Free Consent Judgment - District Court of Arizona - Arizona

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF ARIZONA 8 9 10 11 12 13 14 15 16 17 18 19 20 21 and M argaret Shearburn, present this stipulation regarding their interest in defendant 22 $732,342.45 in funds from National Bank escrow account #01236121, to resolve this matter. 23 24 25 26 27 28 T heir being no objection and the Court finding good cause, it is hereby ordered that the Stipulation, and the facts contained therein, are adopted by the Court. It is therefore Plaintiff, United States of America, by and through its attorney, P aul K . Charlton, United States Attorney for the District of Arizona, Lis a Roberts, Assistant United States A t t orney , of counsel, and Claimants, David Brundage, by and through his counsel, Curtis Ensign, and Richard J. Samson, as Trustee for the Bankruptcy Estate of Robert N. Shearburn United States of America, CIV-03-1700-PHX-DGC Plaintiff, v. S TIPULATED JUDGMENT $732,342.45 in funds from National Bank escrow account #01236121 for Transnation Title Insurance Company located at 1850 North Central, Suite 1200, Phoenix, Arizona, from the sale of real property located at 504 W. Galvin, Phoenix, Arizona 85085; Defendant. CERTIFICATE OF REAS ONABLE CAUS E

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ORDERED that Claimant David Brundage shall receive one half of the seized funds ($732,342.45) in t he ap p roximate amount of $366,171.23, plus interest on that amount from the date the sum was placed into the custody of the U nit ed St at es, via a check made payable to the Curtis Ensign Trust Account. This sum represents the liquidated value of the secured

int eres t in the real estate which has been liquidated and the proceeds of which are the r es in this action. M r. Brundage agrees to accept this amount in full and complete satisfaction of his claim in the Bankruptcy matter, Case No. 04-61472-RBK, associated with Robert N. Shearburn. IT IS FURTHER ORDERED that Claimant Richard J. Samson, as T rustee for the Bankruptcy Estate of Robert N. Shearburn shall receive one half of the seized funds ($732,342.45) in the ap p roximate amount of $366,171.22, plus interest on that amount from the date the sum was placed into the custody of the United States. T his sum represents the

balance of liquidation value of the real estate and may be subject to a construct ive t rust imp os ed up on the funds by United States v. Boylan, 392 F.3d 1002 (9th Cir., 2004) in favor of the unsecured victims of the fraud perpetrated by Shearburn. The Court finds that t he Trustee for the Bankruptcy Estate has already undertaken many of the tasks decreed by the Ninth Circuit in the Boyl an case, including the identification and notification of victims of the fraud, marshaling of available asset s , and p reparation for the liquidation of such assets in anticipation of distribution. In addition, the Court finds t hat t he Trustee is in a unique position with specialized experience for the evaluation of competing claims for limited resources and the determination of legitimate vs. fraudulent or inflated claims. The Court finds therefore, that the most economic and judicious application of the

funds represented in this agreement is for the Trustee to act on behalf of the District Court for the District of A rizona to administer the funds described herein and to supervise the distribution of the res within the context of the Bankruptcy laws and procedures as well as comply w ith the new provisions of the Boylan case in making distributions to the victims and appropriate creditors of the estate.

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The Court finds therefore, that this Settlement Agreement is in compliance with the decision in United States v. Boylan, 392 F.3d 1002 (9th Cir., 2004). Concurrent with the filing of the Stipulation for Compromise Settlement, with this Court, the Chapter 7 Trustee shall submit to the United States Bankruptcy Court for the District of M ontana his motion seeking that Court's approval of his participation in this compromise settlement. The Court recognizes that the Chapter 7 Trustee's participation in this comp romise settlement is subject to the review and approval of the United States Bankruptcy Court for the District of M ontana, following notice and hearing. Upon the entry of an Order from the

Bankruptcy Court approving the Trus t ee's participation in the compromise settlement, this Agreement shall immediately become binding on said Trustee. A copy of t he Bankruptcy

Court Order shall be provided to this Court, and this Stipulated Judgment then executed by the parties. In the event said Court fails t o enter an Order approving the Trustee's

participation in the comp romise settlement, then this Agreement shall be null and void as to all parties. IT IS FURTHER ORDERED that Claimants hereby release and forever discharge the

United States and the Department of Jus t ice, the U.S. Department of Treasury, Internal Revenue Service, the United States M arshals, Department of Homeland Security, and all officers, employees, contract employees, agents, and task force agents from any and all actions, causes of action, suits, proceedings, debts, dues, contracts, judgments, damages, claims , and/or demands whatsoever in law or equity which claimants, their heirs, successors, or assigns ever had, now have, or may have in the future in connection with the seizure, detention, and forfeiture of the above-captioned defendant. //// //// ////

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The Court finds that the agents of the United States and the Department of Justice, the U.S. Department of Treasury, Internal Revenue Service, and the United States M arshals Service had reasonable grounds to seize defendant property described herein, pursuant to the terms of 28 U.S.C. §2465, and that Claimants have not substant ially p revailed as the result of this settlement agreement. Each party is responsible for its respective costs and attorney fees. DATED this 19th day of October, 2005.

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