United States District Court, S.D. Indiana, Indianapolis Division
Jane Magnus-Stinson, Chief Judge
seven years ago, a jury found now-pro se Defendant
Timothy S. Durham guilty of wire fraud, securities fraud,
and conspiracy to commit wire and securities fraud. Mr.
Durham has since exhausted his criminal appellate rights, and
the Court reopened this parallel civil proceeding, brought by
the Securities and Exchange Commission (the
“Commission”) in 2016. In August 2017,
this Court denied the Commission's Motion for Summary
Judgment as it related to civil disgorgement.
April 13, 2018, pursuant to an order from the Magistrate
Judge, [Filing No. 106], the Commission filed a
Motion to Determine Disgorgement, which Mr. Durham opposes.
That Motion is now ripe for the Court's review.
outset, the Court must determine the procedural vehicle for
the Motion that is now pending before this Court. One option
would be to treat the Commission's Motion as a motion for
judgment pursuant to Federal Rule of Civil Procedure 52(a).
See Fontaine v. Metro. Life Ins. Co., 800
F.3d 883, 885-86 (7th Cir. 2015) (explaining that an entry of
judgment pursuant to Rule 52(a) is “essentially a trial
on the papers”). However, in this case, there is no
indication that Mr. Durham has stipulated or otherwise
consented to this method of resolving the remaining issues in
the case. See, e.g., Tran v. Minnesota Life Ins.
Co., 2018 WL 1156326, at *5 (N.D. Ill. Mar. 5, 2018)
(deciding a case based on Rule 52(a) where the parties had
“stipulated that the case should be decided based on
the administrative record”); Marshall v. Blue Cross
Blue Shield Ass'n, 2006 WL 2661039, at *21 (N.D.
Ill. Sept. 13, 2006) (permitting the application of Rule 52
“[w]here parties have agreed, as they have in this
case, to review based on a defined set of
documentary/evidentiary materials”). Accordingly, the
Court will apply the standard that is most favorable to the
non-moving party - in this case, Mr. Durham - and will
analyze the Commission's Motion as a motion for summary
judgment under Federal Rule of Civil Procedure 56.
motion for summary judgment asks the Court to find that a
trial is unnecessary because there is no genuine dispute as
to any material fact and, instead, the movant is entitled to
judgment as a matter of law. SeeFed. R. Civ. P.
56(a). As the current version of Rule 56 makes clear, whether
a party asserts that a fact is undisputed or genuinely
disputed, the party must support the asserted fact by citing
to particular parts of the record, including depositions,
documents, or affidavits. Fed.R.Civ.P. 56(c)(1)(A). A party
can also support a fact by showing that the materials cited
do not establish the absence or presence of a genuine dispute
or that the adverse party cannot produce admissible evidence
to support the fact. Fed.R.Civ.P. 56(c)(1)(B). Affidavits or
declarations must be made on personal knowledge, set out
facts that would be admissible in evidence, and show that the
affiant is competent to testify on matters stated.
Fed.R.Civ.P. 56(c)(4). Failure to properly support a fact in
opposition to a movant's factual assertion can result in
the movant's fact being considered undisputed, and
potentially in the grant of summary judgment. Fed.R.Civ.P.
deciding a motion for summary judgment, the Court need only
consider disputed facts that are material to the decision. A
disputed fact is material if it might affect the outcome of
the suit under the governing law. Hampton v. Ford Motor
Co., 561 F.3d 709, 713 (7th Cir. 2009). In other words,
while there may be facts that are in dispute, summary
judgment is appropriate if those facts are not outcome
determinative. Harper v. Vigilant Ins. Co., 433 F.3d
521, 525 (7th Cir. 2005). Fact disputes that are irrelevant
to the legal question will not be considered. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
summary judgment, a party must show the Court what evidence
it has that would convince a trier of fact to accept its
version of the events. Johnson v. Cambridge Indus.,
325 F.3d 892, 901 (7th Cir. 2003). The moving party is
entitled to summary judgment if no reasonable fact-finder
could return a verdict for the non-moving party. Nelson
v. Miller, 570 F.3d 868, 875 (7th Cir. 2009). The Court
views the record in the light most favorable to the
non-moving party and draws all reasonable inferences in that
party's favor. Darst v. Interstate Brands Corp.,
512 F.3d 903, 907 (7th Cir. 2008). It cannot weigh evidence
or make credibility determinations on summary judgment
because those tasks are left to the fact-finder.
O'Leary v. Accretive Health, Inc., 657 F.3d 625,
630 (7th Cir. 2011). The Court need only consider the cited
materials, Fed.R.Civ.P. 56(c)(3), and the Seventh Circuit
Court of Appeals has “repeatedly assured the district
courts that they are not required to scour every inch of the
record for evidence that is potentially relevant to the
summary judgment motion before them, ”
Johnson, 325 F.3d at 898. Any doubt as to the
existence of a genuine issue for trial is resolved against
the moving party. Ponsetti v. GE Pension Plan, 614
F.3d 684, 691 (7th Cir. 2010).
forth in this Court's 2017 Order, this case involves Mr.
Durham's dealings with Fair Finance Company
(“Fair”), [Filing No. 68-7],
where Mr. Durham formerly served as President and Chief
Executive Officer, [Filing No. 68-1 at 95-96]. The
Seventh Circuit summarized Mr. Durham and his business
partners' dealings with Fair as follows:
They used money invested in Fair to support their lavish
lifestyles and to fund loans to related parties that would
never be repaid. When the company's auditors raised red
flags about its financial status, the auditors were fired.
When Fair experienced cash-flow problems, it misled investors
and regulators so it could keep raising capital.
Eventually the scheme began to unravel. One of the
company's directors, himself under investigation in a
separate matter, alerted the FBI that Fair was being operated
as a Ponzi scheme. After an investigation, the FBI seized
Fair's computer servers and arrested Durham, Cochran, and
Snow. A jury ...