Federal Trade Commission v. Amanda Elizabeth Finley

• Court: Court of Appeals for the Eleventh Circuit
• Decided: March 3, 2021
• Docket: 20-10832
• Status: Unpublished

Opinion

USCA11 Case: 20-10832 Date Filed: 03/03/2021 Page: 1 of 8

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 20-10832 Non-Argument Calendar ________________________

D.C. Docket No. 0:17-cv-60907-FAM

FEDERAL TRADE COMMISSION, STATE OF FLORIDA,

Plaintiffs-Appellees,

JONATHAN E. PERLMAN,

Temporary Receiver-Appellee,

versus

JEREMY LEE MARCUS, individually and as an officer, director, member, manager; or owner of all named corporate defendants, et al.,

Defendants,

AMANDA ELIZABETH FINLEY,

Claimant-Appellant. USCA11 Case: 20-10832 Date Filed: 03/03/2021 Page: 2 of 8

________________________

Appeal from the United States District Court for the Southern District of Florida ________________________

(March 3, 2021)

Before JILL PRYOR, LUCK, and ED CARNES, Circuit Judges.

ED CARNES, Circuit Judge:

Jeremy Marcus bought a 7,568 square-foot waterfront mansion in Fort

Lauderdale for $5,250,000. His then-wife, Amanda Finley, acted as the buyer’s

real estate agent for the purchase of the property and received a commission on the

sale. She accepted part of that commission in cash, and the rest was used as a

“rebate” that reduced the purchase price of the house. As it turns out, Marcus was

engaged in a multimillion-dollar consumer debt fraud scam, and all the cash he

used to purchase the house was derived from his fraudulent activities.

After his scheme unraveled, the Federal Trade Commission and the State of

Florida sued Marcus. The district court created a receivership to benefit the

victims of the scheme and appointed a receiver. The court ordered Marcus to turn

over to the receiver title and possession of the house so that it could be sold and the

proceeds distributed to the victims of Marcus’ fraud. Finley moved for the

imposition of an equitable lien on the property in an amount equal to the part of her

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commission rebate that went toward the purchase price. 1 The district court denied

her motion for an equitable lien, and this is her appeal.

I.

As a licensed real estate agent, Finley worked with a broker, Florida Coastal

Realty Group. Under the terms of the purchase contract for the house that Marcus

bought for $5,250,000, the seller paid the broker a 3% commission, which totaled

$157,500 and was paid from the purchase proceeds. The broker kept $15,750 of

that amount for its contractual fee, and the remaining $141,750 was Finley’s

commission. She elected to receive $34,250 of that amount in cash at closing and

used the remaining balance of $107,500 as a “rebate” that was credited toward the

purchase price of the house, in effect lowering the amount Marcus had to pay for

the property by that much.

It is undisputed that Marcus used money that he stole from his victims to

purchase the house with cash, and Finley resided with Marcus in the luxury home

for 18 months, rent and mortgage free. Finley contends, however, that her

commission was separate from the fraudulent transaction because it came from

1 The receiver had arranged to sell the house for $4 million before Finley moved for an equitable lien. In connection with the sale, the title company required that Finley execute a special warranty deed releasing any homestead claim or interest she had in the house. Finley refused to do so without a guarantee from the receiver that he would pay her $107,500 from the sale proceeds. To avoid stalling the sale, the receiver agreed to hold the $107,500 in trust pending the district court’s determination about Finley’s entitlement to the money. It is still there. 3 USCA11 Case: 20-10832 Date Filed: 03/03/2021 Page: 4 of 8

“clean funds” paid by the seller. But “clean” is not an accurate description of the

funds. “Laundered” might be more accurate. The money used by the seller to pay

the commission came from the purchase money for the house, all of which was

from Marcus’ fraudulent schemes. As the district court found, “The undisputed

forensic accounting shows that the monies for the all-cash purchase of the home

are all traceable to stolen consumer funds.” What happened is that some of the

proceeds from the fraud that Finley’s husband had committed went to the seller of

the house, and part of that went from the seller to Finley, and part of that part went

from her back to the seller.

Finley argues that she had a reasonable expectation she would be repaid the

$107,500 that she furnished toward the purchase price if the house were ever sold.

As she sees it, the receiver (and through him the victims of the fraud) would be

unjustly enriched if allowed to keep Finley’s contribution to the purchase of the

property. The district court disagreed. This is her appeal from the court’s refusal

to grant her an equitable lien on the property.

II.

We review only for abuse of discretion a district court’s decision to deny

equitable relief; any underlying questions of law are reviewed de novo, and

findings of fact upon which the decision was made are reviewed only for clear

error. See Preferred Sites, LLC v. Troup Cty., 296 F.3d 1210, 1220 (11th Cir.

4 USCA11 Case: 20-10832 Date Filed: 03/03/2021 Page: 5 of 8

2002); see also Cox Enters., Inc. v. Pension Benefit Guar. Corp., 666 F.3d 697, 701

(11th Cir. 2012) (“The district court’s distribution of assets in a receivership is an

equitable decision that we review for abuse of discretion.”).

State law applies when determining whether an equitable lien should be

imposed on real property. See, e.g., In re Fin. Federated Title & Tr., Inc., 347 F.3d

880, 886–87 (11th Cir. 2003) (applying Florida law). In Florida, an equitable lien

may be awarded based on the “general consideration of right or justice as applied

to the relations of the parties and the circumstances of their dealings in the

particular case.” Jones v. Carpenter, 106 So. 127, 129 (Fla. 1925). In Jones, the

Florida Supreme Court allowed the trustee of a bankrupt company to have an

equitable lien on the house of the company’s former president because the property

had been improved by funds embezzled from the company. See id. at 129–30.

The court explained that equitable liens “are applied only in cases where the law

fails to give relief and justice would suffer without” the imposition of a lien. Id. at

129.

The Florida Supreme Court has recognized that the imposition of an

equitable lien in a creditor’s favor may be appropriate to prevent unjust

enrichment. See Palm Beach Sav. & Loan Assoc., F.S.A. v. Fishbein, 619 So. 2d

267, 270–71 (Fla. 1993). In that case, a husband forged his wife’s signature and

fraudulently obtained a fourth mortgage in the amount of $1,200,000 on the house

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that he owned jointly with her. Id. at 268. He used $930,000 of the loan proceeds

to pay the existing mortgages and taxes on the house and used the rest for “other

purposes.” Id. at 268. The wife, who had thought that the earlier mortgages had

been satisfied and was unaware of the fourth mortgage, later sought to prevent the

fourth mortgage lender from obtaining a lien on the house. Id. at 269.

The court determined that the lender was entitled to an equitable lien on the

house in the amount of the loan funds that were used to satisfy the preexisting

mortgages. Id. at 271. The court concluded that there was “substantial evidence to

support the finding that [the wife] stands in no worse position than she stood

before the execution of the mortgage” because her husband’s fraudulent action

merely substituted another mortgage for the preexisting ones. Id. at 270–71. The

court reasoned that to hold otherwise would allow the wife to be unjustly enriched

based on the fraudulent action, and that was no less true because she was not

complicit in the fraud. See id. at 271.

Applying Florida law, this Court has recognized that an equitable lien may

be a remedy for creditors “‘where funds obtained through fraud or egregious

conduct were used to invest in, purchase or improve the homestead.’” In re: Fin.

Federated Title & Tr., 347 F.3d at 888 (quoting Havoco of America, Ltd. v. Hill,

790 So. 2d 1018, 1028 (Fla. 2001)). In that case, funds obtained through a

husband’s fraudulent scheme were used to purchase property that he jointly owned

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with his wife, and a bankruptcy court imposed an equitable lien on the property.

Id. at 884–85, 892. We adopted the bankruptcy court’s opinion, which rejected the

wife’s argument that her “lack of knowledge or involvement in [her husband’s]

massive fraudulent activity exonerate[d] her from liability.” Id. at 890. Regardless

of the co-owner’s lack of knowledge of the fraud, it was “the fraudulent nature of

the funds” involved in the purchase that was “of utmost importance.” Id. Because

the wife “would be in the same position” after imposition of the equitable lien as

she had been in “before the fraudulent transfers,” it was appropriate for the court to

grant the receiver an equitable lien on the house. Id. at 891.

In this case, the district court determined that the receiver had an equitable

interest in the property, which was purchased with proceeds of fraud, and any

interest that Finley had should not take priority over the interest of the receiver

(read: the fraud victims). The court rejected as unpersuasive Finley’s argument

that her commission was separately earned. In doing so, the court noted that the

closing documents showed that the property was purchased with cash from Marcus

and no cash from the seller, and it concluded that the transaction was “intertwined

with the fraudulent monies.”

The district court did not abuse its discretion in denying Finley’s motion for

an equitable lien. If Marcus had not purchased the $5.25 million property with the

fruits of his fraud, Finley, who acted as his agent, would not have earned any

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commission at all. Without the equitable lien Finley is in no worse position than if

her husband had not committed the massive fraud he did. She actually is in a

better position as a result of his fraud because she got to keep the $34,250 part of

her commission that she was paid in cash, which she would never have received if

the fraud proceeds had not been used to purchase the property. Not only that, but

she also got to live in a 7,568 square-foot waterfront mansion rent free for a year

and half.

The Florida Supreme Court has made clear that equitable liens arise “out of

general consideration of right and justice” and should only be granted where

“justice would suffer without them.” Jones, 106 So. at 129. A general

consideration of right and justice does not require adding to the gains that Finley

has already received because of her husband’s fraud an additional $107,500.

Especially since that money would indirectly, but surely, come out of the pockets

of the fraud victims. The result she seeks does not arise out of any consideration of

right and justice, which would suffer from it. Equity and the law would not

countenance that result, much less require it.

AFFIRMED.