GILL et al v. HARTSHORN et al
Filing
310
ORDER denying 293 Motion for Judgment as a Matter of Law; denying 295 Motion for Judgment as a Matter of Law. Ordered by U.S. District Judge CLAY D LAND on 02/13/2015. (CGC)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
KAITLYN GILL, LAUREN GILL, and
DANIEL VAN GASKEN,
*
*
Plaintiffs,
*
vs.
CASE NO. 4:12-CV-77 (CDL)
*
LOREN GILL and ELM LEASING,
LLC,
*
Defendants.
*
O R D E R
After four days of trial, a jury determined that Defendants
Loren
Gill
and
Elm
Leasing,
LLC
unlawfully
took
money
that
belonged to Plaintiff Daniel Van Gasken in his capacity as the
trustee for multiple trusts that benefitted a trust known as the
Gill Family Cornerstone Trust.
Specifically, the jury found
that “Daniel Van Gasken, as trustee of the real estate holding
trusts
benefitting
the
Gill
Family
Cornerstone
Trust,
should
recover damages for conversion against Loren Gill . . . [in the
amount of] $240,146 . . . [and] against Elm Leasing, LLC [in the
amount of] $2,846,594.”
also
found
that
Van
Jury Verdict 3 (ECF No. 276).
Gasken
should
recover
his
The jury
expenses
of
litigation, including attorney’s fees, from Loren Gill and Elm
Leasing, LLC.
Id.
The parties subsequently stipulated that
$137,620.05 was a reasonable amount for Van Gasken’s litigation
expenses.
Mot. to Amend J., ECF No. 286.
A final amended
judgment was entered that awards Van Gasken $240,146 against
Loren Gill, $2,846,594 against Elm Leasing, LLC, and $137,620.05
against Loren Gill and Elm Leasing, LLC, jointly.
Am. J., ECF
No. 288.
Dissatisfied with the jury verdict, both Defendants filed
motions for judgment as a matter of law or, in the alternative,
for new trial.
For the reasons explained in the remainder of
this Order, those motions (ECF Nos. 293 & 295) are denied.
BACKGROUND
John
Looking
taxes,
Gill
for
he
a
set
was
a
place
up
pioneer
to
an
in
invest
elaborate
the
his
pay
day
profits
scheme
in
loan
and
which
industry.
minimize
he
his
took
a
purported vow of poverty and became a minister of the Order of
the International Academy of Lymphology.
He set up the Gill
Family Cornerstone Trust in 1999 with his daughters, Kaitlyn and
Lauren
Gill,
included
as
beneficiaries.
The
Gill
Family
Cornerstone Trust was the beneficiary of approximately 250 real
estate holding trusts that each owned one parcel of real estate,
typically income-producing property.
Van Gasken, a friend of
John Gill’s, was the trustee of the real estate holding trusts.
Van Gasken authorized John Gill to manage the properties through
a management company.
The management company received all of
the income generated by the properties owned by the real estate
2
holding trusts.
generated
parties
by
to
payments
The management company also received revenue
certain
this
business
holding
litigation.
indirectly
to
That
John
Gill,
trusts
that
management
which
are
not
company
were
made
structured
as
payment to him for his subsistence as a minister of the Order of
the International Academy of Lymphology.
All went according to John Gill’s plan until 2009, when he
was convicted in Florida on criminal charges related to his pay
day loan businesses.
Rather than report for prison, John Gill
fled
a
and
has
been
fugitive
ever
since.
His
absence
complicated the operation of his intricate “trust-based” real
estate empire.
Hartshorn
rental
Van Gasken and his business associate Kevin
established
properties.
attempted
Acrimony
to
fill
developed
new
One
the
management
of
John
void
between
companies
Gill’s
left
Loren
by
Gill
to
brothers,
John
and
manage
Loren
Gill’s
Van
the
Gill,
absence.
Gasken,
who
controlled the trusts as trustee.
Litigation ensued, and John Gill’s brothers, children, and
former business associates fought for control of the trusts.
The present action arose when John Gill’s daughters, who were
beneficiaries of the Cornerstone Trust, accused Loren Gill, Van
Gasken, and others of depleting the Cornerstone Trust’s assets.
The daughters settled their claim against Van Gasken and others
in exchange for 40% of the properties held in the real estate
3
holding trusts that benefitted the Cornerstone Trust.
Under
that settlement, the daughters are also entitled to 40% of any
assets recovered from Loren Gill.
Gill v. Hartshorn, No. 4:12-
CV-77 (CDL), 2014 WL 1431196, at *4 (M.D. Ga. Apr. 14, 2014).
The claims that remained for resolution by the jury were
RICO claims by Kaitlyn and Lauren Gill against Loren Gill and
Elm Leasing, LLC and conversion claims by Van Gasken, in his
capacity as trustee of the real estate holding trusts, against
Loren
Gill
and
Elm
Leasing,
LLC.1
Elm
Leasing
asserted
a
counterclaim against Van Gasken and third-party claims against
nine
additional
parties.
All
of
these
claims
related
to
property titled to Elm Leasing, LLC that had been managed by
John Gill’s management company.
Van Gasken asserted that he had
been duped into believing that the property in question, which
he claimed had been purchased with proceeds from the real estate
holding trusts for which he was trustee, belonged to a trust
benefitting the Cornerstone Trust.
As it turned out, between
2005 and 2008, John and Loren Gill purchased eight parcels of
property and titled them in the name of Elm Leasing, LLC, which
was actually owned by Loren Gill.
Van Gasken claimed that he
later learned that (a) Loren Gill owned Elm Leasing and (b) much
1
During trial, the Court granted judgment as a matter of law against
Kaitlyn and Lauren Gill on their unjust enrichment claims and related
claims for equitable relief against Loren Gill and Elm Leasing.
Elm
Leasing abandoned its trespass claim against Van Gasken and others,
and Elm Leasing and Loren Gill abandoned their claim for indemnity
against Van Gasken and others.
4
of the money used to purchase the Elm Leasing properties was
stolen from the real estate holding trusts for which he was
trustee
and
beneficiary.
which
had
the
Cornerstone
Trust
as
their
He sought to get that money back in this action.
At trial, Van Gasken’s expert witness, accountant Robert
Behar,
analyzed
the
management
company’s
bank
records
and
determined that roughly $2,850,000 of the funds used to pay for
the
Elm
Leasing
properties
were
real
estate
holding
trust
proceeds that had been received by the management company on
behalf of those trusts.
200:8-16,
Sept.
9,
E.g., Trial Tr. vol. II, 155:18-22,
2014,
ECF
No.
301.
Specifically,
Behar
testified that the money for the properties:
originated from the management company that managed
the
rental
property
owned
by
the
Gill
Family
Cornerstone Trust, and all of that was exclusively
from that source. So roughly $850,000 on 6499 plus all
of the remaining $2 million or whatever -- the
numbers, without pulling the sheet out –- all
originated from rental properties that were already
owned by the Gill Family Cornerstone Trust or owned by
trusts that had that as a beneficiary.
Id. at 200:9-16.
Behar also testified that he was able to
account for the funds the management company received on behalf
of each property held by a real estate holding trust.
191:8-17.
Id. at
Defendants dispute Behar’s conclusions, arguing that
the money came from Loren Gill’s personal business holdings.
But,
based
on
Behar’s
testimony,
a
reasonable
juror
could
conclude that the funds originated from the real estate holding
5
trusts.
A
reasonable
juror
could
also
conclude
that
the
management company held those funds for the benefit of the real
estate holding trusts.
See Trial Tr. vol. III, 225:24-226:15,
Sept. 10, 2014, ECF No. 302 (Kevin Hartshorn testifying that the
management company used the rental income to grow the corpus of
the
real
estate
holding
trusts);
see
also
id.
at
239:9-20
(Hartshorn testifying that he, as trustee of the Cornerstone
Trust, did not receive the rental proceeds).
It is undisputed that Van Gasken knew that at least some
real estate holding trust proceeds were used to pay for the
eight Elm Leasing parcels.
But Van Gasken testified that John
Gill led him to believe that Elm Leasing was owned by a trust
that benefitted the Cornerstone Trust, not by Loren Gill.
Trial
Tr. vol. II at 97:7-18.
Van Gasken also introduced evidence that the office manager
of the new management companies calculated that the companies
held
$234,684
that
belonged
to
Elm
Leasing,
checks to Loren Gill totaling that amount.
and
she
issued
At the time, there
had been no analysis of where the funds for the Elm Leasing
properties originated, so the office manager mistakenly believed
that Loren Gill was entitled to the funds.
See Defs.’ Trial Ex.
192, Email from R. Behar to R. Childs (May 2, 2013) Attach. 2 at
3, ECF No. 280-15 at 5 (noting that the forensic examination was
not done until after the “cash that was not due to Loren Gill”
6
had been given to him).
After Behar determined that the funds
originated from the real estate holding trust properties, Van
Gasken demanded return of the payment.
The jury found that Loren Gill and Elm Leasing participated
in
an
enterprise
that
engaged
in
a
pattern
of
racketeering
activity, but that the activity did not cause Kaitlyn or Lauren
Gill
damages.
Therefore,
judgment
was
entered
in
Defendants on Kaitlyn and Lauren Gill’s RICO claims.
found,
however,
that
Loren
Gill
and
Elm
Leasing
favor
of
The jury
converted
property belonging to Van Gasken in his capacity as trustee of
the real estate holding trusts and awarded damages.
The jury
also found against Elm Leasing on its counterclaims and thirdparty claims.
DISCUSSION
Defendants argue that Van Gasken’s conversion claims fail
as a matter of law.
To prevail on their motions for judgment as
a matter of law, Defendants must show that the jury had no
“legally sufficient evidentiary basis to find for” Van Gasken.
Fed. R. Civ. P. 50(a).
In reviewing the evidence, “the [c]ourt
must draw all reasonable inferences in favor of the nonmoving
party, and it may not make credibility determinations or weigh
the evidence.”
Collins v. Marriott Int’l, Inc., 749 F.3d 951,
957 (11th Cir. 2014).
“Where a legally sufficient basis exists
for a reasonable jury to find for a particular party on an
7
issue, judgment as a matter of law is not proper.”
Watkins v.
City of Montgomery, Ala., No. 13-11718, 2014 WL 7331581, at *1
(11th Cir. Dec. 24, 2014).
“Conversion is an unauthorized assumption and exercise of
the
right
of
ownership
over
personal
property
another, in hostility to [his] rights.”
belonging
to
Dierkes v. Crawford
Orthodontic Care, P.C., 284 Ga. App. 96, 98, 643 S.E.2d 364, 367
(2007)
(internal
quotation
marks
omitted).
To
establish
conversion, Van Gasken was required to show that he had title to
the
property
or
an
immediate
right
of
possession
to
the
property, that Defendants wrongfully possessed it, and that he
demanded possession but the Defendants refused to surrender it.
Id. at 98-99, 643 S.E.2d at 368 (finding no conversion because
defendants returned the property and plaintiffs could not prove
diminution damages).
Here, Defendants argue that Van Gasken’s conversion claims
(and his derivative claim for attorney’s fees) fail for three
main
reasons.
First,
Defendants
contend
that
there
was
no
evidence that the real estate holding trusts had title to the
money or an immediate right to it.
Second, Defendants claim
that there was no evidence tying specific funds to specific real
estate holding trusts.
And third, Defendants assert that the
transfers to Defendants were authorized.
each argument in turn.
8
The Court addresses
I.
Was There Evidence that the Real Estate Holding Trusts Had
a Right to the Money?
To recover damages for conversion, Van Gasken was required
to prove that the real estate holding trusts had title to or a
right to immediate possession of the money that was allegedly
converted.
368.
E.g., Dierkes, 284 Ga. App. at 98, 643 S.E.2d at
Defendants contend that the management companies, which
were not owned by the real estate holding trusts, had title to
the
money.
reasonable
Van
jury
Gasken
could
presented
conclude
evidence
that
the
from
management
which
a
companies
held the rental proceeds on behalf of the real estate holding
trusts,
Although
which
thus
had
Defendants
a
right
disagreed
to
possession
vehemently
of
with
the
that
money.
evidence,
enough evidence existed to create a jury question.
Defendants also assert that some of the money used to buy
the
properties
for
Elm
Leasing
came
from
trusts, not the real estate holding trusts.
business
holding
Defendants made
this same argument at trial, but the jury apparently rejected it
and
instead
examination
believed
Behar,
of
management
the
who
testified
companies’
that
his
forensic
banking
records
revealed that $2,850,000 of the Elm Leasing property funds came
from the real estate holding trusts, not the business holding
trusts.
Based
on
this
evidence,
9
a
reasonable
juror
could
conclude that the funds used to buy the Elm Leasing properties
came from the real estate holding trusts.
Defendants
because
Behar
further
argue
testified
that
that
the
Van
money
Gasken’s
used
to
claim
buy
fails
the
Elm
Leasing properties belonged to the Cornerstone Trust (which is
not a plaintiff here), not the real estate holding trusts.
Behar
testified
properties
that
Cornerstone
that
the
were
already
Trust
beneficiary.”
or
owned
funds
by
“originated
owned
trusts
by
from
rental
Gill
the
that
But
Family
had
that
as
a
Trial Tr. vol. II at 200:9-16 (emphasis added).
And Hartshorn testified that the rental proceeds did not go to
the Cornerstone Trust but were held by the management companies
for the benefit of the real estate holding trusts.
vol. III, 225:24-226:15.
Trial Tr.
From this, a reasonable juror could
conclude that the funds held by the management companies did not
belong to the Cornerstone Trust.
Finally, Defendants contend that Van Gasken does not have
standing
to
pursue
a
conversion
claim
as
to
all
the
funds
allegedly converted by Defendants because 40% of the properties
previously held by the
real
estate
holding trusts have been
transferred to trusts that benefit John Gill’s daughters.
The
claims against Defendants on behalf of the real estate holding
trusts that held those properties were not released, and the
daughters are entitled to 40% of any assets recovered from Loren
10
Gill.
For these reasons, the Court concludes that there is
enough evidence to establish that Van Gasken had standing to
pursue the claims as to all funds allegedly converted from the
real estate holding trusts.
II.
Was There Evidence of Where the Funds Originated?
Defendants
argue
that
even
if
the
real
estate
holding
trusts had a right to possession of the allegedly converted
funds, Van Gasken’s conversion claim against Elm Leasing fails
because there was no evidence tying specific funds to specific
real estate holding trusts.
Conversion damages are available in
“a civil action for trover.”
Trey Inman & Assocs., P.C. v. Bank
of Am., N.A., 306 Ga. App. 451, 458, 702 S.E.2d 711, 717 (2010).
In general, money “is not subject to a civil action for trover
with an election for damages for its conversion” because it is
fungible
intangible
personal
property.
Id.
But
there
are
exceptions to this common law rule, including “where the money
is a specific, separate, identifiable fund.”
Maree v. ROMAR
Joint Venture, 329 Ga. App. 282, 290, 763 S.E.2d 899, 907 (2014)
(internal quotation marks omitted).
That said, a plaintiff in a
conversion action does not have to identify “the number of each
particular bill or note.”
Farmers’ Alliance Warehouse & Comm’n
Co. v. McElhannon, 98 Ga. 394, 394, 25 S.E. 558, 558 (1896).
“[C]hecks and other negotiable instruments can be the subject of
a conversion claim.”
Trey Inman & Assocs., 306 Ga. App. at 458,
11
702 S.E.2d at 717.
And “[i]n this day and age when funds are
commonly transferred via wire and other electronic means, [there
is] no logical reason for treating specific and identifiable
funds that are transferred electronically . . . differently from
checks.”
Id. at 458-59, 702 S.E.2d at 717.
Thus, a conversion
action is available to recover specific amounts of money paid
for a specific purpose.
Associates,
the
Georgia
Id.
Court
For example, in Trey Inman &
of
Appeals
found
a
conversion
claim where a closing attorney wrongfully disbursed a portion of
real estate sale proceeds to the seller instead of the bank that
was entitled to all of the proceeds.
In arguing that Van Gasken did not plead for the recovery
of a specific fund of money, Defendants rely chiefly on Maree v.
ROMAR Joint Venture.
In that case, the court concluded that a
joint venture had no conversion claim when the joint venture’s
manager withdrew money from the joint venture’s cash reserves to
pay litigation costs.
at 906-07.
Maree, 329 Ga. App. at 290-91, 763 S.E.2d
But there, “[t]he money was withdrawn from a joint
fund that belonged to all joint venturers according to their
respective ownership percentages.”
907.
In other words, there was no evidence of where the funds
originated.
their
Id. at 291, 763 S.E.2d at
Here, Behar traced the funds from origination to
ultimate
$2,850,000
of
destination.
the
funds
that
He
were
12
testified
used
to
pay
that
for
roughly
the
Elm
Leasing properties originated from the rental properties held by
the real estate holding trusts.
Trial Tr. vol. II, 200:9-16.
Behar also testified that he was able to account for the funds
the management company received on behalf of each property held
by a real estate holding trust.
Trial Tr. vol. II, 191:8-17.
Therefore, there was sufficient evidence for a reasonable juror
to conclude that Van Gasken sought to recover a specific fund of
money from Elm Leasing.
The fact that the alleged converters
later mingled the funds with other funds does not change this
conclusion.
See Adler v. Hertling, 215 Ga. App. 769, 774, 451
S.E.2d 91, 97 (1994) (“Mingling of the funds in a mixed bank
account does not destroy their identity so as to prevent their
recovery in an action for conversion as long as the funds or a
portion thereof can be traced.”).
III. Was There Evidence that the Transfers Were Not Authorized?
Defendants’ last argument is that Van Gasken’s conversion
claims fail because Van Gasken authorized the transactions.
One
cannot recover for conversion if he authorized the transaction.
Dierkes, 284 Ga. App. at 98, 643 S.E.2d at 367.
argue
estate
that
Van
holding
Defendants
also
Gasken
money
assert
knew
to
that
Elm
that
John
Leasing
Van
payment to Loren Gill.
13
Gasken
Defendants
Gill
transferred
and
did
not
authorized
real
object.
the
2012
Van Gasken testified that John Gill led him to believe that
Elm Leasing was owned by a trust that benefitted the Cornerstone
Trust,
the
same
benefitted.
trust
that
the
real
estate
holding
trusts
He did not believe Elm Leasing was owned personally
by Loren Gill.
Trial Tr. vol. II at 97:7-18.
As to the 2012
payment to Loren Gill, there had been no analysis of where the
funds for the Elm Leasing properties originated, so the office
manager mistakenly believed that Loren Gill was entitled to the
funds after this Court determined that Loren Gill did in fact
own Elm Leasing.
See Defs.’ Trial Ex. 192, Email from R. Behar
to R. Childs (May 2, 2013) Attach. 2 at 3, ECF No. 280-15 at 5
(noting that the forensic examination was not done until after
the “cash that was not due to Loren Gill” had been given to
him).
After Behar determined that the funds originated from the
real estate holding trust properties, Van Gasken demanded return
of the payment.
Based on this evidence, the Court finds that
there was sufficient evidence for a reasonable juror to conclude
that Van Gasken did not authorize the transactions.
IV.
Defendants’ Motion for a New Trial
Defendants also move in the alternative for a new trial.
Those motions are based on the same arguments Defendants relied
on in support of their motions for judgment as a matter of law.
As
discussed
above,
the
evidence
viewed
in
the
light
most
favorable to Van Gasken supports the jury’s verdict, and the
14
Court
may
not
substitute
its
judgment
for
that
of
the
jury
unless the “verdict is against the great, not merely the greater
weight of the evidence.”
Auto-Owners Ins. Co. v. Se. Floating
Docks, Inc., 571 F.3d 1143, 1145, 1155 (11th Cir. 2009) (per
curiam) (internal quotation marks omitted) (reversing district
court’s
grant
of
new
trial
because
jury’s
verdict
was
not
against the great weight of the evidence).
CONCLUSION
In sum, there was sufficient evidence for a reasonable jury
to find in favor of Van Gasken on his conversion claims and his
derivative claim for attorney’s fees.
Defendants’ motions for
judgment as a matter of law (ECF Nos. 293 & 295) are therefore
denied.
The Court also denies Defendants’ alternative motions
for a new trial under Federal Rule of Civil Procedure 59.
IT IS SO ORDERED, this 13th day of February, 2015.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA
15
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