United States of America et al v. Compassionate Home Care Services, Inc. et al

Filing 194

ORDER denying 167 Motion for Attorney Fees. Signed by Chief Judge James C. Dever III on 9/8/2017. (Briggeman, N.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
7:14-CV-113-D

UNITEDSTATESOFAMEIDC~

and STATE OF NORTH CAROLINA,

Plaintiffs,

v.
COMPASSIONATE HOME CARE
SERVICES, INC., et. al.,
Defendants.

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ORDER

On March 15, 2017, the court granted in part plaintiffs' motion for partial summary judgment
on liability against defendants Compassionate Home Care Services, Inc., Carol Anders, and Ryan
Santiago [D.E. 157]. In the same order, the court denied without prejudice defendants' motion to
release sequestered, frozen, and garnished funds for payment of defense counsel's attorney's fees
and costs. See id. at 6-7. On April 25, 2017, defendants renewed their motion to release
sequestered, frozen, and garnished funds for payment of defense counsel's attorney's fees and costs
[D.E. 167]. On JUne 15, 2017, plaintiffs responded in opposition [D.E. 180]. On July 3, 2017,
defendants replied [D.E. 185-1]. As explained below, the court denies defendants' motion.
I.
In July, August, and September of20 14, plaintiffs served writs of attachment, sequestration,
and garnishment against various properties and bank accounts defendants owned. See [D.E. 72-73,
76-77, 91-93, 99, 104]. The Clerk of Court for the Eastern District of North Carolina holds

$93,528.28 1 in sequestered rent, and the Robeson County Clerk of Court holds $60,398.45. See
[D.E. 168] 2-3; [D.E. 180] 2.
Attorney Jon Wall represents defendants Compassionate Hom~ Care Services, Inc., Carol
Anders, and Ryan Santiago and filed his notice of appearance in August 2014. See [D.E. 85]. Wall
contends that his clients paid him $6,000 for attorney's fees in 2014, but owe his law firm
approximately $99,563.87 in fees and expenses through July 2017. See [D.E. 167] ~ 9; [D.E. 184]
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4. Wall also states that he cannot continue to represent defendants without compensation. See

[D.E. 167] ~ 11. Thus, defendants request that the court order the release of $50,000 of the
sequestered funds. See id. ~ 12.
District courts have broad discretion to release sequestered, frozen, or garnished funds. See,
~'United States v.

Jamie, No. 2:10-cv-498, 2011 WL 145196, at *1 (S.D. W. Va Jan. 18, 2011)

(unpublished) (collecting cases). The court has authority to release such funds "in the interest of
fundamental fairness if wrongdoing is not yet proven and the restrained property is a defendant's
only means of securing counsel." Id. (quotation omitted). As the first requirement implies,
"[r]eleasing restrained funds to pay attorney's fees is premised on the fact that wrongdoing is not yet
proven when the fee application is made." United States v. Payment Processing Ctr.. LLC., 439 F.
Supp. 2d 435, 440 (E.D. Pa 2006).
Defendants' request fails because liability has been proven. In its order granting in part
plaintiffs' motion for partial summary judgment, the court held that
defendants knowingly billed for services not rendered, knowingly billed for certain
services provided to patients by unlicensed, non-certified aids, and knowingly billed
1

This amount represents the balance of sequestered rent as of April25, 2017. See [D.E.
180] 2n.2.

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for services provided to patients by close family members. Furthermore,
Compassionate Home Care Services, Inc., Carol Anders, and Ryan Santiago falsified
documents to conceal their obligation to repay the government and used false
documents to support false claims previously submitted. Moreover, the falsity ofthe
claims was material to the Medicaid Program's decision to pay Compassionate Home
Care Services, Inc. As such, defendants Compassionate Home Care Services, Inc.,
Carol Anders, and Ryan Santiago violated the federal and North Carolina false claims
acts.
[D.E. 157] 4--5 (citations omitted). With liability proven, plaintiffs have a strong interest in
preserving the sequestered funds to satisfy a future judgment following a determination of damages.
See Jaime, 2011 WL 145196, at *2 ("In this case, the United States clearly has an interest in
preserving the frozen assets to satisfy any future restitution or forfeiture."). Furthermore, defense
counsel entered his appearance after the government encumbered defendants' assets. Having
considered the entire record and balanced the equities, the court denies defendants' renewed motion
to release sequestered, frozen, and garnished funds.

n.
In sum, the court DENIES defendants' renewed motion to release sequestered, frozen, and
garnished funds for payment of attorney's fees and costs [D.E. 167].
SO ORDERED. Thisji_dayofSeptember2017.

J
SC.DEVERID
Chief United States District Judge

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