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

Citation314 F.3d 745
Decision Date11 December 2002
Docket NumberNo. 01-50464.,01-50464.
PartiesUNITED STATES of America, Plaintiff-Appellee, v. ESTATE OF Andrew Clyde PARSONS as Represented by its Independent Executor, Patrick D. Millar, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

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 JONES and EMILIO M. GARZA, Circuit Judges.

EDITH H. JONES, Circuit Judge:

Juries have twice found Parsons guilty of federal arson, mail fraud, and money laundering. Parsons died while his second appeal was pending before this Court. We hold that Parsons's Estate is not entitled to a return of the criminal forfeiture he paid the government before his death. More problematically, we are compelled by the current law of this circuit to conclude that Parsons's restitution order does not abate due to his death, and we must review his now-abated conviction to determine whether the restitution order was properly awarded. Finding no merit in issues raised concerning the Speedy Trial Act and the interstate commerce basis for Parsons's federal arson charge, we affirm the restitution order.

I. BACKGROUND

On May 13, 1997, a federal grand jury returned a ten-count indictment against Parsons alleging that he intentionally burned a hotel and pavilion he owned in Clifton, Texas. Parsons appealed after a jury convicted him on all ten counts. This Court found that Parsons's trial began outside the time limits prescribed by the Speedy Trial Act, 18 U.S.C. § 3161, et seq., vacated his conviction, and remanded to the district court for determination whether the indictment should be dismissed with or without prejudice. Without a hearing, the district court dismissed the indictment without prejudice and denied Parsons's subsequent motion to reconsider.

The government reindicted Parsons for two counts of federal arson in violation of 18 U.S.C. § 844(i), four counts of mail fraud in violation of 18 U.S.C. § 1341, and four counts of laundering money from criminally derived property in violation of 18 U.S.C. § 1957. A jury again found Parsons guilty on all ten counts. The district court entered a preliminary judgment of forfeiture in the amount of $970,826.90; fined Parsons $75,000; ordered Parsons to pay restitution to the insurance companies that reimbursed him for his claimed losses in the amount of $1,317,834.57; ordered Parsons to pay a special assessment of $1,000; and sentenced Parsons to imprisonment for a term of 78 months and supervised release for a term of three years. Before Parsons died, the United States Department of Treasury, Bureau of Alcohol, Tobacco and Firearms received payment for the forfeiture judgment. Parsons timely appealed his conviction to this Court but then died. This Court granted a motion to substitute his Estate as appellant.

II. DISCUSSION
A. Survival of VWPA Restitution Order

The general rule, uncontested by the government, is that the death of a criminal defendant pending direct appeal of his conviction abates the criminal proceeding ab initio, as if the defendant had never been indicted and convicted.1 Unpaid fines and forfeitures also abate upon a criminal defendant's death.2 But the doctrine of abatement does not apply to fines, forfeitures, and restitution paid prior to a defendant's death. United States v. Zizzo, 120 F.3d 1338, 1347 (7th Cir.1997) (fines and forfeitures); Asset, 990 F.2d at 214 (restitution); United States v. Schumann, 861 F.2d 1234, 1236 (11th Cir.1988) (fine). Thus, Parsons's Estate is not entitled to a return of the forfeiture judgment paid to the government before Parsons's death.

With regard to unpaid restitution orders, this Court has held that if the purpose of the restitution order is primarily compensatory rather than penal, it does not abate upon the death of a defendant pending direct appeal. Asset, 990 F.2d at 214. Moreover, this court must review the defendant's criminal conviction to determine whether the non-abated restitution order was properly awarded. United States v. Mmahat, 106 F.3d 89, 93 (5th Cir.1997). Whether this circuit's current law, which authorizes Parsons's Estate's appeal, comports with the authorization of restitution by the Victim and Witness Protection Act, 18 U.S.C. § 3663 (VWPA) is a matter for debate, particularly when it leads to the strange situation of our reviewing a criminal conviction in what has become a hypothetical case.

In Asset, this Court relied on United States v. Dudley, 739 F.2d 175 (4th Cir. 1984) and on United States v. Cloud, 921 F.2d 225 (9th Cir.1990), in concluding that the doctrine of abatement does not apply to unpaid compensatory restitution awards. Asset, 990 F.2d at 212-14. Cloud does not, however, necessarily support this Court's conclusion in Asset. In Cloud, the appellant, who was still alive, asserted that the portion of his sentence that made any unpaid balance of his restitution payments due and payable upon his death violated 18 U.S.C. § 3565(h) (repealed). Section 3565(h) provided that "an obligation to pay a fine or penalty ceases upon the death of the defendant" (emphasis added). The court stated in Cloud that its task was not to decide whether restitution payments under the VWPA were primarily compensatory or penal in nature but was instead one of statutory interpretation. The court decided that the "ceases upon death" provision did not apply to restitution orders and that interpreting § 3565(h) otherwise could frustrate the compensatory goals of the VWPA.

Although Cloud recognized the compensatory purpose of VWPA restitution orders, a purpose that arguably supports this court's conclusion in Asset, there is a significant difference between the two cases. In Cloud, the appellant had unsuccessfully appealed his conviction before challenging the survival of his restitution order, whereas in Asset, the criminal defendant died pending an appeal of her case, hence her criminal proceeding abated ab initio. Thus, in Cloud, a judgment of conviction supported the appellant's restitution order, but in Asset, the defendant's conviction was abated. The Ninth Circuit rejected the argument that Cloud's restitution order should abate because Cloud had not died pending resolution of his direct appeal, and his conviction had not abated. United States v. Cloud, 872 F.2d 846, 856-57 (9th Cir.1989).

In Dudley, the Fourth Circuit held that the abatement principle does not apply to unpaid restitution orders. Instead of focusing on the language of the VWPA, which requires a judgment of conviction to support a restitution award, the court in Dudley based its holding on the compensatory rather than penal nature of restitution orders under the VWPA. Dudley, 739 F.2d at 177.

The Eleventh Circuit has rejected the Dudley approach and concluded that allowing a restitution order to survive the death of a criminal defendant pending appeal conflicts with the VWPA. United States v. Logal, 106 F.3d 1547, 1552 (11th Cir.1997). Under 18 U.S.C. § 3663(a)(1), the court noted, a defendant must first be convicted of a crime for the court to impose a restitution order, but the abatement principle leaves the defendant "as if he never had been indicted or convicted." See id. (quoting United States v. Schumann, 861 F.2d 1234, 1237 (11th Cir.1988)). The Eleventh Circuit concluded that the "absence of a conviction precludes imposition of the restitution order ... pursuant to § 3663." Moreover, survival of the restitution order would violate the "fundamental principle of our jurisprudence from which the abatement principle is derived ... that a criminal conviction is not final until resolution of the defendant's appeal as a matter of right." Id.

The Third Circuit recently recognized the Eleventh Circuit's view as a minority view, holding that abatement does not apply to compensatory restitution and allowing the parties to brief the merits of a conviction in order to challenge a restitution order. United States v. Christopher, 273 F.3d 294 (3d Cir.2001). The D.C. Circuit and the Second Circuit have both declined to offer an opinion on the issue when decedents' estates left no assets against which a claim for restitution could be enforced. United States v. Wright, 160 F.3d 905, 909 (2d Cir.1998); United States v. Pogue, 19 F.3d 663, 665 (D.C.Cir.1994). Although the Second Circuit avoided answering the question, it noted that the "analytical underpinnings of [not applying the abatement principle to compensatory restitution orders] are not entirely clear... since there is no civil judgment[,] ... and once the conviction is vacated there would seem to be no foundation for the order of restitution." Wright, 160 F.3d at 908-09.

The compensatory purpose of the restitution statutes supports this circuit's current position. If restitution orders did not survive the death of a criminal defendant pending direct appeal, victims would be forced to expend time and expense to prove what the defendant did in a claim against his estate. On the other hand, the VWPA states that restitution may be ordered when "sentencing a defendant convicted of an offense." 18 U.S.C. § 3663(a)(1)(A) (emphasis added). "We assume that Congress is aware of existing law when it passes legislation." Michel v. Total Transp., Inc., 957 F.2d 186, 191 (5th Cir.1992) (quoting Miles v. Apex Marine Corp., 498 U.S. 19, 32, 111 S.Ct. 317, 325, 112 L.Ed.2d 275, 291 (1990)). Federal courts have recognized the abatement principle for over 100 years, see Menken v. Atlanta, 131 U.S. 405, 9 S.Ct. 794, 33 L.Ed. 221 (1889), yet Congress did not provide for the survival of restitution orders following the death of a criminal defendant pending direct appeal.3 Furthermore, although...

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