United States v. Kincaid
| Decision Date | 29 April 2020 |
| Docket Number | No. 19-2654,19-2654 |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. PAUL KINCAID, Defendant, APPEAL OF: STEVEN R. COLLINS, Third-Party Respondent. |
| Court | U.S. Court of Appeals — Seventh Circuit |
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
Submitted April 29, 2020*
Before ILANA DIAMOND ROVNER, Circuit Judge AMY C. BARRETT, Circuit Judge AMY J. ST. EVE, Circuit Judge
Appeal from the United States District Court for the Central District of Illinois.
ORDER
The district court found that a criminal defendant fraudulently quitclaimed his interest in a property to Steven Collins and therefore entered a turnover order under the Federal Debt Collection Procedures Act. Collins appeals. We see no clear error in the district court's findings supporting the turnover order, so we affirm.
Federal officers arrested Collins's longtime business and life partner, Paul Kincaid, in 2006 on child-pornography charges. Kincaid ultimately was convicted, sentenced to 30 years' imprisonment, and ordered to pay $60,000 in restitution.
Following the entry of judgment, prosecutors served Collins with a citation to discover assets to satisfy the restitution order. As part of their investigation, they deposed Collins and searched the home he shared with Kincaid. Collins testified that he and Kincaid had agreed in 1979 (when they purchased the property) that Collins owned 80% and Kincaid owned 20%. In 1995, he continued, both men signed—but never recorded—a quitclaim deed that transferred Kincaid's entire interest to Collins. Days after Kincaid was arrested in 2006, Collins and Kincaid executed—and this time, recorded—a second quitclaim deed transferring Kincaid's interest to Collins. Contemporaneously, Collins issued to Kincaid's defense attorneys a $40,000 mortgage against the home. About a month later, Collins took out another mortgage; at that time, an appraiser valued the home at $125,000. Collins also paid several of Kincaid's expenses after his arrest (car, insurance, and credit card payments, and deposits to Kincaid's prison trust account totaling $22,476), which he asserts was further payment to Kincaid for the 2006 property transfer under an oral agreement.
The government then moved for a turnover order against Collins under the Federal Debt Collection Procedures Act, arguing that Kincaid fraudulently transferred his interest in the home because Collins paid him less than fair market value. The district court agreed and issued a turnover order for half the 2006 property value minus the $40,000 Collins paid to the defense attorneys ($22,500). In doing so, the court found that: (1) Kincaid and Collins owned the home as joint tenants with equal interests; (2) any oral agreement between Kincaid and Collins dividing ownership unequally was unenforceable against creditors because the title stated that they were joint tenants; (3) the 2006 appraisal accurately reflected the home's value at the time; and (4) Collins's promise to pay Kincaid's expenses was too "speculative" at the time of the transfer to be treated as payment for Kincaid's interest in the home.
Collins appealed, and we reversed with instructions to conduct an evidentiary hearing. See United States v. Kincaid, 681 F. App'x 498, 501 (7th Cir. 2017). The government had not produced the original deed to the home, so Collins's testimony that he and Kincaid held unequal interests in the property was uncontested. Collins also disputed the home's valuation and Kincaid's state of mind at the time of the transfer—material issues that, under Illinois law (applicable because the government served the citation to discover assets under 735 ILCS § 5/2-1402(a)), the district court should have held a hearing to resolve. Id. at 500-01.
On remand, both parties submitted position statements (each with lengthy evidentiary exhibits) before the hearing, which the district court struggled to schedule because of Collins's repeated motions to continue. After granting several of his requests—to allow him to seek counsel, write briefs, and ask for time off work—the court scheduled the hearing for a date in September 2018 on which both parties had said they were available. Days before the hearing, however, Collins again moved to continue, saying that he was recovering from a recent injury; this time, the court denied the request, noting that it already had granted several continuances over the course of thirteen months and "[a]t some point, the case needs to move forward." It nevertheless allowed Collins to participate by phone. But Collins did not call in or answer the phone when the courtroom deputy called him.
Collins then moved to reschedule the hearing, but the district court denied the motion. In its order, the district court recounted Collins's long history of extensions and expanded its explanation for not granting the previous continuance; it concluded that if Collins could prepare such a detailed motion to continue—complete with a declaration and mailed less than 24 hours after the scheduled hearing—he also could have participated in the hearing by phone. Based on the history of delay, moreover, the court stated that it "does not believe that [Collins] intends to present evidence at a hearing." It therefore closed the record and ordered the parties to submit summaries of their evidence for its ruling.
Based on those submissions, the court issued a turnover order again. This time, the record included the property's full title history, which showed that Collins and Kincaid purchased the home as joint tenants, and they consistently held themselves out as co-owners on mortgage and easement documents until they executed the 2006 quitclaim deed. Moreover, the county recorder attested that the 1995 quitclaim deed was invalidly executed, so it would not have been recorded even if Collins had tried to add it to the title.
With respect to the home's valuation, the court credited the $125,000 appraisal of the home in 2006 over the competing figure of $86,400 produced in a "retrospective" evaluation that Collins commissioned in 2017. Though that appraisal included a more thorough home inspection than the one completed in 2006, Collins's appraiser conceded that he made "an extraordinary assumption that the condition of the property reflects the retrospective date of [the] appraisal." Finally, as to Kincaid's state of mind, the court concluded that he intended to defraud the government when he signed the 2006 quitclaim deed; it cited the timing of the transfer (days after Kincaid learned he could be subject to criminal fines), his "special relationship" with Collins, and the disparity between the value of Kincaid's 50% interest ($62,500) and the $40,000 Collins paid for it (by way of retaining Kincaid's lawyers). The court did not specifically reconsider Collins's arguments that he paid more under an oral agreement with Kincaid, but it determined that "Kincaid transferred his 50% ownership interest ... for $40,000."
On appeal, Collins first challenges the district court's denial of his motion to continue the last scheduled evidentiary hearing, but we see no error. District courts have considerable discretion in managing their dockets and enforcing deadlines to ensure that the parties are diligent in advancing their causes of action. See FED. R. CIV. P. 6(b)(1); Yancick v. Hanna Steel Corp., 653 F.3d 532, 538-39 (7th Cir. 2011). And though, in our earlier decision, we noted that Illinois law requires a hearing, those procedural rules do not confine the district court to a "procedural straitjacket"—it may proceed in any manner as long as the proceedings ensure due process. Resolution Tr. Corp. v. Ruggiero, 994 F.2d 1221, 1226-27 (7th Cir. 1993).
Here, for more than a year, the court made every effort to comply with our mandate to hold a hearing: it continued the date at least eight times at Collins's request to allow him to prepare, scheduled the hearing for a date that Collins said he was available, and allowed him to appear by phone. In the face of yet another motion, the court appropriately cited the need to move the case forward. And given Collins's detailed continuance request filed less than 24 hours after the scheduled hearing—all while claiming to be too unwell to present evidence—the court's skeptical view of Collins's excuse for his absence was justified. The district court also allowed Collins to appear telephonically and took pains to develop the evidentiary record despite Collins's inability or unwillingness to attend a hearing. We cannot conclude that the court's denial of Collins's last-minute motion to reschedule (or its successors) was unreasonable. See Spears v. City of Indianapolis, 74 F.3d 153, 157-58 (7th Cir. 1996) ().
Collins's arguments that the district court impeded his ability to develop the record do not persuade us either. He challenges the district court's denial...
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