United States v. O'Brien
Opinion of the Court
The United States filed the underlying complaint stating claims for unjust enrichment and conversion arising from Charles William O’Brien’s criminal conduct with respect to mortgages he obtained from various financial institutions. The action filed by the Government can be construed
The underlying facts are somewhat murky, but, in essence, O’Brien engaged in illegal hijinks to obtain mortgages from several financial institutions. In 1990 and 1991, those financial institutions sought foreclosure on the properties in question and obtained money judgments against O’Brien. The Resolution Trust Corporation (“RTC”), the predecessor to the FDIC, insured the financial institutions and ultimately suffered losses due to O’Brien’s illegal conduct.
The Government filed a civil suit in district court in 2001 to collect on O’Brien’s outstanding restitution obligations, stating claims for unjust enrichment and conversion. O’Brien contends that the claims of unjust enrichment and conversion are barred by res judicata because they could have been asserted by the defrauded financial institutions — the FDIC’s predecessors in interest — during prior foreclosure actions brought by the financial institutions in the Ohio courts in 1990 and 1991. The parties filed cross-motions for summary judgment. The district court concluded that res judicata was inapplicable because the federal litigation was based on different facts than the state court litigation. Although O’Brien’s defalcations were central to both, the state court litigation involved O’Brien’s default on various promissory notes while the federal litigation concerned O’Brien’s failure to obey the restitution order issued by the criminal court. Because O’Brien’s failure to obey the restitution order occurred after the state court litigation, the Government had no cause of action to litigate at the time of the state court litigation, and, therefore, the current cause of action was not barred by res judicata. Thus, the district court appeared to conclude that the Government’s claim sought enforcement of O’Brien’s criminal restitution obligations rather than seeking redress for O’Brien’s underlying tortious conduct. The district court granted the Government’s motion for summary judgment and denied O’Brien’s motion. O’Brien filed this timely appeal.
In enforcing the expired restitution order against O’Brien by reducing the criminal order to a civil judgment, the district court relied on language in Joseph suggesting an alternative basis for relief.
Accordingly, we reverse the district court’s grant of summary judgment to the Government. However, as noted above, the complaint — which states claims for unjust enrichment and conversion — could be construed as an attempt by the Government on behalf of the victim of O’Brien’s criminal conduct (the FDIC) to recover for the underlying losses the victim suffered as a result of O’Brien’s criminal conduct. The district court did not consider whether claims of that nature were barred by res judicata. Accordingly, we remand the case for further proceedings consistent with this opinion.
. Much of the confusion can be traced to the fact that the Government is both the prosecutor and the victim in this instance, and it is unclear in which capacity the Government is suing.
. It is unclear whether the losses were a result of claims paid by the FDIC as an insurer or whether the FDIC directly succeeded to the financial institutions’ losses by taking over the financial institutions.
. In Joseph, the court considered 18 U.S.C. § 3579(f), the predecessor to 18 U.S.C. § 3663(f). The language of these provisions is identical, as the sections were renumbered without substantive change in 1984. See Pub. L. No. 98-473, Title II, § 212(a)(1).
. While Joseph remains good law for the purposes of this case, its applicability in future cases is limited, inasmuch as 18 U.S.C. § 3663(f) was eliminated by Congress in 1996. See Anti-terrorism and Effective Death Penalty Act of 1996. Pub. L. No. 104 — 132, § 205(a)(2). Because O’Brien was convicted before the effective date of the change. Pub. L. No. 104-132, § 211, the pre-amendment statute applies. United States v. Comer, 93 F.3d 1271, 1274 n. 1 (6th Cir. 1996).
. The district court also relied on decisions from our sister circuits — United States v. Rostoff, 164 F.3d 63 (1st Cir. 1999) and United States v. Soderling, 970 F.2d 529 (9th Cir. 1992) — for the proposition that the expired restitution order remained enforceable. In Rostoff, however, the First Circuit recognized that its conclusion was inconsistent with this circuit’s decision in Joseph, 164 F.3d at 67 n. 5, and we are bound by Joseph.
Reference
- Full Case Name
- United States v. Charles William O'BRIEN
- Cited By
- 4 cases
- Status
- Published