Free Motion for Summary Judgment - 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. Defendants. RADA DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (Assigned to Hon. James A. Teilborg) (Oral Argument Requested) CAUSE NO. CIV'03 2390 PHX JAT

The following Defendants:
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Leonard & Betty Bestgen Robert Carroll Rudy & Mary Crosswell Charles Davis Richard Derk Orville Dale Frazier

Ronald Kerher Dwight Lankford John & Candes Rada Paul Richard Patrick & Andrea Wehrly

(collectively "Rada Defendants"), by and through counsel undersigned, hereby submit this Motion for Summary Judgment pursuant to Fed.R.Civ.P. 56. This Motion addresses Counts One through Eleven of the Third Amended Complaint of which the Rada Defendants ask that the Court grant summary judgment for the following reasons:

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Case 2:03-cv-02390-JAT

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1.

Count One ­ Breach of fiduciary duty: the Receiver has no standing to allege this claim, as this claim is a state law claim personal to the

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annuitant and not the receivership; 2. Count Two ­ Constructive fraud in confidential relationship: the Receiver alleged the "victims" suffered damage by loss of all or a portion of their investment, a claim personal to the alleged victims;

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Mid-America and the receivership suffered no loss; the Receiver lacks standing to bring this claim; 3. Count Three ­ Constructive trust: the commissions earned by the Rada Defendants are not "receivership assets" covered by the Court's

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Order and they cannot be "marshaled" by the Receiver; moreover, a constructive trust is a remedy not a separate cause of action; 4. Count Four ­ Negligence and Gross Negligence: the Receiver has no standing to make these claims for the "victims [who] suffered injury"; there is no allegation that Mid-America suffered injury resulting from the Rada Defendants' negligence, and negligence is only a state law claim, and any award for damages would belong to

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the alleged "victims" and not to the receivership; 5. Count Five ­ Declaratory and equitable relief for the reasons set forth as to the remaining counts;

Case 2:03-cv-02390-JAT

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Count Six ­ Fraud: the Receiver has no standing to asset state law claims personal to the alleged "victims" in this case;

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Count Seven ­ Federal Securities Fraud: a Charitable Gift Annuity ("CGA") is not defined as a "security" under the '33 Securities Act and '34 Exchange Act and a CGA falls under the exemptions to the '33 Securities Act and the 34 Exchange Act and thus cannot be

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regulated by securities laws; 8. Count Eight ­ State Securities Fraud: a CGA is not regulated by securities laws in Arizona; CGAs are exempted under Arizona statutory law; and no Arizona case defines a CGA as a security;

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Count Nine ­ Fraudulent Transfer: the statute of limitations has expired (A.R.S. § 44-1004) and the applicable statute of repose bars the asserted claims;

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10.

Count Ten ­ Conversion: the Receiver has no standing to bring this claim that is another state law claim personal to the "victims" as affirmed by the Receiver;

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Count Eleven ­ Equitable Disgorgement: the Receiver has no standing to bring this claim, also another state law claim personal to the annuitants.

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The accompanying Memorandum of Points and Authorities and Defendant's Separate Statement of Facts ("SSOF"), with attached exhibits,

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supports this Motion. Also incorporated by reference are Plaintiff's First, Second and Third Amended Complaints, the Final Judgment of the Court in Securities and Exchange Commission v. Dillie et al, CIV-01-2493-PHX(JAT), dated June 6, 2002, the Order issued by the Court in SEC v. Dillie, United of Omaha Life

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Insurance Company, Third Party Claimant v. Warfield, Third Party Defendants, dated March 23, 2004 and the Court's Order Appointing Receiver, dated December 20, 2001.
Dated at Phoenix, Arizona this 30th day of December, 2005.

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BURTON M. BENTLEY, P.C.
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_s/ Burton M. Bentley _________ Burton M. Bentley Attorney for Defendants Rada

PROOF OF SERVICE
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This is to certify that a true copy of the foregoing Motion for Summary 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 of December, 2005. BURTON M. BENTLEY, P.C. /s/ Burton M. Bentley Burton M. Bentley Attorney for Defendants Rada

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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 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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