UNITED STATES OF AMERICA v. 8 GILCREASE LANE, QUINCY, FLORIDA 32351 et al

Filing 131

RESPONSE TO ORDER TO SHOW CAUSE by THOMAS A. BOWDOIN, JR, BOWDOIN HARRIS ENTERPRISES, INC. re 79 Order, Order on Motion for Extension of Time to Answer,. (Attachments: # 1 Affidavit)(Murray, Charles)

UNITED STATES OF AMERICA v. 8 GILCREASE LANE, QUINCY, FLORIDA 32351 et al

Doc. 131

U N IT E D STATES DISTRICT COURT F O R THE DISTRICT OF COLUMBIA U N IT E D STATES OF AMERICA, C iv il No. 08-1345 (RMC) P la in t if f , v. 8 GILCREASE LANE, QUINCY F L O R ID A 32351, ET AL., D e f e n d a n ts .
THOMAS A. BOWDOIN, JR.'S RESPOND TO ORDER TO SHOW CAUSE AND MOTION TO RESCIND RELEASE OF CLAIMS

T H O M A S A. BOWDOIN, JR.'S RESPONSE TO ORDER TO SHOW C A U S E AND RENEWED MOTION TO RESCIND RELEASE OF CLAIMS T h o m as A. Bowdoin, Jr., by counsel and pursuant to Federal Rule of Civil P ro ced u re 60(b), hereby responds to this Court's July 24, 2009 Order to Show C a u s e and moves this Court to vacate the January 22, 2009 Order, restoring Mr. B o w d o in 's right to litigate the above-captioned civil in rem forfeiture proceeding. Mr. Bowdoin filed a verified claim to seized property on August 15, 2008. On J an u a ry 13, 2009, he filed a motion to release claims to seized property. Mr. B o w d o in 's January 13, 2009 motion was predicated on misinformation and m isrep resen tatio n ; therefore, Mr. Bowdoin's Motion to Release Claims is v o id ab le and subject to rescission under Rule 60(b). Mr. Bowdoin hereby r es p o n d s to the Order to Show Cause, and respectfully requests that this Court rein state his claims to seized property.
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U n d er Rule 60(b), good cause exists to reinstate Mr. Bowdoin's claims to s eiz ed property. Under FRCP 60(b), a court may relieve a party from a final ju d g m en t, order, or proceeding when the judgment resulted from, inter alia: mistake, inadvertence, surprise, or excusable neglect; fraud, misrepresentation, or m isco n d u ct by an opposing party; when the judgment is void as a matter of law; o r for any other reason that justifies relief. See FRCP 60(b)(1), (3), (4), (6). Bowdoin's January 13, 2009 motion to release claims was based on his belief that relin q u ish in g his civil claims could possibly prevent imprisonment in a fo rth co m in g criminal matter. Bowdoin believed he had an agreement with the g o v ern m en t that required the release of claims in the above-captioned civil matter. Mr. Bowdoin reasonably relied on information received from his counsel in fo rm in g the belief that release in the civil suit could possibly avoid imprisonment. In fact, no agreement existed and Mr. Bowdoin now faces a significant period of in carceratio n . Given the lack of an agreement, Mr. Bowdoin's release in the ab o v e-cap tio n ed case is illogical. He received nothing of value for the release. Bowdoin has consistently demonstrated an intent to aggressively defend o w n ersh ip of his property in the civil in rem forfeiture proceeding. This Court s h o u ld rescind its January 22, 2009 Order because Mr. Bowdoin lacked k n o w led g e of the consequences for his actions and was induced into filing the release on false pretenses.

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FACTS M r. Bowdoin believed his January 13, 2009 release of claims constituted a s ettle m e n t with the government that could possibly prevent imprisonment in an im m in en t criminal action. His release of claims was based on false pretenses. M r. Bowdoin's January 13, 2009 motion resulted from negotiations with G o v ern m en t counsel concerning criminal charges. When Mr. Bowdoin hired his o rig in al attorneys from Ackerman Senterfitt, they informed him that he could p o ten tially face criminal liability. See Affidavit of Thomas A. Bowdoin, Jr., at ¶ 4 (h erein after "Bowdoin Affidavit"). Bowdoin's Ackerman Senterfitt attorneys r ef er re d him to the law firm of Dobson and Smith, a Florida-based firm sp ecializin g in criminal matters. Id. Bowdoin retained Steven Dobson to handle crim in al issues arising from Bowdoin's operation of AdSurfDaily. Id. at ¶ 5. When Bowdoin retained Dobson, no criminal charges were pending and Bowdoin w as not aware of any matters before the grand jury. Id. Bowdoin paid Dobson a retain er in the amount of $50,000. D o b so n scheduled several meetings with William Cowden, an attorney with th e Department of Justice handling the above-captioned civil in rem forfeiture m atter. Id. at ¶ 6. Between November and December, Dobson met with Cowden o n two separate occasions in Washington, D.C. to discuss Bowdoin's criminal liab ility. Id. Dobson did not explain in detail the substance of his meetings in W ash in g to n , D.C. Id.
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D o b so n then scheduled a meeting with Cowden and Bowdoin in T allah assee, Florida. Id. at ¶ 7. Before meeting with Cowden, Dobson requested th at Bowdoin sign an agreement stating that Bowdoin would cooperate fully with th e Government in exchange for leniency in any forthcoming criminal matters. Id. at ¶ 8. Dobson represented that if Bowdoin did not sign the agreement, he would p ro m p tly be arrested and likely receive a maximum penalty under the statute: between 20 and 40 years for each charge. See id. at ¶ 10. Bowdoin understood fro m Dobson that he was obligated to dismiss claims in the civil in rem forfeiture actio n if he was to receive leniency from the government. Id. Dobson represented th at Bowdoin's cooperation would preclude the possibility of imprisonment fo llo w in g criminal charges. Id. Bowdoin signed a document agreeing to release claims in the civil matter b ecau se he believed doing so would prevent the possibility of prison time. Id. Bowdoin is 74 years old and has a heart condition. Id. Because any measure of p riso n time would constitute a life sentence, Bowdoin's sole concern was avoiding in carceratio n . Id. Bowdoin understood from Dobson that to possibly avoid prison tim e he had to release claims in the civil forfeiture proceeding and disclose facts co n cern in g the operation of ASD to Government counsel. Id. at ¶ 8. Until his m e etin g with Cowden in Tallahassee, Florida, Bowdin had consistently exercised h is Fifth Amendment privilege against self-incrimination in judicial proceedings, th u s evidencing an intent to protect information from disclosure.
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D u r in g the first meeting with Cowden in Tallahassee, Dobson provided C o w d en with Bowdoin's signed agreement. Id. at ¶ 9. During the meeting, C o w d e n reiterated the need for Bowdoin to dismiss claims in the civil forfeiture m atter. Id. Dobson represented to Bowdoin that a failure to follow through with h is agreement would lead to prompt arrest without bail. Id. at ¶¶ 9-10. Following th e signed agreement, Bowdoin disclosed details of the ASD business. Id. The first meeting with Cowden lasted three days. Id. at ¶ 14. Toward the end of the m eetin g s, Bowden came to understand that he likely would face incarceration fo llo w in g an imminent criminal action. Id. Bowdoin slowly came to understand th at what he understood from Dobson was not the case. Id. at ¶ 15. His ag reem en t to cooperate provided Bowdoin with no benefit in the criminal matter. Id. Contrary to Bowdoin's understanding, the pleadings that Bowdoin authorized h is Ackerman Senterfitt attorneys to file in the civil proceeding were not filed in ex ch an g e for the government's relinquishment of seeking a prison sentence. Id. In fact, Bowdoin had no agreement at all with Government counsel. Id. Pursuant to the signed statement Dobson provided, Bowdoin was asked by g o v ern m en t counsel to provide statements which Bowdoin did not believe to be tru e. Id. at ¶ 16. Government counsel requested that Bowdoin admit to criminal co n d u ct despite Bowdoin's belief that operation of ASD was not a Ponzi scheme. Id. at 16. The government thus sought more than cooperation from Bowdoin. It

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so u g h t to have Bowdoin confess and, therefore, concede his rights in the civil fo rfeitu re proceeding and any forthcoming criminal matters. B o w d o in came to understand that Dobson's representation did not serve his in terests and resulted in an agreement with which Bowdoin did not agree. Id. at ¶ 1 7 . At the close of the second meeting with Government counsel in Tallahassee, C o w d en told Dobson to call Robert Garner, the general council, and tell him to sen d the balance of $200,000.00 in the legal trust account to Dobson. Dobson d ir ec te d Garner to release the $200,000.00 to Dobson, but Garner had distributed a portion of the funds to another attorney in an unrelated matter. Dobson discussed th is with Cowden, and Cowden directed that the funds be returned to the trust fu n d and released to Dobson. Cowden represented that a failure to return funds to th e trust account would be considered money laundering and subject the receiving atto rn ey to criminal liability. Prior to releasing funds to Dobson, Garner got ap p ro v al from Bowdoin. F o llo w in g this Court's January 22, 2009 Order, Bowdoin learned that his ag reem en t negotiated between Dobson and the Government was meaningless. Id. a t ¶ 19. Bowdoin learned that Dobson had not resolved any aspect of the criminal m atter. Id. On or about May 2009, Bowdoin learned that the Government su b m itted charges against him to the grand jury. Id. Having lost confidence with D o b s o n , and having learned that his release served no purpose, Bowdoin rejected

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th e Government's offer to travel to Washington, D.C. and enter a criminal plea u n d er a sealed indictment. Id. at ¶ 20. Bowdoin abandoned his right to litigate before this Court without receiving a return benefit, an action he did intend. Id. Therefore, on February 27, 2009, B o w d o in filed a motion to rescind his release and reinstate his claims to seized p ro p erty. Id. DISCUSSION T h is Court should rescind its January 22, 2009 Order and rescind B o w d o in 's release of claims. Bowdoin's release filed with this Court on January 1 3 , 2009 represented a settlement agreement that lacked mutual assent and co n sid eratio n . Under principles of contract law, Bowdoin's release is voidable. In addition, because Bowdoin released his rights under false pretenses, his January 1 3 , 2009 motion was not offered with full knowledge. Accordingly, Bowdoin's r ele as e lacked indicia of voluntariness and was thus deficient. Finally, this Court sh o u ld grant relief under Rule 60(b)(6) in the interests of justice. Bowdoin's reaso n ab le reliance on faulty advice of counsel induced Bowdoin to abandon his leg al rights without incentive. Serious derelictions by counsel form the basis for r elie f under Rule 60(b). 1 . B o w d o in 's Release was Not Legally Effective T h e Supreme Court has upheld the use of "release-dismissal" agreements, w h er eb y a criminal defendant releases his civil rights in return for a prosecutor's
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d ism issal of pending criminal charges. See, e.g., Town of Newton v. Rumery, 480 U .S . 386 (1987). Courts must examine on a case-by-case basis whether the release was valid. See Woods v. Rhodes, 994 F.2d 494, 499 (8th Cir. 1993). The release must be voluntary. Id. Several factors should be considered to determine v o lu n tarin ess, including: the sophistication of the party signing a release; the co st/b en efit considerations made by the signer; and the circumstances of the sig n in g . See id.; Rumery, 480 U.S. at 394. In addition, Courts also consider w h e th e r the signer expressed any unwillingness, and whether the release was clear. See Woods, 994 F.2d at 499. "The most important general concern bearing o n the enforceability of the releases ... [is] whether the releases were knowing and v o lu n ta ry ." Id. Moreover, the "nature of the pending criminal charge is also im p o r ta n t because `the greater the charge, the greater the coercive effect.'" Id. at 5 0 2 -0 3 (Heaney, J., Dissenting) (quoting Rumery, 480 U.S. at 401). Thomas A. Bowdoin's release was not knowing and voluntary. He lacked essen tial information and proceeded with a misunderstanding of the consequences. It was not that he failed to properly assess the consequences; rather, based on statem en ts from his counsel, he believed that his release served a specific b a r g a in e d - f o r purpose; it secured an agreement with the Government. Absent that ag reem en t, Bowdoin would not have submitted a release before this Court. Indeed, the release is senseless given Bowdoin's legal predicament. Bowdoin effectiv ely relinquished his right to litigation in exchange for nothing. Following
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th e release, Government counsel is not obligated to seek a lesser sentence in a crim in al matter. Bowdoin faces the same criminal exposure as he did before the release. He has wasted the efforts of his legal team and the financial investment in th e above-captioned forfeiture matter. Bowdoin's criminal counsel provided no benefit. His counsel's advice did n o t secure an agreement with the Government. Yet Bowdoin was led to believe th at such an agreement existed. Bowdoin agreed to release his claims in the civil fo rfeitu re matter believing first that such action would avoid the possibility of im p riso n m en t. That material misimpression prevented Bowdoin from providing th is Court with an informed and voluntary release of his rights. A release cannot b e voluntary where the party executing the release lacks fundamental knowledge o f the consequences. C.f. Woods, 994 F.2d at 499 (defendant's release was valid o n ly because she "signed a release document knowing the advantages and d isad v an tag es at the time"). The fact that Bowdoin was represented is immaterial because his attorney's d erelict advice contributed to Bowdoin's belief that an agreement existed. Bowdoin's release was secured under false pretenses and, therefore, the agreement is not voluntary. 2. B o w d o in 's agreement with the Government was not valid E v en if this Court finds that an agreement existed between Bowdoin and the G o v ern m en t, that agreement is invalid and voidable. A compromise and
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s ettle m e n t, like other contractual agreements, can be invalidated on grounds that co n sid eratio n was lacking or that mutual assent never existed. See Ulliman S ch u tte const., Inc. v. Emerson Process Management Power & Water Solutions, D .D .C . No. 02-1987, at *4 n.4 (June 2007) ("settlement agreements are governed b y the law of contracts"). Under contract law, "[t]here is no manifestation of m u tu al assent to an exchange if the parties attach materially different meanings to th eir manifestations and neither party knows or has reason to know the meaning a tta ch e d by the other." See Restatement (Second) of Contracts § 20 (Effect of M is u n d e rs ta n d in g ) . A misunderstanding between the parties will prevent contract fo rm atio n when the misunderstanding is "vital enough to justify upsetting the e n tir e arrangement." Id. (citing Palmer, The Effect of Misunderstanding on C o n tra ct Formation and Reformation Under the Restatement of Contracts Second, 6 5 Mich. L. Rev. 33, 57 n.77 (1966). If assent is wanting on the part of one who signs a contract, his or her act h as no more efficacy than if it had been done under duress or by a person of u n so u n d mind. See, e.g., 17 C.J.S. Contracts § 35 (Necessity of Assent). N o mutual assent existed between Bowdoin and the United States G o v e rn m e n t. Before speaking with Government counsel, Bowdoin entered what h e thought was an agreement that would possibly prevent prison time. Operating o n that understanding, Bowdoin disclosed sensitive information against his in terest and executed a release in the civil in rem forfeiture action.
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D u rin g negotiations with Government counsel that lasted more than one m o n th , Bowdoin realized that his understanding of the agreement was different f ro m what the Government intended. The Government intended to seek in carceratio n while Bowdoin believed his cooperation would possibly prevent im p r is o n m e n t. Given the disparity, the parties ostensibly lacked mutual u n d erstan d in g of Bowdoin's liability under the arrangement. This Court's January 22, 2009 Order is akin to enforcing an invalid co n tract. Without mutual assent any purported agreement is invalid and B o w d o in 's performance under the agreement, the January 13, 2009 release of claim s, should be excused by this Court. See MIF Realty LP v. Rochester A s so c ia te s, 92 F.3d 752, 756 (8th Cir. 1996) (stating that settlement agreements m u s t be based upon a meeting of the minds on essential terms to be enforceable, a n d "as a general rule, when the parties dispute the existence or terms of an a g r ee m e n t, the parties must be allowed an evidentiary hearing"). 3 . T h is Court should grant Bowdoin relief under Rule 60(b)(6) T h is Court should grant extraordinary relief under Rule 60(b)(6). Under R u le 60(b)(6), this Court may order relief from judgment where necessary to acco m p lish justice, or where the equities favor setting the judgment aside. See, e.g ., Food Handlers Local 425, Amalgamated Meat Cutters and Butcher Workmen

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o f North America, AFL-CIO v. Pluss Poultry, Inc., 23 F.R.D. 109. 112-13 (W .D .A rk . 1958); MIF Realty, 92 F.3d at 755-56. In MIF Realty, the U.S. Court of Appeals for the Eighth Circuit held that R u le 60(b) is to be given liberal construction so as to do substantial justice and to p rev en t the judgment from becoming a vehicle of injustice. See MIF Realty, 92 F .3 d at 755. The MIF Realty Court held that "[o]ne important equitable co n sid eratio n is whether the litigants received a ruling on the merits of their c la im ." Id. at 756. The Court held that the "district court abused its discretion by d en yin g [the] Rule 60(b) motion, because the prior judgment was based on a m is ta k e n belief that the parties had agreed upon a settlement." Id. Similarly, B o w d o in prematurely terminated his claims in the civil in rem forfeiture because h e believed that a settlement agreement existed with the United States G o v e rn m e n t that would possibly prevent his imprisonment. The existence of that p erceiv ed agreement was the only reason Bowdoin relinquished his right to litig ate the civil forfeiture. Where that agreement never in fact existed, equity m ilitates for Rule 60(b) relief so that Bowdoin can vet his rights before a court of la w . The Government suffers no prejudice from having to prove its case in court as commanded by Congress. See 18 U.S.C. § 985(c) ("[i]n a suit or action b ro u g h t under any civil forfeiture statute for the civil forfeiture of any property ...

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th e burden of proof is on the Government to establish, by a preponderance of the ev id en ce, that the property is subject to forfeiture"). This Court should rescind its January 22, 2009 Order because Bowdoin's d e c is io n to release his claims was predicated on derelict advice from his criminal a tto r n e y . Bowdoin's criminal attorney convinced him that an agreement existed w ith the Government. No such agreement existed. Bowdoin's criminal attorney in d u ced Bowdoin to sign away his rights in the civil forfeiture proceeding on the rep resen tatio n that Bowdoin could possibly avoid prison time if he abandoned the civ il claims. That representation was wholly incorrect. Bowdoin received no b e n e f it from his attorney's criminal representation. Dobson did not barter an a d v a n ta g e o u s deal that could possibly avoid prison time. Dobson did not enter an a p p e a r an c e in a criminal matter. He provided limited counsel during several ex tra-ju d icial interviews and collected legal fees in the amount of $150,000. Bowdoin found Dobson's requested fees "astonishing." See Bowdoin Affidavit at ¶ 17. For that price, Dobson convinced Bowdoin to relinquish his legal claim to m o re than $70 million while receiving nothing in return. Serious derelictions by an attorney can furnish a basis for relief under Rule 6 0 (b )(6 ). See Jackson v. The Washington Monthly, 569 F.2d 119, 122-23 (D.C. C ir. 1977). In Jackson, the appellant's attorney provided negligent advice

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co n cern in g the status of the case. Id. at 122 (finding that the attorney "misled the clien t by reassuring him that the litigation was continuing smoothly when in fact it w a s suffering severely from lack of attention"). The Jackson Court held that an atto rn ey's deception of a blameless client survives as a basis for relief under Rule 6 0 (b )(6 ). Id. at 123. "When a client does not knowingly and freely acquiesce in h is attorney's neglectful conduct, but instead is misled into believing that the a tto r n e y is industrious, dismissal is ... a harsh step ..." Id. (observing that "[p ]u b lic confidence in the legal system is not enhanced when one component p u n ish es blameless litigants for the misdoings of another component of the s y s te m " ) . Bowdoin believed that his attorney acted in his best interest and provided h im with truthful advice. Bowdoin acted on that advice when he asked his A ck erm an Senterfitt attorneys to file a release of claims on January 13, 2009. But D o b s o n 's advice was not just poor judgment. He convinced Bowdoin--a 74 year o ld man with a heart condition--that imprisonment was otherwise assured if he failed to release the civil claims. He persuaded Bowdoin to release significant leg al interests in exchange for nothing, and misled Bowdoin into believing his release of his claim could possibly assure his freedom.

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C O N C L U S IO N F o r the foregoing reasons, the equities favor Bowdoin's motion. This Court s h o u ld rescind its January 22, 2009 Order and grant Bowdoin relief under Federal R u le of Civil Procedure 60(b), reinstating Bowdoin's claims to seized property. S ep tem b er 14, 2009 R esp ectfu lly submitted, T H O M A S A. BOWDOIN, JR.,

B y:

__________________________ C h arles A. Murray, Esq. 2 7 9 1 1 Crown Lake Blvd., Suite 223 B o n ita Springs, FL 34135-4218 P h o n e: 239-649-7773 F ax : 239-262-3517 E m ail: [e-mail] C o u n sel to Thomas A. Bowdoin, Jr., and AdSurfDaily, Inc.

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and accurate copy of the foregoing has been furnished via, email and regular First Class U.S. Mail to William R. Cowden and Vasu B. Muthyala, Assistant United States Attorneys, Asset Forfeiture Unit, 555 4th Street N.W. Washington, DC 20530 this 14th day of September, 2009.

Charles A. Murray, Esq. Attorney for the Claimants Thomas A. Bowdoin, Jr. and AdSurfDaily

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