UNITED STATES of America, Plaintiff-Appellee v. Jo Anna BAME; Hook ‘N Horn, Ltd.; Hook ‘N Horn Wilderness Camp, Ltd.; I Am Home, Inc., Defendants-Appellants.
No. 12-3417
United States Court of Appeals, Eighth Circuit
Filed: Aug. 9, 2013.
721 F.3d 1025
Given the magnitude of the downward variance, the district court offered very little explanation for Cole‘s sentence. Moreover, the relatively brief explanation that the court did offer is at times contradictory. For example, the court stated at sentencing that it was “taking a huge chance” on Cole by imposing only a term of probation, but then said in its statement of reasons that it was confident Cole would not re-offend. Similarly, the court‘s statement of reasons suggested Cole just “went along with her husband‘s scheme and practiced willful blindness.” However, this seems inconsistent with the guilty verdict on the tax evasion charges, because the jury instructions required the jury to find beyond a reasonable doubt that Colе “voluntarily and intentionally violate[d] a known legal duty.”
Because Cole‘s probationary sentence represents a “major departure” from the advisory Guidelines range, the court‘s brief and contradictory explanation of Cole‘s sentence is not sufficient “to allow for meaningful appellate review and to promote the perception of fair sentencing.” See Gall, 552 U.S. at 50, 128 S.Ct. 586. Consequently, we cannot evaluate the government‘s claim of substantive unreasonableness at this time, and we remand for the district court to more fully explain the defendant-specific facts and policy decisions upon which it relied in determining that the probationary sentence is “sufficient, but not greater than necessary,”
IV.
Accordingly, we affirm all of Cole‘s convictions. We do not reach the question of whether Cole‘s sentence is substantively unreasonable because we remand for the district court to offer a fuller explanation for the sentence.
Eric John Magnuson, argued, Adam Spencer Huhta, Kevin Martin Decker, on the brief, Minneapolis, MN, for appellant.
Melissa Briggs, U.S. Department of Justice, Tax Division, argued, Joan I. Oppenheimer, on the brief, Washington, D.C., for appellee.
Before LOKEN, BRIGHT, and BYE, Circuit Judges.
BRIGHT, Circuit Judge.
I.
Fred and Jo Anna Bame married in 1992. Throughout their marriage, Jo Anna assisted Fred financially. One of the non-marital assets Jo Anna brought into the marriage was her home at 5110 Meadville in Excelsior, Minnesota. After they married, Jo Anna added Fred‘s name to the title of 5110 Meadville to allow him tо
In 1999, Fred was forced into involuntary bankruptcy. Jo Anna filed a Proof of Claim in the bankruptcy proceeding in the amount of $1,228,984, based on the mortgage taken out on her home and a number of other debts Fred owed her. Fred admitted that he owed Jo Anna approximately $1.5 million. The bankruptcy trustee commenced an adversary proceeding against Jo Anna, alleging that Fred made fraudulent transfers to Jo Anna prior to the bankruptcy filing. These matters were settled when Jo Anna and the trustee agreed to drop the Proof of Claim and the adversary proceeding, respectively. Fred did not receive a discharge in the bankruptcy proceeding, meaning his personal debts survived the bankruptcy.
The Bames divorced in 2001. The divorce decree required Fred to pay the tax liens on 5110 Meadville and any personal debts he incurred during the marriage. In 2003, Jo Anna sold 5110 Meadville for $1,520,000. Nearly $400,000 of the proceeds from the sale went to pay the tax liens on the property or Fred‘s other creditors.
In May 2005, the IRS sent Fred a letter indicating he would receive a tax refund. Fred called the IRS twice to inquire about the refund. A number of IRS employees conferred and determined Fred was entitled to the refund. Fred was assured by IRS employees that the refund was forthcoming. Jo Anna was privy to the IRS assurances and took notes about Fred‘s communications regarding the refund. In July, a letter from the Taxpayer Advocate Service confirmed that the refund would be mailed on July 29, 2005. The IRS issued Fred a refund check in the amount of $568,022.13. Apparently, the refund was issued due to error by the IRS regarding the taxation of Fred‘s bankruptcy estate. The IRS did not discover its error until January 2006.
At the time the refund check was issued, Fred was living at Hook ‘N Horn Wilderness Camp in Nestor Falls, Ontario, Canada, which was owned by Jo Anna. Every few weeks, Jo Anna or another relative would gather the mail sent to Fred in Minnesota and take it to him in Canada. Thus, Fred and Jo Anna were in Canada when they opened the refund check. They deposited the check in a joint account at a bank in Nestor Falls, Ontario. Fred spent the refund quickly. On the same day as the deposit, Fred wrote checks totaling $350,000 to settle various debts Jo Anna owed. Five days later, Fred paid another $100,000 to Hook ‘N Horn. Jo Anna later paid $32,500 back to Fred from the Hook ‘N Horn account. Fred made additional withdrawals from the account totaling $42,000. Several other withdrawals were made over the telephone, so there is no record of who made the withdrawal or how the funds were spent.
In July 2007, the United States filed suit against Fred seeking to recover the erroneous refund. Fred died on September 9, 2007. The United Statеs engaged in probate proceedings and obtained a judgment against Fred‘s estate for the full amount of the refund plus interest. However, the government was unsuccessful in collecting any of its judgment from Fred‘s estate.
Thwarted in its first attempt to recover the refund, the United States filed the underlying suit in this case against Jo Anna and two entities, I Am Home, Inc. and Hook ‘N Horn. I Am Home is a corporate name used by Jo Anna. Hook ‘N Horn is a fly-in fishing rеsort in Canada. Hook
In Count I of the underlying action, the government sought recovery of the refund under both the
II.
On appeal, Jo Anna argues that the district court erred by granting summary judgment to the government because there were two genuine issues of material fact: her good faith and her entitlement to the money. In addition, she argues that summary judgment was granted in error because unjust enrichment is legally unavailable. Finally, Jo Anna argues that the district court erred in setting the amount of damages and by holding Hook ‘N Horn liable under an alter ego theory. We review the summary judgment determination de novo. Specht v. City of Sioux Falls, 639 F.3d 814, 819 (8th Cir.2011).
In considering the government‘s motion for summary judgment, the district court should have viewed the record in the light most favorable to Jo Anna and given her the benefit of all reasonable factual inferences. Weber v. American Express Co., 994 F.2d 513, 515 (8th Cir.1993). Furthermore, at the summary judgment stage, the court is not permitted to “weigh the evidence, make credibility determinations, or attempt to determine the truth of the matter.” Quick v. Donaldson Co., 90 F.3d 1372, 1376-77 (8th Cir.1996). Viewing the record in the light most favorable to Jo Anna, as we must, and abstaining from any credibility determinations, we conclude that genuine issues of material fact existed and the grant of summary judgment to the government was error.
First, there is a genuine issue of material fact as to Jo Anna‘s good faith defense. The district court noted that if Jо Anna received the money in good faith, without knowledge that the refund was a mistake, she would have a valid defense to the claim of unjust enrichment. United States v. Bame, No. 11-62, 2012 WL 3544762, at *4 (D.Minn. Aug. 16, 2012). Jo Anna argues that the record establishes her good faith because at the time she received the money, she had no idea the refund was mistaken. The IRS gave Fred multiple assurances that the refund was proper, and Jo Anna was privy to this informаtion.1 Fred and Jo Anna filed sep-
Second, there is a genuine issue of material fact as to Jo Anna‘s entitlement to the money Fred transferred to her. There can be no unjust enrichment when a defendant is entitled to the money, by contract or otherwise. Schaaf v. Residential Funding Corp., 517 F.3d 544, 554 (8th Cir.2008) (emphasis added). Although there is no written contract detailing Fred‘s debt to Jо Anna and thus her entitlement to the money, Jo Anna presented evidence that she was otherwise entitled to the funds. The record shows that Jo Anna paid a number of debts that were solely Fred‘s. Jo Anna‘s settlement with the bankruptcy trustee only terminated Jo Anna‘s claim against the bankruptcy estate. It did not change the status of Fred‘s personal debts to Jo Anna, which were not extinguished at the conclusion of the bankruptcy prоceeding. Thus, the district court incorrectly concluded that there was no support in the record for Jo Anna‘s entitlement to the money.
The district court erred by granting the government summary judgment because there are genuine issues of material fact.3 Therefore, we reverse and remand to the district court for further proceedings.
III.
Jo Anna also argues that the district court erred by granting summary judgment because no relief based on unjust enrichment may be had when a party has another remedy at law. This presents a serious question that we need not resolve at this time because we remand the case for further consideration. Nonetheless, we point out the following regarding the
In Minnesota, “[a] party may not have equitable relief where there is an adequate remedy at law available.” ServiceMaster of St. Cloud v. GAB Bus. Servs., Inc., 544 N.W.2d 302, 305 (Minn. 1996). Unjust enrichment is an equitable remedy. Thus, “[r]elief under the theory of unjust enrichment is not available where there is an adequate legal remedy or where statutory standards for recovery are set by the legislature.” Southtown Plumbing, Inc. v. Har-Ned Lumber Co., 493 N.W.2d 137, 140 (Minn.Ct.App.1992). This principle has often been applied by the Federal District Court for the District of Minnesota. See, e.g., Cummins Lаw Office, P.A. v. Norman Graphic Printing Co., 826 F.Supp.2d 1127, 1132 (D.Minn. 2011) (Kyle, J.) (“Minnesota courts repeatedly have held that the availability of statutory claims (whether state or federal) will preclude the assertion of an unjust-enrichment or other equitable claim seeking the same relief.“); Maranda v. Grp. Health Plan, Inc., No. 07-4655, 2008 WL 2139584, at *3 (D.Minn. May 20, 2008) (Doty, J.) (dismissing unjust enrichment claim because plaintiffs had adequate legal remedies in the form of state and federal 4 FLSA claims); Arеna Dev. Grp., LLC v. Naegele Commc‘ns, Inc., No. 06-2806, 2008 WL 1924179, at *5 (D.Minn. April 29, 2008) (Montgomery, J.) (dismissing an unjust enrichment claim because a Minnesota fraud statute provided an adequate remedy at law); Levine v. N. Am. Mortg., No. 98-556, 2000 WL 34494823, at *5 (D.Minn. May 17, 2000) (Tunheim, J.) (concluding that the plaintiff could not maintain an unjust enrichment claim because he had an adequate remedy at law under the
In this case, it appears that adequate remedies at law were available to the government. The government pleaded claims under both the
Although a body of case law says unjust enrichment recovery may not be had where a party has an adequate legal remedy, the government argues it can get around this restraint by pleading and pursuing unjust enrichment and the adequate legal remedy simultaneously. Thе government argues that a party is only precluded from recovering under a theory of unjust enrichment if it failed to pursue the existing adequate remedy at law. Thus, the government argues that because it pleaded and pursued both equitable and legal claims, it was entitled to recover under unjust enrichment.
It is true that some district courts are unwilling to dismiss an unjust enrichment claim at the pleading stage despite the existence of an adequate legal remedy, because the federal rules allow for the pleading of claims in the alternative. See, e.g., United States v. R.J. Zavoral & Sons Inc., 894 F.Supp.2d 1118, 1127 (D.Minn. 2012) (declining to dismiss an unjust enrichment claim at the time because “at a minimum, the Government may maintain [unjust enrichment] as alternative claim for relief” under the federal rules); Marty H. Segelbaum, Inc. v. MW Capital, LLC, 673 F.Supp.2d 875, 880 (D.Minn.2009) (declining to dismiss an unjust enrichment claim, noting that “at this stage in the litigation, plaintiff is permitted to pursue alternative theories that would provide remedies at law and equity“). But the issue here is not one of pleading. The government also accurately notes that some cases have emphasized a plaintiff‘s failure to pursue the adequate legal remedy when dismissing unjust enrichment claims. See, e.g., Cummins Law Office, 826 F.Supp.2d at 1132 (“Moreover, here it is not simply the existence of a statutory remedy that bars Cummins‘s equitable claims, but also its failure to avail itself of that remedy.“) But despite courts’ occasional emphasis of the failure to pursue a legal remedy, it is the existence of an adequate legal remedy that precludes unjust enrichment recovery. District courts routinely dismiss unjust enrichment claims where the plaintiff pleaded and pursued both equitable and legal claims simultaneously, as well as where the plaintiff failed to pursue adequate lеgal remedies. See, e.g., In re Viagra Prods. Liab. Litig., 658 F.Supp.2d 950, 968-69 (D.Minn.2009) (explaining that the plaintiffs’ unjust enrichment claim failed due to the existence of an adequate legal remedy where the plaintiffs also pleaded tort claims). It should make no difference that the govern-
We reverse and remand for further proceedings consistent with this opinion.