U.S. v. Estate of Parsons, 01-50464.

• Decision Date: 16 April 2004
• Docket Number: No. 01-50464.,01-50464.
• Citation: 367 F.3d 409
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Andrew Clyde PARSONS, ESTATE OF, as Represented by Its Independent Executor, Patrick D. Millar, Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

367 F.3d 409

UNITED STATES of America, Plaintiff-Appellee, v. Andrew Clyde PARSONS, ESTATE OF, as Represented by Its Independent Executor, Patrick D. Millar, Appellant.

No. 01-50464.

United States Court of Appeals, Fifth Circuit.

April 16, 2004.

COPYRIGHT MATERIAL OMITTED

Joseph H. Gay, Jr., Asst. U.S. Atty. (argued), Joseph A. Florio, San Antonio, TX, for Plaintiff-Appellee.

David L. Botsford, Law Office of David L. Botsford, Austin, TX, Herbert V. Larson, Jr. (argued), New Orleans, LA, for Appellant.

Appeal from the United States District Court for the Western District of Texas.

Before KING, Chief Judge, and JOLLY, HIGGINBOTHAM, DAVIS, JONES, SMITH, WIENER, BARKSDALE, EMILIO M. GARZA, DeMOSS, BENAVIDES, STEWART, DENNIS, CLEMENT, and PRADO, Circuit Judges.^*

JERRY E. SMITH, Circuit Judge:

This case requires us to apply the doctrine of abatement ab initio to restitution and forfeiture orders where a criminal defendant dies while his appeal is pending. Concluding that, under the specific facts of this case, all consequences of the untested criminal conviction should abate, we DISMISS the appeal and REMAND with direction to VACATE the judgment of conviction and sentence, including the order of restitution, and to dismiss the indictment. We do not, however, direct the government to return monies paid as part of this particular Preliminary Judgment of Forfeiture.

I.

After a second trial following a vacated conviction, a jury found Andrew Parsons guilty of two counts of arson, four counts of mail fraud, and four counts of money laundering. Parsons allegedly set fire to his property and wrongfully received insurance proceeds to compensate for the loss. In addition to a verdict of guilty, the jury returned a special forfeiture verdict.¹ The district court sentenced Parsons to seventy-eight months' imprisonment, a fine of $75,000, a special assessment of $1,000, restitution of $1,317,834.57 to the defrauded insurance companies, and three years' supervised release.²

Parsons then informed the government that he wished to sell the three tracts. The government approved the sale of those tracts for $1,900,000 under a contract that would provide cash at closing of $1,000,000. That sale was completed, and a check for $970,826.90 was given to the United States in return for a release of liens.

The sale in question was completed pursuant to an agreement between Parsons and the United States. The government filed a motion describing the agreement. The motion states, in relevant part:

[B]ecause Defendant Parsons had no other apparent financial means with which to fully pay the Money Judgment in the amount of $970,826.90, the United States of America did not object to the ... sale of [the three tracts], provided that a [government agent] be present at the real estate closing to receive a cashiers check....

. . .

Further, inasmuch as this case remains on appeal at this time, the United States of America agrees that in the event Defendant Parsons prevails in the final determination of this appeal, and no final judgment of forfeiture is entered in this case, that the [government] should return to Defendant Parsons the entire amount of $970,826.90, plus interest....

After the sale, the district court entered a Preliminary Judgment of Forfeiture of $970,826.90, pursuant to Fed.R.Crim.P. 32.2(b).³ The order states, in relevant part:

ORDERED that inasmuch as this case remains on appeal at this time, in the event Defendant Parsons prevails in the final determination of this appeal, and no Final Judgment of Forfeiture is entered in this case, the [government] shall return to Defendant Parsons ... the entire amount of $970,826.90, plus interest....

While this appeal was pending, Parsons died. This court allowed his estate to substitute itself for him as appellant, and the estate submitted a new appellate brief, arguing that Parsons's death abated the conviction, restitution order, and forfeiture orders. The estate also protected its interests by arguing, in the alternative, that if the restitution and forfeiture orders were not automatically abated by Parsons's death, the conviction should be reversed on grounds of violation of the Speedy Trial Act and inadequate nexus to interstate commerce.

A panel of this court upheld the restitution order and Preliminary Judgment of Forfeiture and rejected Parsons's other merits issues raised on appeal. United States v. Estate of Parsons, 314 F.3d 745, 750 (5th Cir.2002), vacated for reh'g en banc, 333 F.3d 549 (5th Cir.2003). Recognizing that it was bound by United States v. Asset, 990 F.2d 208 (5th Cir.1993), and United States v. Mmahat, 106 F.3d 89 (5th Cir.1997), the panel concluded that "because the restitution order here is unquestionably compensatory in nature, it survives Parsons's death." Parsons, 314 F.3d at 750.⁴

II.

Asset, Mmahat, and Parsons describe the current state of our abatement jurisprudence. "It is well established in this circuit that the death of a criminal defendant pending an appeal of his or her case abates, ab initio, the entire criminal proceeding." Asset, 990 F.2d at 210.⁵ That is, the appeal does not just disappear, and the case is not merely dismissed. Instead, everything associated with the case is extinguished, leaving the defendant "as if he had never been indicted or convicted." Parsons, 314 F.3d at 749 (quoting United States v. Schumann, 861 F.2d 1234, 1237 (11th Cir.1988)).

With respect to restitution, we have looked to the purpose of the order to determine whether it abates with the conviction. "When restitution is ordered simply to punish the defendant, it is penal and abates with the rest of his conviction. When it is designed to make his victims whole, however, it is compensatory and survives his death." Mmahat, 106 F.3d at 93. Additionally, abatement does not entitle a defendant to monies paid before death as part of a fine or restitution order.⁶

III.

Despite the common acknowledgment that abatement ab initio is a well-established and oft-followed principle in the federal courts,⁷ few courts have plainly articulated the rationale behind the doctrine. Two primary approaches support abatement ab initio. The finality principle reasons that the state should not label one as guilty until he has exhausted his opportunity to appeal. The punishment principle asserts that the state should not punish a dead person or his estate. Although the finality principle best explains why criminal proceedings abate at death, finality does not justify the distinction between compensatory and penal restitution orders.

Under the finality rationale, we have described the entitlement to one appeal as follows:

[W]hen an appeal has been taken from a criminal conviction to the court of appeals and death has deprived the accused of his right to our decision, the interests of justice ordinarily require that he not stand convicted without resolution of the merits of his appeal, which is an "integral part of [our] system for finally adjudicating [his] guilt or innocence."

United States v. Pauline, 625 F.2d 684, 685 (5th Cir.1980) (emphasis added, brackets in original) (quoting Griffin v. Illinois, 351 U.S. 12, 18, 76 S.Ct. 585, 100 L.Ed. 891 (1956)).⁸ The defendant's attack on his conviction tests previously unforeseen weaknesses in the state's case or outright errors at trial.⁹ Under this rationale, neither the state nor affected parties should enjoy the fruits of an untested conviction.

The second rationale focuses on the precept that the criminal justice system exists primarily to punish and cannot effectively punish one who has died. "[T]he purposes of criminal proceedings are primarily penal — the indictment, conviction and sentence are charges against and punishment of the defendant — such that the death of the defendant eliminates that purpose."¹⁰ The government and other circuits have mentioned this justification.¹¹

Given that the doctrine of abatement ab initio is largely court-created and a creature of the common law, the applications of abatement are more amenable to policy and equitable arguments. Neither of the previously-articulated rationales fully explains our current approach to abatement, restitution orders, and fines paid before death. As we will explain, we adopt the finality rationale and adjust our restitution jurisprudence accordingly.

The punishment rationale supports our current distinction between penal and compensatory restitution orders¹² and justifies the line, with respect to fines, drawn at the time of death.¹³ Punishment does not, however, adequately explain the other aspect of our abatement jurisprudence — the elimination of the criminal proceedings against that person. Presumably, under the punishment rationale, courts could retain the record of conviction and block proceedings that would punish the estate.¹⁴

The finality principle provides a better explanation why all prior proceedings disappear. A defendant's death during appeal forces a court to decide between disregarding a finding of guilt and entering an unreviewed judgment. Presumptions of innocence and a desire to ensure guilt naturally point to extinguishing all criminal proceedings.

The primary justification for the abatement doctrine arguably is that it prevents a wrongly-accused defendant from standing convicted. The Supreme Court and other circuits have recognized this justification for abatement. We now adopt it as the primary reason behind abatement and, by so doing, we reject Asset's and Mmahat's descriptions of the punishment justification.

Accordingly, regardless of its purpose, the order of restitution cannot stand in the wake of Parsons's death. Because he now is deemed never to have been convicted or even charged, the order of restitution abates ab initio.¹⁵

IV.

Although the government may argue that this approach harms the interests of those allegedly injured, such an argument cannot outweigh the finality rationale. "[T]he goal of the [compensatory...