United States District Court, M.D. Georgia, Columbus Division
CLAY D. LAND, District Judge.
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." Jury Verdict 3 (ECF No. 276). The jury also found that Van Gasken should recover his 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.
John Gill was a pioneer in the pay day loan industry. Looking for a place to invest his profits and minimize his taxes, he set up an elaborate scheme in which he 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 holding trusts. The management company also received revenue generated by certain business holding trusts that are not parties to this litigation. That management company made payments indirectly to John Gill, which were 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 and has been a fugitive ever since. His absence complicated the operation of his intricate "trust-based" real estate empire. Van Gasken and his business associate Kevin Hartshorn established new management companies to manage the rental properties. One of John Gill's brothers, Loren Gill, attempted to fill the void left by John Gill's absence. Acrimony developed between Loren Gill and Van 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 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. 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 of the money used to purchase the Elm Leasing properties was stolen from the real estate holding trusts for which he was trustee and which had the Cornerstone Trust as their beneficiary. 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. E.g., Trial Tr. vol. II, 155:18-22, 200:8-16, Sept. 9, 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. Id. at 191:8-17. 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 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, and she issued checks to Loren Gill totaling that amount. 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" 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 favor of Defendants on Kaitlyn and Lauren Gill's RICO claims. The jury found, however, that Loren Gill and Elm Leasing converted property belonging to Van Gasken in his capacity as trustee of the real estate ...