U.S. v. Rostoff, Civil Action No. 96-10558-WGY.
| Decision Date | 13 January 1997 |
| Docket Number | Civil Action No. 96-10559-PBS.,Civil Action No. 96-10558-WGY. |
| Citation | 956 F.Supp. 38 |
| Parties | UNITED STATES of America, Plaintiff, v. Steven M. ROSTOFF and David R. Rostoff, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
Michael J. Traft, Carney & Bassil, Boston, MA, for Steven M. Rostoff.
MEMORANDUM AND DECISION
On March 15, 1996, the government filed individual suits against two brothers, Steven M. Rostoff and David Rostoff (collectively, "the Rostoffs"), for their failure to pay court-ordered restitution to the Federal Deposit Insurance Corporation (the "FDIC"). See United States of America v. Steven M. Rostoff, Civ. Action No. 96-10558-WGY; United States of America v. David R. Rostoff, Civ. Action No. 96-10559-PBS.1 These two suits arise out of judgments previously entered against the Rostoffs on January 29, 1993 by Judge Zobel in an earlier proceeding, United States v. Steven M. Rostoff, Crim. No. 92-10006-01-Z, and United States v. David Rostoff, Crim. No. 92-10006-02-Z (collectively "Rostoff I"), aff'd United States v. Rostoff, 53 F.3d 398 (1st Cir.1995). In Rostoff I, the brothers Rostoff were found guilty of conspiracy, bank fraud, and making false statements. Judge Zobel sentenced each to 15 months in prison followed by two years of supervised release, and ordered each to pay a special assessment of $3,650.00 immediately, as well as restitution to the FDIC of an amount "not to exceed" $650,000.00.2 The probationary period for each brother ended on March 31, 1996.
During the Rostoffs' sentencing, Judge Zobel specifically stated that interest on the judgment was to be waived, United States v. Rostoff, Crim. No. 92-10006-01-Z, Judgment (Dckt # 324) at 5-6; United States v. Rostoff, Crim. No. 92-10006-02-Z, Judgment (Dckt # 322) at 7-8, and dictated that the installments were to be paid according to a schedule "as established by the Chief, U.S. Probation [the "Probation Office"]." Id. No fine was imposed because of the Rostoffs' inability to pay. Id. Concerning the order of restitution, Judge Zobel stated:
With respect to restitution, I have some difficulty understanding the financial data that have been supplied, and I do believe that the government is correct that I should look at it with a view to the future. I will therefore impose restitution not to exceed $650,000 without interest. I'm sure counsel will explain to the defendants that if at the end of probation there is no possibility of that being paid, then it will be remitted.
Trial Transcript, January 29, 1993 at 91 (emphasis added). Furthermore, in her written Statement of Reasons accompanying the judgment, Judge Zobel stated that the court departed from the sentencing guidelines because "the amount of loss substantially overstated the seriousness of the offense as a number of other factors collaborated to cause the loss." Rostoff, Crim. No. 92-10006-01-Z, Judgment at 7; Rostoff, Crim. No. 92-10006-02-Z, Judgment at 9. This aspect of the judgment was affirmed by the First Circuit on appeal. See Rostoff, 53 F.3d at 414.
After paying relatively paltry sums — $7,463.21 from Steven and $8,200.00 from David — amounting to 1.17% and 1.26% of the total respectively — the Rostoffs ceased making payments sometime in early 1996. These lawsuits followed. In June, 1996, Steven Rostoff filed a motion to dismiss the present suit, which was denied from the bench by this Court. The government here moves for summary judgment in an attempt to convert Judge Zobel's criminal restitution order into a civil judgment.
The standard for granting summary judgment under Federal Rule of Civil Procedure 56 is stringent. Summary judgment is appropriate only where the moving party can demonstrate through "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any" that there is "no genuine issue as to any material fact," and that it "is entitled to a judgment as a matter of law." CMM Cable Rep, Inc. v. Ocean Coast Properties, Inc., 97 F.3d 1504, 1512-13 (1st Cir.1996) (citing Grubb v. KMS Patriots, L.P., 88 F.3d 1, 2 [1st Cir.1996]), see Fed.R.Civ.P. 56(c). The moving party has the burden of establishing the lack of a genuine, material factual issue. Wayfield v. Town of Tisbury, 925 F.Supp. 880, 881 (D.Mass.1996) (citing Snow v. Harnischfeger Corp., 12 F.3d 1154, 1157 [1st Cir.1993], cert. denied, 513 U.S. 808, 115 S.Ct. 56, 130 L.Ed.2d 15 [1994]) (citations omitted). A factual dispute is "genuine" if a reasonable jury could resolve the point in favor of the nonmoving party. Rodriguez-Pinto v. Tirado-Delgado, 982 F.2d 34, 38 (1st Cir.1993). A fact is "material" if it has the "potential to affect the outcome of the suit under the applicable law." Nereida-Gonzalez v. Tirado-Delgado, 990 F.2d 701, 703 (1st Cir.1993). Finally, the evidence must be read "in the light most flattering to the nonmovant," and the court should "indulg[e] all reasonable inferences in that party's favor." Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir.1994). According to the Supreme Court's decision in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), "at the summary judgment stage, the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249, 106 S.Ct. at 2511.
The United States brings this action to recover the amount owed the FDIC pursuant to the Federal Debt Collection Procedures Act ("Debt Collection Act"), codified at 28 U.S.C. § 3001 et seq., and the Victim and Witness Protection Act of 1982 ("Victim/Witness Protection Act"), codified at 18 U.S.C. § 3663 et seq. The government contends that the Debt Collection Act allows the United States to convert a restitution order issued pursuant to the Victim/Witness Protection Act into a civil judgment, since as of August 12, 1996, Steven Rostoff owes the United States unpaid principal of $642,536.79, and David Rostoff owes $641,800.00.3 The Rostoffs argue that they have fully complied with the terms of Judge Zobel's restitution order; that the language of the Victim/Witness Protection Act excuses them from further liability for monies owed the FDIC; and that, in any event, there is a dispute concerning a material fact — the total amount of restitution owed — since the Rostoffs previously made a bona fide offer of complete restitution which was refused. Each issue will be discussed in turn.
It is clear that, having fulfilled their terms of probation — a fact the government does not contest — the Rostoff brothers are free from supervision by the Probation Office. What is at issue here is whether the Rostoffs are free from any obligation to pay the restitution ordered by Judge Zobel in Rostoff I. The Victim/Witness Protection Act, under which Judge Zobel sentenced the Rostoffs, grants a judge discretion to order restitution to any victim "in addition to ... any other penalty authorized by law" when sentencing a defendant convicted of an offense under title 18.4 18 U.S.C. § 3663(a)(1). In addition, at the time of the sentencing, the Victim/Witness Protection Act provided that:
(1) [a court ordering restitution].... may require that such defendant make restitution under this section within a specified period or in specified installments. (2) The end of such period or the last such installment shall not be later than: (A) the end of the period of probation if probation is ordered. ...
18 U.S.C. §§ 3663(f)(1) and (f)(2)(A) (repealed 1996) (emphasis added).5 At the time of the sentencing, the Victim/Witness Protection Act provided that orders of restitution are enforceable by the United States "in the same manner as a judgment in a civil action." 18 U.S.C. § 3663(h)(1)(B) (repealed 1996).6 The Debt Collection Act, discussed below, provides the exclusive civil procedure for United States to collect judgments on debts. See 18 U.S.C. § 3001(a)(1).
The Rostoffs' argument in opposition to the government's motion for summary judgment — essentially a reconstituted version of the points raised in their earlier (failed) motion to dismiss — proceeds as follows: since the periods of probation have terminated, Judge Zobel's order of restitution has been fully discharged. Therefore, the Rostoffs claim an exemption from having to satisfy the remainder of the $650,000.00 criminal judgments against them. They also contend — albeit with some justification — that Judge Zobel's restitution order did not require payment of a specific amount, only such amounts as are determined by the Probation Office.7
To support this argument, the Rostoffs state that they have made all payments requested of them by the Probation Office, there has never been any motion filed to extend their probation, and there has been no claim that they violated any of the terms of their probation. Memorandum of Law on Defendant's Motion for Summary Judgment and in Opposition to United States' Motion for Summary Judgment ("Defendants' Opposition") at 3. Relying upon the language of 18 U.S.C. § 3663(f)(2)(A) (repealed 1996), supra, the brothers maintain that the termination of the two year period of supervised release ends their obligation to pay restitution, giving the Probation Office "no authority to require [them] to make any restitution payments." Id. In their brief, the Rostoffs cite three circuit courts of appeal that have considered the power to enforce a restitution order under the Victim/Witness Protection Act and have uniformly held, consistent with the plain language of the repealed section 3663(f)(2)(A), that a defendant may not be compelled to make payments of restitution beyond the expiration of his...
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U.S. v. Rostoff
...not the time period during which a civil suit by a victim to enforce the restitution order may be prosecuted." United States v. Rostoff, 956 F.Supp. 38, 42 (D.Mass.1997). The United States and the Rostoffs then filed cross-motions for summary judgment. The district court denied the Rostoffs......
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U.S. v. Rostoff, Civil Action No. 96-10558-WGY.
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