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United States Court of Appeals For The Ninth Circuit
United States Court of Appeals For The Ninth Circuit
LAWRENCE J. WARFIELD,
Plaintiff-Appellee,
v.
MICHAEL ALANIZ,
Defendant, No. 07-15586
and D.C. No.
CV-03-02390-JAT
LEONARD BESTGEN; BETTY BESTGEN;
ROBERT CARROLL; CHARLES DAVIS;
PATRICK WEHRLY; ANDREA
WEHRLY,
Defendants-Appellants.
LAWRENCE J. WARFIELD,
Plaintiff-Appellant,
v.
MICHAEL ALANIZ, No. 07-16377
Defendant,
D.C. No.
and
LEONARD BESTGEN; BETTY BESTGEN;
CV-03-02390-JAT
7645
7646 WARFIELD v. BESTGEN
Argued and Submitted
October 23, 2008—San Francisco, California
COUNSEL
OPINION
Not only did Robert Dillie promise his investors “a gift for
your lifetime and beyond,” he pledged “preservation of the
American way of life,” “preservation of your assets,” and
“preservation of the American family.” Unless Dillie meant to
refer to the way of life perfected by the Boston swindler
Charles Ponzi and his family,1 we can safely say that Dillie’s
claims were a bit overstated.
1
See United States v. Masten, 170 F.3d 790, 797 n.9 (7th Cir. 1999)
(describing the origin of the Ponzi scheme).
7650 WARFIELD v. BESTGEN
The vehicle by which Dillie was to deliver these dreams
was a charitable gift annuity, sold through the Dillie-
controlled Mid-America Foundation (“Foundation”). From
1996 until 2001, the Foundation sold its charitable gift annui-
ties through financial planners, insurance agents, and others,
including the Defendants in this lawsuit.
After a seven-day jury trial, the jury found for the Receiver
on the federal and state securities law, constructive fraud,
negligence per se, and unjust enrichment claims and for
Defendants on the general negligence, conversion, and fraud-
ulent transfer claims. Defendants were ordered to pay dam-
ages ranging from $31,900 to $109,900 per person.
Defendants timely appealed the judgment, and the Receiver
filed a protective cross-appeal from the district court’s denial
of summary judgment on the fraudulent transfer claim.3
II
Defendants argue that the investors did not make any “in-
vestment of money” within the meaning of Howey because
they lacked the requisite intent to realize financial gain
through the transactions, and intended instead to make chari-
table donations. In addition, and relatedly, Defendants argue
that the investors had no “expectation of profits” because the
anticipated value of the gift annuities at the time of purchase
was always less than the purchase amount. Defendants do not
dispute that there was a “common enterprise” or that any prof-
its were “the product of the efforts of a person other than the
investor,” and we accordingly need not address whether the
Foundation’s charitable gift annuities satisfy these elements
of the Howey test.
III
Id.
(1) Exemption
IV
VI
AFFIRMED.