Kilpatrick appeal denied

The Michigan Court of Appeals has denied Kwame Kilpatrick’s appeal of Judge David Groner’s probation violation order.

You can read the order here.

Kilpatrick dodges hearing – for now

  Former Detroit Mayor Kwame Kilpatrick has gotten a repreive from the Michigan Court Of Appeals, which halted his Friday probation violation hearing, reported The Detroit Free Press:

The ruling also put on hold, at least temporarily, an arrest warrant signed [Thursday] by Wayne County Circuit Judge David Groner for Kilpatrick after he failed to make a $79,011 court-ordered restitution payment stemming from his criminal case along with additional allegations that he failed to give a “complete and accurate accounting” of his wife’s finances.

 The warrant also alleges that Kilpatrick failed to surrender all his tax refunds and did not account for all his gifts and benefits, including the $240,000 lent to him by various business leaders, including Peter Karmanos, Roger Penske, Dan Gilbert and Jim Nicholson.

 Nonetheless, the appellate judges had words for Daniel Hajji, one of Kilpatrick’s attorneys, after Hajji argued this week in court filings that his client

 In the motion to stop the proceedings, Hajji wrote Tuesday that the former Detroit mayor has to maintain an upper-crust lifestyle in Texas because he is trying to sell computer systems to “the privileged and the affluent.”

 Appellate Judge Karen Fort Hood wrote that Hajji’s filing is “unconscionable and does not merit serious consideration.”

 The warrant was requested by the state Department of Corrections and Kilpatrick’s probation officer.

 Additionally, the warrant says Kilpatrick did not turn over his state and city pension, as required by his 2008 plea agreement.

  There was no time frame given for a resolution, but you can bet this case his the highest priority and will be adressed immediately, if not sooner.

Blame It On The Goose, Blame It On The Henny

Back in the day, I interned at a local prosecutor’s office, you know, the one in the largest city in Michigan. There, I watched a drug trial in which a defense attorney defended his drug dealing1 client by saying, and I quote, “My client is a drug dealer, but he’s too good a drug dealer to get caught. There is no way he could have been selling drugs when he was arrested.”

A, er, “nuanced” defense, for sure, but not exactly one you could expect a jury of civies to digest.

1 Allegedly!

Now consider the new defense of Kwame Kilpatrick in his probation appeal. His attorney, Daniel Hajji, filed his brief in the Court of Appeals yesterday, arguing that it’s not fair that Kilpatrick be expected to make such a large restitution payment because it’s absolutely necessary that Kilpatrick live the high life.

"The clientele he must establish a rapport with are likely to be the privileged and the affluent," Hajji said in the motion. "Burgers and beer at the local bar is not going to be sufficient."

[Detroit Free Press]

More from the brief from the Freep:

In a motion asking the appeals court to reconsider and postpone Kilpatrick’s Friday probation-violation hearing in circuit court, Hajji said: "Detroit is being revictimized, and this time, the trial court and the prosecution are lending a hand."

Hajji said it would be no surprise if Kilpatrick loses his job because of the additional scrutiny. "The trial court and the prosecution do not seem to be concerned with getting the restitution paid," he wrote of Wayne County Circuit Judge David Groner.

"The trial court appears to infer that it wants Mr. Kilpatrick to live a middle-class existence, when such an existence is inconsistent with earning a sufficient amount to fulfill his restitution obligation.

"Mr. Kilpatrick is going to have to function in the upper echelons of society."

Maybe Groner should just order Carlita to pay it then, you know, marital assets and all. Besides, Kwame doesn’t know if she has a job to lose.

[UPDATE: Read the motion for yourself here. The Freep story is just the tip of the iceberg.]

6th Cir: ERISA lien can’t be put on future SSD benefits

In Hall v Liberty Life Assurance Co of Boston, the 6th Cir. held that the an ERISA plan couldn’t put an equitable lien on future Social Security benefits to recover overpayment of benefits paid from a long-term disability policy.

Sonya Hall went on disability in 2002. She was required to seek Social Security disability benefits under her disability policy, so that the the social security benefits were to offset a portion of her insurance payments.  Between 2002 and 2006, she was denied benefits several times. Finally, in 2006, she was granted benefits retroactively to 2002 for her disability.

Liberty Life, the disability insurer, sought an equitable lien as restitution for the amount she was overpaid when she received retroactive social security benefits.  The court said that, while Liberty Life was entitled to the equitable lien, by statute, such lien could not be placed on future social security benefits:

We similarly agree with the district court’s conclusion in this regard, and we affirm on the basis of the court’s Opinion dated October 31, 2008, with the exception of the court’s decision to impose an equitable lien directly upon Hall’s future Social Security benefits for reimbursement of the Plan’s overpayments. Such a lien is prohibited by federal statute.

A plan fiduciary is permitted to bring a claim for equitable relief to enforce the terms of the plan. 29 U.S.C. § 1132(a)(3). For restitution of insurer overpayments to be of an equitable nature, the restitution must involve the imposition of a constructive trust or
equitable lien on “particular funds or property in the [insured’s] possession.” [Great-Life]. The plan must identify a particular fund, distinct from an insured’s general assets, and the portion of that fund to which the plan is entitled. [Sereboff]. Courts are not permitted, however, to place a lien directly on the Social Security benefits themselves. 42 U.S.C. § 407(a) … The equitable lien in this case must therefore be limited to a specifically identifiable fund (the overpayments themselves) within Hall’s general assets, with the Plan entitled to a particular share (all overpayments due to her receipt of Social Security benefits, not to exceed the amount of benefits paid).

The lien imposed by the district court deviated from the principles set forth in Gilchrest because the court imposed the lien directly on the Social Security benefits received by Hall. This is impermissible because the Plan has no claim to Hall’s future Social Security benefits prior to the point at which they are in her possession. The Plan conceded this point during oral argument. Accordingly, we find that the district court erred in imposing an equitable lien directly upon Hall’s future Social Security benefits.

Kilpatrick hearing mercifully closes

Closing arguments on the Kwame Kilpatrick restitution case start today, signaling the beginning of the end of this particular ring in the Detroit political circus.

A decision is expected by Jan. 20 – not a day too soon.

DETROIT (AP) — Closing arguments in the restitution hearing of ex-Detroit Mayor Kwame Kilpatrick are scheduled to start in Wayne County Circuit Court.

Kilpatrick’s attorney has said his client’s $6,000 monthly payment to Detroit should be halved because he makes less money as a salesman for Dallas-based Covisint than he did when that amount was set.

Kilpatrick already has made several $3,000 payments.

Prosecutors are expected to argue that Kilpatrick has not been truthful about his finances.

Judge David Groner says he will issue his ruling Jan. 20.