Securities and Exchange Commission v. Gary Van Waeyenberghe and First Choice Management Services, Inc.

In the
United States Court of Appeals
For the Seventh Circuit
No. 01-2691
Securities and Exchange Commission,
Plaintiff-Appellee,
v.
Gary Van Waeyenberghe and First Choice
Management Services, Inc.,
Defendants.
Appeal of Arnstein & Lehr
Appeal from the United States District Court
for the Northern District of Indiana, South Bend Division.
No. 3:00cv0446RM--Robert L. Miller, Jr., Judge.
Argued January 24, 2002--Decided March 29, 2002
Before Easterbrook, Ripple, and Diane P.
Wood, Circuit Judges.
Per Curiam. Gary Van Waeyenberghe--
convicted of fraud, tax evasion, and
other offenses, see United States v. Van
Waeyenberghe, No. 87-2048 (7th Cir. Feb.
5, 1988) (unpublished order), and the
target in a murder-for-hire scheme by his
former confederate, see United States v.
Leibowitz, 857 F.2d 373 (7th Cir. 1988)--
wired $150,000 to Arnstein & Lehr as a
retainer for representing him and First
Choice Management Services in litigation.
Arnstein & Lehr did not know it at the
time, but the money came from First
Choice. Within days the sec filed a suit
accusing Van Waeyenberghe and First
Choice of new frauds, and it asked the
district court to freeze the defendants’
assets and recoup any large recent
expenditures, which the sec believed
should be recovered so that the funds
would be available to distribute to
bilked investors if the charges of fraud
should be sustained. Cf. United States v.
Monsanto, 491 U.S. 600 (1989); Caplin &
Drysdale, Chartered v. United States, 491
U.S. 617 (1989); SEC v. Quinn, 997 F.2d
287 (7th Cir. 1993). The district court
issued the requested order, and Arnstein
& Lehr was among those compelled to turn

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over funds received from the defendants.
If Van Waeyenberghe and First Choice
prevail in the suit, then the money will
be returned to Arnstein & Lehr, but if
they lose then the law firm may end up
out of pocket. It has asked us to reverse
the turnover order.
The sec contends that the turnover order
is not a "final decision" appealable
under 28 U.S.C. sec.1291. An antecedent
issue also requires thought: Is the
appeal timely? According to Arnstein &
Lehr, the turnover order was signed and
filed on March 23, 2001. If the order was
appealable at all, Arnstein & Lehr had 60
days to file its notice of appeal. See
Fed. R. App. P. 4(a)(1)(B). Yet the
notice was not filed until June 26.
Arnstein & Lehr calculates the time
differently. It filed a motion on April
16, 2001, asking the district court
toreconsider its decision. This motion
was denied on May 29, and the notice of
appeal--filed within 30 days--therefore
is timely, Arnstein & Lehr contends.
Although a timely motion for
reconsideration suspends the finality of
a judgment, see Fed. R. App. P.
4(a)(4)(A), this motion itself appears to
be untimely. A motion to alter or amend
the judgment must be filed within 10
days. See Fed. R. Civ. P. 59. As a
practical matter this means 14 days,
because weekends are excluded. See Fed.
R. Civ. P. 6(a). But Arnstein & Lehr
filed its motion 24 days after the
district court’s decision. It is
therefore untimely and does not affect
the period for appeal.
In a memorandum filed after oral
argument, Arnstein & Lehr concedes this
but contends that the motion should be
treated as one under Fed. R. Civ. P.
60(b). A motion under Rule 60(b) is on
the list in Rule 4(a)(4)(A) only when
filed within 10 days of the decision, so
this motion does not extend the time for
appeal. Denial of a Rule 60(b) motion may
be independently appealable--although all
that such an appeal presents for decision
is whether the district court properly
applied the Rule 60(b) criteria, not
whether the initial order was correct.
But even this limited review is
unavailable, because the motion did not
come within Rule 60(b) in the first
place. A Rule 60(b) motion is proper only

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after the terminating order of the whole
litigation, see Kapco Mfg. Co. v. C&O
Enterprises, Inc., 773 F.2d 151 (7th Cir.
1985), and that event lies in the future.
The district court’s docket complicates
this analysis. Usually an order is signed
on one day and entered on the docket that
same day, or shortly afterward. If the
two dates differ, it is the date of
docketing that starts the time for
purposes of motions practice and appeals.
See Darne v. Wisconsin, 137 F.3d 484, 486
n.1 (7th Cir. 1998). But three dates are
associated with this order. Arnstein &
Lehr says that the district judge signed
the turnover order on March 23, 2001. The
docket indicates its entry on March 29. A
bracketed notation at the end of the
entry then says: "Entry date 04/02/01".
If the entry date was March 29, then the
motion (and thus the appeal) remains
untimely. If the actual entry date was
April 2, however, then the motion for
reconsideration was timely under Rule 59,
and the notice of appeal likewise is
timely. One or more of these dates may be
a clerical error, making it
correspondingly hard to determine
timeliness. We therefore turn back to the
question whether the order is appealable
in the first place, an issue that may
make it unnecessary to pursue the
timeliness question further.
Arnstein & Lehr contends that the
turnover order is final and appealable
under sec.1291 as a "collateral order";
it does not contend that this order is
appealable as an interlocutory injunction
under 28 U.S.C. sec.1292 or that any
other statute authorizes an appeal.
Contrast Grupo Mexicano de Desarrollo,
S.A. v. Alliance Bond Fund, Inc., 527
U.S. 308 (1999). Nor is this an appeal by
Van Waeyenberghe or First Choice
contending that the order will undermine
or preclude defense of the pending
litigation, and thus can be analogized to
the security bond in Cohen v. Beneficial
Industrial Loan Corp., 337 U.S. 541
(1949). Cf. Herbstein v. Bruetman, 241
F.3d 586 (7th Cir. 2001). Instead it is a
creditor’s appeal, and the only fight is
over interim custody of funds.
The collateral-order doctrine allows
immediate appeal of decisions that are
"conclusive, that resolve important
questions separate from the merits, and

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that are effectively unreviewable on
appeal from the final judgment in the
underlying action." Swint v. Chambers
County Commission, 514 U.S. 35, 42
(1995). It is hard to see how any of
these requirements is satisfied. No
turnover order is "conclusive"; the order
determines only who holds the stakes
while the litigation proceeds. If Van
Waeyenberghe and First Choice prevail,
then the funds will be handed back to
Arnstein & Lehr. This also shows that the
decision cannot be called "unrelated to
the merits"; it is entangled with the
merits. Finally, Arnstein & Lehr will
have a remedy by appeal from any order
treating the funds as available for
distribution to creditors. It may make
then all of the arguments it advances
now. Arnstein & Lehr disputes this final
point, contending that, because it has
withdrawn as counsel, it cannot appeal
from the final judgment. But its appeal
would not be as counsel; it would be as
creditor. The reasons we have canvassed
show why courts routinely treat as non-
final orders to turn assets over to
receivers pending further adjudication.
See, e.g., FTC v. Overseas Unlimited
Agency, Inc., 873 F.2d 1233 (9th Cir.
1989); United States v. Beasley, 558 F.2d
1200 (5th Cir. 1977). We see no good
reason why this appeal should be handled
differently.
Dismissed for want of jurisdiction

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