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United States v. Hines

United States District Court, S.D. Alabama, Southern Division

June 2, 2015

UNITED STATES OF AMERICA,
v.
JACK WITHERSPOON HINES, JR. Defendant.

ORDER

KRISTI K. DuBOSE, District Judge.

This action is before the Court on the Motion for Satisfaction of Restitution and Release of Garnishments and supporting documents filed by Defendant Jack Witherspoon Hines, Jr., the United States' response in opposition, Hines' reply, Hines' supplement to the Motion, the United States' supplementation after the hearing, and Hine's reply to the supplement (docs. 102, 105, 107, 112, 113, 114). A hearing was held on May 7, 2015. Defendant Hines, his counsel G. Douglas Jones, and Assistant United States Attorneys Alex Lankford IV and Erica Hilliard were present for the hearing.

Upon consideration of the motion, responses, replies and supplementation, the argument and evidence presented at the hearing, and for reasons set forth herein, Hines' motion is GRANTED. Accordingly, it is ORDERED that the restitution due to the Bank of Brewton is deemed satisfied, the Writs of Garnishment heretofore issued (docs. 44-46, 53-58, 77) are terminated, and the Garnishees are discharged and released from any further obligation.

Background

Hines was indicted for making a false statement to BankTrust in Brewton, Alabama (Count One) and making a false statement to the Bank of Brewton (Count Two) in connection with renewals of loans. Later, Hines waived indictment and pled guilty to an Information. He was convicted of making a false statement to the Bank of Brewton and was sentenced to probation for three years. As a special condition, Hines was ordered to make restitution to the Bank. After a hearing to determine the amount of restitution, Hines was ordered to pay to the Bank the sum of $500, 730.81 and to make minimum monthly payments of $500.00 toward satisfaction of the restitution. He was given credit for payments received from an insurance company during the course of his probation.

Hines was not ordered to make payments through the Clerk of the Court. However, Hines paid $500.00 per month to the Clerk, which was disbursed to the Bank. The United States filed applications for post-judgment continuing Writs of Garnishment against nine companies. The Writs were issued in early July 2014.

In mid-July, Hines filed a notice of change in economic status wherein he sought relief from the monthly restitution payments and a stay of the garnishments, the latter raised in his reply to the United States response. The United States opposed the motion. Another application for a Writ of Garnishment was filed and that Writ issued in late July 2014. At this point, ten Writs had issued.

After briefing the question of Hines' change in economic status, the Court heard the parties' oral argument. The Court found that Hines had shown a significant change in his financial condition. The Court stayed the enforcement of nine Writs of Garnishment, allowed the Writ of Garnishment as to Quantum Resources, LLC to remain in effect. The Court reduced Hines' monthly restitution payment to $0.00.[1]

Hines filed the instant motion for satisfaction of restitution and release of garnishments on basis that the restitution has been satisfied as part of the mediated settlement of two separate state court civil actions between Hines, his business entities, and the Bank that were filed in 2011 and 2013 (docs. 102, 102-1, 102-2). The mediation occurred in February 2015. In support of the motion, Hines provides a letter from counsel for the Bank to the Probation Officer assigned to this action, stating that the restitution has been "fully satisfied as of February 19, 2015 as part of a litigation settlement between the Bank and Mr. Hines" and that the "Bank therefore deems that Mr. Hines restitution obligations ordered in [this action] are satisfied and that no further collection efforts are necessary." (Doc. 102-1, Exhibit 1, Letter dated March 2, 2015).[2] Hines also provides the declaration of a senior vice president of the Bank stating as follows:

The purpose of this declaration is to confirm for the Court that as of February 19, 2015, all debts and obligations of Jackson W. Hines and Hines Realty, Inc. to the Bank of Brewton have been satisfied as part of the a litigation settlement between the Bank and Mr. Hines. The Bank thus deems his restitution obligation ordered in this case also satisfied and that no further collection efforts are necessary.

(Doc. 102-2, Exhibit 2)

Hines supplemented his motion with a copy of the Memorandum of Settlement at Mediation[3] (doc. 112-1, Exhibit 3) and a copy of the Settlement Agreement (doc. 112-2, p. 2, Exhibit 4). The Settlement Agreement provides a brief statement of the facts underlying the state court actions. Hines and Hines Realty Company, Inc. were indebted to the Bank in the total amount of $1.5 million on three mortgages for four parcels of real property. Hines and Hines Realty defaulted on these debts and the Bank foreclosed. However, the attorney representing the Bank improperly bid $1.5 million at the foreclosure of each property for a total of $4.5 million, instead of bidding the separate mortgage balance or appraised value for each foreclosed parcel. In the lawsuits, Hines and Hines Realty claimed wrongful foreclosure, asserted that the foreclosures had extinguished the debts, sought money damages relating to the excessive bid with return of the foreclosed real property, and cancellation of Hines' restitution.

In the Settlement Agreement, the Bank acknowledged that its attorney's actions "in conducting the foreclosures and bidding the total unpaid balance" of the debt "on each of the foreclosures was carried out by mistake and negligently; that the fault leading to the present action lies with" the Bank's attorney. (Id.) According to the terms of the settlement and the orders of the Circuit Court confirming title to the real property, Hines and Hines Realty's debts were extinguished, Hines received title to a warehouse with rental income, [4] $20, 000 as an attorney's fee, any restitution payments received by the Bank after February 19, 2015, [5] and satisfaction of the remaining restitution of approximately $475, 000.00. (Id.; Doc. 112-1, p. 2, Memorandum of Settlement at Mediation, Exhibit 3; Doc. 112-5, Orders vesting title, Exhibit 7) The Bank received title to "15 acres of lake property and the apartments". (Id.) The parties also agreed that

The restitution ordered in the criminal case of United States of America v. Jack Witherspoon Hines, CR-12-00026-KD, Southern District of Alabama, and payable to the Bank of Brewton, is deemed by the Bank to be satisfied and no further collection efforts by the United States are necessary. Should the Bank receive any restitution payments from any source after ...

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