Free Proposed Jury Instructions - District Court of Arizona - Arizona

1 Guttilla & Murphy, PC 2 3 4
Firm No. 00133300 Ryan W. Anderson (No. 020974) 4150 West Northern Ave. Phoenix, Arizona 85051 (623) 937-2795 [email protected]

5 Attorneys for the Receiver 6 BURTON M. BENTLEY, P.C. 7 8 9
Burton M. Bentley, Esq. (Bar No 00980) 5343 North 16th Street, Suite 480 Phoenix, Arizona 85016 (602) 861-3055 (602) 861-3230 fax [email protected]

10 Attorneys for the Rada Defendants 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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Case 2:03-cv-02390-JAT

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA Lawrence J. Warfield, Receiver, Plaintiff, v. Michael Alaniz, et al. Defendants. Cause No. CV 03-2390 PHX JAT ) ) ) JOINT PROPOSED JURY ) INSTRUCTIONS ) ) ) (Assigned to the Hon. James A. Teilborg) )

JOINT PROPOSED JURY INSTRUCTIONS

Document 532

Filed 10/02/2006

Page 1 of 85

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Section I. Model Instructions Duty of Jury

Ladies and gentlemen: You are now the jury in this case, and I want to take a few 4 minutes to tell you something about your duties as jurors and to give you some 5 instructions. At the end of the trial, I will give you more detailed instructions. Those instructions will control your deliberations. You should not take anything I may say or 6 do during the trial as indicating what I think of the evidence or what your Verdict should be. 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
Manual of Model Civil Jury Instructions, 9th Cir. (2001), cited hereinafter as "FMCJI ___."

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FMCJI 1.2

Claims and Defenses

To help you follow the evidence, I will give you a brief summary of the positions 3 of the parties: 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

The Receiver claims that each defendant: a. b. c. d. e. f. g. h. i. Breached his fiduciary duties to his client; Committed constructive fraud in a confidential relationship; Took secret profits; Was negligent; Committed securities fraud under the federal securities laws; Committed securities fraud under the Arizona securities laws; Received a fraudulent transfer; Converted the property of others; and Is required to disgorge his commissions.

The defendant denies those claims, and defendants contend that the fraudulent transfer claim is barred by the statutes of limitations and by the affirmative defenses of 13 having accepted commissions in good faith and that reasonably equivalent was exchanged when a charitable gift annuity was sold and a commission was paid for that 14 sale. 12 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3
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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

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Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

FMCJI 1.3

What is Evidence

The evidence you are to consider in deciding what the facts are consists of: (1) (2) (3) the sworn testimony of any witness; the exhibits which are received into evidence; and any facts to which the lawyers stipulate.

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

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FMCJI 1.4

What is Not Evidence

The following things are not evidence, and you must not consider them as 3 evidence in deciding the facts of this case: 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

(1) (2) (3) (4)

statements and arguments of the attorneys; questions and objections of the attorneys; testimony that I instruct you to disregard; and anything you may see or hear when the court is not in session, even if what you see or hear is done or said by one of the parties or by one of the witnesses.

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 1.5

Evidence for Limited Purpose

Some evidence may be admitted for a limited purpose only. When I instruct you 3 that an item of evidence has been admitted for a limited purpose, you must consider it only for that limited purpose and for no other. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

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FMCJI 1.6

Direct and Circumstantial Evidence

Evidence may be direct or circumstantial. Direct evidence is direct proof of a fact, 3 such as testimony by a witness about what that witness personally saw or heard or did. Circumstantial evidence is proof of one or more facts from which you could find another 4 fact. You should consider both kinds of evidence. The law makes no distinction between 5 the weight to be given to either direct or circumstantial evidence. It is for you to decide how much weight to give to any evidence. 6 By way of example, if you wake up in the morning and see that the sidewalk is 7 wet, you may find from that fact that it rained during the night. However, other evidence, 8 such as a turned on garden hose, may explain the presence of water on the sidewalk. Therefore, before you decide that a fact has been proved by circumstantial evidence, you 9 must consider all the evidence in the light of reason, experience, and common sense. 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

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FMCJI 1.7

Ruling on Objections

There are rules of evidence that control what can be received into evidence. When a lawyer asks a question or offers an exhibit into evidence and a lawyer on the other side thinks that it is not permitted by the rules of evidence, that lawyer may object. If I overrule the objection, the question may be answered or the exhibit received. If I sustain the objection, the question cannot be answered, and the exhibit cannot be received. Whenever I sustain an objection to a question, you must ignore the question and must not guess what the answer might have been.

Sometimes I may order that evidence be stricken from the record and that you 8 disregard or ignore the evidence. That means that when you are deciding the case, you must not consider the evidence that I told you to disregard. 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

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FMCJI 1.8

Credibility of Witnesses

In deciding the facts in this case, you may have to decide which testimony to 3 believe and which testimony not to believe. You may believe everything a witness says, or part of it, or none of it. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

In considering the testimony of any witness, you may take into account: (1) (2) (3) (4) (5) (6) (7) the opportunity and ability of the witness to see or hear or know the things testified to; the witness' memory; the witness' manner while testifying; the witness' interest in the outcome of the case and any bias or prejudice; whether other evidence contradicted the witness' testimony; the reasonableness of the witness' testimony in light of all the evidence; and any other factors that bear on believability.

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The weight of the evidence as to a fact does not necessarily depend on the number of witnesses who testify.

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE 9
0758-011(55323)

Case 2:03-cv-02390-JAT

Document 532

Filed 10/02/2006

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FMCJI 1.9

Conduct of the Jury

I will now say a few words about your conduct as jurors:

First, you are not to discuss this case with anyone, including your fellow jurors, 4 members of your family, people involved in the trial, or anyone else, nor are you allowed 5 to permit others to discuss the case with you. If anyone approaches you and tries to talk to you about the case please let me know about it immediately; 6 Second, do not read any news stories or articles or listen to any radio or television 7 reports about the case or about anyone who has anything to do with it; 8 Third, do not do any research, such as consulting dictionaries, searching the 9 Internet or using other reference materials, and do not make any investigation about the 10 case on your own; 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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Fourth, if you need to communicate with me simply give a signed note to the [___] bailiff, [___] clerk, [___] law clerk... to give to me; and

Fifth, do not make up your mind about what the verdict should be until after you have gone to the jury room to decide that case and you and your fellow jurors have 14 discussed the evidence. Keep an open mind until then. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10
Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 1.10

No Transcript Available to Jury

At the end of the trial, you will have to make your decision based on what you 3 recall of the evidence. You will not have a transcript of the trial. I urge you to pay close attention to the testimony as it is given. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

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FMCJI 1.11

Taking Notes

If you wish, you may take notes to help you remember what witnesses said. If you 3 do take notes, please keep them to yourself until you and your fellow jurors go to the jury room to decide the case. Do not let note-taking distract you so that you do not hear other 4 answers by witnesses. When you leave, your notes should be left in the [___] courtroom, 5 [___] jury room, [___] envelope in the jury room. 6 Whether or not you take notes, you should rely on your own memory of what was said. Notes are only to assist your memory. You should not be overly influenced by the 7 notes. 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 1.12

Outline of Trial

The next phase of the trial will now begin. First, each side may make an opening 3 statement. An opening statement is not evidence. It is simply an outline to help you understand what that party expects the evidence will show. A party is not required to 4 make an opening statement. 5 The Receiver will then present evidence, and counsel for the defendant may cross6 examine. Then the defendant may present evidence, and counsel for the Receiver may cross-examine. 7 After the evidence has been presented, [___] I will instruct you on the law that applies to the case and the attorneys will make closing arguments, or [___] the attorneys 9 will make closing arguments and I will instruct you on the law that applies to the case. 8 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

After that, you will go to the jury room to deliberate on your verdict.

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 1.13

Burden of Proof (More Probably True)

When a party has the burden of proof on any claim or affirmative defense by a 3 preponderance of the evidence, it means you must be persuaded by the evidence that the claim or affirmative defense is more probably true than not true. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 1.14

Burden of Proof (Clear and Convincing)

When a party has the burden of proving any claim or defense by clear and 3 convincing evidence, it means you must be persuaded by the evidence that the claim or defense is highly probable. Such evidence requires a higher standard of proof than proof 4 by a preponderance of the evidence, but a lower standard of proof than proof beyond a 5 reasonable doubt. 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

You should base your decision on all of the evidence, regardless of which party presented it.

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 2.2

Bench Conferences and Recesses

From time to time during the trial, it may become necessary for me to talk with the 3 attorneys out of the hearing of the jury, either by having a conference at the bench when the jury is present in the courtroom, or by calling a recess. Please understand that while 4 you are waiting, we are working. The purpose of these conferences is not to keep 5 relevant information from you, but to decide how certain evidence is to be treated under the rules of evidence and to avoid confusion and error. 6 We will, of course, do what we can to keep the number and length of these 7 conferences to a minimum. I may not always grant an attorney's request for a 8 conference. Do not consider my granting or denying a request for a conference as any indication of my opinion of the case or of what your verdict should be. 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 2.4

Stipulations of Fact

The parties have agreed to certain facts that have been stated to you. You should 3 therefore treat these facts as having been proved. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 2.1

Cautionary Instruction - First Recess

[Note: Cautionary instruction to be given at first recess.]

Guttilla & Murphy, PC

4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

We are about to take our first break during the trial, and I want to remind you of 4 the instruction I gave you earlier. Until the trial is over, you are not to discuss this case 5 with anyone, including your fellow jurors, members of your family, people involved in the trial, or anyone else, nor are you allowed to permit others to discuss the case with 6 you. If anyone approaches you and tries to talk to you about the case, please let me know about it immediately. Do not read or listen to any news reports of the trial. Finally, you 7 are reminded to keep an open mind until all the evidence has been received and you have 8 heard the arguments of counsel, the instructions of the court, and the views of your fellow jurors. 9 If you need to speak with me about anything, simply give a signed note to the 10 [___] bailiff, [___] clerk, [___] law clerk... to give to me. 11 I will not repeat these admonitions each time we recess or adjourn, but you will be 12 reminded of them on such occasions. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18
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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 2.5

Judicial Notice

[Note: This instruction regarding judicial notice should be given at the time notice is 3 taken.] 4 The court has decided to accept as proved the fact that [e.g., the city of San 5 Francisco is north of the city of Los Angeles], even though no evidence has been introduced on the subject. You must accept this fact as true. 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 2.6

Deposition as Substantive Evidence

[Note: This instruction should be used only when testimony by deposition is offered as 3 substantive evidence.] 4 When a person is unavailable to testify at trial, the deposition of that person may 5 be used at the trial. A deposition is the sworn testimony of a witness taken before trial. The witness is placed under oath to tell the truth and lawyers for each party may ask 6 questions. The questions and answers are recorded. The deposition of [witness], which was taken on [date], is about to be presented to 8 you. Deposition testimony is entitled to the same consideration and is to be judged, insofar as possible, in the same way as if the witness had been present to testify. 9 Do not place any significance on the behavior or tone of voice of any person 10 reading the questions or answers. 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

7

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 2.13

Use of Interrogatories of a Party

[Note: This instruction should be given before interrogatories and answers are read to the 3 jury.] 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

Evidence is now to be presented to you in the form of answers of one of the parties to written interrogatories submitted by the other side. These answers have been given in writing and under oath, before the actual trial, in response to questions which were submitted in writing under established court procedures. The answers are entitled to the same consideration and are to be judged as to credibility and weight, and otherwise considered by you insofar as possible, as if the answers were made from the witness stand.

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 3.1

Duties of Jury to Find Facts and Follow Law

Guttilla & Murphy, PC

4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

Members of the jury, now that you have heard all the evidence [and the arguments 3 of the attorneys], it is my duty to instruct you on the law which applies to this case. A copy of these instructions will be available in the jury room for you to consult if you find 4 it necessary. 5 It is your duty to find the facts from all the evidence in the case. To those facts you 6 will apply the law as I give it to you. You must follow the law as I give it to you whether you agree with it or not. You must not be influenced by any personal likes or dislikes, 7 opinions, prejudices, or sympathy. That means that you must decide the case solely on 8 the evidence before you. You will recall that you took an oath promising to do so at the beginning of the case. 9 In following my instructions, you must follow all of them and not single out some 10 and ignore others; they are all equally important. You must not read into these 11 instructions or into anything the court may have said or done any suggestion as to what verdict you should return--that is a matter entirely up to you. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22
Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

FMCJI 3.2

What is Evidence

The evidence from which you are to decide what the facts are consists of: (1) the sworn testimony of any witness; (2) the exhibits which have been received into evidence; and (3) any facts to which the lawyers have agreed or stipulated.

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 3.3

What is Not Evidence

In reaching your verdict, you may consider only the testimony and exhibits 3 received into evidence. Certain things are not evidence, and you may not consider them in deciding what the facts are. I will list them for you: 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

(1) Arguments and statements by lawyers are not evidence. The lawyers are not witnesses. What they have said in their opening statements, [will say in their] closing arguments, and at other times is intended to help you interpret the evidence, but it is not evidence. If the facts as you remember them differ from the way the lawyers have stated them, your memory of them controls. (2) Questions and objections by lawyers are not evidence. Attorneys have a duty to their clients to object when they believe a question is improper under the rules of evidence. You should not be influenced by the objection or by the court's ruling on it. (3) Testimony that has been excluded or stricken, or that you have been instructed to disregard, is not evidence and must not be considered. In addition some testimony and exhibits have been received only for a limited purpose; where I have given a limiting instruction, you must follow it. (4) Anything you may have seen or heard when the court was not in session is not evidence. You are to decide the case solely on the evidence received at the trial.

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE 24
0758-011(55323)

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Document 532

Filed 10/02/2006

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FMCJI 3.6

Credibility of Witnesses

In deciding the facts in this case, you may have to decide which testimony to 3 believe and which testimony not to believe. You may believe everything a witness says, or part of it, or none of it. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

In considering the testimony of any witness, you may take into account: (1) the opportunity and ability of the witness to see or hear or know the things testified to; (2) the witness' memory; (3) the witness' manner while testifying; (4) the witness' interest in the outcome of the case and any bias or prejudice; (5) whether other evidence contradicted the witness' testimony; (6) the reasonableness of the witness' testimony in light of all the evidence; and (7) any other factors that bear on believability.

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The weight of the evidence as to a fact does not necessarily depend on the number 16 of witnesses who testify. 17 18 19 20 21 22 23 24 25 26 27 28 25
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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 3.7

Opinion Evidence, Expert Witnesses

You have heard testimony from person who, because of education or experience, 3 are permitted to state opinions and the reasons for those opinions. 4 Opinion testimony should be judged just like any other testimony. You may accept it or 5 reject it, and give it as much weight as you think it deserves, considering the witness' education and experience, the reasons given for the opinion, and all the other evidence in 6 the case. 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 3.9

Charts and Summaries Not Received in Evidence

[Note: This instruction applies only where the charts and summaries are not received into 3 evidence and are used for demonstrative purposes.] 4 Certain charts and summaries that have not been received in evidence have been 5 shown to you in order to help explain the contents of books, records, documents, or other evidence in the case. They are not themselves evidence or proof of any facts. If they do 6 not correctly reflect the facts or figures shown by the evidence in the case, you should disregard these charts and summaries and determine the facts from the underlying 7 evidence. 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 3.10

Charts and Summaries in Evidence

Certain charts and summaries have been received into evidence to illustrate 3 information brought out in the trial. Charts and summaries are only as good as the underlying evidence that supports them. You should, therefore, give them only such 4 weight as you think the underlying evidence deserves. 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 3.11

Two or More Parties ­ Different Legal Rights

You should decide the case as to the Receiver and each defendant separately. 3 Unless otherwise stated, the instructions apply to all parties. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 4.1

Duty to Deliberate

When you begin your deliberations, you should elect one member of the jury as 3 your presiding juror. That person will preside over the deliberations and speak for you here in court. 4 5 6 Each of you must decide the case for yourself, but you should do so only after you have considered all of the evidence, discussed it fully with the other jurors, and listened 8 to the views of your fellow jurors. 7 Do not be afraid to change your opinion if the discussion persuades you that you 10 should. Do not come to a decision simply because other jurors think it is right. 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

You will then discuss the case with your fellow jurors to reach agreement if you can do so. Your verdict must be unanimous.

9

It is important that you attempt to reach a unanimous verdict but, of course, only if each of you can do so after having made your own conscientious decision. Do not 12 change an honest belief about the weight and effect of the evidence simply to reach a 13 verdict. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30
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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 4.2

Use of Notes

Some of you have taken notes during the trial. Whether or not you took notes, you 3 should rely on your own memory of what was said. Notes are only to assist your memory. You should not be overly influenced by the notes. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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1 ST 2 3 4 5 6 7 8 9 10 11
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4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

FMCJI 4.3

Communication with Court

If it becomes necessary during your deliberations to communicate with me, you may send a note through the [___] bailiff, [___] clerk, [___] law clerk, signed by your presiding juror or by one or more members of the jury. No member of the jury should ever attempt to communicate with me except by a signed writing; and I will communicate with any member of the jury on anything concerning the case only in writing, or here in open court. If you send out a question, I will consult with the parties before answering it, which may take some time. You may continue your deliberations while waiting for the answer to any question. Remember that you are not to tell anyone--including me--how the jury stands, numerically or otherwise, until after you have reached a unanimous verdict or have been discharged. Do not disclose any vote count in any note to the court.

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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FMCJI 4.4

Deadlocked Jury

A verdict form has been prepared for you. [Any explanation of the verdict form 3 may be given at this time.] After you have reached unanimous agreement on a verdict, your presiding juror will fill in the form that has been given to you, sign and date it, and 4 advise the court that you are ready to return to the courtroom. 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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FMCJI 4.5

Burden of Proof (More Probably True)

Burdon of proof means burden of persuasion. On any claim or defense, the party 3 who has the burden of proof must persuade you, by the evidence. In determining whether a party has met this burden, consider all the evidence that bears on that claim, regardless 4 of which party produced it. 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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FMCJI 5.1

Burden of Proof ­ Preponderance of the Evidence

When a party has the burden of proof on any claim or affirmative defense by a 3 preponderance of the evidence, it means you must be persuaded by the evidence that the claim or affirmative defense is more probably true than not true. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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FMCJI 5.2

Burden of Proof ­ Clear and Convincing Evidence

When a party has the burden of proof on any claim or affirmative defense by clear 3 and convincing evidence, it means you must be persuaded by the evidence that the claim is highly probable. This standard is more exacting than the standard of more probably 4 true than not true, but it is less exacting than the standard of proof beyond a reasonable 5 doubt. 6 You are to use the standard of more probably true than not true for all claims in this case except those for on which you are specifically instructed that the burden of 7 proof is the standard of clear and convincing evidence. 8 In determining whether a party has met any burden of proof, you will consider all 9 the evidence, whether presented by Receiver or the defendants. 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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FMCJI 5.3

Complete Affirmative Defense

On any claim, if you find that each of the elements on which the Receiver has the 3 burden of proof has been proved, your verdict should be for the Receiver on that claim, unless you also find that the defendant has proved an affirmative defense, in which event 4 your verdict should be for the defendant on that claim. 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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FMCJI 4.5

Additional Instructions of Law

[Note: Use this oral instruction for giving a jury instruction to a jury while it is 3 deliberating.] 4 At this point I will give you a further instruction. By giving a further instruction at 5 this time, I do not mean to emphasize this instruction over any other instruction. You are not to attach undue importance to the fact that this was read separately to you. You shall consider this instruction together with all of the other instructions that 7 were given to you. 8 [Insert text of new instruction.] 9 You will now retire to the jury room and continue your deliberations. 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

6

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1 ST 2 3

FMCJI 4.6

Deadlocked Jury

[Note: For use if jury is deadlocked.]

Members of the jury, you have advised that you have been unable to agree upon a 4 verdict in this case. I have decided to suggest a few thoughts to you. 5 As jurors, you have a duty to discuss the case with one another and to deliberate in 6 an effort to reach a unanimous verdict if each of you can do so without violating your individual judgment and conscience. Each of you must decide the case for yourself, but 7 only after you consider the evidence impartially with your fellow jurors. During your 8 deliberations, you should not hesitate to reexamine your own views and change your opinion if you become persuaded that it is wrong. However, you should not change an 9 honest belief as to the weight or effect of the evidence solely because of the opinions of 10 your fellow jurors or for the mere purpose of returning a verdict. 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

All of you are equally honest and conscientious jurors who have heard the same evidence. All of you share an equal desire to arrive at a verdict. Each of you should ask 12 yourself whether you should question the correctness of your present position. 13 I remind you that in your deliberations you are to consider the instructions I have 14 given you as a whole. You should not single out any part of any instruction, including 15 this one, and ignore others. They are all equally important. 16 17 18 19 20 21 22 23 24 25 26 27 28 39
Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

You may now retire and continue your deliberations.

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

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1 ST 2 3 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

FMCJI 21.1 Securities-Misrepresentation-Elements and Burden of Proof (15 U.S.C. § 78j(b))

On the Receiver's claims for violations of federal securities law, the Receiver has the burden of proving each of the following elements by a preponderance of the evidence: 1. the defendant made an untrue statement of a material fact or omitted a material fact necessary under the circumstances to keep the statements that were made from being misleading in connection with the trading of securities; the defendant acted knowingly; the defendant used or caused the use of the mail or telephone in connection with the trading of securities whether or not the mail or telephone was used to make an untrue statement or a material omission; the defendant's client reasonably relied on defendant's untrue statement of a material fact or defendant's failure to state a necessary material fact in purchasing the Mid-America annuity; and the defendant's client suffered damages as a result of the defendant's conduct.

2. 3.

12 13 14 15 16

4.

5.

If you find that each and all of the elements on which the Receiver has the burden of proof has been proved, your verdict should be for the Receiver. If, on the other hand, 17 the Receiver has failed to prove any of these elements, your verdict should be for the 18 defendant. 19 Note: Non-substantive alterations stipulated by the Receiver and the Rada Defendants. 20 21 22 23 24 25 26 27 28 40
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1 ST 2 3

FMCJI 21.2 Securities-Misrepresentation or Omission and MaterialityDefinitions (15 U.S.C. §§ 78j(b), 77k)

A fact stated or omitted is material if there is a substantial likelihood a reasonable buyer or seller of annuities would consider the fact important in deciding whether or not 4 to buy or sell a particular annuity. 5 Whether a fact stated or omitted is material depends on the facts as they existed at 6 the time of the statement or omission. 7 Note: In first paragraph, "securities" and "security" deleted, and "annuities" and 8 "annuity" inserted, as stipulated by the Receiver and the Rada Defendants. 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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FMCJI 21.3 Securities- Scienter-Knowledge-Definition (15 U.S.C.§ 78(J)(B))

A defendant acts knowingly when the defendant makes an untrue statement with 3 the knowledge that the statement was false or with reckless disregard for whether the statement was true, or the defendant omits necessary information with the knowledge that 4 the omission would make the statement false or misleading or with reckless disregard for 5 whether the omission would make the statement false or misleading. 6 Reckless means highly unreasonable conduct that is an extreme departure from ordinary care, presenting a danger of misleading Mid-America Annuitants, which is 7 either known to the defendant or is so obvious that the defendant must have been aware 8 of it. 9 Note: In second paragraph, "investors" deleted and "Mid-America Annuitants" inserted, 10 as stipulated by the Receiver and the Rada Defendants. 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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RAJI (Civil) 4th 2- Negligence 1- Violation of Statute (Negligence Per Se)

If you find from the evidence that a defendant has violated a federal or state law, 3 that defendant is negligent. You should determine whether that negligence was a cause of injury to the Receiver. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
2

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
Revised Arizona Jury Instructions (Civil), 4th Edition (2005), cited hereinafter as "RAJI (Civil) 4th ____."

43
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1 ST 2

RAJI (Civil) 4th- Fault 2- Definition of Causation

Before you can find a defendant at fault, you must find that either (a) violation of 3 the federal or state laws, was a cause of injury to the Receiver, or (b) the defendant's failure to adhere to the standards of defendant's profession was a cause of injury to the 4 Receiver. 5 A defendant caused an injury if the defendant's actions helped produce the injury 6 and if the injury would not have happened without such actions. 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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RAJI (Civil) 4th Fault 4- Statement of Liability Issues (No Comparative Fault)

If you find a defendant was not at fault, then your verdict must be for that 3 defendant, but if you find a defendant was at fault, then that defendant is liable to the Receiver and your verdict must be for the Receiver. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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_________________________________ UNITED STATES DISTRICT JUDGE
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1 ST RAJI (Civil) 4th Negligence 10- Willful or Wanton Conduct (Aggravated Negligence) 2 3 4 5 The Receiver claims that the defendants engaged in willful or wanton conduct. This type of fault involves aggravated negligence.

Willful or wanton conduct is action or inaction with reckless indifference to the results, or to the rights or safety of others. The defendant is recklessly indifferent if the 6 defendant knows or a reasonable person in the defendant's position ought to know that: 7 8 9 10 (2) The risk is so great that it is highly probable that harm will result. If you find that the Receiver willfully or wantonly caused the Receiver's injury, and that the defendant was at fault, then you should not determine relative degrees of 11 fault. However, you may find for the defendant or for Receiver, as you deem fit.
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

(1) The action or inaction creates an unreasonable risk of harm; and

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 46
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_________________________________ UNITED STATES DISTRICT JUDGE
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1 ST 2

RAJI (Civil) 4th Commercial Torts 2- Fiduciary Duty (Causation)

Before you can find the defendant liable on the breach of fiduciary duty claim, you 3 must find that the defendant's breach was a cause of the damages for which the Receiver seeks recovery. 4 5 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

A breach of fiduciary duty is a cause of damages if it helps produce the damages and if the damages would not have occurred without the breach.

12 13 14 15 16 17 18 19 20 21 22 23 DATED: _______________________ 24 25 26 27 28 47
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1 DF 2

FMCJI 6.11 Independent Contractor -- Definition

An independent contractor is a person who performs services for another person 3 under an express or implied agreement and who is not subject to the other's control, or right to control, the manner and means of performing the services. In this case, the Rada 4 Defendants are claiming to be independent contractors, not employees of Mid-America 5 companies, and not subject to the control of Robert Dillie or the Mid-America companies in connection with the sale of charitable gift annuities. 6 Plaintiff's Objection: 7 8 Irrelevant. 9 The use of the monolithic term "Rada Defendants" improperly contradicts the stipulated10 to Jury Instruction No. 3.11 (FMCJI)("You should decide the case as to each defendant separately...."), requires the Receiver to prove the elements of his claim against all of the 11 Rada Defendants to obtain relief from any of the Rada Defendants, obfuscates each Rada Defendant's obligation to establish his or her own defenses, and ignores any defendant 12 not included as a Rada Defendant. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 48
Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

Guttilla & Murphy, PC

4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

Page 48 of 85

1 2 3

Section II: Non-Model Stipulated Instructions Non-Model Stipulated Instruction No. 1--Explanation of Jury Instructions

A jury instruction informs the jury of the applicable law to the facts of the case 4 without misleading the jury. The purpose of a jury instruction is to enable the jury to 5 comprehend the case clearly and arrive at a just, fair and correct verdict. Simply put, jury instructions are statements of the law governing the case to be followed by the jury. 6 Comment: 7 8 Northrop Corp. v. General Motors Corp., 807 N.E. 2d, 94 (Ind. App. 2004) 9 SDDS, Inc. v. State, 650 N.W. 2d 1, 8 (S.D. 2002) 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

Villines v. Mier, 58 S.W. 3d 921, 924 (Mo. App. S.D. 2001)

Black's Law Dictionary, 7th Ed., defines jury instruction as "a direction or guideline that a judge gives a jury concerning the law of the case." Black's Law Dictionary, Gardner, th 13 Bryan, Editor (7 ed. 1999). 12 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 49
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_________________________________ UNITED STATES DISTRICT JUDGE
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1 Non-Model Stipulated Instruction No. 2--Constructive Fraud- General 2 If a relation of trust and confidence exists between two parties so that one of them 3 places peculiar reliance in the trustworthiness of another, the latter is under a duty to make a full and truthful disclosure of all material facts and is liable for misrepresentation 4 or concealment. If there is such a duty, the breach of this duty gives rise to an action in 5 constructive fraud. 6 Constructive fraud is a breach of a legal or equitable duty which, without regard to moral guilt or intent of the defendant, the law declares fraudulent because the breach 7 tends to deceive others, violates public or private confidences, or injures public interests. 8 Constructive fraud in this context means that a negligent omission of a regulatory requirement or noncompliance with a regulation causes prejudice to persons whom the 9 regulation was intended to protect. 10 Source: Taeger v. Catholic Family & Cmt'y Servs., 995 P.2d 721 (Ariz.App. 1999) 11 (constructive fraud); Rhoads v. Harvey Publications, Inc., 700 P.2d 840 (Ariz.App. 1984) (constructive fraud, burden of proof). 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 50
Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

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4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

Page 50 of 85

1 Non-Model Stipulated Instruction No. 3--Constructive Fraud 2 The defendants admit to selling Mid-America Charitable Gift Annuities without a 3 securities license, which license is a regulatory requirement of federal and state securities laws. Accordingly, if you find a defendant owed a duty that gives rise to an action in 4 constructive fraud, then you must find that the defendant breached that duty by violating 5 federal and state securities laws. 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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1 Non-Model Stipulated Instruction No. 4--Negligence- General 2 If you find by a preponderance of the evidence that a defendant owed a duty to the 3 Receiver, breached that duty, and, in so breaching, caused injury to the Receiver, then the defendant is liable to the Receiver for negligence. 4 5 Source: See Wisener v. State, 598 P.2d 511, 514 (Ariz. 1979)(providing elements of negligence action and burden of proof). 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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_________________________________ UNITED STATES DISTRICT JUDGE

Page 52 of 85

1 Non-Model Stipulated Instruction No. 5--Negligence- Professional Standard of Care 2 If the defendant held him- or herself out to the public as possessing special 3 knowledge, skill or expertise, then the defendant must perform his/her activities according to the standard of his profession. If the defendant does not, the defendant may 4 be held liable under negligence for the damage caused by the defendant's failure to 5 adhere to the standard. 6 Source: Darner Motor Sales, Inc. v. Universal Underwriters Ins. Co., 682 P.2d 388, 402403 (Ariz. 1984). 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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_________________________________ UNITED STATES DISTRICT JUDGE
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1 2

Non-Model Stipulated Instruction No. 6--Arizona Securities Law- General

For the Receiver to prevail on his claim for fraud under the Arizona securities 3 laws, the Receiver must show the defendant, in connection with the offer or sale of MidAmerica Charitable Gift Annuities, directly or indirectly did any of the following: 4 5 6 7 8 3. 1. 2. Employed any device, scheme or artifice to defraud. Made any untrue statement of material fact, or omitted to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. Engaged in any transaction, practice or course of business which operates or would operate as a fraud or deceit.

9 Source: A.R.S. § 44-1991. 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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1 Non-Model Stipulated Instruction No. 7--Arizona Securities Law- Knowledge 2 The Receiver does not need to prove the defendant knew that an untrue statement 3 made by the defendant was untrue. The Receiver must prove merely that the statement was untrue, material and misleading. 4 5 Source: Aaron v. Fromkin, 994 P.2d 1039, 1042 (Ariz.App. 2000) (plaintiff's burden). 6 7 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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_________________________________ UNITED STATES DISTRICT JUDGE
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1 Non-Model Stipulated Instruction No. 8--UFTA- Actual Intent 2 3 4 5 6 7 The law entitles the Receiver to recover fraudulent transfers made with actual intent to defraud the amount of the commission paid to a defendant unless the defendant proves the existence of the affirmative defense of good faith for reasonably equivalent value or that the transfer occurred more than four years before the Receiver filed his Complaint and that the Receiver's Complaint was filed more than one year after the Receiver discovered the existence of the claim. The Court has found the Receivership Entities operated as a fraudulent Ponzi scheme. Accordingly, the transfers were made by Mid-America with the intent to defraud.

8 Source: Amended Order Supercedes [sic] August 1, 2006, Order, §§ 2(A)(1)(b) (finding Mid-America opeated Ponzi scheme); Warfield v. Byron, 436 F.3d 551, 556 (5th Cir. 9 2006) (Ponzi scheme insolvent from inception); In re Rodriquez, 209 B.R. 424, 430 10 (Bankr. S.D.Tex. 1997)(defining Ponzi scheme); A.R.S. § 44-1008(A); A.R.S. § 441009(1)(statute of repose). 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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_________________________________ UNITED STATES DISTRICT JUDGE

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1 Non-Model Stipulated Instruction No. 9--UFTA- Constructive Fraud 2 The Court has found and the law entitles the Receiver to recover constructively 3 fraudulent transfers received after December 3, 1999, regardless of intent, if (1) the Receivership Entities did not receive reasonably equivalent value for the payment of 4 commissions to the defendants, and (2) either: 5 a. the Receivership Entities were engaged in a business for which their 6 remaining assets were unreasonably small in relation to the business.; or 7 8 9 10 b. the Receivership Entities intended to incur, or believed or reasonably should have believed that it would incur, debts beyond its ability to pay as they became due.

The Court has determined that the Receivership Entities operated as a Ponzi scheme, which schemes are insolvent from their inception. Accordingly, the 11 Receivership Entities were insolvent at the time of the transfers to the defendants.
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Source: A.R.S. § 44-1004(A)(2); Amended Order Supercedes [sic] August 1, 2006, Order; Spanier v. United States Fid. & Guar. Co., 623 P.2d 19, 24-25 (Ariz.App. 1980)(no reasonably equivalent value exchanged if transfer renders transferee insolvent); see A.R.S.§ 44-1003. Warfield v. Byron, 436 F.3d 551, 556 (5th Cir. 2006) (Ponzi scheme are insolvent from inception); In re Ramirez Rodriguez, 209 B.R.424, 434 (Bankr.S.D.Tex. 1997) (stating that "as a matter of law, the Defendant gave no value to the debtors [Ponzi scheme operators] for the commissions attributable to investments made by others pursuant to the verbal agreement with [the debtors]"

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE 57
0758-011(55323)

Case 2:03-cv-02390-JAT

Document 532

Filed 10/02/2006

Page 57 of 85

1 Non-Model Stipulated Instruction No. 10--UFTA- Good Faith Defense 2 As to the Receiver's actual fraud claim under Arizona's Uniform Fraudulent 3 Transfer Act, to establish the affirmative defense of good faith for reasonably equivalent value the defendant must prove and you must find both of the following as to each 4 commission payment the defendant received from the Receivership Entities: 5 a. The defendant gave reasonably equivalent value for the commission 6 payment; and b. The defendant took the commission payment in good faith. 7 8 Source: ARS § 44-1008(A). 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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_________________________________ UNITED STATES DISTRICT JUDGE
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1 2

Non-Model Stipulated Instruction No. 11--Conversion

For the Receiver to prevail on his conversion claim, he must prove by a 3 preponderance of the evidence that a defendant wrongfully exerted dominion or control over the property of a Mid-America Annuitants in denial of or inconsistent with the 4 annuitants' rights in such property. 5 Source: Shartzer v. Ulmer, 333 P.2d 1084, 1088 (1959) (seminal case defining tort of 6 conversion in Arizona); Tom Reed Gold Mines Co. v. Brady, 117 P.2d 484, 486 (Ariz. 1941) (burden of proof); Lerner v. Brettschneider, 598 P.2d 515, 518 (Ariz.App. 1979) 7 (burden of proof). 8 9 10 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
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1 Non-Model Stipulated Instruction No. 12--Equitable Disgorgement 2 The Receiver claims that the defendants have been unjustly enriched by retaining 3 the transfers received from the Receivership Entities and, therefore, should be made to turnover such receipts to the Receiver. 4 5 6 7 8 9 10 (1) an enrichment; (2) an impoverishment; (3) a connection between the enrichment and the impoverishment; (4) absence of justification for the enrichment and the impoverishment; and (5) an absence of a remedy provided by law. To establish his claim for unjust enrichment, the Receiver must prove the following elements by a preponderance of the evidence:

Guttilla & Murphy, PC

4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

Source: Community Guardian Bank v. Hamlin, 898 P.2d 1005, 1008 (Ariz.App. 1995) 11 (citing City of Sierra Vista v. Cochise Enter., Inc., 697 P.2d 1125, 1131 (Ariz.App. 1984); Stapley v. American Bathtub Liners, Inc.,785 P.2d 84, 88 (Ariz.App.1989)). 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 60
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DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

Page 60 of 85

1 2 3

Section III: Non-Model Instructions Requested by the Plaintiff Plaintiff's Jury Instruction No. 1--General

The Receiver has alleged and the Court has found that Robert Dillie, Mid-America 4 Foundation, Inc. and Mid-America Financial Group, Inc. (collectively, the "Receivership 5 Entities") operated a "Ponzi scheme" and as such committed fraud on persons investing with the Receivership Entities (the "Mid-America Annuitants") by making commission 6 payments to each of the defendants. A Ponzi scheme means a fraudulent enterprise in which proceeds received from 8 new investors are paid to earlier investors to create the appearance of a legitimate profitmaking business opportunity and induce further investment or prevent complaints to 9 government agencies. The Receivership Entities, operating as a Ponzi scheme, were 10 insolvent from their inception. 11
Guttilla & Murphy, PC
4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

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Additionally, the Receiver has alleged and the Court has found that the Receivership Entities made fraudulent transfers in the form of commission payments to 12 the defendants for marketing Charitable Gift Annuities presented by the Receivership 13 Entities ("Mid-America Charitable Gift Annuities"). 14 The date of each commission payment has been stipulated to by the parties. As to 15 certain of those payments the defendants contend that the date the Receiver filed his Complaint against the defendants is more than one year before the Receiver knew or 16 should have known of the existence of his Fraudulent Transfer claim. The burden is on the defendant to prove the date the Receiver knew or should have known of the existence 17 of his Fraudulent Transfer claim. 18 Source: Amended Order Supercedes [sic] August 1, 2006, Order, §§ 2(A)(1)(b) and 19 2(F)(finding fraudulent transfer). 20 21 22 (Paragraph 2) The statement read to the jury does not support "insolven(cy) from 23 inception." 24 (Paragraph 3) Transfers were not fraudulent unless not in good faith and not for 25 reasonably equivalent value. 26 27 28 61
Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

Defendants' Objection:

DATED: _______________________ _________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

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1 Plaintiff's Jury Instruction No. 2--Breach of Fiduciary Duty 2 The defendants acted as securities brokers with respect to the sale of Mid-America 3 Charitable Gift Annuities. A securities broker may owe a special duty to his or her clients, which is called a fiduciary duty. This duty may require a securities broker to act 4 with the utmost loyalty, good faith and disclosure for his/her client. 5 Receiver claims that the defendant owed and breached this fiduciary duty. To 6 establish this claim, the Receiver must prove: 7 8 9 (1) Defendant breached this duty; (2) Defendant's breach was a cause of Receiver's damages; and (3) Receiver's damages.

th 10 Source: RAJI (Civil) 4 Commercial Torts 1A; Gemstar Ltd. v. Ernst & Young, 917 P.2d 222, 233 (1996) (nature of fiduciary duty owed); Mason v. Bulleri, 543 P.2d 478, 481 11 (Ariz.App. 1975)(broker failing to .

Guttilla & Murphy, PC

4150 West Northern Ave Phoenix, Arizona 85051 (623) 937-2795

12 13

Defendants' Objection:

Securities broker only liable as fiduciary when he acts for the client and has discretion to 14 buy and sell securities for his clients without further approvals. 15 The Defendants did not act as securities brokers. Under the '34 Act, a broker is defined 16 in Section 3(a)(4) as: 17 18 "any person engaged in the business of effecting transactions in securities for the account of others."

19 It connotes a certain regularity of participation in purchasing and selling securities. 20 UFITEC, S.A. v. Carter, 142 Cal.Rptr 279, CCH Dec. 96, 252. 21 22 23 24 25 26 27 28 62
Case 2:03-cv-02390-JAT Document 532 Filed 10/02/2006

DATED: _______________________

_________________________________ UNITED STATES DISTRICT JUDGE
0758-011(55323)

Page 62 of 85

1 Plaintiff's Jury Instruction No. 3--Federal Securities Law- General 2 The Receiver claims to have suffered a loss caused by the defendant's violation of 3 the federal securities laws. 4 The Court has already determined that Mid-America's Charitable Gift Annuity 5 sold by the defendants is a security not subject to any exemptions, for purposes of application of the federal securities laws. Each defendant sold a security when he sold a 6 Mid-America Charitable Gift Annuity to his client. The buying and selling of securities is controlled by the securities laws. In 8 particular, the securities laws prohibit misrepresentation