Free Statement - District Court of Arizona - Arizona

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Burton M. Bentley, Esq. (Bar No. 00980) BURTON M. BENTLEY, P.C. 5343 North 16th Street, Suite 480 Phoenix, Arizona 85016 (602) 861-3055 (602) 861-3230 fax Attorney for Rada Defendants IN THE UNITED STATES DISTRICT COURT

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IN THE DISTRICT OF ARIZONA LAWRENCE J. WARFIELD, RECEIVER, Plaintiff, vs. MICHAEL ALANIZ, et al. (Assigned to Hon. James A. Teilborg) Defendants. CAUSE NO. CIV'03 2390 PHX JAT RADA DEFENDANTS' SEPARATE STATEMENT OF FACTS IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

The following Defendants: Leonard and Betty Bestgen Robert Carroll Rudy and Mary Crosswell Charles Davis Richard Derk Orville Dale Frazier Ronald Kerher Dwight Lankford John and Candes Rada Paul Richard Patrick and Andrea Wehrly

(collectively "Rada Defendants") by and through counsel undersigned, hereby
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submit this Separate Statement of Facts in Support of their Motion for Summary Judgment pursuant to Fed.R.Civ.P. 56. ///

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1.

Mid-America Foundation, Inc. ("Mid-America") hired independent

contractors throughout the country, via "Independent Associate Agreements," to sell charitable gift annuities. See copies of signed Independent Associate Agreements for Rada Defendants Kerher and Rada; Gift Annuity Agent Compensation Agreements for Rada Defendants Richard, Lankford and Carroll; Associate Agreement for Rada Defendants Carroll; Planned Giving Advisor Consultant Agreement for Rada Defendants Richard; General Agent Representation Agreements for Rada Defendants Rada, Kerher and Derk; and Marketing and Sales Agreement for Rada Defendants Davis and Wehrly; Deposition testimony of Rudolph Crosswell, dated October 3, 2005, p. 25, lns. 12-14 and p. 36, lns. 7-12; Deposition testimony of Orville Frazier, dated October 12, 2005, p. 29, lns. 7-12; Gift Annuity Agent Compensation Agreement for Rada Defendant Wehrly, attached hereto as Exhibit "A." 2. The non-resident independent contractors were licensed insurance See Declarations of non-resident Rada

agents in their state of residency. Defendants, Exhibit "B." 3.

In December of 2003, Plaintiff Lawrence J. Warfield, in his capacity

as Receiver for Mid-America, caused a nine-count complaint, and amended to 11 counts, to be filed against the above-named Rada Defendants that were hired by Mid-America to sell charitable gift annuities. Amended Complaint, ¶¶ 123-176. 4. Each of the Rada Defendants is listed by name and state of residence Complaint, ¶ 8. See Third

at the time the Complaint was filed:

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Rada Defendants Bestgen, Leonard and Betty Carroll, Robert Crosswell, Rudy and Mary Davis, Charles Derk, Richard Frazier, Orville Dale Kerher, Ronald Allen Lankford, Dwight Rada, John and Candes Richard, Paul Wehrly, Patrick and Andrea

State of Residence at the Time Complaint was Filed Arizona California Arizona Massachusetts Florida South Dakota South Dakota Texas Arizona Maine Texas

See Declarations of Rada Defendants Carroll, Davis, Derk, Frazier, Kerher, Lankford, Richard and Wehrly, attached hereto as Exhibit "B"; and see

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Independent Associate Agreement of John Rada attached hereto as Exhibit "A," address listed in Arizona. 5. Plaintiff has alleged that Defendants received commissions from

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Mid-America for services in the sale of Mid-America charitable gift annuities ("CGAs") to Mid-America clients. Complaint, ¶¶ 169, 173, 175. 6. Plaintiff now complains that those commissions were fraudulent

conveyances. Complaint, ¶¶ 170-171.
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7.

The only federal claim in Plaintiff's Complaint is found in Count

Seven, which alleges that Defendants violated Section 12 of the Federal Securities Act of 1933 ("'33 Act"), Section 10(b) of the Federal Securities and Exchange

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Act of 1934 ("'34 Act") and SEC Rule 10b-5, all other claims are state claims. See Third Amended Complaint, ¶162.

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8.

The only basis for personal jurisdiction alleged by the Plaintiff is the

"nationwide service of process" provision of the Federal Securities and Exchange Act, 15 U.S.C.A. § 78aa (Section 27, '34 Act). See Third Amended Complaint, ¶27. 9. The findings of the Court in SEC v. Dillie indicate that Mr. Dillie

submitted to a default judgment. See Court's Order dated June 7, 2002. 10. The Court in that case found that what Mid-America was selling

constituted a "security" under federal law. See Court's Order dated June 7, 2002. 11. Mid-America was a 501(c)(3) organization. See letter from the IRS

attached hereto as Exhibit "C." 12. Lisa Mayfield, owner of the Mayfield Agency, testified in a

deposition dated November 4, 2005, that she requested audited financial statements from Mid-America. Mid-America responded that they had some independent auditors at the company going over records and that the financial statements were forthcoming, but it never arrived. See deposition of Lisa Mayfield, dated November 4, 2005, pp. 4, 8 and 24, Exhibit "D" attached hereto. 13. Mid-America provided each individual sales representative with

consumer brochures and marketing materials, which included biographical information of Mid-America Board of Directors and Trustees. Mid-America also provided the sales representatives with a personal data sheet and a Gift Annuity Disclosure Statement for each individual prospective Mid-America annuity purchaser. Financial and summary balance sheets were provided. See attached

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hereto as Exhibit "E" the following: Charitable Gift Annuity Client Information; Mid-America Procedures for Issuance of Gift Annuity; Charitable Gift Annuity Contract Data Page; brochure "Strength & Confidence Through Experience"; brochure "Board of Directors & Trustees ­ Foundation of Integrity"; financial statements and balance sheets; and the first page of a Gift Annuity Disclosure Statement.
Dated at Phoenix, Arizona this 30th day of December, 2005. BURTON M. BENTLEY, P.C. _s/ Burton M. Bentley _________ Burton M. Bentley Attorney for Rada Defendants

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PROOF OF SERVICE This is to certify that a true copy of the foregoing Motion for Summary

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Judgment has been filed electronically with the Court and that the persons listed below designated as "CM/ECF Registered" will be served with same by the Court's CM/ECF system; and that the other persons listed below have been served with a copy of the Motion for Summary Judgment by first class mail this 30th day

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of December, 2005.

BURTON M. BENTLEY, P.C. /s/ Burton M. Bentley Burton M. Bentley Attorney for Defendants Rada Ryan W. Anderson ECF Registered Attorneys for Plaintiff Brad A. Denton ECF Registered Gunderson, Denton & Proffitt, PC Attorneys for Michael and Ann McLaughlin Albert P. Massey ECF Registered Lentz, Cantor & Massey Attorneys for Richard Wilson Gregory Shebest ECF Registered Attorney for Heritage Marketing Martin D. Koczanowicz Larry Alvin Donaldson ECF Registered Koczanowicz & Donaldson Attorneys for Ron Tucker Robert Tretiak 4615 North Ft. Apache Road Las Vegas, NV 89129 Defendant Pro Se David Knutson First Financial Center, Ltd. 119 Third Street, N.E. #333 Cedar Rapids, IA 52401 Defendant Pro Se

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David Tigges First Financial Center, Ltd. 119 Third Street, N.E. #333 Cedar Rapids, IA 52401 Defendant Pro Se Ren Bidwell 3430 Pacific Avenue SE Olympia, WA 98501 Defendant Pro Se

Steve A. Bryant. 3618 Mt. Vernon, # A Houston, TX 77006-4238 Co-Counsel for Rada Defendants Bruce F. Walters 2606-C West Roosevelt Boulevard Monroe, NC 28110 Pro Per

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