# Sharpe

> District Court, E.D. North Carolina · May 19, 2026

URL: https://www.frixlaw.com/law-library/cases/11358519

## Case

- **Full name:** United States of America v. Richard T. Sharpe and Sherry J. Peele
- **Court:** District Court, E.D. North Carolina
- **Decided:** May 19, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
WESTERN DIVISION
Case No. 5:23-C V-00353-M
UNITED STATES OF AMERICA, )
Plaintiff,
v. ORDER
RICHARD T. SHARPE, and
SHERRY J. PEELE, )
Defendants.
This matter comes before the court on the Plaintiff's Motion for Partial Summary
Judgment. DE 25. Pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b),
United States Magistrate Judge Robert B. Jones, Jr. issued a Memorandum and Recommendation
(“M&R”), recommending that the court deny the Plaintiff's motion. DE 47. The Plaintiff filed a
timely objection to the M&R.' DE 49. The court finds that it has subject matter jurisdiction over
this action. For the reasons that follow, the court respectfully rejects the M&R in part, and grants
in part and denies in part the Plaintiff's motion. Plaintiffs claims against Defendants and its theory
of joint and several liability will proceed to trial.
I. Procedural History
In this action for recovery of disability benefits under the Railroad Retirement Act,
allegedly overpaid to Defendant Richard T. Sharpe (“Sharpe”’), the United States alleges common
law claims for fraud, conversion, payment under mistake of fact, and unjust enrichment, and claims
for violations of the False Claims Act. DE 1 at 4 55-101. On June 27, 2023, Plaintiff filed a

‘Despite the opportunity to do so, Defendants did not file a response to the objection.

complaint against Defendants, alleging that they had engaged in a “fraudulent course of conduct
and scheme to defraud the United States by falsely claiming and collecting disability benefits.”
DE 1 at 1. Defendants filed an answer on September 27, 2023, raising three affirmative defenses
and, otherwise, denying the factual bases for Plaintiff’s claims.
Plaintiff filed the instant motion on December 9, 2024, requesting that the court grant
summary judgment on its payment by mistake and unjust enrichment claims, the Defendants’
statute of limitation defense, and its theory that Defendant Sherry J. Peele (“Peele”) should be held
jointly and severally liable. DE 26 at 17, 21, 22. On January 15, 2025, Defendants responded to
the motion arguing that (1) the statute of limitations for the claims has lapsed, or that genuine
issues of material fact exist as to whether the statute of limitations has lapsed (DE 34 at 10); (2)
the doctrine of voluntary payment precludes the claims (DE 34 at 6); and (3) genuine issues of
material fact exist as to the underlying support for the claims (DE 34 at 8-9). Defendants also
contend that joint and several liability should not attach to Peele. DE 34 at 9.
The court referred the motion to Judge Jones on October 28, 2025; he held a hearing on
February 11, 2026, and issued the present M&R on February 20, 2026. Judge Jones finds that the
voluntary payment doctrine does not apply, but genuine issues of material fact exist with respect
to Plaintiff’s claims and Defendant’s statute of limitations defense. DE 47. Plaintiff filed a timely
objection in which it contends that Judge Jones (1) improperly permitted Defendants to create
factual issues by identifying discrepancies in their own factual accounts; (2) failed to recognize
that Sharpe’s undisputed failure to report to the Railroad Retirement Board (“RRB”) rendered him
ineligible to receive benefits; and (3) improperly accepted Defendants’ “facts” concerning a 2015
telephone call with an RRB agent to find that a genuine issue of material fact exists for the statute
of limitations defense. See DE 49. Notably, the M&R does not mention Plaintiff’s joint and

several liability theory, and Plaintiff makes no objection to such omission. See id.; see also DE
49,
Upon review of the record, this court questioned whether it lacked the authority to
adjudicate Plaintiff’s claims in favor of review by the Fourth Circuit Court of Appeals, as required
by statute (see 45 U.S.C. § 231g, incorporating 45 U.S.C. § 355(f)), and that disregard of the
statutory requirement for specific findings by the Board under circumstances presented here may
lead to questions concerning due process protections or even the constitutionality of the applicable
statutes themselves. The court directed the parties to file supplemental briefs concerning the
following:
1. Whether Plaintiff's claims are properly before this court given the applicable statute’s
provision that an annuitant’s eligibility for payment of occupational disability benefits
shall cease upon the annuitant’s failure to report certain changes in circumstances,
“except for good cause shown to the Board” (45 U.S.C. § 23 1a(a)(3)), particularly here,
where no administrative review nor hearing occurred. See 45 U.S.C. § 231f (‘any
person aggrieved by a decision on his application for an annuity or other benefit shall
have the right to appeal to the Board”).
2. Whether Plaintiffs claims are properly before this court given that no final
determination has been made by the Railroad Retirement Board concerning the
allegations against Defendants, including whether, “in the judgment of the Board,”
recovery of any erroneous payment “would be against equity or good conscience.” See
45 U.S.C. § 2311.
3. Whether it is proper under the Administrative Procedures Act to forego the procedures
required by applicable regulations for determining the eligibility of a claimant to
receive, or continue receiving, occupational disability benefits. See 20 C.F.R. §§
220.10 — 220.21.
Order, DE 50. The parties each filed a timely brief (DE 51, 52), and the court is now fully apprised.
II. Subject Matter Jurisdiction
Before proceeding to determine whether summary judgment is proper, the court must
assure itself of its jurisdiction to adjudicate the claims in this case. See MDC Innovations, LLC v.
Hall, 726 F. App’x 168, 172 (4th Cir. 2018) (citing Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737,

740 (1976)) (“[A] court is required to satisfy itself of its subject matter jurisdiction even if the
parties do not raise the issue.”). Here, Plaintiff alleges the court’s subject matter jurisdiction under
28 U.S.C. §§ 1331 and 1345. Compl. § 3, DE 1. Section 1331 grants federal courts original
jurisdiction over cases involving federal questions “arising under the Constitution, laws, or treaties
of the United States.” Mayor & City Council of Baltimore v. BP P.L.C.,31 F.4th 178, 197 (4th Cir.
2022) (citing 28 U.S.C. § 1331). Here, Plaintiff alleges claims under the False Claims Act, which,
of course, involve questions arising under federal law and, if Plaintiff were not the United States,
this court’s jurisdiction to hear Plaintiff’s state law claims might arise under 28 U.S.C. § 1367
(granting pendent or “supplemental” jurisdiction over state law claims related to the federal
claims). See Poppleton Now Cmty. Ass’n, Inc. v. La Cite Dev., LLC, -- F.4th --, 2026 WL 1204639,
at *6 (4th Cir. May 4, 2026). However, as the Plaintiff in this case, the United States has invoked,
and may properly invoke, the court’s jurisdiction under Section 1345,” which states:
Except as otherwise provided by Act of Congress, the district courts shall have
original jurisdiction of all civil actions, suits or proceedings commenced by the
United States, or by any agency or officer thereof expressly authorized to sue by
Act of Congress.
28 U.S.C. § 1345. Thus, “federal courts have jurisdiction over any case brought by the United
States as a plaintiff unless Congress has ‘otherwise provided’ for jurisdiction elsewhere.” United
States v. J & E Salvage Co., 55 F.3d 985, 987 (4th Cir. 1995).
Plaintiff argues that the Railroad Retirement Act of 1974, 45 U.S.C. §§ 231-231v (“RRA”),
at issue here, neither abrogates nor repeals Section 1345 and, thus, the court has jurisdiction to
hear its claims in this case. Defendants counter that the RRA and its regulations require that all

Indeed, the Fourth Circuit has ruled that, where federal jurisdiction is based on Section 1345,
other statutes are unnecessary to provide a jurisdictional basis. See U.S. ex rel. Rahman v.
Oncology Assocs., P.C., 198 F.3d 502, 510 (4th Cir. 1999).

benefits disputes be heard and resolved in the first instance by the RRB in accordance with
applicable procedures. The court concludes that the RRA does not abrogate Section 1345, which
provides this court jurisdiction to hear Plaintiff’s claims against Defendants.
Federal courts, including the Fourth Circuit, have long recognized the United States’ right
to bring common law civil actions to collect monies owed to the federal government. See United
States v. Moffitt, Zwerling & Kemler, P.C., 83 F.3d 660, 667 (4th Cir. 1996) (“The right exercised
by the federal government . . . to bring suit at common law [is] a long-standing one.”). For
example, in United States v. Texas, 507 U.S. 529 (1993), the defendants argued that the Debt
Collection Act of 1982 abrogated the government’s right to pursue collection efforts under the
common law, but the Supreme Court rejected this position and found that the United States could
properly bring common law actions to recover prejudgment interest on debts owed by the states.
Id. at 539.
Citing Texas, the Fourth Circuit concluded in Moffitt, supra, that the Comprehensive
Forfeiture Act (CFA) did not preempt the government’s ability to bring a state law conversion
action against a law firm, whose fees were allegedly subject to forfeiture because they were funded
primarily by drug trafficking proceeds. Moffitt, 83 F.3d at 666-67. The Fourth Circuit instructs,
start from the premise that federal statutes do not, by implication, abrogate the government’s
right to bring common law suits.” Jd. at 667. Under the authority granted by Section 1345, the
United States “can bring common law actions ‘claiming in its contractual and proprietary relations
the same protection of the general law, at least, that belong[s] to any other legal person.’” /d.
(citation omitted). Accordingly, “common law actions are available to the government to
supplement those remedies found in federal statutes, as long as the statute does not expressly
abrogate those rights.” Id. (emphasis added).

No party argues that the RRA specifically expresses Congress’ intent to abrogate Section
1345, and the court finds that it does not. Instead, Defendants argue the RRA “requires” that the
RRB not only hear disputes like that alleged here, but also abide by procedures for recovery of
erroneous disability payments in accordance with the Act and its regulations (DE 52 at 2-3);
however, Defendants provide no statutory or case citations supporting this position. The RRA
itself does not require that the RRB hear disputes concerning alleged overpayments and the
recovery thereof. See 45 U.S.C. § 231f(b) (describing the RRB’s “powers and duties”). Rather,
the statute provides only that recovery of any payments found to be erroneous by the RRB may be
made by adjustment in subsequent payments. 45 U.S.C. § 231i(a). The statute also grants the
RRB authority to decline recovery when, in its judgment, the payee is “without fault” or when it
“would be contrary to the purpose” of the RRA or “against equity or good conscience.” 45 U.S.C.
§ 231i(c).? Finally, the “jurisdiction” provision requires that the RRB’s decisions “shall be subject
to judicial review in the same manner . . . as though the decision were a determination . . . under
the Railroad Unemployment Insurance Act.” 45 U.S.C. § 231g. In other words, the RRA requires
judicial review of the RRB’s decisions in a court of appeals. Denberg v. U.S. R.R. Retirement Bd.,
696 F.2d 1193 (7th Cir. 1983), cert. denied, 466 U.S. 926 (1983) (citing 45 U.S.C. § 231g).
None of these provisions abrogates or “repeals” Section 1345. In United States y. Lahey
Clinic Hospital, Inc., the First Circuit found that Section 1345 “can only be limited, as the initial
proviso provides, by (1) an explicit repeal of the statute by an Act of Congress or (2) an implicit

3 This court initially expressed a concern about the provision implicated by this action, 45 U.S.C.
§ 23la(a)(3), which requires that a disability payee provide “satisfactory proof” of his or her
disability “from time to time as prescribed by the Board.” The provision also describes the
consequences of failing to abide by the requirement (i.e., payments “shall cease”); however, the
record in this case indicates that Plaintiff seeks recovery for overpayments only through May 2018,
before any payments “ceased” under this provision (if at all) and, thus, this portion of the provision
appears to be irrelevant.

repeal by total irreconcilability of the two acts.” 399 F.3d 1, 9 (1st Cir. 2005) (citing Colorado
River Water Conservation Dist. v. United States, 424 U.S. 800, 808 (1976)). For an implicit repeal
of § 1345, a party must show that (1) the provisions of § 1345 are in irreconcilable conflict with
the later statute, or (2) the later statute, by clear and manifest intent, covers the whole subject
matter area and was meant as a substitute. /d. at 10. “The intention of Congress to repeal must be
clear and manifest,” and “[r]epeal of a federal statute by implication is disfavored.” Jd. The party
arguing for repeal has the burden to show that the statute has been repealed. Jd.
Defendants make no argument concerning Section 1345 or its repeal and, in any event, the
court finds nothing in the RRA that explicitly repeals Section 1345. Defendants’ argument that,
under the RRA, jurisdiction arises in federal court only upon review of an RRB decision is not
persuasive. See DE 52 at 4. “The United States is not asking the federal courts to review a decision
of the [RRB]; it is bringing an independent action to establish the United States’ right to obtain
restitution of monies wrongfully paid from the public fisc.” Lahey, 399 F.3d at 12. Nothing in the
RRA or its attendant regulations establishes that the RRA is the exclusive means by which the
government may seek recovery of overpayments of disability benefits.‘
Regarding whether the RRA implicitly repeals Section 1345, the court finds none of the
listed provisions imply any such limitation. Again, Defendants mention nothing about whether an
irreconcilable conflict arises between the RRA and Section 1345. The RRA’s provision for judicial
review of the RRB’s decisions does not preclude the United States’ ability to recover erroneous
benefits payments under a different grant of jurisdiction. ““The mere fact that some acts are made

“To the extent that Defendants argue any regulation supporting the RRA mandates that the United
States follow the administrative process, Section 1345 “cannot be repealed by administrative
regulation from an executive branch agency.” Lahey, 399 F.3d at 13; see also id. (“§ 1345 by its
terms states, ‘except as otherwise provided by Act of Congress’; it does not state ‘except as
provided by administrative regulation of an agency.””).

reviewable should not suffice to support an implication of exclusion as to others.” /d. at 14
(quoting Verizon Md., Inc. v. Pub. Serv. Comm. of Md., 535 U.S. 635, 644 (2002)). For the RRA,
Congress has provided an avenue for judicial review of the Board’s decisions; however, that “does
not support an implication that other avenues of judicial review are precluded.” Jd.
In sum, the court has satisfied itself that it has jurisdiction under Section 1345 to hear the
United States’ claims against Defendants in this case.
II. Findings of Fact
Except as noted below, neither party objects to Judge Jones’ “Statement of Undisputed
Facts” (DE 47 at 2-3), and the court finds no clear error. Accordingly, the court adopts the
statement and recites the facts as follows.
This case arises out of Defendant Richard Sharpe’s (“Sharpe”) claims for and receipt of
disability benefits payments under the RRA. DE 27 68-69; Pl. Ex. 15, DE 29-5. Sharpe worked
as a railroad conductor from 1976 (DE 27 § 1) until February 2015 (id. § 52). While working as a
conductor, and thereafter, Sharpe took part in multiple business ventures. /d. 2. Sharpe owns a
Christmas tree farm and sales lot; a wreath business, Carolina Wreath and Farm, Inc. (“Carolina
Wreath”); and rental properties. /d. 2-4, 9, 43. Sharpe uses a single bank account for all of the
income and expenses related to his businesses and rental properties. /d. § 50. Although the focus
of Sharpe’s tree business is Christmas trees and wreaths, Carolina Wreath operates year-round. Id.
4 23. Sharpe sources trees from tree farms around North Carolina, including his own located in
Yancey County and Nash County. /d. §§ 18, 19. Throughout the year, Sharpe plants, trims, and
fertilizes his trees. Jd. § 24. Sharpe’s 2016 tax return indicates that he drove 25,000 miles while
working on behalf of Carolina Wreath. DE 29-1 at 5.

In February 2015, just shy of forty years of employment with the railroad, Sharpe suffered
a head injury. DE 27 § 52. Asa result of this injury, Sharpe developed difficulty reading. Resp.
UMF 4 1, DE 35. In September 2015, Sharpe, with the assistance of his fiancé, Defendant Sherry
Peele (“Peele”), applied for disability benefits through the RRB.” Application for Determination
of Employee’s Disability, DE 1-2; DE 27 §§ 54-58. Unfamiliar with the process, Peele relied on
an RRB representative, Hester Gammage (“Gammage”), to help her complete the disability
application. DE 35 4 15. Over the phone, Gammage asked Peele questions and began filling out
the disability application form AA-d1 (DE 1-2) based on answers Peele provided. DE 35 4 15(e);
DE 36-2 at 6.° Gammage mailed the partially completed AA-dl form to Peele and Sharpe to
complete, sign, and mail back. DE 35 § 15(g). Sharpe signed the form, but he does not recall
doing so because of his injury at the time. DE 27 § 64; DE 35 § 64. The section Sharpe signed
certifies that the signer (Sharpe) will immediately notify the RRB if his condition improves or if
he works, whether for himself or for another. DE 27 § 62. The RRB reviewed and granted Sharpe’s
application, determining he was qualified to receive a disability annuity benefits. Jd § 69.

The RRB administers comprehensive retirement, disability, survivor, unemployment, and
sickness benefit programs for the nation’s railroad workers and their eligible family members
pursuant to the RRA, and the Railroad Unemployment Insurance Act, 45 U.S.C. §§ 351-359. The
RRB generally takes the place of the Social Security Administration for railroad workers and their
families. DE | at 3.
The parties dispute details regarding the substance of the phone call. Defendants assert that
Gammage asked whether Sharpe had a business, and Peele responded by telling Gammage about
Carolina Wreath, the tree lot, and the rental property. DE 35 § 5(h). Peele explained to Gammage
that Carolina Wreath and the tree lot did not make money. Jd. Although the rental property was
generating income, after describing the operation to Gammage as a migrant camp where farmers
pay to house their workers, Gammage informed Peele that it was rental income and therefore it
was not considered and did not count. Jd. Plaintiff asserts Peele gave conflicting information
regarding this phone call, as her sworn interrogatory responses indicate Gammage excluded
Sharpe’s tree and wreath businesses from the form because they were essentially hobbies. DE 37
at 15.

Sharpe’s condition had improved by mid-2017, and his doctor permitted him to continue the work
he had been doing for Carolina Wreath, but Sharpe was not released to return to work as a railroad
conductor. DE 27977. Sharpe never notified the RRB of any improvement in his condition. Id.’
The RRB Office of the Inspector General started investigating Sharpe in October 2019,
following a review of RRB disability annuitants and businesses incorporated in North Carolina.
DE 27 § 92; DE 35 §§ 16, 20. The RRB sent Sharpe a continuing disability report form in the fall
2019, which Defendants completed and submitted on December 10, 2019. DE 1-4; DE 27 § 87.
On the form, Peele, on behalf of Sharpe, certified that Sharpe was not employed, self-employed,
or an owner or co-owner of a business from August 1, 2015 to the present (December 10, 2019).
DE 27 {f 88-91; DE 1-4 at 1, 5, 14.
IV. Legal Standards
A magistrate judge’s recommendation carries no presumptive weight. The court “may
accept, reject, or modify, in whole or in part, the . .. recommendation[ ] . . . receive further evidence
or recommit the matter to the magistrate judge with instructions.” 28 U.S.C. § 636(b)(1); accord
Mathews v. Weber, 423 U.S. 261, 271 (1976). The court “shall make a de novo determination of
those portions of the report or specified proposed findings or recommendations to which objection
is made.” Jd. § 636(b)(1). The court does not perform a de novo review where a party makes only
“general and conclusory objections that do not direct the court to a specific error in the magistrate’s
proposed findings and recommendations.” Stokes v. Berryhill, 294 F. Supp. 3d 460, 462 (E.D.N.C.

The record indicates that letters from the RRB reminding Sharpe of his obligation to report any
changes (including improved condition, commenced or increased work, or increased earnings)
were addressed to him at his P.O. Box in Sharpsburg, NC on November 17, 2016, November 8,
2017, December 20, 2018, and November 12, 2019 (see DE 28-6); however, Peele testified that
she does not recall receiving the letters (DE 28-2 at 53: 20 - 54: 10) and the RRB OIG agent could
not confirm that these reminders were actually sent or received (DE 36-3 at 35: 2-20).
10

2018) (quoting Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir.1982)). Absent a specific and timely
objection, the court reviews only for “clear error” and need not give any explanation for adopting
the recommendation. Diamond v. Colonial Life & Accident Ins. Co., 416 F.3d 310, 315 (4th Cir.
2005).
Neither party objects to the legal standards by which Judge Jones analyzed the Plaintiffs
motion. The court agrees that the proper analysis is under Rule 56 of the Federal Rules of Civil
Procedure. If “the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law” the court shall grant summary judgment. Fed.
R. Civ. P. 56(a). A dispute is “genuine” if the evidence would permit a reasonable jury to find for
the nonmoving party, and “[a] fact is material if it might affect the outcome” of the litigation.
Jacobs v. N.C. Admin. Office of the Courts, 780 F.3d 562, 568 (4th Cir. 2015) (internal quotations
and citations omitted). The court’s role at the summary-judgment stage is not “to weigh the
evidence and determine the truth of the matter” but, rather, “to determine whether there is a genuine
issue for trial.” Anderson v,. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Accordingly, the court
must “resolve all factual disputes and any competing, rational inferences in the light most
favorable” to the nonmoving party. Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003)
(quoting Wightman v. Springfield Terminal Ry. Co., 100 F.3d 228, 230 (1st Cir. 1996)).
When the nonmovant bears the burden of proof at trial, the party seeking summary
judgment bears the initial burden of “pointing out to the district court—that there is an absence of
evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986). If the moving party carries this initial burden, the burden then shifts to the nonmoving
party to point out “specific facts showing that there is a genuine issue for trial.” Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ. P. 56(e)). In so

11

doing, “the nonmoving party must rely on more than conclusory allegations, mere speculation, the
building of one inference upon another, or the mere existence of a scintilla of evidence.” Dash v.
Mayweather, 731 F.3d 303, 311 (4th Cir. 2013). Instead, the nonmoving party must support its
assertions by “citing to particular parts of . . . the record,” or by “showing that the materials cited
do not establish the absence . . . of a genuine dispute.” Fed. R. Civ. P. 56(c)(1); see Celotex, 477
U.S. at 324. “Significantly, a party must be able to present the materials it cites in ‘a form that
would be admissible in evidence,’ and supporting affidavits and declarations ‘must be made on
personal knowledge’ and ‘set out facts that would be admissible in evidence.’” Doe v. Morgan
State Univ., 544 F. Supp. 3d 563, 573 (D. Md. 2021) (quoting Fed. R. Civ. P. 56(c)(2) & (c)(4)).
While “it is the province of the jury to resolve conflicting inferences from circumstantial
evidence[,] [p]ermissible inferences must still be within the range of reasonable probability.” Ford
Motor Co. v. McDavid, 259 F.2d 261, 266 (4th Cir.), cert. denied, 358 U.S. 908 (1958). It is “the
duty of the court to withdraw the case from the jury when the necessary inference is so tenuous
that it rests merely upon speculation and conjecture.” Jd. Accordingly, when the evidence, taken
in the light most favorable to the nonmovant, reveals two equally plausible alternatives, a choice
of one over the other would require a reasonable jury to speculate; in such instance, summary
judgment is proper.
V. Analysis
Plaintiff contends that, by his failure to report, Sharpe became ineligible to receive RRA
occupational disability benefits. The RRA, administered by the RRB, provides that current
railroad employees, who have completed twenty years of service or are at least sixty years of age,
are eligible for disability benefits if their “permanent physical or mental condition is such as to be

12

disabling for work in their regular [railroad] occupation.” 45 U.S.C. § 231a(a)(I)(iv).8 The Act
provides that “[s]uch satisfactory proof shall be made from time to time as prescribed by the Board,
of the disability . . . and of the continuance of such disability.” 45 U.S.C. § 231a(a)(3). “If the
individual fails to comply with the requirements prescribed by the Board as to proof of the
continuance of the disability . . ., his right to [the disability annuity] shall... cease[.]” 45 U.S.C.
§ 23 1a(a)(3).
The RRB has promulgated regulations concerning reporting requirements. A disability
annuity recipient who “is disabled for work in his or her regular occupation” must “promptly tell”
the RRB if his impairment improves, if he returns to any type of work, if he increases the amount
of work he performs, or if his earnings increase. 20 C.F.R. § 220.16. In addition, recipients are
required to file an earnings report for any month in which their earnings exceed a stated limit. 20
C.F.R. § 220.162. “This reporting duty is critical because the RRB ‘conducts continuing disability
reviews to determine whether or not the annuitant continues to meet the disability requirements of
the law.’” United States v. Hill, 119 F.4th 862, 867 (11th Cir. 2024) (quoting 20 C.F.R. §
220.186(a)).
As noted above, Judge Jones concludes that the voluntary payment doctrine does not apply,
but genuine issues of material fact exist with respect to Plaintiff’s claims and Defendants’ statute
0? limitations defense. DE 47. Plaintiff objects to the M&R in two respects: (1) the facts on which
Judge Jones relies to find a genuine triable issue concerning the statute of limitations defense are
irrelevant; and (2) the material factual issues on which Judge Jones relies for Plaintiff's payment

® No party objects to Judge Jones’ finding that this subsection applies to Sharpe’s eligibility for
benefits and the court finds no error.
13

by mistake and unjust enrichment claims were improperly created by Defendants. See DE 49. In
addition, the Plaintiff contends that Defendants should be held jointly and severally liable.
A. Statute of Limitations Defense
The parties agree that the United States’ unjust enrichment and payment by mistake claims
are quasi-contract claims governed by the six-year statute of limitations set forth in 28 U.S.C. §
2415(a).? In this case, Plaintiff filed the Complaint on June 27, 2023; thus, under § 2415(a), any
claims for damages arising before June 27, 2017, would be time barred. However, 28 U.S.C. §
2416 provides that the period during which “the facts material to the right of action are not known
and reasonably could not be known by an official of the United States charged with the
responsibility to act in the circumstances” shall be excluded “for the purpose of computing the
limitations periods established in section 2415.”
Plaintiff contends that it did not know, and reasonably could not have known, until late
2019 that Sharpe’s condition had improved and he may not have been eligible to receive disability
benefits. Defendants counter that Plaintiff became aware of material facts as early as September
2015, during the telephone call between Peele and Gammage, the RRB representative. DE 34 at
10. According to Defendants, the details of the phone call included Peele’s description of the
“wreath/tree lot business” and the “rental property” owned by Sharpe. Jd. Judge Jones found that
the details of the 2015 phone call raise genuine issues of material fact. DE 47 at 14. In its
objection, Plaintiff argues that any information Peele may have provided Gammage in September
2015 is immaterial to the statute of limitations question, because the information was disclosed

As noted by Judge Jones, a question may exist as to whether § 2415(a) is applicable. See DE 47
at 13 n.5 (citing King v. R.R. Ret. Bd., 981 F.2d 365, 367 (8th Cir. 1992)). However, although King
has not been cited in the Fourth Circuit, the parties agree to application of § 2415(a). Accordingly,
for purposes of this analysis, the court will assume that the United States’ claims are subject to the
six-year statute of limitations in § 2415(a).
14

before Sharpe submitted his application and was ultimately approved to receive benefits. DE 49
at 12.
The court finds the undisputed facts and applicable law align with Plaintiff’s position.
Nothing in the statutory language of the RRA suggests that simple ownership of a business, prior
to the receipt of disability payments and without evidence of the claimant’s income or work in that
business, violates the disability annuity policy of the RRA. The RRB approved Sharpe’s benefits
application after considering both the information provided over the telephone and that later
received in writing from Sharpe and Peele. What is material for the unjust enrichment and payment
by mistake claims is when the United States became aware of its allegations that Sharpe’s condition
had improved, that he was working, or that he was earning above the statutory limit after he began
receiving disability benefits.
Defendants have further argued that publicly available information about their companies
sufficiently put the United States on notice of the facts material to the rights of action more than
six years prior to the filing of this suit. DE 34 at 11. Specifically, Defendants note that Carolina
Wreath was “incorporated in 2003,” that its Articles of Incorporation identify Sharpe as the “sole
director of the company,” and that the annual reports filed following its incorporation identify
Sharpe as president and Peele as Secretary of the corporation. /d. Defendants also point to the
Carolina Wreath and Sharpe Tree Farm websites, and the latter’s Facebook page, as evidence that
the United States “had information available to it to bring its claims well before December 2019.”
Id.
Even assuming that the publicly available information identified by Defendants would be
sufficient to satisfy the § 2416 standard (i.e., “material to the right of action’), information in a
public database typically does not suffice to put a party on notice that the limitations period has

15

commenced. Cf United States v. DeFelice, No. CIV-14-415-RAW, 2015 WL 7018018, at *3 (E.D.
Okla. Nov. 10, 2015) (finding that information in the National Missing Persons Data System was
“too attenuated” to satisfy a “should have been known” standard to prevent tolling of statute of
limitations). Furthermore, the Carolina Wreath Articles of Incorporation and its annual reports
identifying Sharpe as president of the company do not describe Sharpe’s involvement in the
business, any improved condition, or any earnings above the statutory limit, much less Sharpe’s
involvement in the tree farm business or the rental property. Finally, Defendants do not offer a
factual description of the Facebook page.
Defendants do not raise genuine issues of material fact as to whether the Plaintiff’s claims
are time barred. Viewed in the light most favorable to Defendants, the facts alleged by Defendants
to have put the United States on notice of the basis of its claims earlier than late 2019 are not
legally sufficient to have done so. Conversely, Plaintiff has demonstrated by undisputed facts that
it did not know, and should not have known, about the possibility of erroneous payments to Sharpe
until the RRB commenced its investigation in October 2019. The court respectfully rejects this
portion of the recommendation and grants Plaintiff's motion for summary judgment on
Defendants’ statute of limitations defense.
B. Plaintiff’s Claims
As to its payment by mistake claim, Plaintiff alleges that the RRB paid disability annuity
benefits to Sharpe from January 1, 2016 through May 28, 2018, under the mistaken belief that
“Sharpe’s condition had not improved, that he was not working, and that he was not earning
substantial income from his work.” DE 26 at 18. In response, Defendants argue that the doctrine
of “voluntary payment” bars Plaintiff’s claim. DE 34 at 6. Specifically, Defendants argue that
Gammage, an RRB employee, was acting as an agent of the RRB when she assisted Peele and

16

Sharpe with Sharpe’s disability claim. /d. at 7. Defendants allege that any information Gammage,
as an agent, collected during the call could be “imputed to the RRB,” and as such, the RRB was
aware of Sharpe’s businesses and paid his disability anyway. /d. Defendants also point to several
alleged factual issues with respect to the elements of Plaintiff's payment under mistake of fact
claim. See DE 34 at 7-8.
Judge Jones found that Defendants’ assertion of the voluntary payment doctrine, which is
an affirmative defense, is untimely and prejudicial to Plaintiff. DE 47 at 10-11.!° No party objects
to this conclusion and the court finds no clear error. Accordingly, this court will not consider
whether the doctrine applies to preclude summary judgment.
Turning to the law governing Plaintiff’s payment by mistake claim, the United States may
recover funds which its agents have “wrongfully, erroneously, or illegally paid” without a statute
to authorize the United States to do so. United States v. Wurts, 303 US 414, 415 (1938).
Accordingly, district courts in the Fourth Circuit have recognized that the United States may
recover overpayments by federal programs through a common law theory of payment by mistake.
See, e.g., United States v. CB&I Areva Mox Services, LLC, No. 1:19-CV-444-TLW, 2020 WL
13920697, at *1 (D.S.C. Dec. 15, 2020); United States v. Brooks, No. 1:22-CV-0101, 2022 WL
1812254, at *1 (E.D. Va., June 1, 2022); United States v. Fadul, No. CIV.A. DKC 11-0385, 2013

© Defendants’ failure to raise the voluntary payment defense in their Answer, or amend their
Answer to include it, results in waiver of the affirmative defense. Rule 8(c) of the Federal Rules
of Civil Procedure requires a party to “affirmatively state any avoidance or affirmative defense.”
Fed. R. Civ. P. 8(c). “Under the accepted interpretation of Rule 8(c)... any matter constituting
an avoidance or affirmative defense to the matters raised in plaintiff's complaint must be pleaded
in a timely manner or it is deemed to be waived.” Pinnix v. SSC Silver Stream Operating Co. LLC,
No. 7:14-CV-161-FL, 2017 WL 4278608, at *1 (E.D.N.C. Sept. 26, 2017) (quoting Westfarm
Assoc. Ltd. P ship v. Washington Suburban Sanitary Comm’n, 66 F.3d 669, 689 (4th Cir. 1995)).
Defendants’ answer, which makes no mention of the voluntary payment affirmative defense, was
filed in September 2023, and they sought no amendments of the pleading before the deadline.
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WL 781614, at *1 (D. Md. Feb. 28, 2013). A claim for payment by mistake of fact “allows the
government to recover funds which its agents have wrongfully, erroneously, or illegally paid.”
Fadul, 2013 WL 781614 at *12 (quoting United States v. Medica—Rents Co., 285 F. Supp. 2d 742,
776 (N.D. Tex. 2003)). For such a claim, “the government is entitled to reimbursement for
payments . . . where it is shown: (1) payments were made (2) under the belief that they were
properly owed; (3) that belief being erroneously formed; and (4) the mistaken belief was material
to the decision to pay.” United States v. Adams, 371 F. Supp. 3d 1195, 1217 (N.D. Ga. 2019). The
government “need not plead that the defendants knew the payments were mistaken.” Jd. at 1218.
Notably, Judge Jones asserts that “[i]n North Carolina, there is not a stand-alone cause of
action for payment by mistake, but those who make a payment by mistake are permitted to bring
an action to recover under the theory of unjust enrichment.” DE 47 at 11 (citations omitted). He
proceeded to determine whether summary judgment was proper by analyzing both claims under
the standards applicable to an unjust enrichment claim in North Carolina. Jd. at 12-13. In its
objection, the United States mentions nothing about this portion of the analysis, but in its motion
for summary judgment, the government noted that it “does not believe there is a meaningful
difference between federal common law and North Carolina law with respect to the claims and
cites to North Carolina law for ease of reference.” DE 26 at 18 n.1. Having no objection to the
legal standards by which Judge Jones evaluated Plaintiff’s claims, and finding no clear error, the
court adopts the same standards here.
“Under North Carolina law, to recover on an unjust enrichment claim, plaintiffs must
prove (1) that they conferred a benefit on another party, (2) that the other party consciously
accepted the benefit, and (3) that plaintiffs did not confer the benefit gratuitously or
officiously (i.e., not conferred by an interference in the affairs of the other party in a manner

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that is not justified in the circumstances).” Mix v. Chemours Co. FC, LLC, 456 F. Supp. 3d
748, 764 (E.D.N.C. 2019) (citations omitted). “[W]hen money is paid to another under the
influence of a mistake of fact, and it would not have been paid had the person making the
payment known that the fact was otherwise, the money may be recovered. The basis of such
recovery is that money paid through misapprehension of facts belongs, in equity and good
conscience, to the person who paid it.” United States v. Jurik, 943 F. Supp. 2d 602, 612-
13 (E.D.N.C. 2013) (quoting Tarlton v. Keith, 250 N.C. 298, 306, 108 S.E.2d 621, 626
(1959)).
No party disputes that Plaintiff conferred a benefit on Sharpe and that Sharpe consciously
accepted the benefit. With respect to element three, however, Defendants argue that genuine issues
of material fact exist as to whether Plaintiff conferred the payments gratuitously or officiously,
specifically, whether because of “Sharpe and Peele’s failure to notify the RRB of Sharpe’s
improved condition, work, and earnings,” the RRB did not “know[ ] Sharpe was able to work and
was earning in excess of the monthly allowable earnings limit.” See DE 34 at 7. Judge Jones
determined that Sharpe may have, in fact, received an overpayment of benefits by his failure to
report his improved condition and increased work; however, Judge Jones concluded that genuine
issues of material fact exist as to whether Sharpe’s earnings increased to more than the monthly
limit and were, thus, reportable. See DE 47 at 16 (“While it is undisputed that Sharpe did not
report additional earnings to the RRB, the court cannot grant the Government’s motion for
summary judgment based on conflicting financial records that create a genuine issue of material
fact.”).
Plaintiff objects to Judge Jones’ conclusion for two reasons: (1) the M&R identifies only
one dispute of fact (i.e., the “conflicting factual accounts regarding Sharpe’s net earnings in

19

documents that he signed, swore out, and/or certified”), and Defendants improperly created such
dispute by identifying discrepancies in their own account of the facts; and (2) the M&R did not
consider Sharpe’s undisputed failure to notify the RRB of his improved condition and work on
behalf of his property rental business and Carolina Wreath. DE 49 at 6-11. Again, Plaintiff
contends that it paid Sharpe occupational disability benefits during the relevant period “under the
mistaken belief that Sharpe’s condition had not improved, he was not working, and he was not
earning substantial income.” DE 26 at 18.
The court finds that, under the prevailing law and regulations, the earnings issue examined
by Judge Jones is relevant to only one question in this case, and genuine issues of material fact
exist as to whether and, if so, when (1) Sharpe’s occupational disability improved, (2) he returned
to or (3) increased work, or (4) his earnings increased, any of which must be found to determine
when (if at all) Sharpe’s obligation to report arose. As noted above, the applicable reporting
regulation provides:
If the annuitant is entitled to a disability annuity because he or she is disabled for work
in his or her regular occupation, the annuitant should promptly tell the Board if—
(a) His or her impairment(s) improves;
(b) He or she returns to any type of work;
(c) He or she increases the amount of work; oer
(d) His or her earnings increase.
20 C.F.R. § 220.16 (emphasis added). The statute by which this regulation was promulgated
requires that, “[i]f the individual fails to comply with the requirements prescribed by the Board as
to proof of the continuance of the disability .. ., his right to any annuity by reason of such disability
shall, except for good cause shown to the Board, cease[.]” 45 U.S.C. § 23 la(a)(3).

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Here, Judge Jones properly found no genuine issue of material fact as to whether Sharpe
made a report to the RRB during the relevant period; Sharpe admittedly did not. See DE 47 at 15
(“Because Sharpe failed to make any such report, he may have received an overpayment of
benefits.””). Judge Jones also concluded that, because the attendant regulations (1) require the
return of disability payments if the employee earns more than a certain amount per month, (2)
permit the imposition of a penalty for failures to report, and (3) allow the Board to make “end-of-
year adjustments,” summary judgment is unwarranted because genuine issues of material fact exist
regarding Sharpe’s earnings. DE 47 at 15-16. The court agrees with Judge Jones’ conclusion but,
as explained below, only with respect to whether Sharpe increased his work and/or earnings and
failed to report the increase(s) to the RRB.
Plaintiff objects to Judge Jones’ conclusion, arguing that “[a] party against whom summary
judgment is sought cannot create a jury issue by identifying discrepancies in his own account of
the facts.” Spriggs v. Diamond Auto Glass, 242 F.3d 179, 191 n.7 (4th Cir. 2001). The Fourth
Circuit has consistently held this proposition to be true. See, e.g., Rohrbough v. Wyeth
Laboratories, Inc., 916 F.2d 970 (4th Cir. 1990); Barwick v. Celotex Corp., 736 F.2d 946 (4th Cir.
1984). In those cases, the factual discrepancy came from affidavits attached to the nonmovant’s
response to the motion for summary judgment. The factual context here, however, is meaningfully
different. The purported factual discrepancy noted by Plaintiff does not arise out of an affidavit
filed by Defendants in response to the present motion but exists between two exhibits appended to
Plaintiff’s own Statement of Facts. See generally DE 29 at Exs. 11, 12, 13, 18, 19, 20. Sucha
discrepancy cannot be characterized as an improper effort on the part of the nonmovants to create
an issue of fact. The court overrules Plaintiff’s objection in this respect.

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Plaintiff also objects that Judge Jones did not evaluate Plaintiff’s arguments that Sharpe
failed to notify the RRB of his improved impairment and/or return to work in his property rental
business and Carolina Wreath. The court agrees and respectfully finds the evaluation incomplete.
It is certainly possible that, if Sharpe’s impairment had improved or Sharpe had returned to work
but he did not increase the amount of his work or earnings, he may still be found to have violated
45 U.S.C. § 231a(a)(3) if he failed to report such events. The applicable regulation, 20 C.F.R. §
220.16, does not require an employee to report an improved impairment and a return to work and
an increase in work or earnings. The statute’s plain language states that an employee’s right to a
disability annuity “shall . . . cease” if the employee “fails to comply with the requirements
prescribed by the Board as to proof of the continuance of the disability.” 45 U.S.C. § 231a(a)(3)
(emphasis added). Certainly, a reported improved impairment or return to work alone might affect
the RRB’s determination as to whether an employee remains “disabled” under the statute and
retains the right to receive annuity payments. Thus, the court adopts the portion of the M&R
concluding that genuine issues of material fact exist as to whether Sharpe failed to report an
increase in work or earnings, but finds it is not the end of the evaluation.
Regarding improved impairment, the court considers definitions set forth in a publicly
available document referenced by the Plaintiff and attached as Exhibit A to the Complaint. Form
RB-1d is an Employee Disability Benefits booklet intended “for use with Form AA-1d,” the
standard application for disability annuity payments for railroad employees like Sharpe. See RB-
1d, DE 1-1. Sharpe certified on his application that he received a copy of the booklet; however,
Peele testified that she never received nor read the booklet. In any event, the booklet informs
applicants about their rights and responsibilities and advises, in relevant part, that, “to receive an
occupational disability annuity, you must . . . be ‘permanently disabled’ for work in your

22

‘regulation railroad occupation.’” Jd. at 6. “Permanently disabled” is defined as “a permanent
medical condition that prevents you from working.” /d. at 23. The booklet also advises that “[t]o
be disabled for all work in your regular railroad occupation means that your condition prevents
you from working in your regular job, although you may be able to do other kinds of work.” Id.
at 24 (emphasis added).
The record reflects that Sharpe suffered his head injury in February 2015, then submitted
an application for occupational disability benefits on September 15, 2015. On the Application for
Determination of Employee’s Disability (Form AA-1d), the form states, in relevant part, “I agree
to immediately notify the RRB: if I work for any employer, railroad or nonrailroad, or perform any
self-employment work; [or] if my condition improves; ....” DE 1-2 at 10. The form bears the
signature, “Richard T Sharpe.” Jd. Plaintiff contends that Sharpe falsely indicated on the
application that he had not worked in the year prior (including self-employment) and did not expect
to work in the forthcoming year; however, Defendants counter that, due to his head injury, Sharpe
does not recall completing the form and that he and Peele were instructed by an RRB agent how
to complete the form, including whether to include information about Sharpe’s businesses. The
court finds genuine issues of material fact exist as to whether the information contained in Sharpe’s
application was improperly reported.
Plaintiff argues that by 2016, Sharpe’s impairment had “sufficiently improved” such that
he was able to work on behalf of his businesses, and he reported to the Internal Revenue Service
that he “materially participated” in the operation of his businesses that year. DE 26 at 10.
Defendants counter that Sharpe testified he did very little work after his injury, and he experienced
episodes, even to the date of his deposition, when he could not work at all. The court finds material

23

factual issues exist as to whether, if at all, Sharpe’s work during this period demonstrates an
improvement in his occupational disability and/or “return” to work.
Plaintiff contends, as conceded by Defendants, that in mid-2017, “Sharpe’s doctor had told
him that although his condition did not allow him to be a conductor, he could engage in other work,
as he had already been doing.” DE 26 at 11. Plaintiff asserts that Sharpe himself testified that,
during the relevant period, he was “pretty much” the only person performing the following
physical work (DE 28-1 at 56: 11-19) for his businesses: planted, trimmed, and fertilized trees;
transported trees from other areas of North Carolina to his farm in Yancey County; loaded smaller
trees onto the truck or trailer; used a chainsaw, pole trimmer, and other equipment—sometimes
climbing a ladder to use the equipment—to trim taller trees; fertilized trees by wearing a backpack
and walking around the multi-acre properties to spray the trees; and cleaned the tree lot at the close
of the season (id. at 58-63). In conjunction with renting his farms, Sharpe maintained buildings
and dug ditches, and for his seasonal labor camp, Sharpe engaged in carpentry, painting, roofing,
electrical, and some plumbing work, as well as installing and removing air conditioners. Sharpe
further testified that, in 2017, 2018, and 2019, his participation in these activities was essentially
the “same.” See DE 28-1, at 141: 1-3, 145: 8-16, 150: 10-12, 156: 4-12. On his tax returns for
2017, 2018, and 2019, Sharpe reported that he “materially participated” in Carolina Wreath and
his property rental and farm businesses. See DE 29-2, 29-3, and 29-4. Additionally, on Sharpe’s
2016 tax return, he reported the company vehicle was driven 22,700 miles (DE 29-1 at 12); Sharpe
further testified that in 2017, he drove 22,150 miles (DE 28-1 at 144: 1-6), and in 2018, he drove
26,500 miles (id. at 152: 4-18).
While this activity certainly demonstrates Sharpe’s ability to engage in some physical
work, it does not conclusively show that Sharpe’s occupational disability “improved,” particularly

24

as Sharpe’s physician in 2017 found that he could not return to work as a railroad conductor. The
court finds genuine issues of material fact exist as to whether and, if so, when Sharpe’s impairment
improved or he “returned” to work during the relevant period and, thus, whether he was obligated
to report such activities.'!! On the record presented, a jury must determine the material factual
issues and, thus, summary judgment is not warranted on Plaintiff’s payment by mistake and unjust
enrichment claims against Sharpe.
C. Joint and Several Liability
As mentioned above, despite the parties’ opposing positions on the matter, Judge Jones did
not address the issue of whether Sharpe and Peele are jointly and severally liable for damages on
Plaintiff’s unjust enrichment and payment by mistake claims, and Plaintiff did not object to this
omission. Although not directly on point, the Fourth Circuit has addressed a situation where a
plaintiff failed to object to a recommendation in which the magistrate judge did not follow the
district court’s order; plaintiff argued “the magistrate judge ‘did not do what [the district court]
ordered him to do,’ and, thus, ‘[t]here [was] nothing’ for [plaintiff] ‘to object to.”” See Diamond,
416 F.3d at 316. The court concluded that plaintiff’s lack of objection failed to put the district
court on notice that the plaintiff wanted de novo review of that portion of the recommendation. /d.
This court recognizes that, in Diamond, the magistrate judge made a specific finding
regarding a claim and, in this case, the magistrate judge made no finding. However, the court
perceives no material difference between the duty to object to a magistrate judge’s finding and a
duty to object to a magistrate judge’s omission. That said, the only action to be taken by the district
court in the absence of a timely, specific objection is to review the magistrate judge’s

“As stated above, Plaintiff argues that Sharpe signed the application indicating he understood his
obligation to report any changes to the RRB, and Peele testified that she did not receive the annual
reminders to report any improvements in Sharpe’s condition.
25

recommendation for “clear error.” In some cases, such review might be appropriate, such as when
a magistrate judge intentionally omits an analysis for a specific reason. However, here, Judge
Jones makes no mention of the omission or, even, of the issue itself. Accordingly, the court must
conclude that the omission was unintentional.
In such situation, the court finds that the interest of justice requires a de novo review of the
issue. Plaintiff argues that the common law permits joint and several liability for multiple
defendants engaged in concerted wrongdoing, even when a plaintiff directly made a payment to,
or conferred measurable benefit on, only one defendant. Specifically, Plaintiff contends that
Sharpe and Peele lived together, and Peele had control and/or signature authority over Carolina
Wreath’s bank account and Sharpe’s personal account. Plaintiff asserts that money from both
accounts was used for business and household purposes, demonstrating that Peele enjoyed the
“fruits” of the disability payments. Finally, Peele engaged in “concerted wrongdoing,” in that she
was involved in applying for Sharpe’s disability annuity and, by completing the 2019 continuing
disability report, concealing his improved condition, work, and earnings from the RRB.
Defendants counter that a genuine issue of material fact exists as to whether the parties
engaged in concerted wrongdoing. According to Defendants, no evidence exists demonstrating
that Peele directly and specifically benefited from the RRB disability payments; rather it shows
only that she lived with Sharpe, was his fiancée, had access to certain bank accounts, and such
bank accounts were used for business and household purposes.
The doctrine of joint and several liability may apply only “when there has been a judgment
against multiple defendants.” McDermott, Inc. v. AmClyde, 511 U.S. 202, 220-21 (1994).
However, the Supreme Court has noted that, for disgorgement actions, such doctrine is “sometimes
seemingly at odds with the common-law rule requiring individual liability for wrongful profits.”

26

Liuv. S.E.C., 591 U.S. 71, 90 (2020). Nevertheless, the Court recognized that “‘[t]he common law
did, however, permit liability for partners engaged in concerted wrongdoing,” even where a
measurable benefit only has been wrongfully conferred upon one of the defendants. Jd. at 90-91
(“The historic profits remedy thus allows some flexibility to impose collective liability.”).
Addressing the facts of that action, the Court noted:
Here, petitioners were married. The Government introduced evidence that Liu
formed business entities and solicited investments, which he misappropriated. It
also presented evidence that Wang held herself out as the president, and a member
of the management team, of an entity to which Liu directed misappropriated funds.
Petitioners did not introduce evidence to suggest that one spouse was a mere passive
recipient of profits. Nor did they suggest that their finances were not commingled,
or that one spouse did not enjoy the fruits of the scheme, or that other circumstances
would render a joint-and-several disgorgement order unjust.
Id. at 91 (citations omitted). The Court then remanded the case for a determination as to “whether
the facts are such that petitioners can, consistent with equitable principles, be found liable for
profits as partners in wrongdoing or whether individual liability is required.” Jd.
Plaintiff cites Liu in support of its position, and Defendants point out that disputed facts in
this case, similar those in to Liu, require review by a factfinder. The court agrees with Defendants.
The term “concerted wrongdoing” implicates a requirement to determine the parties’ intent to
engage in unlawful conduct and, here, on the record presented, insufficient facts exist as to whether
Peele intended for Sharpe to (allegedly) wrongfully receive the disability benefits and, thus, for
the court to find her jointly and severally liable with Sharpe. This matter, along with Plaintiff’s
claims, will proceed to trial.
VI. Conclusion
The court has subject-matter jurisdiction over this action and finds no material factual
issues concerning whether Plaintiff’s claims are barred by the statute of limitations. However, the
record presented demonstrates genuine issues of material fact as to whether the occupational
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disability annuities Sharpe received January 1, 2016 — May 30, 2018 were paid by mistake because
Sharpe failed to report to the RRB any improved impairment, return to work, or increase in work
or earnings after he started receiving the payments. Material factual issues also exist concerning
whether Sharpe and Peale are jointly and severally liable for Plaintiff’s claims. Thus, the court
finds summary judgment is not warranted as to Plaintiff’s claims for mistake of fact and unjust
enrichment and as to Plaintiff’s theory of joint and several liability. All of Plaintiff’s claims against
Sharpe, whether Peele is also liable, and the amount of actual damages owed (if any) on these
claims, will proceed to a jury trial.
Accordingly, the M&R is respectfully ACCEPTED IN PART AND REJECTED IN PART,
and Plaintiff’s Motion for Partial Summary Judgment [DE 25] is GRANTED IN PART AND
DENIED IN PART.
The parties are ORDERED to confer and inform this court’s civil case manager (Rebecca
Chapman 910-679-2068) of the anticipated length ofa trial and their pronosed three (3) trial dates.
Th
SO ORDERED this 1% day of May, 2026.
CAs PAV eae
RICHARDE.MYERSIL
CHIEF UNITED STATES DISTRICT JUDGE

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11358519. Public record. Not legal advice.