. Id. Through discovery in

 that case, Universitas learned that Avon owned SDM. Because SDM was organized

 and registered in Oklahoma, Universitas registered its judgment in the Western

 District of Oklahoma. Universitas II, 2020 WL 8768520, at *1. The present appeal

 challenges the district court’s order disallowing Attorney Sandberg from contesting

 garnishment rulings against SDM without obtaining SDM’s permission to represent it

 in court.

 II.    Garnishment Proceedings

        Universitas sought to collect on the judgment against both Avon and SDM.

 Universitas II, 2020 WL 8768520, at *1–2. In response, Avon argued that it was not

 the judgment debtor identified in the Southern District of New York case. Avon

 sought a permanent injunction prohibiting Universitas from executing the judgment

 against Avon or SDM. Universitas II, 2020 WL 8768520, at *1. The Oklahoma

 federal district court denied this motion and entered an order piercing Avon’s

 corporate veil. The court then enjoined Avon from transferring, concealing, or

 encumbering its interest in SDM.

                                           4
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        The district court also appointed a receiver for Avon to prevent it from

 disposing of any other assets. Under his court-appointed authority, the receiver

 replaced the manager of SDM, which marked a split between the old SDM

 management (as we call it, “pre-receivership SDM”), represented by Attorney

 Sandberg, and the new SDM management (“post-receivership SDM”).2 Pre-

 receivership SDM (through Attorney Sandberg) and Avon (represented by different

 counsel) both appealed the district court’s order piercing Avon’s corporate veil and

 its order appointing a receiver. Those appeals were recently argued in this court and

 are currently pending. Universitas Educ., LLC v. Avon Cap., LLC, No. 21-6044 (10th

 Cir. argued Sept. 27, 2022); Universitas Educ., LLC, v. Avon Cap., LLC, No. 21-6049

 (10th Cir. argued Sept. 27, 2022); Universitas Educ. v. Avon Cap., LLC, No. 21-6133

 (10th Cir. argued Sept. 27, 2022); Universitas Educ., LLC v. SDM Holdings, LLC,

 No. 21-6134 (10th Cir. argued Sept. 27, 2022).

 III.   Attorney Sandberg’s Involvement

        Early in the garnishment proceedings, before the receivership, Attorney

 Sandberg filed several motions on SDM’s behalf. But even after the district court

 appointed a receiver and post-receivership SDM changed management, Attorney

 Sandberg continued to file objections on behalf of pre-receivership SDM, ignoring

 that it had a new manager. For instance, Attorney Sandberg objected to Universitas’s

        2
         We use the terms “pre-receivership SDM” and “post-receivership SDM” only
 to avoid reader confusion, but these terms do not represent any official SDM
 designations used by the parties or the district court.

                                            5
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 notice that it was refiling its monetary judgment.3 At a December 2021 hearing over

 several matters, including this objection, the district court asked Attorney Sandberg

 about his authority from SDM’s new manager to represent post-receivership SDM.

 That inquiry is at the heart of this appeal. Attorney Sandberg equivocated, stating that

 the post-receivership SDM’s manager hadn’t opposed his appearance but hadn’t

 authorized him to represent the post-receivership SDM. Attorney Sandberg agreed

 with the court and stated that “going forward, then, [he would] confer with the

 receiver and/or the manager and make sure that [he was] authorized to continue to

 appear on behalf of SDM.” R. vol. II, at 468. The district court struck Attorney

 Sandberg’s objection and concluded the hearing.

       That day, the district court entered an order “not[ing] that the receiver has

 replaced the manager of SDM” with a new manager. Id. at 383. The order also stated

 that SDM’s objection to Universitas’s filing was stricken because “[t]he objection

 was filed without authority from the manager of [post-receivership] SDM and hence

 may not properly be viewed as the position of SDM.” Id. at 385.

       A week after the hearing and order, Attorney Sandberg filed a motion for

 reconsideration, purportedly on SDM’s behalf. In this motion, he contested the

 district court’s requirement that he have the post-receivership-SDM management’s

 permission before continuing to represent post-receivership SDM, stating as follows:

       [SDM] files this Motion for Reconsideration of the Court’s sua sponte
       requirement that counsel obtain the authorization of the receiver for

       3
         Attorney Sandberg originally characterized this objection as a response
 motion, but the court labeled it an objection, so we match the court’s language.
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       Avon-WY [“Avon”] or manager of SDM-OK [“SDM”] appointed by the
       receiver before continuing to represent SDM-OK. The receiver and
       manager refused counsel’s request, depriving SDM-OK of counsel.
       Notably, SDM-OK is not in the receivership.

 Id. at 386–87. 4 Attorney Sandberg argued that the district court had deprived SDM of

 counsel, which violated the LLC’s due-process and equal-protection guarantees.

 Attorney Sandberg requested permission to continue to file documents on behalf of

 post-receivership SDM, despite having earlier admitted that he had not obtained

 permission from the post-receivership SDM’s manager to continue his representation.

       The district court denied reconsideration, reasoning that the recently appointed

 manager of post-receivership SDM should control its litigation strategy and court

 filings. But the district court clarified that Attorney Sandberg was free to represent

 any interest-holders with their permission.

       Next, Attorney Sandberg—purporting to act on SDM’s behalf—appealed the

 district court’s order. He claimed that the district court’s order enjoined SDM’s

 ability to represent itself and control its property and assets. But he has provided no

 basis for his assertion of appellate jurisdiction under 28 U.S.C. § 1292(a)(1). He has

 failed to show that he represents a party to the appeal. Thus, we lack jurisdiction.

       4
          The district court referred to Avon as “Avon-WY” and SDM as “SDM-OK.”
 R. vol. II, at 386–87. In its order, the district court used “SDM-OK” as shorthand for
 SDM Holdings, LLC. Id. The district court referred to Avon as “Avon-WY” to
 distinguish between the three Avon entities involved in the Western District of
 Oklahoma veil-piercing analysis: Avon-WY, Avon-NV, and Avon-CT. Universitas
 II, 2020 WL 8768520, at *5–6. For this order, we are concerned only with Avon-WY.
                                               7
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                                      DISCUSSION

        We generally have jurisdiction over final judgments from a district court.

 28 U.S.C. § 1291. But we also have jurisdiction to review certain interlocutory

 orders, including orders granting a permanent injunction. 28 U.S.C. § 1292(a)(1).

 That section “was intended to carve out only a limited exception to the final-

 judgment rule,” and we construe the exception narrowly. Carson v. Am. Brands, Inc.,

 450 U.S. 79, 84 (1981). Attorney Sandberg argues that we have jurisdiction over this

 appeal as an interlocutory order imposing filing restrictions on post-receivership

 SDM.

        But Attorney Sandberg has a fundamental problem apart from the reach of our

 § 1292(a)(1) appellate jurisdiction. The district court struck SDM’s objections

 because Attorney Sandberg filed them without permission from the post-

 receivership-SDM manager. Even on appeal, he provides no assurance that he

 represents the client on whose behalf he has filed the appeal. He cannot appoint

 himself as a party’s counsel.5 The district court’s order requiring Attorney Sandberg

 to represent a party to the case before filing in the court does not effectively enjoin

 SDM from future filings. The district court did not impose filing restrictions on post-

 receivership SDM. Rather, post-receivership SDM did not authorize Attorney

 Sandberg to act as its lawyer.

        5
         Attorney Sandberg may represent the pre-receivership SDM management
 when challenging the receivership. He has done so in the pending appeal on that
 issue. Universitas Educ., LLC v. SDM Holdings, LLC, No. 21-6134 (10th Cir. argued
 Sept. 27, 2022).
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                                    CONCLUSION

       Attorney Sandberg does not represent any of the parties to this appeal, and his

 filings do not reflect post-receivership SDM’s litigation position. To the extent

 Attorney Sandberg contests the receivership and SDM’s new manager (appointed by

 the receiver), that appeal is not before us, and we will not comment on its merits.

 This appeal is dismissed. The pending motion for leave to file a reply brief is denied.

                                             Entered for the Court

                                             Gregory A. Phillips
                                             Circuit Judge

                                            9