Janvey v. Romero

• Decision Date: 16 March 2016
• Docket Number: No. 15–10435.,15–10435.
• Citation: 817 F.3d 184
• Parties: Ralph S. JANVEY, in his capacity as Court Appointed Receiver for the Stanford International Bank LTD et al., Plaintiff–Appellee v. Peter ROMERO, Defendant–Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

817 F.3d 184

Ralph S. JANVEY, in his capacity as Court Appointed Receiver for the Stanford International Bank LTD et al., Plaintiff–Appellee

v.Peter ROMERO, Defendant–Appellant.

No. 15–10435.

United States Court of Appeals, Fifth Circuit.

March 16, 2016.

Kevin M. Sadler, Baker Botts, L.L.P., Palo Alto, CA, Douglas J. Buncher, Neligan Foley, L.L.P., Timothy Stuart Durst, Esq., Baker Botts, L.L.P., Dallas, TX, Sherwin Faridifar, Scott Daniel Powers, Baker Botts, L.L.P., Austin, TX, for Plaintiff–Appellee.

Brian Wade Clark, Kane Russell Coleman & Logan, P.C., David Patrick Long, Squire Patton Boggs, L.L.P., Dallas, TX, for Defendant–Appellant.

Before BENAVIDES, DENNIS, and SOUTHWICK, Circuit Judges.

FORTUNATO P. BENAVIDES, Circuit Judge:

This appeal involves another Stanford Ponzi scheme case. Plaintiff–Appellee Ralph S. Janvey, in his capacity as Court Appointed Receiver for the Stanford International Bank Ltd., et al. (the "Receiver"), brought a fraudulent transfer claim against Defendant–Appellant Peter Romero ("Romero"), a former international advisor to the Stanford entities. For the reasons below, we AFFIRM.

I. BACKGROUND

Because the Stanford Ponzi scheme has been the subject of numerous appeals in this Court, this opinion only briefly recounts the facts relevant to this appeal. See generally, e.g., Janvey v. Democratic Senatorial Campaign Comm., Inc. (DSCC ), 712 F.3d 185, 188–89 (5th Cir.2013). For almost twenty years, R. Allen Stanford ("Stanford") and his co-conspirators perpetrated a multi-billion dollar Ponzi scheme. The Ponzi scheme involved a network of numerous entities owned by Stanford (the "Stanford entities") that sold fraudulent certificates of deposit ("CDs") to investors.

After Romero retired from the United States Department of State in 2001, he began working part-time as a member of the Stanford International Advisory Board (the "IAB"). Although the nature of Romero's job functions are disputed, there is evidence to support that his job essentially was to market the Stanford brand internationally. He worked on the IAB for almost eight years, resigning in January 2009. He received $700,000 as advisory board fees for his work on the IAB, distributed in periodic installments over the span of these eight years, plus travel expense reimbursement and payments on his own Stanford CDs.

On February 16, 2009, the Securities and Exchange Commission filed a lawsuit against Stanford, Stanford's Chief Financial Officer James M. Davis ("Davis"), various other individuals, and various Stanford entities. That same day, the court appointed Ralph S. Janvey to be the Receiver for those defendants. On August 27, 2009, Davis pled guilty to criminal charges. In October 2010, the Receiver began investigating payments made to the members of the IAB, including Romero. On February 15, 2011, which was approximately four and a half months after the Receiver began investigating the IAB, the Receiver filed the underlying lawsuit against Romero.

In the underlying lawsuit, the Receiver sought to recover the monies paid by the Stanford entities to Romero under a fraudulent transfer claim or, alternatively, an unjust enrichment claim. After a four-day jury trial in February 2015, the jury found in favor of the Receiver on both the fraudulent transfer and unjust enrichment claims. Romero then filed a motion for judgment as a matter of law, alleging that a portion of the fraudulent transfer claim is barred by the statute of repose and that unjust enrichment is not an independent cause of action.¹ The district court denied Romero's motion and entered a final judgment awarding the Receiver $788,655.01 in damages under the fraudulent transfer claim only; no damages were awarded under the alternative unjust enrichment claim. Romero now appeals the district court's denial of his post-verdict motion for judgment as a matter of law. Additionally, Romero requests abatement of this appeal pending a ruling by the Texas Supreme Court on a question certified to it by this Court in a different appeal regarding the reasonably-equivalent-value defense to a fraudulent transfer claim.

II. STANDARD OF REVIEW

"We review de novo the district court's denial of a motion for judgment as a matter of law, applying the same standards as the district court." Abraham v. Alpha Chi Omega, 708 F.3d 614, 620 (5th Cir.2013). "Judgment as a matter of law is proper when ‘a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.’ " Id. (quoting FED.R.CIV.P. 50(a) ). "Under that standard, a litigant cannot obtain judgment as a matter of law unless the facts and inferences point so strongly and overwhelmingly in the movant's favor that reasonable jurors could not reach a contrary conclusion." Cox Operating, L.L.C. v. St. Paul Surplus Lines Ins. Co., 795 F.3d 496, 500 (5th Cir.2015). We must review "all of the evidence in the record." Carroll v. Ellington, 800 F.3d 154, 168 (5th Cir.2015). "We credit the non-moving party's evidence and disregard all evidence favorable to the moving party that the jury is not required to believe." Id. "After a jury trial, [the] standard of review is especially deferential." Abraham, 708 F.3d at 620 (alteration in original).

III. ANALYSIS

A. Fraudulent Transfer

Romero appeals the district court's denial of his post-verdict motion for judgment as a matter of law, contending, inter alia, that a portion of the Receiver's fraudulent transfer claim is barred by the statute of repose. On this issue, the district court's charge and jury's verdict provided as follows:

QUESTION NO. 2:

Did the plaintiff timely file his [fraudulent transfer] claim? Answer "yes" or "no":

YES

INSTRUCTIONS FOR QUESTION NO. 2:

The plaintiff timely filed his claim if the plaintiff did not discover and could not reasonably have discovered the transfers to Romero and their fraudulent nature until after February 15, 2010.

The district court denied the motion for judgment as a matter of law, holding that "the Receiver presented sufficient evidence from which the jury could conclude that despite diligence, the Receiver did not and could not have reasonably discovered his [fraudulent transfer] claims until after February 15, 2010." On appeal, Romero does not dispute the accuracy of the wording of the jury charge. Rather, Romero disputes the sufficiency of the evidence supporting the jury's finding.

The Receiver brought his fraudulent transfer claim under the Texas Uniform Fraudulent Transfer Act ("TUFTA"). TUFTA provides the following statute of repose, in relevant part:

[A] cause of action with respect to a fraudulent transfer or obligation under this chapter is extinguished unless action is brought ... within four years after the transfer was made or the obligation was incurred or, if later, within one year after the transfer or obligation was or could reasonably have been discovered by the claimant....

TEX. BUS. & COM.CODE § 24.010(a)(1) (emphasis added); Nathan v. Whittington, 408 S.W.3d 870, 874 (Tex.2013). With respect to TUFTA's one-year repose period, this Court has held that "a fraudulent-conveyance claim does not accrue until the claimant knew or reasonably could have known both of the transfer and that it was fraudulent in nature." DSCC, 712 F.3d at 193 (emphasis added).

The Receiver filed his fraudulent transfer claim against Romero on February 15, 2011. Romero does not dispute that claims for transfers made to him on or after February 15, 2007, are not barred by the statute of repose because they fall within the four-year repose period. The parties' dispute is whether claims for transfers made to Romero prior to February 15, 2007, fall within the one-year repose period.² Specifically, they dispute the knowledge-of-transfer accrual requirement of the one-year repose period, not the fraudulent-nature accrual requirement—that is, whether the Receiver filed the fraudulent transfer claim within one year after he discovered or could reasonably have discovered the transfers to Romero.³

When a plaintiff discovered or could reasonably have discovered a transfer is generally a question of fact for the fact-finder. DSCC, 712 F.3d at 196 ; Walker v. Anderson, 232 S.W.3d 899, 909, 911 (Tex.App.—Dallas 2007, no pet.) ; Duran v. Henderson, 71 S.W.3d 833, 839 (Tex.App.—Texarkana 2002, pet. denied). "However, if reasonable minds could not differ about the conclusion to be drawn from the facts in the record, then the start of the [response] period may be determined as a matter of law." DSCC, 712 F.3d at 196 ; Walker, 232 S.W.3d at 909 ; Duran, 71 S.W.3d at 839. Whether the plaintiff exercised reasonable diligence to discover a fraudulent transfer is relevant to determining whether a plaintiff could reasonably have discovered a fraudulent transfer. See Brown, 767 F.3d at 438 ; DSCC, 712 F.3d at 194–95, 198 ; Zenner v. Lone Star Striping & Paving, L.L.C., 371 S.W.3d 311, 315–17 (Tex.App.—Houston [1st Dist.] 2012, pet. denied) ; Duran, 71 S.W.3d at 839.⁴

The jury found that the Receiver "did not discover and could not reasonably have discovered the transfers to Romero and their fraudulent nature until after February 15, 2010." Romero contends that the Receiver could have discovered the transfers to Romero before February 15, 2010, if the Receiver had chosen to start investigating the IAB sooner, and that the Receiver's decision to not investigate the IAB until October 2010 should not toll the statute of repose. Specifically, Romero contends that the Receiver could have discovered the transfers within four and a half months of his appointment, which was on February 16, 2009, because the Receiver discovered the transfers at most four and a half months after he began to investigate the IAB. The Receiver claims that the investigation into Romero was completed four and a half months after it began because the Receiver had already compiled and analyzed the Stanford entities' records and that, therefore, the jury was entitled to infer the Receiver's...