The opinion of the court was delivered by: Byron G. Cudmore, U.S. Magistrate Judge:
Monday, 19 December, 2011 10:23:03 AM
Clerk, U.S. District Court, ILCD
This matter comes before the Court on the United States' Motion for Turnover Order (d/e 98) and United States' Renewed Motion for Turnover Order (d/e 116) (Motion). On April 18, 2008, this Court entered a judgment of conviction against Defendant Paul Kincaid for possession and production of child pornography, in violation of 18 U.S.C. §§ 2251(a) and 2252A(a)(5)(B). Judgment in a Criminal Case (d/e 58). This Court ordered Kincaid to pay $60,000.00 in restitution and a $200.00 special assessment. Id. at 5. The Government then commenced post judgment supplementary proceedings to collect restitution and special assessment. The Government commenced a citation proceeding against third party respondent Steven R. Collins. Citation to Discover Assets Third Party (d/e 74). Collins and Kincaid have lived together since 1974 and have been business partners since late 1978 or early 1979. The Government conducted discovery to ascertain Kincaid's interest in (1) the house and out building in which the two men resided and operated their business, (2) the personal property located on the real estate, and (3) their joint bank accounts. The Government now asks for a turnover order against Collins ordering him to turnover fifty percent of all common property. For the reasons set forth below, the Motion is ALLOWED in part.
Kincaid and Collins began living together in 1974 in Grand Blanc, Michigan. Kincaid was divorced with on-going child support obligations. Collins was single and, apparently, had recently graduated from high school. See Notice of Compliance (d/e 143) attached Deposition of Steven R. Collins on June 15, 2010 (Collins Deposition), at 7, and Deposition of Paul Kincaid on May 20, 2011 (Kincaid Deposition), at 20, 29. At the time, Collins was helping a woman named Edna Smitley maintain and renovate several rental properties and collect rents from tenants. Collins Deposition, at 45; Kincaid Deposition, at 74. Collins testified that Smitley gave him a number of pieces of furniture because he helped her keep up her properties. Smitley also agreed to sell a house to Collins and Kincaid on contract for deed for $25,000. Collins and Kincaid testified that Collins put down $5,000.00 on the purchase price at the time the parties executed the contract. Collins testified that he borrowed the money from his father. Collins Deposition, at 72; Kincaid Deposition, at 30-31.
Collins also purchased several pieces of furniture in June 1974 with the money he received as gifts at his high school graduation. 3rd Party Respondent Steven R. Collins' Response in Opposition to United States' Renewed Motion for Turnover (DOC. # 116) (d/e 119) (Collins Response), Exhibit 105, Affidavit of Steven R. Collins dated November 8, 2010 (2010 Collins Affidavit), ¶¶ 14-15 and Exhibit 102, Furniture Sales Receipt dated June 14, 1974; Third Party Respondent Steven R. Collins' Sur-reply to United States Response (DOC.# 129) (d/e 136) (Collins Sur-reply), Exhibit 148, Affidavit of Lucille Collins, ¶ 9.
Collins states that he maintained both a separate checking account and a joint account with Kincaid while the men lived together in Michigan from 1974 to 1978. Defendant Paul Kincaid's Response to United States Response (Doc. # 129) (d/e 142) (Kincaid Response), Exhibit 186, Affidavit of Steven Collins dated September 9, 2011 (2011 Collins Affidavit), ¶¶ 4, 11.
Collins and Kincaid both worked at Flint Board Tractor when they began living together. Kincaid worked as a bookkeeper until some time in 1975. Kincaid Deposition, at 9, 21. Kincaid became unemployed in 1975, and thereafter in 1975, underwent kidney surgery. Kincaid Deposition, at 9. Kincaid needed money and sold his record collection and an antique oak icebox to Collins. Collins Deposition, at 46. Kincaid had approximately 4,000 records. Kincaid Deposition, at 36. Thereafter, Collins started acquiring records. Collins stated that he had accumulated some 40,000 records, 45s, 78s, and LPs, by the time that they moved from Michigan to Illinois in 1978. Collins continued buying old records up until the mid 1990s. Collins Deposition, at 58; Kincaid Deposition, at 64; 2010 Collins Affidavit, ¶ 8; see Collins Response, Exhibits 74-79, Moving Receipt from Allied Van Lines dated September 13, 1979 (listing over 40 boxes of records moved from Michigan to Illinois).
After Kincaid recovered from kidney surgery in 1975, he went back to school to become a licensed hair dresser. Kincaid was unemployed all of 1976 while he was in school. Kincaid finished school and got his license in 1977. Kincaid Deposition, at 10. Collins also became a licensed hair dresser. Collins and Kincaid then worked as hairdressers in Michigan beginning in 1977. Kincaid Deposition, at 27.
In 1978, Collins and Kincaid decided to move to Illinois. Kincaid grew up in Carlinville, Illinois, and so was familiar with the area. The two men initially lived in Carlinville. In October 1978, Collins purchased a building located at 110 West Union Avenue, Litchfield, Illinois. Collins renovated the building, and in January 1979, Collins and Kincaid opened a hair salon called the Hair Clinic at the 110 West Union location. Collins Deposition, at 9-13.
In October 1979, the two men bought a house and out building located at 502 E. Union Avenue, Litchfield, Illinois (Premises). The Premises was at the corner of Union Avenue and Harrison Street. The purchase price was $55,000. Collins testified that he paid the down payment of $10,000. Collins Deposition, at 8. Collins mother states that Collins borrowed money from his father to make down payments on houses in Illinois. Lucille Collins Affidavit ¶ 10. Collins testified that he personally did the work to renovate the house and the out building located on the Premises.
Collins testified that he and Kincaid agreed when they bought the Premises that Collins would have an 80 percent interest in the Premises and Kincaid would have a 20 percent interest because Collins put up the down payment and agreed to do the work to renovate the Premises. The deed did not indicate that Collins and Kincaid held unequal interests in the Premises, and the two men did not execute any written documents at the time regarding their agreement to hold unequal interests in the Premises. The recorded deed stated that two men held the Premises as joint tenants with rights of survivorship. Collins Deposition, at 36-38.
In 1987, the men moved the Hair Clinic to the out building located on the Premises. Collins Deposition, at 15. The Hair Clinic building faced Harrison Street. The Hair Clinic had a separate address of 410 N. Harrison Street. Collins sold the 110 West Union location some time later. Collins Deposition, at 14.
Collins and Kincaid ran the Hair Clinic as a partnership. They did not have any written partnership documents. Collins Deposition, at 10; Kincaid Deposition, at 13. They kept joint bank accounts. Collins Deposition, at 22-25; Kincaid Deposition, at 15-16. They deposited the proceeds from the business into the joint accounts and operated the business and the house from those accounts. Collins Deposition, at 26; Kincaid Deposition, at 40-41, 45, 51.
Collins and Kincaid bought and sold cars over time. Each car was owned jointly. At the time of Kincaid's arrest in 2006, they owned a 2005 Chevrolet Venture minivan. Collins Deposition, at 32-33; Kincaid Deposition, at 68. Collins sold the minivan in May 2009 for $1,000 less than the balance owing on the purchase loan secured by the vehicle. Collins Deposition, at 34-35.
Collins also had credit card accounts. Collins took out the credit cards in his own name on his own credit, but arranged for Kincaid to be an additional cardholder on the accounts. Collins Deposition, at 27-30.
Collins and Kincaid also ran a disc jockey business called PK the DJ. They performed disc jockey services at weddings, anniversaries, class reunions, and similar private events. The proceeds from the disc jockey business went into the men's joint bank accounts. Collins Deposition, at 27. They operated this business from the late 1970s to the late 1990s. The last gig was in approximately 1997 or 1998. Collins Deposition, at 18; Kincaid Deposition, at 77-79. Kincaid either gave or sold most of the equipment to an individual named Justin Titsworth. Collins Deposition, at 19; Kincaid Deposition, at 79-80. All that remains are two speakers and two turntables. Collins Deposition, at 19. From 1996 to 2005, Collins worked part time as a real estate agent. Collins Deposition, at 16. Collins' earnings from his real estate work went into their joint bank accounts. Collins Deposition, at 26.
In 1994 or 1995, Kincaid's ex-wife commenced actions in Michigan and Illinois to collect unpaid child support from Kincaid. Kincaid was arrested at one point for failure to pay child support. Kincaid Deposition, at 57. The court documents submitted by Kincaid indicate that Kincaid's ex-wife claimed more than $18,000.00 in unpaid back child support. Kincaid Response, Exhibit 181, Kincaid v. Kincaid, Montgomery County, Illinois Circuit Court No. 80-F-8, Excerpts from Order Under Reciprocal Act entered April 10, 1980, and and schedule of unpaid child support from from 1973 through 1993. Collins and Kincaid testified that Collins paid lawyers in Illinois and Michigan to represent Kincaid. Ultimately, the back child support claim was settled on April 12, 1996, for a payment of $8,500.00. Kincaid Response, Exhibit 184, Signature Page of Settlement Order entered April 12, 1996. Collins testified that he paid a total of $15,000.00 to lawyers and for the $8,500.00 settlement. Collins states that he got some of the money by selling his weight room equipment to Lake Williamson Christian Center in Carlinville, Illinois, for $7,500.00. 2011 Collins Affidavit ¶ 12.
In exchange for Collins' payment of attorneys and the settlement, Kincaid executed a quit claim deed on December 30, 1995, conveying all of his interest in the Premises to Collins. Collins Deposition, at 36; Collins Response, Exhibit 1, Quitclaim Deed dated December 30, 1995 (1995 Deed). Collins stated that the $15,000 reflected Kincaid's 20 percent interest in the equity in the Premises. Collins Deposition, at 36. Collins and Kincaid also executed a document three days later, on January 2, 1996, entitled, ...