Court Opinion

ID: 1024884
Source: CourtListenerOpinion
Date Created: 2013-07-05 06:40:46.799168+00
Date Added: 2024-06-11T12:27:34.543286
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                               No. 07-6935

UNITED STATES OF AMERICA,

                                                  Plaintiff - Appellee,

          versus

DANIEL WATLINGTON, a/k/a Gator Slim,

                                                 Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Wilmington. James C. Fox, Senior
District Judge. (5:05-cr-00004-F)

Submitted:   January 9, 2008                 Decided:   January 30, 2008

Before NIEMEYER, MICHAEL, and KING, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Daniel Watlington, Appellant Pro Se. S. Katherine Burnette,
Assistant United States Attorney, Joshua B. Royster, UNITED STATES
DEPARTMENT OF JUSTICE, Raleigh, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

            Daniel Watlington appeals the district court’s orders

denying his claim that certain trust assets were exempt from

attachment and granting a writ of execution for the United States

to satisfy the restitution judgment by levying the property in the

trust.     For the reasons that follow, we affirm the orders of the

district court.

            Watlington was convicted of several charges relating to

wire and bank fraud.      The district court issued an injunction

freezing Watlington’s assets in anticipation of a restitution

order, including assets held in the name, “Pallie Trust.”             The

district    court   ordered   Watlington   to   pay   $3,921,809.51   in

restitution to his victims.     Watlington requested an exemption for

the Pallie Trust, claiming he was only a trustee on the account.

The United States responded that Watlington set up the trust to

hide his assets, and it could reach the trust property because

Watlington was the sole grantor and the trust was revocable.

            The district court denied Watlington’s request for an

exemption from attachment of the assets held in trust.          In its

collection efforts, the United States applied for and received a

writ of execution for the property held by the Pallie Trust.

            Watlington argues on appeal that the district court erred

by allowing the United States access to the property in the Pallie

Trust to satisfy his restitution judgment.      He contends the United

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States was time-barred from challenging the validity of the trust

and the United States “failed to provide any material facts or

evidence which would demonstrate that [he] is not an arms length

General Manager of Pallie Trust.”

          Watlington contends various statutes of limitations apply

to the Pallie Trust to prevent the United States from attacking the

trust’s validity.   While he relies on North Carolina’s statute of

limitations of three years for contract and civil fraud actions,

this statute does not apply to his case as the United States did

not bring a contract or civil fraud action against him.        See

N.C.G.S. § 1-52 (2005).     Watlington additionally relies on the

state statute prohibiting the commencement of judicial proceedings

to contest the validity of a trust that was revocable at the

settlor’s death any later than three years after the settlor’s

death.   See N.C.G.S. § 36C-6-604 (2005).   This statute likewise

does not apply because Watlington, the settlor of the trust,

remains living.

          When the powers retained by the grantor effectively

amount to ownership of the trust estate, the grantor fails to

create a valid trust.     76 Am. Jur. 2d Trusts § 24 (2007).   The

documents provided by the United States indicated that Watlington

and Karen Battershell were the two trustees of the Pallie Trust and

that the trust was revocable.       As a trustee, Watlington was

responsible for administering the property of the trust.    As the

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sole grantor of a revocable trust, Watlington had the power to

recall the trust at any time and effectively retained ownership of

the trust estate.     Under these facts, the assets in the Pallie

Trust were properly subject to attachment to satisfy Watlington’s

restitution obligations.

          Accordingly, we affirm.   We dispense with oral argument

because the facts and legal contentions are adequately presented in

the materials before the court and argument would not aid the

decisional process.

                                                          AFFIRMED

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