Sufficiency of Evidence

Listen to this article

7^th Circuit Court of Appeals

Case Name: Coexist Foundation, Inc., v. Michael Fehrenbacher, et al.

Case No.: 16-3332

Officials: WOOD, Chief Judge, and ROVNER and WILLIAMS, Circuit Judges.

Focus: Sufficiency of Evidence

This case involves the unfortunate meeting of a hapless retired baseball player seeking to invest his earnings, a self‐described “con man” who claims to be reformed, persons running a Ponzi scheme, and a man who “had no business handling the investment finances of others.” Coexist Foundation, Inc. v. Fehrenbacher, 2016 WL 4091623, *4 (N.D. Ill. Aug. 2, 2016). The con man is the plaintiff, and it is doubtful that he is truly reformed. The man who had no business handling the investments of others is the primary defendant. The Ponzi scheme was run by a Florida company called Assured Capital, which is not a party to this suit. The person who lost everything is, of course, the unlucky baseball player, whose father was attempting to manage his son’s finances when he fell victim to the scheme here. After a bench trial, the district court determined that the defendants violated a Florida law prohibiting the sale of unregistered securities. The court ordered rescission in the hopes that some of the money would get back to the baseball player, who had obtained a judgment against the con man in separate litigation. The defendants now appeal and we affirm.

On appeal, Fehrenbacher argues that the allegations of the unregistered securities count were not proven. In particular, he asserts that there was no evidence regarding a “security” or a sale of a security; that no scheme or transaction took place in Florida as required by the statute; that Fehrenbacher received no consideration for the deal; that judgment should not have been granted against all defendants; and that the doctrine of unclean hands should have been applied to deprive Coexist of any recovery. Fehrenbacher characterizes his argument as one of statutory interpretation and contends that the standard of review for all issues is therefore de novo. Although we agree that issues of law are reviewed de novo, it is clear from the content of Fehrenbacher’s argument that he is mainly challenging the sufficiency of the evidence presented to the district court on this count. After a bench trial, we review the district court’s factual findings for clear error and its conclusions of law de novo. Fed. R. Civ. P. 52(a)(6); Kelley v. Chicago Park Dist., 635 F.3d 290, 295–96 (7th Cir. 2011). Additionally, we must give “due regard to the trial court’s opportunity to judge the witnesses’ credibility.” Fed. R. Civ. P 52(a)(6).

Affirmed

Full Text

Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.