Appendix — Temora Trading Co. v. Perry

WALLACE PERRY, as Trustee of

the Estate of Boyd James

O'Donnell and Joan O'Donnell,

Bankrupts,

Respondent.

No. 13531

FILED

MAY 27 1982

C.R. DAVENPORT

Clerk of Supreme Court

By /s ith Fountain

Deputy Cler

Appeal from order striking defen-

dant's answer, entering a default judg-

ment, and awarding summary judgment.

Pourth Judicial District Court, Elko

County; Joseph 0. McDaniel, Judge.

Affirmed.

A-l .

Wilson, Wilson and Barrows, Ltd.,

Las Vegas;

Moneymaker & Morrison,

Los Angeles, California,

for Appellant.

Goicoechea, DiGrazia & Marvel,

Elko; Russell Piccoli,

Phoenix Arizona,

for Respondent.

Respondent Wallace Perry, as Trustee

of the Estate of Boyd James O'Donnell

and Joan O'Donnell, Bankrupts, commenced

this action in the district court to

quiet title to certain property located

in Elko County.

The District judge, after finding

that appellant-defendant Temora Trading

Company, Ltd. had willfully failed to

comply with the court's discovery

orders, struck Temora's answer. NRCP

A-2.

37(b). Summary judgment was entered in

favor of the Trustee. This appeal fol-

lowed:

THE FACTS

O'Donnell filed for bankruptcy in

Arizona. Respondent Perry was named

trustee in the bankruptcy proceedings.

Although O'Donnell was adjudicated bank-

rupt, he was denied a bankruptcy dis-

charge. Just prior to filing his peti-

tion for bankruptcy, O'Donrell transfer-

red valuable real estate holdings to a

James Gleason, who allegedly transferre’

the property to Temora.

Discovery was protracted and bitterly

fought. Eventually, Perry noticed the

depositions of three of Temora's offi-

cers in the Bahamas. At the time set

A-3.

for their depositions their local attor-

ney appeared and stated that they would

not be deposed without an order from a

Bahamian court. Perry obtained an order

from <ne district court in Elko compel-

ling Temora to produce its officers.

The order was served on Temora's counsel

in Elko. The officers still refused to

comply.

Thereafter, the district court struck

Temora's answer and entered a default

judgment against Temora. Temora argues

that the district court abused its dis-

cretion by granting a default judgment

as a sanction for failure to honor the

court's orders. Temora also suggests

that Perry's complaint fails to state a

cause of action because it appears on

the face of the complaint that the cause

is barred by the statute of limitations.

A-4.

We reject Temora’s contentions and we

affirm the default judgment.

THE DEFAULT JUDGMENT

NRCP 37(b) empowers the district

court with a broad range of sanctions

that may be invoked when parties fail to

comply with discovery orders. The court

may strike all or part of a party's

Pleadings, and enter a default judgment.

The sanction of dismissal or default

may be imposed only in cases of willful

noncompliance of the court's orders.

Pinkelman v. Clover Jewelers Boulevard,

Inc., 91 Nev. 146, 532 P.2d 608 (1975).

The district judge in the instant case

found that Temora's failure to comply

was willful. That finding is supported

by substantial evidence, including

Temora's history of obstructing

discovery, as well as the failure of

A-5.

Temora's officers to appear for their

depositions. 1/

1/ Temora was not responsive to

Certain interrogatories. In response to

interrogatories 8 and 9, counsel for

Temora, Mr. Moneymaker, stated that

"James Gleason -- address unknown"

formed Temora and contributed all its

property. The Nassau attorney who

formed Temora, Mr. Ralph Seligman, in

his deposition testified to the

contrary:

MR. MONEYMAKER: All right. Now I

take it -- has Mr. Gleason or Temora

Trading Company waived the attorney-

client privilege of confidentiality

imposed upon you under Bahamian law?

THE WITNESS: There is no attorney-

client privilege between myself and

Temora. As far as Mr. Gleason is

concerned, I am satisfied the gentleman

does not exist.

MR. MONEYMAKER: All right. I take

it, what you are telling me is that

James Gleason, to your knowledge, has

not waived the privilege?

THE WITNESS: Mr. James Gleason, to

my knowledge, does not exist, and

therefore there is no privilege to

waive.

MR. MONEYMAKER: I take it --

THE WITNESS: I am satisfied that I

was du as an instrument of fraud, and

this is the reason I have sworn my

affidavit.

A-6.

In Skeen v. Valley Bank of Wevade, 89

Nev. 301, 511 P.2d4 1053 (1973), this

court held:

"Default judgments will be upheld

where the normal adversary pro-

cess has been halted due to an

unresponsive party, because dili-

gent parties are entitled to be

protected against interminable

delay and uncertainty as tc their

legal rights. 89 Nev. at 303;

511 P.2d at 1054.

THE STATUTE OF LIMITATIONS

Temora argues that even if the dis-

trict court did not err in striking its

answer, it was error to grant a default

judgment. Temora's contention is that

Perry's complaint failed to state a

cause of action because it did not plead

facts showing that the statute of limit-

ations was tolled. See Kellar v. Snow-

Gen, 87 Nev. 488, 489 P.2d 90 (1971);

A-7.

Bank of Nevada v. Friedman, 82 Nev. 417,

420 P.24 1 (1966).

However, Perry alleged in his conm-

plaint that Gleason was a fictitious

person. When the answer was stricken,

all of Perry's allegations were taken as

true. A transfer of property to a fic-

titious person is a complete nullity,

transferring no title. An action to

avoid such a transfer is not subject to

the statute of limitations. Gayle v.

Jones, 63 F.Supp. 481 (W.D. La. 1945);

Houghton v. Houghton, 116 So. 493 (La.

1928).

RES JUDICATA

Finally, Temora suggests that Perry's

complaint is barred by the doctrines of

res judicata and collateral estoppel.

These were affirmative defenses included

A-8 .

in Temora's answer. The defenses were

stricken with the answer.

The judgment is affirmed.

fs /Gunderson, C.J.

csManoukian, J.

I

cs/Springer, J.

P

s bra J.

cacstetfen. J.

Attest: A full, true and Correct

Copy.

C.R. Davenport, Clerk of the Supreme

Court

By/s/Judith Fountain Deputy.

A-9 .

Petitioners,

vs.

THE HONORABLE JOSEPH O. McDANIEL,

District Judge in the Fourth

Judicial District Court of the

State of Nevada, in and for the

County of Elko,

Respondent.

No. 13991

PILE Ds

June 23, 1982

C. R. Davenport

Clerk of Supreme Court

By /s/Judith Fountain

Deputy Cler

Rehearing denied. WNRAP 40(c) (1).

It is so ORDERED.

B-1.

/s/Gunderson, C.J.

Gunderson

/s/Menoukian, J.

Menoukian

/s/Springer, J.

Springer

/s/Mowbray, J.

Mowbray

/s/Steffen, J.

Steffen

Hon. Jospeh 0. McDaniel,

District Judge

Messrs. Terry & Winter

Richard M. Moneymaker, Esq.

Messrs. Goicoechea & DeGrazia

Messrs. Wilson, Wilson & Barrows

Russell Piccoli, Esq.

R. L. Kane, Clerk

TEMORA TRADING COMPANY, LTD., a Bahamian

corporation, MICHAEL W. MOGAN, BURTON

BERGERON, EUGENE FOX, TED IVY, JAMES

GLEASON, a fictitious person, wm™UOVO

ANSTALT, a Liechtensteinian trust, and

DOES I through 100, inclusive,

Defendants.

PILED:

1981 JUL 13 PM 2:57

Clerk R.L. Kane

Deputy /s/

ORDER GRANTING PLAINTIFF'S MOTION

TO DISMISS FOR FAILURE TO MAKE

DISCOVERY, AND SUMMARY JUDGMENT

C-l1.

FINDINGS OF FACT

AND I LAW

Plaintiff's Motion to Dismiss for

Failure to Make Discovery and in the

Alternative for Summary Judgment having

come on regularly for hearing on May 12,

1981, the Court having examined the

Affidavits and other documentation pro-

duced by the parties, considered the

memoranda and oral argument of respec-

tive counsel and being fully advised in

the matter, now makes Findings of Fact

and Conclusions of law as follows:

FINDINGS OF FACT

1. During the late 1960's the Bank-

rupt BOYD JAMES O'DONNELL (hereinafter

called O'DONNELL) and JOAN O'DONNELL,

his wife, acquired the subject real

property situated in the County of Elko,

C-2.

Nevada, and in the Counties of Los Ange-

les and San Bernardino in California,

either individually or through other

entities under the control of O'DONNELL.

2. Thereafter all of the subject

propery was conveyed to JAMES GLEASON.

3. On March 13, 1970, the O'DONNELLS

filed their Petition in Bankruptcy in

the U.S. District Court for the District

of Arizona. They alleged therein that

they were insolvent and did not list the~

subject property as assets. JAMES GLEA-

SON then conveyed the subject property

to Defendant TEMORA TRADING COMPANY,

LTD. (hereinafter called TEMORA), 4

Bahamian corporation. Stock was issued

GLEASON, and then it was transferred to

NUOVO ANSTALT, a Liechtenstein trust.

4. In 1972, O'DONNELL's Discharge in

Bankruptcy was denied for making false

C-3.

statements in the Bankruptcy proceed-

ings.

5. The Trustee in Bankruptcy, WAL-

LACE PERRY, in his investigation of the

transfers of the subject property sus-

pected that JAMES GLEASON was either a

fictitious person or a “straw man," and

that the aforesaid transactions were a

fraudulent scheme whereby O'DONNELL

would retain the control and benefit of

the subject property free and clear of

his creditors.

6. After many years of litigation in

the Federal Bankruptcy Courts in Arizona

and California, and the U.S. District

Court in California, in which TEMORA's

attorney, Richard M. Moneymaker, was

successful in obtaining dismissals for

lack of jurisdiction, the litigation

ended up in this Court as a Quiet Title

C-4.

action filed on September 1, 1977.

Plaintiff was and is relying on certain

"badges of fraud" in connection with the

various conveyances to prove fraudulent

conveyances.

7. Mr. Moneymaker, on behalf of his

client TEMORA, has contended throughout

that his client was a bona fide corpora-

tion with a Board of Directors and

Stockholders, engaged in lawful business

transactions. That the Plaintiff and

his attorneys were engaged in a never-

ending, malicious harassment of TEMORA.

8. Plaintiff served 120 Interroga-

tories on TEMORA on January 27, 1978.

Partial Answers were filed on March 7,

1978. The Answers were not made by any

officer or managing agent of the corpor-

ation, but by Mr. Moneymaker, as attor-

ney~-in-fact, pursuant to a General Power

C-5.

of Attorney. Except for filing a copy

of the Articles of Association and Memo-

randum of Association for TEMORA, and a

description of the land and the names

and addresses of the then Board of

Directors, Mr. Moneymaker objected to

all other questions on the grounds of

relevance. This resulted in denying

Plaintiff any discovery whatsoever.

After a two-and-a-half year war of

Motions, further Answers were filed,

again by Mr. Moneymaker. Much of the

delay was justified while a determin-

ation of the issue of whether JAMES

GLEASON was a fictitious person, was res

judicata resulting from Orders made in

the Federal Courts in previous litiga-

tion. This problem even involved

Appeals to the Ninth Circuit Court of

Appeals.

C-6.

9. Plaintiff's efforts to take the

despositions in 1979 of the Board of

Directors, Donald Aberle, A. F. Bowe and

L. D. Burrows, were met with Motions for

Protective Orders filed on behalf of

TEMORA.

10. After the Fourth Amended Com-

plaint was filed on May 18, 1980, and

Defendant TEMORA filed its Answer, the

aforementioned Answers to Interroga-

tories were filed on November 12, 1980,

the Court having entered an Order to

Compel Answers on September 9, 1980.

These Answers did provide some informa-

tion concering TEMORA's ownership and

operations. The name and address of the

person having custody of the stock book

and corporate minute book was given as

Mr. Donald Aberle, Nassau, Bahamas.

That Dr. Kicher, Basil, Switzerland, had

C-7.

possession of the financial statements.

Also of interest was the statement that

O"DONNELL was a joint signator with Mr.

Moneymaker on a TEMORA bank account in

Glendale, California; that O'DONNELL had

operated and managed the Mediterranean

Apartment Building for TEMORA since

1976, after the building had been

acquired by TEMORA on aée foreclosure

sale, and he later sold the building for

TEMORA. The Answers pointed the way for

further discovery on the part of the

Plaintiff.

ll. In the meantime, Plaintiff's

attorney, Russell Piccoli, investigated

information that O'DONNELL was doing

business as TEMORA TRADING COMPANY. He

traveled to Los Angeles in April of 1979

and interviewed Arthur Silberman and

c-8.

Geoffrey Miller. Mr. Miller's Deposi-

tion was later taken on June 5, 1979.

He testified that O'DONNELL was operat-

ing a diesel fuel business under the

name of TEMORA TRADING COMPANY, and

represented that it was O'DONNELL's

company.

12. Mr. Piccoli then flew to Swit-

zerland to interview the two Swiss

directors of TEMORA and the Trustee of

NUOVO ANSTALT. He found that Dr. Kicher

was really Dr. Iur. Walter H. Keicher

who resides in Vaduz, Liechtenstein. He

had formed the NUOVO ANSTALT Trust and

had received instructions from

O'DONNELL. When he was pressed for

documents, Dr. Keicher suggested that

Mr. Piccoli obtain Letters Rogatory from

the Court, addressed to him, and he

would then answer the questions.

c-9 .

Letters Rogatory were obtained, address-

ed to Dr. Keicher and also to Dr. H. U.

Stucki. TEMORA, by and through its

attorney, Mr. Moneymaker, submitted

Cross Interrogatories. They consisted

of two questions which in effect told

Dr. Keicher and Dr. Stucki to clam up

and don't tell them anything. They

didn't respond.

13. Mr. Moneymaker was noticed for a

Deposition personally. He claimed an

attorney-client privilege.

14. In February of 1981, after prior

interviews by Mr. Piccoli, Ralph David

Seligman, the Bahamian attorney who was

involved in forming TEMORA, gave an

Affidavit. This was the first real,

direct evidence to support Plaintiff's

allegations. Mr. Seligman also appeared

for a Deposition in the American Embassy

c-10.

at Nassau, Bahamas, on April 2, 1981.

After several questions by Mr. Piccoli,

Mr. Moneymaker asked to be permitted to

question the witness on voir dire. The

questions indicated that Mr. Seligman

should refuse to answer any questions

and take advantage of the Bahamian pri-

vilege of non-disclosure, or to claim an

attorney-client privilege. Mr. Seligman

was not so inclined. Seligman then

testified that TEMORA was formed as a

"shelf corporation" by him and his for-

mer associate, Sir Guy Henderson, in

1969. This means that the corporation

was formed, using Sir Guy and office

personnel as the Board of Directors,

each of whom was issued one share of

stock. The corporation was then dormant

(on a shelf) until someone wished to

purchase it. He testified that TEMORA

C-1l1 .

was purchased by O'DONNELL, reportedly

for JAMES GLEASON, on August 12, 1971.

The deeds from GLEASON to TEMORA were

dated in July, 1971. Mr. Seligman at no

time ever met JAMES GLEASON. His only

contact was with MR. O'DONNELL, Max

Fink, a Los Angeles attorney, and Dr.

Keicher of the NUOVO ANSTALT Trust. By

1979 he was convinced that he was being

"used" by MR. O'DONNELL in a fraudulent

scheme and requested that the affairs of

TEMORA be assigned to someone else. Sir

Guy Henderson also gave an Affidavit

wherein he stated he had never met JAMES

GLEASON.

15. During the first part of 1981,

Plaintiff really got lucky. Apparently

in December of 1980, O'DONNELL began

having marital problems with his present

wife, Irene Blank O'Donnell. She

C-12.

contacted Attorney Eugene L. Wolver,

Jr., Of Los Angeles, in regard to a

divorce. O'DONNELL had left certain

records in her home when they separated.

She turned these records over to Wolver.

He turned them over to Walter Goodwin,

one of O'DONNELL's creditors, who then

turned them over to Mr. Piccoli. Fur-

ther records between O'DONNELL and

TEMORA were found in the files of Blanc

Investment Compmany, owned by Irene

Blanc O'Donnell, and turned over to Mr.

Piccoli. Mr. Piccoli then filed the

papers with the Court. The correspond-

ence between O'DONNELL and Donald

Aberle, President of TEMORA, established

a very close relationship, although

O'DONNELL was still playing his little

game that JAMES GLEASON had some right,

title or interest in TEMORA and the

C-13.

trusts holding the stock; that O'DONNELL

had paid fees for TEMORA, in direct con-

tradition of Moneymaker's Answers to

Interrogatories; that O'DONNELL arranged

to be appointed “investment advisor" for

TEMORA in May of 1976; arranged to have

a new trust set up in Guernsey Channel

Islands, to ceplace NUOVO ANSTALT; that

there was a close relationship between

O'DONNELL, TEMORA and Attorney Money-

maker during this period of time.

16. TEMORA's Directors, Aberle, Bowe

and Burrows, were properly noticed for

Depositions the first part of April,

1981, in the American Embassy, Bahamas.

With all of the information and docu-

ments in the possession of Mr. Piccoli

at that time, the Deposition of Mr.

Aberle could have been very interesting

had he appeared. He did not appear, nor

C-14.

did the other two officers. Instead,

they sent an attorney to claim their

privilege under the Bahamian law, even

though Mr. Moneymaker, with tongue in

cheek, pleaded with their attorney to

have them appear. The Court finds that

said failure to appear was willful and

deliberate and in direct violation of

this Court's Order.

CONCLUSIONS OF LAW

1. This Court acquired in rem juris-

diction of this action due to the fact

that part of the real property is situ-

ated in the County of Elko, State of

Nevada. That TEMORA, by and through its

attorney, Richard Moneymaker, made a

general appearance and the Court acquir-

ed personal jurisdiction to enter any

and all Orders pertaining to the

C-15.

California real property. That all

other Defendants have failed to answer

or otherwise plead after having been

duly served with process, either person-

ally or by publication, and default is

hereby entered against BOYD JAMES

O'DONNELL, JOAN O'DONNELL, JAMES GLEASON

and NUOVO ANSTALT.

2. A debtor who wishes to conceal

his assets from his creditors can

acquire a Bahamian corporation and

transfer his assets to said corporation

through either a fictitious person or

straw man. The board of directors of

said corporation are nothing more than

puppets. The stock is then issued to a

Liechtenstein trust. The trustee then

becomes a member of the board of direc-

tors. The debtor then controls the

corporation and its assets through the

c-16.

trustee. Both countries have laws that

permit and, in fact, guarantee a veil of

secrecy surrounding the ownership of

these entities, and it is next to impos-

sible for a creditor or any other third

person to obtain any information as to

the true beneficiary of the trust. One

drawback of this scheme is that this

Court considers that any debtor who goes

to this much trouble really, really has

something to hide. The person who has

something to hide in this case is none

other than BOYD JAMES O'DONNELL. Such a

scheme in and of itself is a paramount

"badge of fraud." Another pitfall is

when the assets are real property situ-

ate in the U.S.A. and there is litiga-

tion as to the ownership and title.

When the Bahamian corporation makes a

C-17.

general appearnace to protect its inter-

est in the real property, it submits to

the jurisdiction of the Court in the

United States where the land is located.

When the Board of Directors are noticed

for Depositions, they are subjected to

the laws of the Court in which the suit

is pending, and cannot then attempt to

hide behind the secrecy laws of the

Bahamas. If they do, sanctions can and

will be imposed, pursuant to NRCP 37(d).

3. TEMORA's Board of Directors will-

fully and deliberately and in defiance

of this Court's Order, refused to appear

for their Depositions. Such contempt

calls for the maximum sanctions provid-

ed, pursuant to NRCP 37(d).

4. TEMORA's attorney, Richard M.,

Moneymaker, has deliberately blocked and

Gelayed Plaintiff's efforts to make

>

c-18 .

discovery. That as TEMORA's attorney-

in-fact he has given false information

in answering Interrogatories in respect

to O'DONNELL's association and connec-

tion with TEMORA.

5. That for the willful and deliber-

ate refusal to make discovery, the

Defendants' Answer should be stricken

and Summary Judgment entered for the

Plaintiff and against the Defendants on

Plaintiff's Third and Sixth Causes of

Action in the Fourth Amended Complaint.

Skeen v. Valley Bank of Wevada, 89 Nev.

301, 511 P.2d@ 1053 (Nev. 1973). The

conveyances from O'DONNELL or his enti-

ties to JAMES GLEASON were fraudulent

conveyances, and the title to all of the

subject property vested in the Plaintiff

Trustee in Bankruptcy upon the filing of

the Petition in Bankruptcy on March 13,

c-19.

1970, as provided by Sec. 70 of the

Bankruptcy Act as Amended to 1968 (11

U.S.C. 110).

6. In further support of Summary

Judgment, TEMORA's Board of Director's

refusal to make discovery raises a pre-

sumption that, had they appeared for

their Depositions, the evidence present-

ed would have supported the allegation

of the Plaintiff's Third and Sixth

Causes of Action. See NRS 47.250(3).

7. Badges of fraud are recognized as

proof of a fraudulent conveyance. Leo-

nardo v. Leonardo, 251 F.2d 22 (D.C.

Cir. 1958), Smith v. Popham, 266 Ore.

625, 513 P.2d 1172 (1973), Pirst Wation-

al Bank of Omaha v. First Cadco Corpora-

tion, 189 Neb. 743, 205 N.W.2d 115

(1973), and Payne v. Gilmore, 382 P.2d

140 (Okla. 1963). Hibernia Bank v. La.

C-20.

Ave. Realty Co., 79 S. 554 (La. 1918);

Estate of Cleo B. Reed v. Butcher, 566

P.2d 587 (Wyo. 1877); U.S. v. Leggett,

292 F.2€ 423 (6th Circuit) states the

general rule at pages 426-247:

The issue of fraud is

commonly determined by certain

recognized indicia, denominated

"badges of fraud," which are

circumstances so frequently at-

tending fraudulent transfers than

an inference of fraud arises from

then. Pergrem v. Smith, Ky.,

supra, 255 S.W.2d 42, 44; Leo-

mardo v. Leonardo, 251 F.2d 22,

27; Bentley v. Caille, 289 Mich.

74, 78, 286 N.W. 163, 164.

Inadequacy of consideration,

secret or hurried transactions

not in the usual mode of doing

business, and the use of dummies

or fictitious parties are common

examples of “badges of fraud."

As said in the Bentley case,

supra: "No effort to hinder or

delay creditors is more severely

condemned by the law than an

attempt by a debtor to place his

property where he can still enjoy

it and at the same time require

his creditors to remain unsatis-

fied." Although “badges of

fraud" are not conclusive and are

more or less strong or weak

according to their nature and the

C-21.

number occurring in the same

case, “a concurrence of several

badges will always make out a

strong case."

8. Plaintif€ should recover his

costs of suit.

DATED this 13th day of July, 1981.

/s/ Jos. O. McDaniel

DISTRICT JUDGE

C-22.

Ho. 14762

COMPANY, LTD., a Bahamian

corporation, MICHAEL W. MOGAN,

BURTON BERGERC ’ EUGENE FOX,

TED IVY, JAMES GLEASON, a

fictitious person, NUOVO

ANSTALT, a Liechtensteinian

trust, and DOES I through 100,

inclusive,

Defendants.

FILED:

1981 JUL 13 PM 2:50

Clerk R.L. Kane

/s/ Deputy

DECREE QUIETING TITLE

AND JUDGMENT

Plaintiff's Motion to Dismiss for

Failure to Make Discovery and in the

C-23.

Alternative for Summary Judgment having

come on for hearing May 12, 1981, and

the Court after examining the affidavits

and other documentation produced by the

parties and considering the memoranda

and oral arguments of counsel, and the

Court having filed its Findings of Fact

and Conclusions of Law;

IT IS ORDERED, ADJUDGED AND DECREED

as follows:

1. Plaintiff is the owner in fee

simple and entitled to the possession of

certain real property situated in the

County of Elko, State of Nevada, des-

cribed in Exhibit A attached hereto.

Together with the funds received from

MICHAEL W. MOGAN, BURTON BERGERON,

EUGENE FOX AND TED IVY (purchasers in

good faith under Contracts with O'DON-

NELL).

C-24.

2. The claims of Defendants BOYD

JAMES O'DONNELL, JOAN O'DONNELL, NUOVO

ANSTALT, JAMES GLEASON, and TEMORA TRAD-

ING COMPANY, its officers, directors,

agents, attorneys at law and attorney-

in-fact, and all who may claim title

under them as to said real property are

without any right whatever, and said

persons and corporation have no estate,

right, title, lien, or interest whatever

in or to said real property or any part

thereof, or said funds, and are all

permanently enjoined from claiming or

asserting any estate, right, title,

lien, or interest in or to said real

property of funds or any part thereof;

3. Defencant TEMORA TRADING COMPANY

and Richard M. Moneymaker, as attorney-

in-fact, their officers, agents, repre-

sentatives, employees, attorneys, and

C-25.

all other persons in active concert and

participation with them are hereby

ordered to execute a Deed to Plaintiff,

with thirty (30) days, to the following

real properties in the State of Califor-

nia:

(a) Lot 60 in Tract 21360, in

the County of Los Angeles, State of

California, as per map recorded in Book

587, Pages 59 to 63 of Maps, in the

office of the County Recorder of said

County, commonly known as 1065 North

Hillcrest Road, Beverly Hills, Califor-

nia.

(b) The easterly 82.5 feet of

the westerly 165 feet of Lot 511 of

Tract 1000, in the County of Los Ange-

les, State of California, as per map

recorded in Book 19, Pages 1 to 34,

inclusive, of Maps in the office of the

C-26.

Recorder of said County, except the

South 250 feet thereof, commonly known

as the R-4 Lot on Sherman Way, Van Nuys,

California.

(c) 57 Arcola Avenue, North

Hollywood, being Lot 1 of Tract No.

11,650 as per map recorded in Book 2420

Page 25 in official records of said

County Recorder of Los Angeles County.

(4) Lot 253 of Tract 323 as per

map recorded in Book 14, Page 85 of maps

in the office of the County Recorder of

Los Angeles County.

(e) That certain real property

situate in the County of San Bernardino,

State of California, subject to various

contracts of sale, commonly known as the

"Hesperia Lands” described as: Tract

4725, Lots 213 and 231, as per map

recorded in Book 59, Pages 72-75,

C-27.

inclusive of Maps; Tract 4840, Lots 673,

2, 502, and 629, as per map recorded in

Book 61, Pages 57-59 of Maps; Tract

4724, Lots 177 and 138, as per map

recorded in Book 60, Pages 58-62 of

Maps; Tract 4725, Lot 37, as per map

recorded in Book 59, Pages 72-75, inclu-

sive of Maps, all in the office of the

County Recorder of San Bernardino Coun-

ty, California.

4. In the event of the properties

listed in paragraph 3 have been sold,

Defendant TEMORA TRADING COMPANY and

Richard M. Moneymaker, as attorney-in-

fact, their officers, agents, represen-

tatives, employees, attorneys and all

persons in active concert and participa-

tion with them are hereby ordered to pay

over to the Plaintiff any and all pro-

ceeds received from said sale or sales,

C-28.

as well as any documentation pertaining

to said sale, all within thirty (30)

Gays from the date hereof.

5. The Court hereby specifically

reserves jurisdiction to enter all

necessary additional orders to effect

the enforcement of the above Judgment.

IT IS FURTHER ORDERED, ADJUDGED AND

DECREED that Plaintiff recover his costs

of suit.

ISSUED at Elko, WNevada, July 13,

1981.

/s/Jos. O. McDaniel

DISTRICT JUDGE

CERTIFICATE OF MAILING

The undersigned employee of the

Fourth Judicial District Court hereby

certifies that on the 13th day of July,

1981, one copy of the foregoing Decree

Quieting Title and Judgment, and one

C-29.

copy of Order Granting Plaintiff's

Motion to Dismiss for Failure to Make

Discover, and Summary Judgment were

mailed to each of the following-named

attorneys:

1. Richard M. Moneymaker, Esq., Money-

maker & Morrison, 700 S. Flower

Street, Suite 1702, Los Angeles,

California 90017

2. Richard G. Barrows, Esq., Wilson,

Wilson & Barrows, Ltd., P. O. Box

389, Elko, Nevada 89801

3. Russell Piccoli, Esq., Goldstein &

Kingsley, 1110 E. McDowell Road,

Phoenix, Arizona 85006

4. Robert B. Goicoechea, Esq., Goicoe-

chea, DiGrazia & Marvel, P. 0. Box

1358, Elko, Nevada 89801

/s/Beryl L. Jenkins

Beryl L. Jenkins

C-30.

The following real property situate in

the County of Elko, State of Nevada:

TOWNSHIP 36 NORTH, RANGE 58 EAST,

—s=—“Section?: WN 1/2 SE 1/4

Section 29: NE 1/4 NW 1/4

TOWNSHIP 37 NORTH, RANGE 58 EAST,

Section 1l: SW 1/4 SE 1/4;

NW 1/4 SE 1/4

Section 25: SW 1/4

Section 35: NE 1/4

eee 38 NORTH, RANGE 58 EAST,

Section 25: NW 1/4 SW 1/4

TOWNSHIP 37 NORTH, RANGE 59 EAST,

M.D.B.&M.

ection 17: SE 1/4

TOWNSHIP 37 NORTH, RANGE 59 EAST,

ection 31: NE 1/4; Ww 1/2

SE 1/4; W 1/2 E1/2 SE 1/4

TOWNSHIP 38 NORTH, RANGE 59 EAST,

M. -B.&M.

ection 29: WN 1/2 NW 1/4

SE 1/4; SW 1/4

TOWNSHIP 35 NORTH, RANGE 57 EAST,

* 7 -& *

Section l: WN 1/2 SE 1/4

C-31.

DO NOT PUBLISH#H

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN THE MATTER OF

BOYD O'DONNELL

and

JOAN O'DONNELL, Bankrupts.

TEMORA TRADING CO.,

Plaintiff-Appellant,

vs.

WALLACE PERRY, Trustee.

NO. 76-1837

PILED

JAN 26, 1979

Emil E. Melfi, Jr. Clerk

U.S. Court of Appeals

Appeal from the United States

District Court for the Central

_District of California

D-1.

Before: ELY and TRASK, Circuit Judges,

and FITZGERALD, * District Judge.

Upon the filing of voluntary peti-

tions for bankruptcy in Arizona, bank-

ruptcy proceedings were commenced

against Boyd and Joan O'Donnell, and

pursuant thereto, a trustee, Wallace

Perry, was duly appointed. Thereafter

the trustee, learning of properties

previously owned by the bankrupts and

located in Southern California and

Nevada, instituted ancillary proceedings

in the District Court for the Central

District of California. The trustee

contended in those ancillary proceedings

that the disposition of the properties

to various persons, including one James

* Honorable James M. Fitzgerald,

United States District Judge, District

of Alaska, sitting by designation.

D-2.

Gleason, constituted a fraud upon the

bankrupts’ creditors and accordingly,

the trustee sought and secured personal

injunctions against further disposition

of the properties by the transferees.

However, prior to the issuance of these

injunctions, Mr. Gleason had transferred

all his interests in the subject proper-

ties to Temora Trading Co., a Bahamian

corporation, in return for a beneficial

interest in the shares of Temora. Three

years after issuance of the requested

injunctions appellant, Gleason's succes-

sor-in-interest, brought this collateral

proceeding in the bankruptcy court for

the Central District of California,

seeking to set aside the Gleason injunc-

tions as void for want of jurisdiction

over the person. The bankruptcy judge

refused to vacate the injunctions and

D-3.

the district court affirmed without

opinivn. The sole issue we address here

relates to the validity of those injunc-

tions.

Our appellate jurisdiction is confer-

red by 28 U.S.C. §1292(a)(1), an appeal

from an order of the district court

refusing to dissolve an injunction.

Although the trustee failed to file a

brief, he sent a brief communication to

the clerk of court suggesting that the

appeal was moot on the ground that

Temora had succeeded in disposing of the

properties despite the existence of the

injunctions. However, at oral argument

the issue of mootness was conceded to be

without merit. This compels us to

address the issue in this case: whether

the bankruptcy court in the ancillary

D-4.

proceedings had personal jurisdiction to

issue the injunctions against Gleason.

The issue of lack of jurisdiction

over the person was not raised before

the original bankruptcy judge prior to

issuance of the injunctions, presumably

because Gleason never made an appearance

before the court, personally or other-

wise. The basis for the ancillary pro-

ceeding, as alleged by the trustee, was

that Gleason was an alter ego of the

bankrupts and that signatures of Glea-

son's name were actually executed by the

bankrupts. At the time, although urging

the “alter ego" theory, the trustee did

not go so far as to allege that Gleason

was a fictitious person. Instead, the

trustee sought personal service of the

moving papers on Gleason.

D-5.

Appellant Temora Trading Co., having

acquired title from Gleason prior to the

issuance of the injunctions, challenged

the validity of the injunctions in col-

lateral proceedings brought in the Cent-

ral District of California. + this was

lf It is clear from all the aut-

horities that a collateral attack may be

brought by any party, at any time,

against a judgment void for want of

subject matter jurisdiction or of juris-

diction over the person. Due to its

jurisdictional nature such an attack is

always timely and must be ruled upon by

the court. See Bookout v. Beck, 354

F.2d 823, 825 (Sth Cir. 1965). See also

Hanley v. Four Corners Vacation Prop.,

Inc., 480 F.2d 536, 538 (10th Cir.

1973); Berry v. Allen, 411 F.2d 1142,

1146 (6th Cir. 1969); Davis v. St. Paul-

Mercury Indemnity Co., 294 F.2d 641, 643

(4th Cir. 1961); United States v. Sotis,

131 F.2d 783, 787 (7th Cir. 1942);

United States v. Milana, 148 F.Supp.

152, 154 (E.D. Mich. 1957). According-

ly, the referee's ruling that Rule 60(b)

barred appellant's complaint was error.

See Bookout, supra, at 825. See also

Comprehensive Merchandising Catalogs,

Inc. v. Madison Sales Cocp., 521 F.2d

1210, 1211 n. 1 (7th Cir. 1975); Graci-

ette v. Star Guidance, Inc., 66 F.R.D

(continued)

D-6.

the first time the jurisdictional issue

was raised. At that time the trustee

conceded in the pre-trial order that

service had been improper, but, somewhat

inconsistently from his original posi-

tion in the ancillary proceeding, argued

that Gleason was a fictitious person and

that appellant had acquired its title

through fraud. In the proceedings that

followed, testimony offered by Temora

Trading Co. showing that Gleason, in

fact, did exist. The bankruptcy judge

accordingly found Gleason was not a

fictitious person. Nevertheless, on

424, 426 (S.D.N.Y¥Y. 1975); Fed. R. Civ.

Proc. 60(b), cl. 43; J. Moore, 7 Federal

Practice, 9460.25 [1] and 2 Federal Prac-

tice, 44.02[3], at 4-46 (2d ed. 1973);

Wright and Miller, 11 Federal Practice

and Procedure, §2862 at 197, 200 (1973).

D-7.

other grounds, judgment was entered

against Temora. 2/

Appellant Temora Trading subsequently

appealed to the district court. At that

time, the trustee shifted ground, con-

tending service had been perfected by

way of substituted service. It thus

appears that the trustee is now prepared

to concede the existence of Gleason.

The district judge denied the appeal

without opinion.

The following facts, elicited in the

bankruptcy court below, reveal the basis

2/ see note 1, supra. Despite the

evidence that Gleason Indeed existed

(thus calling into question the adequacy

of service), the bankruptcy judge con-

Cluded that plaintiff lacked standin

below to contest the injunctions. We

find that inasmuch, as the injunctions

against its predecessor-in-interest

clouded appellant's title to the subject

properties, appellant had sufficient

standing to contest their validity on

jurisdictional grounds.

D-8.

upon which we conclude that there was no

perfected service of process on Gleason.

The evidence squarely established while

one Opal DeShong had been personally

served (or served by mail) with the

injunction papers intended for Gleason,

Ms. DeShong had never been authorized by

Gleason to receive service of process.

Since Gleason himself was never served,

we conclude that compliance with the

service requirements of Rule 4(d)(1) of

the Federal Rules of Civil Procedure was

never accomplished.

Nor does the evidence reveal that

substituted service was made under the

terms of Rule 4(d)(7). That subsection

permits service to proceed in the "man-

ner prescribed by the law of the state"

in which the district court sits.

Although California Code of Civil

D-9.

Procedure §415.20 allows for substituted

service, such service is limited to

delivery of copies to specific loca-

tions, including the person's “usual

Place of business." While the testimony

revealed that Ms. DeShong had on at

least one occasion met Gleason and

notarized his signature on certain docu-

ments, the record is devoid of any sup-

port for the position that Wilden Realty

(Ms. DeShong's place of employment) was

Gleason's “usual place of business."

Accordingly, we conclude that substi-

tuted service under the provisions of

Rule 4(d)(7) was also never perfected.

As a result, the personal injunctions

issued by the ancillary bankruptcy pro-

ceedings in 1971 and 1972, having never

been accompanied by acquisition of per-

sonal jurisdiction over Gleason through

D-10.

personal appearance, service, waiver or

otherwise, were improperlv issued.

We conclude that the bankruptcy court

never acquired jurisdiction over the

person of James Gleason, a necessary

prerequisite to issuance of any personal

injunction enjoining his disposition of

certain properties, and, accordingly,

find that the injunctions were void ab

initio. See cases cited in note l,

supra. The order below dismissing the

appeal is reversed and the cause remand-

ed with instructions to vacate the

injunctions.

D-11l.

JOAN O'DONNELL, Bankrupts.

TEMORA TRADING CO.,

Plaintiff-Appellant,

vs.

WALLACE PERRY, Trustee.

NO. 76-1837

FILED

DEC 3 1979

Richard H. Deane

Clerk, U.S. Court of Appeals

ORDER MODIFYING MEMORANDUM OF DECISION

Appeal from the United States

District Court for the

Central District of California

D-12.

Before: ELY and TRASK, Circuit Judges,

and FITZGERALD, * District Judge.

The third full sentence on page 3 of

the Court's memorandum of decision of

January 26, 1979 is modified to read:

The Bankruptcy Court found it

unnecessary to rule as to the

existence of James Gleason and

accordingly made no finding of

fact in that regard.

This sentence replaces the sentence

currently reading: "The bankruptcy

judge accordingly refused to find that

Gleason was a fictitious person."

* Honorable James M. Fitzgerald,

United States District Judge, District

of Alaska, sitting by designation.

D-13.

Ho. 3 of 1980

An Act to amend the Banks and Trust

Companies Regulation Act, 1965.

(Assented to: 24th March, 1980)

Commencement: 24th March, 1980)

Enacted by the Parliament of The Baha-

mas.

l. This Act may be cited as the

Banks and Trust Companies Regulation

(Amendment) Act, 1980.

2. Section 10 of the Banks and Trust

Companies Regulation Act, 1965 is

repealed and the following section sub-

stituted --

10. -=- .(1) No person who has

acquired information in his capa-

city as --

(a) director, officer, enm-

ployee or agent of any licen-

see or former licensee;

(b) counsel and attorney,

consultant or auditor of the

Central Bank of The Bahamas,

established under section 3

of the Centril Bank of The

Bahamas Act, 1974, or as an

E-..

employee or agent of such

counsel and attorney, consul-

tant or auditor;

(c) counsel and attorney,

consultant, auditor, account-

ant, receiver or liquidator

of any licensee or former

licensee or as an employee or

agent of such counsel and

attorney, consultant, audi-

tor, accountant, receiver or

liquidator;

(4) auditor of any customer

of any licensee or former

licensee or as an employee or

agent of such auditor;

(e) the Inspector under the

provisions of this Act,

shall, without the express or

implied consent of the customer

concerned, disclose to any person

any such information relating to

the identity, assets, liabili-

ties, transactions, accounts of a

customer of a licensee or relat-

ing to any application by any

person under the provisions of

this Act, as the case may be,

except --

(i) for the purpose of the

performance of his dwties or

the exercise of his fwnctions

under this Act, if amy; or

(2)

(3)

(ii) for the ‘‘ e of the

performance o is duties

within the scope of his

employment; or

(iii) when a licensee is

lawfully required to make

disclosure by any court of

competent jurisdiction within

The Bahamas, or under the

provisions of any law of The

Bahamas.

Nothing contained in this

section shall --

(a) prejudice or derogate

from the rights and duties

subsisting at common law

between a licensee and its

customer; or

(b) prevent a licensee from

oviding upon a legitimate

siness request in the nor-

mal course of business a

general credit rating with

respect to a customer.

Every person who contravenes

the provisions of subsection

(1) of this section shall be

guilty of an offence against

this Act and shall be liable

on summary conviction to a

fine not exceeding fifteen

thousand dollars or to a term

of imprisonment not exceeding

two vears or to both such

fine and imprisonment."

E-3.

Section ll(e) of the Federal Bank-

ruptcy Act of 1938 (11 U.S.C. Sec. 29

(e)) provides:

e. A receiver or trustee may,

within two years subsequent to

the date of adjudication or with-

in such further period of time as

the Federal or State law may

permit, institute proceedings in

behalf of the estate upon rr

claim against which the period

limitation fixed by Federal or

State law had not expired at the

time of the filing of the peti-

tion in bankruptcy. Where, by

any agreement, a period of limit-

ation is fixed for instituting a

suit or proceeding upon any

claim, or for presenting or fil-

ing any claim, proof of claim,

proof of loss, demand, notice, or

the like, or where in any pro-

ceeding, judicial or otherwise, a

period of limitation is fixed,

either in such proceeding or by

applicable Federal or State law,

for taking any action, filing any

Claim or pleading, or doing any

act, and where in any such case

such period had not expired at

the date of the filing of the

petition in bankruptcy, the

F-l.

receiver or trustee of the bank-

rupt may, for the benefit of the

estate, take any such action or

Go any such act, required of or

permitted to the bankrupt, within

a period of sixty days subsequent

to the date of adjudication or

within such further period as may

be permitted by the agreement or

in the proceeding or by appli-

cable Federal or State law as the

case may be.

Section 70(a) of the Federal Bank-

ruptcy Act of 1938 (11 U.S.C. Sec.

110(a)) provides:

SECTION SEVENTY

(11 U.S.C. § 110)

§ 70. Title to Property. a.

The trustee of the estate of a

bankrupt and his successor or

successors, if any, upon his or

their appointment and qualifica-

tion, shall in turn be vested by

operation of law with the title

of the bankrupt as of the date of

the filing of the petition initi-

ating a proceeding under this

Act, except insofar as it is to

property which is held to be

exempt, to all of the following

kinds of property wherever locat-

ed (1) documents relating to his

property; (2) interests in

patents, patent rights, copy-

rights, and trade-marks, and in

applications therefor: Provided,

That in case the trustee, within

thirty days after appointment and

qualification, does not notify

the applicant for a patent, copy-

right, or trademark of his elec-

tion to prosecute the application

to allowance or rejection, the

bankrupt may apply to the court

for an order revesting him with

the title thereto, which petition

shall be granted unless for cause

shown by the trustee the court

grants further time to the trust-

ee for making such election; and

such applicant may, in any event,

at any time petition the court to

be revested with such title in

case the trustee shall fail to

prosecute such application with

reasonable diligence; and _ the

court, upon revesting the bank-

rupt with such title, shall

direct the trustee to execute

proper instruments of transfer to

make the same effective in law

and upon the records: (3) powers

which he might have exercised for

his own benefit, but not those

which he might have exercised

solely for some other person; (4)

property transferred by him in

fraud of his creditors; (5) pro-

perty, including rights of

ac ton, which prior to the filing

of the petition he could by any

means have transferred or which

might have been levied upon and

F-3.

sold under judicial process

against him, or otherwise seized,

impounded, or sequestered: Pro-

vided, That rights of action ex

elicto for libel, slander,

injuries to the person of the

bankrupt or of a relative,

whether or not resulting in

death, seduction, and criminal

conversation shall not vest in

the trustee unless by the law of

the State such rights of action

are subject to attachment, execu-

tion, garnishment, sequestration,

or other judicial process: And

provided further, That when any

ankrupt, w S a natural per-

son, shall have any insurance

policy which has a cash surrender

value payable to himself, his

estate, or personal representa-

tives he may, within thirty days

after the cash surrender value

has been ascertained and stated

to the trustee by the company

issuing the same, pay or secure

to the trustee the sum so ascer-

tained and stated, and continue

to hold, own, and carry such

policy free from the claims of

the creditors participating in

the distribution of his estate

under the bankruptcy proceedings,

otherwise the policy shall pass

to the trustee as assets; (6)

rights of action arising upon

contracts, or usury, or the un-

lawful taking or detention of or

injury to his pro, erty; (7) con-

tingent remainders, executory

F-4.

devises and limitations, rights

of entry for condition broken,

rights or possibilities of rever-

ter, and like interests in real

property, which were nonassign-

able prior to bankruptcy and

which, within six months there-

after, become assignable inter-

ests or estates or give rise to

powers in the bankrupt to acquire

assignable interests or estates;

and (8) property held by an

assignee for the benefit of cred-

itors appointed under an assign-

ment which constituted an act of

bankruptcy, which property shall,

for the purposes of this Act, be

deemed to be held by the assignee

as the agent of the bankrupt and

shall be subject to the summary

jurisdiction of the court.

All property, wherever locat-

ed, except insofar as it is pro-

perty which is held to be exempt,

which vests in the bankrupt with-

in six months after bankruptcy by

bequest, devise or inheritance

shall vest in the trustee and his

successor or successors, if any,

upon his or their appointment and

qualification, as of the date

when it vested in the bankrupt,

and shall be free and discharged

from any transfer made or suffer-

ed by the bankrupt after bank-

ruptcy.

All property, wherever locat-

ed, except insofar as it is

F-5.

property which is held to be

exempt, in which the bankrupt has

at the date of bankruptcy an

estate or interest by the entire-

ty and which within six months

after bankruptcy becomes trans-

ferable in whole or in part

solely by the bankrupt shall, to

the extent it becomes so trans-

ferable, vest in the trustee and

his successor or successors, if

any, upon his or their appoint-

ment and qualification, as of the

date of bankruptcy.

The title of the trustee

shall not be affected by the

prior possession of a receiver or

other officer an any court.