FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT February 25, 2014
Elisabeth A. Shumaker
Clerk of Court
HAMSTEIN CUMBERLAND MUSIC
GROUP; HOWLIN’ HITS MUSIC, INC.;
HAMSTEIN CUMBERLAND MUSIC
COMPANY; B.H. ASSOCIATES, INC.,
d/b/a Hamstein Music Company; BILL Nos. 12-5177 & 13-5030
HAM, (D.C. No. 4:06-CV-00063-GKF-PJC)
(N.D. Okla.)
Plaintiffs - Appellees,
v.
LORELEI WILLIAMS,
Defendant - Appellant,
and
ESTATE OF JERRY LYNN
WILLIAMS,
Defendant.
ORDER AND JUDGMENT*
Before KELLY, ANDERSON, and MATHESON, Circuit Judges.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Following a bench trial, the district court issued findings of fact and
conclusions of law and entered judgment in favor of the plaintiffs (referred to
collectively as “Hamstein”). Lorelei Williams filed a motion for new trial, which the
district court denied. In case number 12-5177, Ms. Williams appeals the district
court’s denial of her Motion for New Trial. In case number 13-5030, Ms. Williams
appeals the district court’s order compelling her to post an appeal cost bond under
Fed. R. App. P. 7. Hamstein moves to dismiss Ms. Williams’ appeal in case number
12-5177 based on her failure to satisfy the bond requirement. Exercising jurisdiction
under 28 U.S.C. § 1291, we affirm the district court’s bond order, deny Hamstein’s
motion to dismiss, and affirm the denial of Ms. Williams’ motion for new trial.
I. Background
Plaintiff Bill Ham is the owner and officer of the Hamstein companies.
Hamstein is in the music and entertainment business. Hamstein acts as an
“administrator” for songwriters by collecting royalties and paying the songwriters
their share of the royalty revenue. Ms. Williams’ former husband, Jerry Lynn
Williams, was a songwriter. They were married from 1988 until they divorced in
May 2005. Hamstein alleged in this action that Mr. Williams fraudulently transferred
assets to Ms. Williams through a consent divorce decree, in violation of Oklahoma’s
version of the Uniform Fraudulent Transfer Act (“UFTA”), Okla. Stat. tit. 24,
§§ 112-123.
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Beginning in 1989, Hamstein was the administrator under several
co-publishing agreements with Mr. Williams. But by 1998 the relationship had
soured, and Hamstein sued Mr. Williams alleging breach of a 1994 agreement.
Hamstein and Mr. Williams settled that dispute in March 2000. In December of that
year, Hamstein commenced an arbitration proceeding alleging that Mr. Williams had
failed to account for and pay royalties owed under their March 2000 settlement.
Mr. Williams did not initially participate in the arbitration process. In June
2003, he moved to a Caribbean island. The evidence indicated that Mr. Williams
moved away from the United States to avoid service of process. Several witnesses
testified at the trial that Mr. Williams was passionate about and focused on protecting
his assets from Hamstein.
Hamstein obtained a court order compelling Mr. Williams to arbitrate, and in
December 2004, the arbitrator awarded Hamstein $500,000 in attorney fees as a
sanction for Mr. Williams’ failure to respond to discovery. Hamstein filed a
complaint in federal court in Texas to confirm this arbitration award.
The Texas federal court entered a default judgment against Mr. Williams in
February 2005 and confirmed the $500,000 arbitration award with interest. The court
later denied Mr. Williams’ motion to set aside the default and ordered the parties to
complete the pending arbitration within 120 days.
By March 2005, Mr. Williams was in ill health and, in the event of his death,
he wished to impede Hamstein from collecting his assets. He believed that he could
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protect his assets from the arbitration award through a divorce proceeding.
Ms. Williams filed a petition for dissolution of marriage against Mr. Williams on
May 6, 2005, in Tulsa County District Court, and a consent divorce decree was
entered on May 31, 2005, dissolving their marriage and dividing their marital
property.
Ms. Williams’ attorney drafted the property division, including two schedules
labeled “A” and “B.” Schedule B (hereafter “Songbook B”) was an eight-page list of
nearly 400 of Mr. Williams’ songs. The consent divorce decree awarded
Ms. Williams the rights to Songbook B, which had an estimated value of $50,000,
among other assets. Following entry of the decree, Mr. Williams was unable to pay
his debts, and his liabilities exceeded his assets. He was technically insolvent.
In June 2005, the arbitrator entered a final award in favor of Hamstein in the
total amount of $1.149 million, and the Texas federal court entered a final judgment
in favor of Hamstein in September 2005, for $564,162, plus interest and costs.
Mr. Williams passed away in November 2005.
The court found that Mr. Williams intended to use his divorce to hinder, delay,
or defraud Hamstein, and concluded that Mr. Williams’ transfer of assets in the
divorce was a fraudulent transfer as defined in § 116 of the UFTA. The court also
determined that the burden of proof in a UFTA action under Oklahoma law is a
preponderance of the evidence. The court entered judgment in favor of Hamstein and
against Ms. Williams and Mr. Williams’ estate, setting aside, vacating, annulling, and
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avoiding all of the transfers made in the divorce decree as necessary to satisfy
creditors’ claims.
After the district court issued its judgment, Ms. Williams retained new counsel
and filed a motion for new trial under Fed. R. Civ. P. 59 and 60. She acknowledged
that she had not previously raised some of the contentions she advanced in her
post-trial motion. As relevant to this appeal, Ms. Williams argued that Songbook B
could not have been fraudulently transferred to her by Mr. Williams because it was
exempt property under the UFTA. Noting that Ms. Williams could have made her
arguments in her prior briefing, the district court held it was inappropriate for her to
raise them for the first time in her motion for new trial. The court then held,
alternatively, that her exempt property claims were without merit. It also rejected
Ms. Williams’ contention that the burden of proof under the UFTA was by clear,
satisfactory, and convincing evidence, rather than a preponderance of the evidence.
Ms. Williams appeals the district court’s denial of her motion for new trial in case
number 12-5177.
Hamstein filed a motion under Fed. R. App. P. 7 asking the district court to
compel Ms. Williams to post a bond to ensure the payment of costs on appeal. The
district court adopted a report and recommendation of a magistrate judge finding that
Hamstein had already spent $10,000 in appeal-related costs and recommending a
$15,000 bond, which the court ordered her to post. Ms. Williams appeals that order
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in case number 13-5030. When she failed to post a bond, Hamstein moved to dismiss
Ms. Williams’ appeal in case number 12-5177.
II. Discussion
We address Ms. Williams’ appeal of the order requiring her to post an appeal
cost bond, Hamstein’s motion to dismiss the merits appeal, and Ms. Williams’
arguments regarding the motion for new trial in turn.
A. Order Compelling Ms. Williams to Post a $15,000 Appeal Cost Bond
Federal Rule of Appellate Procedure 7 provides that “[i]n a civil case, the
district court may require an appellant to file a bond or provide other security in any
form and amount necessary to ensure payment of costs on appeal.” We review a
district court’s order under Rule 7 for an abuse of discretion. See Westinghouse
Credit Corp. v. Bader & Dufty, 627 F.2d 221, 224 (10th Cir. 1980). “A court abuses
its discretion only when it makes a clear error of judgment, exceeds the bounds of
permissible choice, or when its decision is arbitrary, capricious or whimsical, or
results in a manifestly unreasonable judgment.” Queen v. TA Operating, LLC,
734 F.3d 1081, 1086 (10th Cir. 2013) (internal quotation marks and alteration
omitted).
After reviewing the record, we find the district court did not abuse its
discretion in ordering Ms. Williams to post the $15,000 appeal bond. In reaching
that decision, the court considered (1) her ability to pay a bond; (2) the risk she
would not pay costs assessed on appeal; (3) the merits of her appeal; (4) the costs
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expected to be incurred by the appellees; (5) Ms. Williams’ compliance with court
orders; and (6) whether she demonstrated bad faith or vexatious conduct. The court
weighed each of these factors in Hamstein’s favor. We find no reason to disturb the
court’s factual finding that plaintiffs had already spent close to $10,000 in costs at
the time the bond was requested, and the order of $15,000 was well within the district
court’s discretion given the plaintiff’s estimate that their costs on appeal would be at
least $5,000. We affirm the district court’s bond order.
B. Hamstein’s Motion to Dismiss the Appeal in Case Number 12-5177
Hamstein moves this court to dismiss the appeal in case number 12-5177
because Ms. Williams has not complied with the district court’s order to post the
$15,000 appeal cost bond. We do not doubt that we have the authority to dismiss an
appeal when the appellant fails to comply with a district court’s order to post a Rule
7 bond, but we decline to do so in this case. The appeal is fully briefed, and we elect
to consider it. See Perry v. Pogemiller, 16 F.3d 138, 139 n.1 (7th Cir. 1993).
Hamstein’s motion to dismiss the appeal is therefore denied.
C. Denial of Ms. Williams’ Motion for New Trial
Ms. Williams raises several contentions of error in the district court’s denial of
her motion for new trial. She maintains that she brought her motion under Fed. R.
Civ. P. 59(a), 60(b)(1) and 60(b)(6). We review for an abuse of discretion both a
district court’s denial of a motion for a new trial under Rule 59(a) and its denial of a
motion for relief from judgment under Rule 60(b). See Elm Ridge Exploration Co. v.
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Engle, 721 F.3d 1199, 1216 (10th Cir. 2013) (reviewing denial of Rule 59(a) motion
for new trial); Lindberg v. United States, 164 F.3d 1312, 1322 (10th Cir. 1999)
(reviewing denial of motion under Rule 60(b)(1) & (6)).
Ms. Williams asserts that the district court erred in rejecting as untimely her
arguments that Songbook B was exempt property under the UFTA and that it was
marital property subject to Oklahoma law of tenancy by the entireties. She
acknowledges that she did not advance either of these arguments at trial or in her
post-trial proposed findings of fact or conclusions of law,1 but argues that failure
should be excused because it was the fault of former counsel. She argues it was
necessary for the district court to address the merits of her newly raised claims
regarding Songbook B to correct errors of law in the court’s judgment and to avoid
manifest injustice.
We conclude that the district court did not abuse its discretion in deciding that
her arguments were not raised at the appropriate time. Whether to address arguments
made in a Rule 60(b) motion that could have been but were not raised before entry of
judgment is within the district court’s discretion. Lindberg, 164 F.3d at 1322.
1
Ms. Williams notes that she did assert earlier in the district court proceedings
that certain property was not subject to the UFTA, although not “at a meaningful time
and in a meaningful way.” Aplt. Opening Br. (12-5177) at 46. She admits that she
did not cite in her proposed conclusions of law any of the authorities on exempt
property under the UFTA that she later relied on in her motion for new trial. She also
acknowledges that her summary judgment motion “never argued . . . that the UFTA
precluded the relief sought,” and her trial brief “made no reference to the ‘entireties’
nature of the assets.” Id. at 47.
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Similarly, motions under Rule 59 are not vehicles to “advance arguments that could
have been raised in prior briefing.” Servants of Paraclete v. Does, 204 F.3d 1005,
1012 (10th Cir. 2000). Moreover, Ms. Williams voluntarily chose her attorneys and
is bound by their actions. Gripe v. City of Enid, 312 F.3d 1184, 1188-89 (10th Cir.
2002). To the extent she is dissatisfied with counsel’s performance, her remedy is in
a suit for malpractice.2 Id. at 1189. Because Ms. Williams failed to raise these
contentions at the appropriate time in the district court, we do not address their merits
in this appeal. See Lyons v. Jefferson Bank & Trust, 994 F.2d 716, 722-23 (10th Cir.
1993).
Finally, Ms. Williams complains of the district court’s conclusion that a
preponderance of the evidence was the correct standard for assessing Hamstein’s
UFTA claim. She states in her opening appeal brief that “[t]his issue is irrelevant
unless this Court reverses and remands this case for a new trial,” Aplt. Opening Br.
(12-5177) at 49 n.27, and she reiterates in her reply brief that this issue is “moot”
unless we do so, Aplt. Reply Br. (12-5177) at 16. Because we affirm the district
court’s denial of her motion for a new trial, we do not address this issue.
The judgment of the district court is affirmed.
Entered for the Court
Paul J. Kelly, Jr.
Circuit Judge
2
We take no position on whether such a suit by Ms. Williams has any merit.
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