Opposition Brief — Long Beach Mortgage Co. v. Evans
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Supteme Court. U.S.
FILED
No. 09-1258 MAY 19 2010
OFFICE OF tHE CLERK
jn The
Supreme Court of the Gnited Siates
¢
LONG BEACH MORTGAGE COMPANY,
Petitioner,
V.
ROBB EVANS, AS RECEIVER
FOR TLC AMERICA, INC.,
Respondent.
+
On Petition For A Writ Of Certiorari
To The Court Of Appeals Of Texas,
Fifth District
*
BRIEF IN OPPOSITION
*
KAREN L. HART
Counsel of Record
RANDALL K. LINDLEY
Ross A, WILLIAMS
BELL NUNNALLY & MARTIN LLP
3232 McKinney Avenue, Suite 1400
Dallas, Texas 75204-2429
Telephone: (214) 740-1400
Facsimile: (214) 740-5744
karenh@bellnunnally.com
Attorneys for Respondent
Robb Evans, as Receiver
for TLC America, Inc.
COCKLE LAW BRIEF PRINTING CO. (800) 225-6964
OR CALL COLLECT (402) 342-2831
QUESTIONS PRESENTED
Does this Court have jurisdiction over this case
and should the Petition for a Writ of Certiorari be
granted where:
a)
b)
C)
This case concerns resolving the priority of
claims to real property under Texas law, with no
important federal issues to be decided by this
Court.
The decision of the intermediate Texas appeals
court finding that Respondent and the California
receivership court had proper in rem jurisdiction
over the real property at issue is correct and
consistent with federal law, including federal
circuit authorities, which are likewise in har-
mony. Respondent complied with 28 U.S.C. Sec-
tion 754’s requirements, timely filing of his order
of appointment in Texas.
Petitioner admits that 28 U.S.C. Sections 754
and 1692 provide a receiver jurisdiction over
receivership assets no matter where they are
located. Sections 754 and 1692 are congressional
mandates governing the powers and jurisdiction
of federal receivers and receivership courts,
trumping the local action doctrine and demon-
strating that Petitioner’s implied preemption
arguments are meritless.
il
CORPORATE DISCLOSURE STATEMENT
Robb Evans is a federally appointed receiver for
TLC America, Inc. Robb Evans 1s an individual. TLC
America, Inc. is neither a subsidiary nor an affiliate
of a publicly held company. No publicly owned com-
pany owns 10% or more of the shares of TLC America,
Inc.
11
TABLE OF CONTENTS
Page
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CORPORATE DISCLOSURE STATEMENT ........ 1]
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CONSTITUTIONAL AND STATUTORY PROVI-
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STATEMENT OF THE CASE...................ccccecceeceee
DE I iiidiivivcccvevenedccinsscsiniawcnavinace
I. Robb Evans is Appointed Receiver for the
Assets of TLAC America, INC. ........<c.0ccs<cec0e..
II. The Receiver Sues to Recover TLC Amer-
SE Is descyes rena so cevatnsasd i uasccmeansan
Ill. The Receiver Learns of the Marquette
Property and Files a Lis Pendens...............
[V. Long Beach Loans Money to the Prices and
BUDO BH BAU iio
V. A Constructive Trust is Imposed on the
Marquette Property ....... Maen SELON Mae Fone oP
VI. The Receiver is Authorized to Sell the
Marquette Property “Free and Clear’”.........
VII. Full Fee Simple Title to the Marquette
Property 1s Vested in the Receiver ..............
VIIT. Long Beach’s Lien Claim Clouds Title to
Chie BEA UICCEE FOCI aan ie siscsdescccceccsccsecsss
6
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10
TABLE OF CONTENTS — Continued
Page
The Receiver Files Declaratory Suit in
Texas State Court and Prevails in the Trial
Court, the Dallas Appeals Court and the
Texas Supreme Court
LONG BEACH’S PETITION SHOULD BE DE-
The Dallas Appeals Court’s Decision that
the Receiver Properly Invoked In Rem
Jurisdiction under 28 U.S.C. Section 754
is Fully Consistent with and Supported
by the Federal Circuits, Which are in
Harmony Regarding the Correct Interpre-
tation and Application of Section 754. Peti-
tioner’s Asserted “Conflict” is Illusory
A. The Receiver Timely Complied with
Section 754
B. The Dallas Appeals Court’s Determina-
tion that the Receiver Properly Invoked
the California Court’s Jurisdiction un-
der Section 754 is Correct and Con-
sistent with the Federal Circuits
The Federal Circuits are in Harmony
Concerning Section 754
IT.
ITT.
TABLE OF CONTENTS — Continued
Page
Petitioner’s Local Action Doctrine Argu-
ment Rests on the Tenuous Constitutional
Premise that Congress is Without Power to
Effect The Courts’ In Rem Jurisdiction
under Section 754. Regardless, the Local
Action Doctrine is Irrelevant in the
Context of the Receivership Jurisdiction
Granted under Sections 754 and 1692........
A. Petitioner’s Local Action Doctrine Ar-
gument is Based on a Faulty Con-
stitutional Premise, Making Review
I ova. ince duis reaiteceubasheconcees tina eveuans
B. Regardless, the Local Action Doctrine
is Irrelevant in the Context of the
Receivership Jurisdiction Granted un-
der Sections 754 and 1692 ....................
Petitioner’s Implied Preemption Argument
also Fails to Meet Review Standards Be-
cause it Neither Presents a State/Federal
Conflict nor an Issue of First Impression.
Any Conflict with the Local Action Doc-
trine Imagined by long Beach is Based in
Sections 754 and 1692, Congressional
Mandates that Trump the Local Action
Doctrine, a Concept of Common Law..........
PY cis nascessecsevencsseess faa Badal saan catyaeuaiias
30
32
TABLE OF CONTENTS — Continued
TABLE OF APPENDICES
Copy of Records Reflecting Transmittal and
Filing of October 4, 2000 Temporary Re-
straining Order and Orders: (1) Freezing
Assets; (2) Appointing a Temporary Receiver;
(3) for Repatriation; (4) Prohibiting the De-
struction of Documents; (5) Granting Expe-
dited Discovery; (6) for Accountings; and
Order to Show Cause re Preliminary Injunc-
tion and Appointment of a Permanent Re-
ceiver (the “Order”), and Excerpts from the
Order
Copy of Records Reflecting Transmittal and
Filing of November 1, 2000 Order of Pre-
liminary Injunction and Orders: (1) Freezing
Assets; (2) Appointing a Receiver; (3) Pro-
hibiting the Destruction of Documents; (4) for
Accountings; (5) for Repatriation of Assets;
and (6) for Expedited Discovery (the “Or-
der”), and Excerpts from the Order
Copy of Notice of Lis Pendens Filed July 23,
2002
Copy of Excerpt from Texas Home Equity Se-
curity Instrument Filed August 2, 2002 ....... App. 18
TABLE OF AUTHORITIES
CASES
Bowles v. Russell, 551 U.S. 205 (2007)
Brennan v. U.S. Postal Serv., 489 U.S. 1345
(Fale dels lancer Sop ER yn 30, 31
Citronelle-Mobile Gathering, Inc. v. Watkins,
934 F.2d 1180 (11th Cir. 1991)
Eller Indus., Inc. v. Indian Motorcycle Mfg.,
Inc., 929 F. Supp. 369 (D. Colo. 1995)
First Natl Bank of Alabama-Huntsville ov.
Haile, 455 U.S. 949 (1982)
In re French, 440 F.3d 145 (4th Cir. 2006), cert.
denied, French v. Liebman, 549 U.S. 815
(2006)
In re Gucci, 309 B.R. 679 (S.D.N.Y. 2004)
Haile v. Henderson Nat'l Bank, 657 F.2d 816
(6th Cir. 1981), cert. denied, First Nat’l Bank
of Alabama-Huntsville v. Haile, 455 U.S. 949
(1982) passim
Kontrick v. Ryan, 540 U.S. 443 (2004).................381, 35
Liberte Capital Group, LLC v. Capwill, 462
Re ee ee a Ne eran ehvnanccavennccasedcnsncdenssionseciss 20
Long Beach Mortg. Co. v. Evans, 284 S.W.3d
406 (Tex. App.—Dallas 2009), reh’g overruled
(June 17, 2009), review denied (Nov. 20,
2009), cert. filed (Apr. 15, 2010)
Matter of Rimsat, Ltd., 98 F.3d 956 (7th Cir.
eee ne ea oar aris unise akan cas exsusarivan ced 20
TABLE OF AUTHORITIES — Continued
Page
Pope v. Loutsville, New Albany & Chi. Ry. Co.,
We BOR 19
Quilling v. Stark, 3:05-CV-1976-L, 2006 WL
1683442 (N.D. Tex. June 19, 2006)
Rice v. Sioux City Mem’ Park Cemetery, 34!
U.S. 70 (1955)
Sec. & Exch. Comm'n v. Am. Capital Invs., Inc.,
98 F.3d 1133 (9th Cir. 1996), cert. denied,
Shelton v. Barnes, 520 U.S. 1185 (1997), abro-
gated un other grounds by Steel Co. v. Citizens
for a Better Envt, 523 U.S. 83 (1998)
Sec. & Exch. Comm’n v. Cook, No. 3-01-CV-
0480-R, 2001 WL 803791 (N.D. Tex. July ll,
2001)
Sec. & Exch. Comm’n vu. Infinity Group Co., 27
F. Supp. 2d 559 (E.D. Pa. 1998)
Sec. & Exch. Comm’n v. Vision Comme’ns, Inc.,
74 F.3d 287 (D.C. Cir. 1996) passim
Sec. & Exch. Comm’n v. Vision Commce’ns, Inc.,
No. 94-0615 (CRR), 1994 WL 855061 (D.D.C.
June 28, 1994)
Sec. & Exch. Comm’n v. Equity Serv. Corp ,
F.2d 1092 (3d Cir. 1980)
Select Creations, Inc. v. Paliafito Am., Inc.,
F. Supp. 740 (E.D. Wis. 1994)
Shelton v. Barnes, 520 U.S. 1185 (1997)
In re Simon, 153 F.3d 991 (9th Cir. 1998).................. 33
TABLE OF AUTHORITIES — Continued
Page
Steel Co. v. Citizens for a Better Env't, 523 U.S.
FR Ra eivknks 60s thnoniasasaisicsteei tesa eee 24
U.S. v. Arizona Fuels Corp., 739 F.2d 455 (9th
aes RPT cascnsoxcscnaxascashensuxbdausendiudeicustcan tees passim
Warfield v. Arpe, CIVA 3:05CV1457 R, 2007 WL
549467 (N.D. Tex. Feb. 22, 2007) .....................380, 33
STATUTES AND RULES
UNITED STATES CODE TITLE 28
SEINE: WUD vancd snc casavcensdaaciedissnaseasaiedabevaniesaanene passim
NN ge Te eases au beeae seaiedenmanues epee ll
Section 1692
FEDERAL RULE OF CIVIL PROCEDURE 65.......... 21
CONSTITUTIONAL AND
STATUTORY PROVISIONS INVOLVED
28 U.S.C. Section 754 (2006) provides:
A receiver appointed in any civil action or
proceeding involving property, real, personal
or mixed, situated in different districts shall,
upon giving bond as required by the court, be
vested with complete jurisdiction and control
of such property with the right to take
possession thereof.
He shall have capacity to sue in any district
without ancillary appointment, and may be
sued with respect thereto as provided in
section 959 of this title.
Such receiver shall, within ten days after the
entry of his order of appointment, file copies
of the complaint and such order of appoint-
ment in the district court for each district in
which property is located. The failure to file
such copies in any district shall divest the
receiver of jurisdiction and contro] over all
such property in that district.
28 U.S.C. Section 1692 (2006) provides:
In proceedings in a district court where a
receiver is appointed for property, real, per-
sonal, or mixed, situated in different dis-
tricts, process may issue and be executed in
any such district as if the property lay wholly
within one district, but erders affecting the
property shall be entered of record in each of
such districts.
STATEMENT OF THE CASE
secause this case solely concerns the priority of
interests to certain real property located in Dallas,
Texas (the “Marquette Property”) under Texas law,
there are no issues for this Court to review. Respon-
dent Robb Evans, as Receiver for TLC America, Inc.
(“Respondent” or the “Receiver”) was appointed as
receiver to represent elderly investors who were
defrauded in connection with a real estate investment
scheme. The Receiver was appointed to return assets
to the receivership estate for the henefit of the
investors, who have been waiting nearly ten years for
final disposition of the Marquette Property, the last
remaining receivership asset. In connection with the
Marquette Property, the Receiver filed a lis pendens
in the Dallas County Real Property Records long
before Petitioner Long Beach Mortgage Company
(“Petitioner” or “Long Beach”) filed a mortgage lien on
the Property. Petitioner refused to release its later
filed and recorded lien, and the Receiver was forced to
file a declaratory judgment action in Texas state court
against Long Beach to have his lis pendens declared
superior to Long Beach’s lien claim.
Three levels of Texas courts, from the Dallas trial
court to the Texas Supreme Court, which denied re-
view, have now correctly decided that the Receiver’s
lis pendens and resulting interest in the Marquette
Property are superior to Petitioner’s lien claim, which
was declared void and of no force or effect concerning
the Property. Ultimately, this case arises purely as a
function of state law governing priority of claims to
real property under state law. Long Beach’s Petition
filed before this Court is simply its last-ditch effort to
delay the inevitable and to delay disposition of the
Marquette Property, which the Receiver has been
waiting to sell as the fully vested title holder for years
now. Significantly, if the Court were to review this
case, its decision would only affect the parties’ narrow
priority dispute, a state law issue outside the juris-
diction of this Court.
Recognizing that it has not and cannot win the
priority dispute to the Marquette Property with re-
spect to its lien claim, which was correctly deter-
mined to be inferior to the Receiver’s hs pendens,
Petitioner glosses over the state law that is at the
core of this case and has instead invented “federal
questions” that are inapplicable and invalid. As such,
and in its misguided quest to invalidate the Re-
ceiver’s superior lis pendens, Long Beach improperly
altempts to collaterally attack the final judgment of
the U.S. District Court for the Central District of
California (the “California Court”), where the court
entered a constructive trust on the Marquette Prop-
erty, one of the properties to which the Receiver
sought to be deemed the rightful owner in the action
forming the basis of the .teceiver’s lis pendens. Long
Beach improperly argues that the Receiver and the
4
California Court lacked jurisdiction over the Mar-
quette Property because the Receiver allegedly failed
to timely file the order appointing him Receiver of
TLC America, Inc. Long Beach, as it has done at
every stage of this appeal, misconstrues the law and
the facts in its Petition. Petitioner cannot deny, and
in fact admits, that 28 U.S.C. Section 754 authorizes
federal district courts to exercise intradistrict in rem
jurisdiction over property located in other districts. 28
U.S.C. §§ 754, 1692 (2006). As a result of this conces-
sion, Long Beach has resorted to technical arguments
that the Receiver allegedly failed to comply with the
statutory requirements for invoking jurisdiction. Long
Beach’s arguments are entirely incorrect-—the Re-
ceiver complied with the requirements of Section 754
and his appointment order was timely filed in Texas.
Further, Long Beach’s assertion that that the
opinion of the Fifth District Court of Appeals in
Dallas, Texas (the “Dallas Appeals Court”) is in
conflict with federal law or any decision of the federal
circuit courts is also incorrect and insupportable. Pe-
tilioner’s arguments are simply smoke and mirrors.
The “conflict” presented by Long Beach is entirely
concocted and does not meet the standards for this
Court’s review under Supreme Court Rule 10, which
Long Beach tellingly ignores in its Petition. The
Dallas Appeals Court correctly applied 28 U.S.C. Sec-
tions 754 and 1692 in a manner consistent with the
language of those statutes and federal case law, and
correctly held that the California Court had in rem
jurisdiction over the Marquette Property. 28 U.S.C.
$$ 754, 1962 (2006); see U.S. Sup. Cr. R. 10. There is
harmony between and among the Dallas Appeals
Court and the federal courts regarding the interpreta-
tion and application of Section 754. Moreover, Peti-
tioner’s unfounded complaint that the courts merely
misapplied Section 754 does not present a sufficient
basis for review. See U.S. Sup. Cr. R. 10. (stating that
“a petition for a writ of certiorari is rarely granted
when the asserted error consists of ... the mis-
”
application of a properly stated rule of Jaw.”).
Although Petitioner admits in its Petition that
Sections 754 and 1692 authorize federal district
courts to exercise intradistrict in rem jurisdiction
over property located elsewhere, in its second argu-
ment, Petitioner conveniently ignores those statutes
and asserts instead that the local action doctrine
alone governs jurisdiction in cases such as this one.
But Petitioner cannot change the jurisdictional man-
date expressed by Congress in Sections 754 and 1692
by ignoring it, and this Court should not entertain
such a constitutionally spec:ous argument by grant-
ing review.
Petitioner’s final argument regarding implied
preemption also fails to meet the standard for review
because it neither presents a state/federal conflict nor
an issue of first impression. U.S. Sup. CT. R. 10. Any
conflict with the local action doctrine imagined by
Long Beach is based in Sections 754 and 1692,
congressional mandates that specifically govern the
powers and jurisdiction of federal receivers and re-
ceivership courts and trump the local action doctrine,
a concept of common law.
6
Because Petitioner fails to present any issucs
worthy of this Court’s consideration and fails to meet
the standard for review by this Court, its Petition for
a Writ of Certiorari should be denied.
.
BACKGROUND FACTS
Robb Evans is Appointed Receiver for
the Assets of TLC America, Inc.
In 2000, the Securities and Exchange Commis-
sion, in Sec. & Exch. Comm’n v. TLC Investments &
Trade Co., et al., Case No. SACV 00-960-DOC, in the
U.S. District Court for the Central District of Cali-
fornia (the “SEC Litigation”), brought suit against
TLC America, Inc. (“TLC America”) -»1 related pusi-
ness entities and individuals for federal securities
laws violations for the misuse and diversion of over
$28 million in investor funds.’ In the SEC Litigation,
the California federal court initially appointed Robb
Evans as Temporary Receiver on October 4, 2000 (the
“October 4, 2000 Order”).* This temporary appoint-
ment order gave Robb Evans the “full powers of an
equity receiver ... with full power over all funds,
assets, collateral, [and] premises ... of TLC.” The
' C.R. Vol. 2, p. 67. “C.R.” refers to the Clerk’s Record,
which consists of five separate volumes filed in the Dallas
Appeals Court. Citations to Respondent’s Appendices, which are
attached, are denoted herein as “Resp. App.”
* C.R. Vol. 3, pp. 423, 425, 432-34; Resp. App. at 3-7.
> C.R. Vol. 3, p. 432; Resp. App. at 4.
7
October 4, 2000 Order also immediately authorized
the Receiver to “have access to and to collect and to
take custody ... of all assets ... of TLC” and “to take
such action as is necessary and appropriate to
preserve ... any assets of TLC.” This initial order of
appointment created a receivership estate for the
assets of TLC America, and it established Robb Evans
as the Receiver of that estate. The October 4, 2000
Order did not provide a date for any exptration of the
receivership estate or the establishment of Robb
Evans as Receiver of TLC America.” On October 13,
2000, the Receiver filed his initial order of
appointment and the Complaint in the SEC
Litigation in the United States District Court for the
Northern District of Texas.*
On November 1, 2000, the court in the SEC
Litigation entered an order appointing Robb Evans as
Permanent Receiver of TLC America (the “November
1, 2000 Order”).’ The November 1, 2000 Order con-
tinued the same receivership powers and authorities
imbued in Robb Evans by the October 4, 2000 Order.”
The November 1, 2000 Order likewise continued the
receivership estate initially created by the October 4,
2000 Order.’ On December 20, 2000, the Receiver
* C.R. Vol. 3, pp. 432-33; Resp. App. at 4-6.
° C.R. Vol. 3, pp. 422-42; Resp. App. at 3-7.
° C.R. Vol. 3, pp. 423, 443, 485; Resp. App. at 1, 7.
" C.R. Vol. 3, pp. 463, 471-74; Resp. App. at 10-15.
° C.R. Vol. 3, pp. 471-74; Resp. App. at 11-14
* Id.
8
mailed this order of permanent appointment to the
United States District Court for the Northern District
of Texas for filing.” On January 2, 2001, the Clerk of
the United States District Court for the Northern
District of Texas stamped the order as received.”
Il. The Receiver Sues to Kecover TLC
America’s Property.
The Receiver then brought suit to recover TLC
America’s property in Robb Evans, as Receiver for
TLC America, Inc. v. James F. Garro, David Price, et
al., Case No. SACV 01-6466, in the U.S. District
Court for the Central District of California (the
“Garro Litigation”). The Receiver asserted claims of
fraud, conversion, negligence and breach of fiduciary
duty.’ The Receiver also sought the imposition of a
constructive trust on property purchased with funds
stolen from TLC America.” Importantly, the Receiver
did not simply plead constructive trust to satisfy any
money judgment he received on his other causes of
action. Rather, the Receiver requested an order de-
claring that the defendants held purchases or in-
vestments made with TLC America funds in a
constructive trust for the benefit of TLC America and
C.R. Vol. 3, p. 462; Resp. App. at 8.
' C.R. Vol. 3, pp. 462, 463; Resp. App. at 8.
C.R. Vol. 2, pp. 66, 67.
' C.R. Vol. 2, pp. 67, 102.
“ C.R. Vol. 2, pp. 67, 139-40.
9
declaring TLC America the owner of the purchases or
investments made with TLC America funds.” Thus,
on the face of the Receiver’s complaint, the Receiver
sought an interest in any and all property purchased
with TLC’s funds.
Ill. The Receiver Learns of the Marquette
Property and Files a Lis Pendens.
Specifically, over $2.5 million of TLC America’s
funds had been wired into a Durham Capital Group,
Inc. (“Durham”) bank account controlled by David
Price, the President of Durham, and his now former
wife, Carol Miller Price (collectively, the “Prices”)."°
During the course of the Garro Litigation, the Re-
ceiver discovered that over $1 million of the funds
transferred into the Durham account controlled by
David Price and Carol Miller Price were diverted into
an account separately controlled by Carol Miller
Price.’ Carol Miller Price then used this money to
purchase the Marquette Property.” Through dis-
covery in the Garro Litigation, the Receiver learned
of the Marquette Property in July 2002." Immedi-
ately upon discovering the Marquette Property, the
Receiver filed a Notice of Lis Pendens providing
° C.R. Vol. 2, pp. 139-40.
'° C.R. Vol. 2, p. 284.
C.R. Vol. 2, p. 285.
'" C.R. Vol. 2, pp. 285-86.
" C.R. Vol. 2, pp. 67-68, 285-86.
10
notice of his interest and rights in the Marquette
Property... The Receiver filed the Notice of Lis
Pendens on July 23, 2002."
IV. Long Beach Loans Money to the Prices
and Records a Lien.
On July 24, 2002, one day after the Receiver’s lis
pendens was filed, the Prices entered a $400,000
home equity loan with Long Beach.” A deed of trust
on the Marquette Property secured this loan.” On
August 2, 2002, Long Beach filed the deed of trust in
the Dallas County Real Property Records, creating a
lien claim on the Marquette Property.” it is undis-
puted that the Prices defaulted on their loan with
Long Beach, and now Long Beach’s claim has clouded
title to the Marquette Property. Tellingly, Long Beach
never foreclosed on its claimed inte:est in the
Marquette Property.”
” C.R. Vol. 2, pp. 67-68; Resp. App. at 16-17.
“ C.R. Vol. 2, pp. 68, 145-48; Resp. App. at 16.
* C.R. Vol. 2, pp. 68, 151-64; Resp. App. at 18.
we”
* Id.
~ C.R. Vol. 2, p. 68
11
Ve A Constructive Trust is Imposed on the
Marquette Property.
After a trial on the merits, the California federal
court, on or about December 16, 2002, in the Garro
Litigation found David Price liable for the fraudulent
transfer of TLC America’s funds in the amount of
$3,505,001.59.” The court also imposed a constructive
trust “over the real property, fixtures and furnishings
located at 7843 Marquette, Dallas, Texas.” The court
further held that “Defendants ... and their agents,
servants, assigns and those acting in concert with
them are enjoined from engaging in any activities to
transfer, secret or dissipate these assets.”
The California federal court also made findings of
fact that further demonstrated the direct connection
between the Marquette Property and the Garro Liti-
gation.”’ Based on these facts, the court imposed a
constructive trust on the Marquette Property “in
order to prevent the unjust enrichment of” David
Price.” Importantly, the court in the Garro Litigation
specifically found that it had jurisdiction over the
case based on 28 U.S.C. Section 1331 and the broad
jurisdictional grant of 28 U.S.C. Section 754, which
extended the court’s ancillary jurisdiction anywhere
*° C.R. Vol. 2, pp. 68-69, 174-75, 191-92.
” C.R. Vol. 2, pp. 175, 191-92.
= id,
” C.R. Vol. 2, pp. 184-85.
” ©.R. Vol. 2, 9. 191.
12
in the United States that receivership property is
located.”
VI. The Receiver is Authorized to Sell the
Marquette Property “Free and Clear.”
After the constructive trust was imposed in the
Garro Litigation, in 2003, the Receiver petitioned the
court in the SEC Litigation for permission to sell the
Marquette Property.” The court in the SEC Litigation
granted the Receiver permission to sell the Marquette
Property “free and clear of all liens and interests
therein, with such liens and interests to attach to the
net proceeds of sale.” The court further ordered that
“the sale proceeds shall be held in trust by the Re-
ceiver pending resolution of all disputes concerning
distribution of the sale proceeds and any claimed
interests in the Property.”“ The court also ordered
David Price, Carol Price, Long Beach and any other
third party claimant to file a claim with the court
within 60 days if they intended to assert an interest
in the sale proceeds.” The court authorized the Re-
ceiver to “perform any and all... acts necessary to
effectuate the orderly sale of the Property.””
* CLR. Vol. 2, p. 188.
* C.R. Vol. 2, pp. 69, 197-239.
“ C.R. Vol. 2, pp. 242-44.
“ CR. Vol. 2, p. 244.
” C.R. Vol. 2, p. 243.
ae.
13
The Receiver originally arranged to sell the Mar-
quette Property to Sally K. Johnson for $838,000.”
Given the various claims to the Marquette Property,
the sales contract with Ms. Johnson was extended
several times while the outstanding claims to the
Marquette Property are resolved.” As a result of the
successive appeals and the continued delays caused
by Long Beach, the sale to Ms. Johnson has since
been lost.
Vil. Full Fee Simple Title to the Marquette
Property is Vested in the Receiver.
Carol Miller Price, a Dallas resident, ignored the
California federal court’s order in the SEC Litigation
and did not file a claim in that proceeding.” She still
asserted a claim to the title to the Marquette Prop-
erty, clouding title and thwarting the Receiver’s ef-
forts to secure title insurance to sell the Marquette
Property to Ms. Johnson.” The Receiver then reg-
istered the judgment imposing the constructive trust
for enforcement in the U.S. District Court for the
Northern District of Texas in Robb Evans, as Receiver
for TLC America, Inc. v. James FE. Garro, David Price,
et al., Case No. 3:038-MC-00022-M."' In 2004, the
C.R. Vol. 2, pp. 69, 214
" C.R. Vol. 2, p. 69
Id.
Id.
Id
14
Northern District of Texas divested David Price and
Carol Miller Price of all title and interest to the
Marquette Property and vested full fee simple title to
the Marquette Property in the Receiver.” The court
also authorized the Receiver to sell the Marquette
Property and to convey full fee simple title to the
Marquette Property.” The court’s orders enforcing the
constructive trust against the Prices reinforce the fact
that neither David Price nor Carol Miller Price had a
levitimate claim to the Marquette Property to begin
with. The Marquette Property was purchased by the
Prices with stolen money, and as a result, the Prices
were merely holding the property in trust for Robb
Evans, as Receiver for TLC America, the rightful
owner.
VIII. Long Beach’s Lien Claim Clouds Title to
the Marquette Property.
Long Beach did not file a claim in the SEC
Litigation pursuant to the California federal court’s
March 30, 2004 Order on Amended Ex Parte Appli-
cation.” Long Beach has asserted that it did not file a
claim because it allegedly was not served with the
Order on Amended Ex Parte Application, providing
the 60-day deadline to assert a claim to the sale
C.R. Vol. 2, pp. 69-70, 247-48, 251-53
" Id
“ C.R. Vol, 2, p. 70
15
proceeds.’ Therefore, the California federal court did
not resolve Long Beach’s lien claim, which has
clouded title to the Marquette Property and impeded
the sale to Ms. Johnson since title insurance could
not be produced to close the sale to Ms. Johnson.”
IX. The Receiver Files Declaratory Suit in
Texas State Court and Prevails in the
Trial Court, the Dallas Appeals Court
and the Texas Supreme Court.
The Receiver filed a declaratory judgment action
against Long Beach in the Dallas County district
court to resolve the competing claims to the Mar-
quette Property.” On January 22, 2007, the trial
court granted the Receiver’s summary judgment mo-
tion and entered a Final Judgment in favor of the
Receiver, declaring the Receiver’s lis pendens valid,
effective, and superior to Petitioner’s lien claim to the
Marquette Property; declaring Petitioner’s lien claim
void and of no force or effect concerning the Property;
vesting and quieting full title and interest in the
property in Respondent; authorizing Respondent to
16
sell the Property; and awarding Respondent attor-
neys’ fees.”
The Dallas Appeals Court affirmed the trial
court’s judgment, specifically holding that Respon-
dent and the California Court had jurisdiction over
the Marquette Property pursuant to 28 U.S.C.
Section 754 and applicable Federal authority. Long
Beach Mortg. Co. v. Evans, 284 5.W.3d 406, 412 (Tex
App.—Dallas 2009), reh’g overruled (June 17, 2009),
review dented (Nov. 20, 2009), cert. filed (Apr. 15,
2010). Petitioner filed a Petition for Review with the
Texas Supreme Court, Respondent filed a Reeponse
Brief, and the court denied the Petition.” Now, Long
Beach has frivolously continued its successive ap-
peals to this Court, filing an unwarranted and in-
supportable Petition for a Writ of Certiorari, which
should be summarily denied
+
~ C.R. Vol. 4, pp. 631-34; Pet. App. B. Citations to Peti
tioner’s Appendices, which are attached to the Petition for a Writ
of Certiorari, are denoted herein as “Pet. App.”
Pet App \
Pet App C
4
17
LONG BEACH’S PETITION
SHOULD BE DENIED
1. The Dallas Appeals Court’s Decision that
the Receiver Properly Invoked In Rem
Jurisdiction under 28 U.S.C. Section 754 is
Fully Consistent with and Supported by
the Federal Circuits, Which are in Har-
mony Regarding the Correct Interpretation
and Application of Section 754. Petitioner’s
Asserted “Conflict” is I/lusory.
Supreme Court Rule 10 and this Court’s estab-
lished opinions clearly provide that review is unwar-
ranted on the basis of a conflict between the courts
where the asserted conflict is illusory. See U.S. Sup.
Cr. R. 10(b), (c); Rice v. Stoux City Mem’l Park Ceme-
tery, 349 U.S. 70, 79 (1955). A petition for writ of
certiorari should only be granted in cases “where
there is a real and embarrassing conflict of opinion
and authority between the [courts].” Rice, 349 U.S. at
79. In the case at hand, there is no such conflict.
Contrary to Long Beach’s insinuations, there is no
conflict between the Dallas Appeals Court’s opinion
and federal decisions concerning the interpretation or
application of Section 754. Further, the federal cir-
cuits consistently apply and interpret Section 754.
A. The Receiver Timely Complied with
Section 754.
Long Beach has repeatedly acknowledged and
admitted that, pursuant to 28 U.S.C. Sections 754
and 1692, the Receiver is empowered to collect assets
mr ree smear eeie ae
18
anywhere in the United States. Long Beach again
concedes this point in its Petition to this Court. The
territorial jurisdiction of the receivership court, here
the U.S. District Court for the Central District of
California, extends to any district where property of
the receivership estate may be located, even if the
property is located in different states across the
nation. See Haile v. Henderson Nat'l Bank, 657 F.2d
816, 822, 824 (6th Cir. 1981), cert. denied, First Nat'l
Bank of Alabama-Huntsvilie v. Haile, 455 U.S. 949
(1982); Sec. & Exch. Comm’n v. Cook, No. 3-01-CV-
0480-R, 2001 WL 803791, at *2 (N.D. Tex. July 11,
2001); Select Creations, Inc. v. Paliafito Am., Inc., 852
F Supp. 740, 780-81 (EH.D. Wis. 1994) (rejecting
reliance on state Jaw and the argument that Court
through the Receiver could not reach property located
outside of Wisconsin).
Section 754 provides, in pertinent part, that a
receiver:
. Shall, within ten days afver the entry of
his order of appointment, file copies of the
complaint and such order of appointment in
the district court for each district in which
property is located. The failure to file such
copies in any district shall divest the receiver
of jurisdiction and control over all such
property in that district.
28 U.S.C. § 754. Section 1692 provides:
In proceedings in a district court where a
receiver is appointed for property, real,
personal, or mixed, situated in different
19
districts, process may issue and be executed
in any such district as if the property lay
wholly within one district, but orders af-
fecting the property shall be entered of
record in each of such districts.
28 U.S.C. § 1692 (emphasis supplied).
The Sixth Circuit in the Haile decision summed
up the operation of these statutes:
We begin with the undisputed proposition
that the initial suit which results in the
appointment of the receiver is the primary
action and that any suit which the receiver
thereafter brings in the appointment court in
order to execute his duties is ancillary to the
main suit. As such, the trial court has an-
cillary subject matter jurisdiction of every
such suit irrespective of diversity, amount in
controversy or any other factor which
would normally determine jurisdiction.
See Haile, 657 F.2d at 822 (emphasis supplied) (citing
Pope v. Loutsville, New Albany & Chi. Ry. Co., 173
U.S. 573 (1899)).
The Sixth Circuit succinctly concluded that:
The court in which the federal receiver is
appointed thus has ancillary subject-matter
jurisdiction of suits brought by the receiver
in the execution of his duties, and the court’s
geographical jurisdiction is extended to all
20
districts where receivership property is
found.
Id. at 824.
Receivers are typically appointed in equity for
the purpose of preserving and collecting property for
the benefit of the receivership estate, established in
this instance for the benefit of the victims of securi-
ties fraud. See Liberte Capital Group, LLC v. Capwill,
462 F.3d 543, 551 (6th Cir. 2006); Eller Indus., Inc. v.
Indian Motorcycle Mfg., Inc., 929 F. Supp. 369, 372
(D. Colo. 1995). The purpose of Sections 754 and 1692
is to provide a receiver and the receivership court
with nationwide jurisdiction to make it easier to
adjudicate interests in property that are subject to
the receivership estate. Such broad jurisdiction is a
well recognized concept in connection with bank-
ruptcy trustees and bankruptcy courts, which have
nationwide jurisdiction to adjudicate interests and
claims to assets within the bankruptcy estate. See
Matter of Rimsat, ‘.td., 98 F.3d 956, 961 (7th Cir.
1996) (“[T)Jhe efficacy of the bankruptcy proceeding
depends on the court’s ability to control and marshal
assets of the debtor wherever located”). Receivership
estates, like bankruptcy estates, are so powerful that
they even extend internationally. See In re French,
440 F.3d 145, 151 (4th Cir. 2006), cert. denied, French
v. Liebman, 549 U.S. 815 (2006); In re Gucci, 309 B.R.
679, 681 (S.D.N.Y. 2004); Citronelle-Mobile Gather-
ing, Inc. v. Watkins, 934 F.2d 1180, 1186-87 (11th Cir.
1991) (holding receiver had power to assert authority
21
over property in foreign country under order allowing
such action as to both personal and real property).
Although Long Beach acknowledges the applica-
bility of these statutes, it attempts to avoid them by
claiming that the Receiver did not timely file his
order of appointment within the ten-day period pro-
vided by Section 754. Long Beach’s ultra-technical
argument is simply incorrect.
Long Beach does not dispute that Robb Evans
filed the October 4, 2000 Order appointing him
Receiver of TLC America in the Northern District of
Texas within the ten-day period provided by Sec-
tion 754. The October 4, 2000 Order was filed in the
Northern District of Texas on October 13, 2000, only
nine days later.’ Pursuant to Sections 754 and 1692,
jurisdiction of the Receiver and the California federal
court was, therefore, established upon the timely
filing of the October 4, 2000 Order and the Receiver’s
Complaint in the Northern District of Texas on
October 13, 2000. Importantly, the October 4, 2000
order never expired.”
' CR. Vol. 3, p. 423; Resp. App. at 1, 3, 7.
* C.R. Vol. 3, pp. 422-42; Resp. App. at 3-7. The October 4,
2000 Order contained several separate orders, including an
order granting a temporary restraining order (the “[TRO”) and
the order of initial appointment of Robb Evans as receiver. Oniy
the TRO, not the appointment order, expired under the terms of
the Order and as required by Federa! Rule of Civil Procedure 65.
22
Long Beach suggests that even after timely filing
the initial order appointing him receiver, Robb Evans
was required to re-file the order appointing him
permanent receiver. Section 754, which does not dis-
tinguish between temporary and permanent orders,
does not require this. 28 U.S.C. § 754. The legislative
purpose behind Sections 754 and 1692 is to assist
receivers with their duties, not to burden them with
duplicative filing requirements for appointment or-
ders.” The point of these statutes is to make the
receiver’s job easier in retrieving receivership assets
to make the victims that a receiver represents whole
again. See Sec. & Exch. Comm’n v. Infinity Group Co.,
27 F. Supp. 2d 559, 567 (E.D. Pa. 1998) (finding that
the court, in a securities violations suit, had “‘author-
ity to grant the full panoply of equitable remedies so
that the [victims] can obtain complete relief,” in-
cluding “disgorgement, asset freezes, appotntments
of receivers, repatriation of assets, constructive
trusts, and restitution.”) (emphasis supplied). Signifi-
cantly, Long Beach has consistently failed to present
any case law that reads such a duplicative filing re-
quirement into Section 754.
By filing the October 4, 2000 Order initially
appointing him Receiver for TLC America in the
* Indeed, it would be unjust to divest a receiver of juris
diction where a receiver later discovers property in a jurisdiction
that the receiver did not have knowledge of within the ten day
time period. To do so would be unfair to the victims represented
by the receiver.
23
Northern District of Texas on October 13, 2000, Robb
Evans met the ten-day requirement of Section 754
and established his and the California Court’s juris-
diction over the Marquette Property. It is irrelevant
that the November 1, 2000 Order, which simply
continued the receivership and the Receiver’s power
and authority established in the October 4, 2000
Order, was filed in the Northern District of Texas
more than ten days after its entry. Jurisdiction had
already been established by the filing of the October
4, 2000 Order.
B. The Dallas Appeals Court’s Determi-
nation that the Receiver Properly
Invoked the California Court’s Juris-
diction under Section 754 is Correct
and Consistent with the Federal Cir-
cuits.
Based on the foregoing facts and the language of
the statute, the Dallas Appeals Court correctly
determined that the Receiver property invoked the
California Court’s jurisdiction under Section 754.
Significantly, the decision is also consistent with the
federal circuits that have opined on the application of
Section 754’s filing requirements. As such, there is no
basis for review due to a “conflict” between the Dallas
Appeals Court and the federal courts. See U.S. Sup.
Cr. R. 10; Rice, 349 U.S. at 79.
24
As stated, it is irrelevant under Section 754 that
the permanent order of appointment, which con-
tinued the established jurisdiction of the California
Court, was filed in the Northern District of Texas
more than ten days after being entered. Even if the
time limits of Section 754 applied to the Receiver’s
filing of the permanent appointment order, the case
law consistently holds that any belated filing was
effective to invoke jurisdiction under Section 754,
given that Petitioner was not prejudiced as a result.
Sec. & Exch. Comm’n v. Am. Capital Invs., Inc., 98
F.3d 1133, 1136 (9th Cir. 1996), cert. denied, Shelton
v. Barnes, 520 U.S. 1185 (1997), abrogated on other
grounds by Steel Co. v. Citizens for a Better Envt,
523 U.S. 83 (1998); Sec. & Exch. Comm’n v. Vision
Comme’ns, Inc., 74 F.8d 287, 288 (D.C. Cir. 1996);
U.S. v. Arizona Fuels Corp., 739 F.2d 455, 460 (9th
Cir. 1984); Sec. & Exch. Comm’n v. Equity Serv.
Corp., 632 F.2d 1092, 1095 (3d Cir. 1980). Indeed, Pe-
titioner could not have suffered any prejudice or harm
due to a delay in filing the permanent order of
appointment, because the order was filed in the
Northern District of Texas more than a year and a
half before the Receiver filed the lis pendens and
Petitioner entered the deed of trust, and nearly two
years before the California Court imposed a con-
structive trust on the Marquette Property. Even if the
second filing were required, Petitioner has not, and
indeed cannot, show a shred of evidence that it was
prejudiced as a result.
As such, the Dallas Appeals Court’s decision is
correct and consistent with the holdings in Equity
25
Service Corp., Arizona Fuels Corp., Vision Communti-
cations, and American Capital Investments. Because
this case has been correctly decided and presents no
conflict of authority, Long Beach has failed to meet
this Court’s standards for exercising review. See U.S.
Sup. Cr. R. 10; Rice, 349 U.S. at 79.
C. The Federal Circuits are in Harmony
Concerning Section 754.
Long Beach suggests in its Petition that the
federal circuits are somehow in conflict in connection
with the application of Section 754’s filing
requirements. The cases, again, are consistent in
finding that that a receiver may invoke jurisdiction
under Section 754 by either timely filing a complaint
and order of appointment, or by belatedly filing them
so long as the belated filing occurs before the case is
heard, i.e., before any party is prejudiced by the
belated filing. Am. Capital Invs., Inc., 98 F.3d at 1136;
Vision Comme'ns, Inc., 74 F.3d at 288; Arizona Fuels
Corp., 739 F.2d at 460; Equity Serv. Corp., 632 F.2d at
1095. Long Beach attempts to muddle the landscape
of the existing case law, but regardless of Long
Beach’s vague and confusing assertions in its Peti-
tion, the federal circuits are in harmony concerning
Section 754.
In Equrty Service Corp., a federal receiver ap-
pointed in an S.E.C. action died before complying
with the filing requirements of Section 754 and
gaining jurisdiction over certain oil and gas wells
26
located in a foreign district. Equity Serv. Corp., 632
F.2d at 1093. His replacement did not comply with
Section 754 until several months after being ap-
pointed. Jd. More than a year later, the well owners
sought to enjoin him from operating the wells by
challenging his jurisdiction based on his failure to
timely comply with the filing requirements of Section
754. Id. at 1094. The Third Circuit held that the
receiver had jurisdiction under Section 754 despite
the belated filing because the well owners failed to
show any harm from the lack of notice in the interim.
Id. at 1095.
In Arizona Fuels Corp., the Receiver never
complied with the filing requirements of Section 754.
Nevertheless, the Ninth Circuit held that the Re-
ceiver had jurisdiction over the intangible personal
property at issue because: (1) the party challenging
jurisdiction was not prejudiced by the failure to file
because it had received a copy of the complaint and
order of appointment and had actual notice of the
receivership proceedings, which it participated in; (2)
the receivership court had personal jurisdiction over
the complaining party separate from Section 754; and
(3) the court reasoned that the filing requirement
under Section 754 should not apply where the two
considerations above are present. Arizona Fueis
Corp., 739 F.2d at 460-61. Long Beach relies upon
Arizona Fuels Corp. to suggest that jurisdiction was
improperly asserted in this case. Arizona Fuels Corp.,
however, simply does not apply to the case at hand.
The Ninth Circuit determined that it was not a
27
requirement that Section 754 be complied with in
that case because the assets at issue were personal
property “in the form of a monetary credit, held by a
party over whom the court already has jurisdiction,
who has actual notice of the receivership and has
previously appeared in the receivership court” and
thus “there is no purpose gerved in requiring the
Receiver to trace the funds to Houston and make a
§ 754 filing there.” Jd. at 460-61. As a result, there is
no conflict between this case and the other cases cited
by Petitioner as they relate to the issues presented
here. Petitioner implicitly acknowledges as much by
merely citing this case in a footnote without any
discussion. Petitioner cannot create a circuit split on
the issues presented in this case by citing to in-
apposite cases.
The opinion in Vision Communications is in
harmony with the decisions in Equity Service Corp.
and Arizona Fuels Corp. In Vision Communications,
the issue was whether the receiver had acquired in
rem jurisdiction over certain transmission rights,
including a site lease for a transmission tower, by
complying with the filing requirements of Section
754. See Vision Comme'ns, Inc., 74 F.3d at 289; Sec. &
Exch. Comm'n v. Vision Comme’ns, Inc., No. 94-0615
(CRR), 1994 WL 855061, at *1 (D.D.C. June 28, 1994)
(describing rights at issue as including a site lease
for a transmission tower). The Receiver belatedly
filed the documents required by Section 754, but
not until after the court issued an injunction against
the party challenging jurisdiction. Vision Comme’ns,
’
2d
Inc., 74 F.3d at 290. The court acknowledged the
Equity Service Corp. and Arizona Fuels Corp. opin-
ions, and the concept that jurisdiction could be
obtained under Section 754 by a belated filing before
the case was heard (1.e., where the complaining party
was not prejudiced), but held that a belated filing
could not confer jurisdiction retroactively where an
injunction had already been entered. /d. at 291. Thus,
Viston Communications is not in conflict with Equity
Service Corp. and Arizona Fuels Corp., but is merely
distinguishable from them, and recognizes that a
belated filing can still invoke jurisdiction under
Section 754 where the parties are not prejudiced. See
id,
Petitioner further mischaracterizes the holding
in American Capital Investments. In that case, the
court did not “specifically hloJld that appointment ofa
permanent receiver required the timely filing of a
notice pursuant to [Section] 754.” See Pet. p. 10 (em-
phasis added). Rather, the court merely held that
such a filing was sufficient to invoke jurisdiction
under Section 754 where a timely filing was not made
within ten days of the district court’s issuance of an
order of temporary appointment. Thus, American
Capital Investments stands for the proposition that
where a temporary appointment is not timely filed, a
permanent appointment provides a new window for
timely filing. But it does not follow, as Petitioner
suggests, that Section 754 requires the inefficiency
of a second filing after a permanent appointment
despite the prior timely filing of a temporary
99
appointment. To the contrary, the court pointed out
that even if the filing was late, the complaining party
had not shown any resulting prejudice, thereby rec-
ognizing (consistently with Equity Service Corp.,
Arizona Fuels Corp., and Vision Communications)
that a belated filing still invokes jurisdiction under
Section 754 in the absence of prejudice.
Ultimately, the cases cited by Petitioner are in
harmony rather than conflict, and stand for the prop
osition tt a belated filing still invokes jurisdiction
under ‘tion 754 where the complaining party's
rights not prejudiced. Because there is no “real
and embarrassing conflict of opinion and authority
between the Circuit Courts of Appeals” on this issue,
this case fails to meet the standards for exercising
review. Rice, 349 U.S. at 79; see also U.S. Sup. Cr. R
LO.
Il. Petitioner’s Local Action Doctrine Argu-
ment Rests on the Tenuous Constitutional
Premise that Congress is Without Power to
Effect the Courts’ In Rem Jurisdiction un-
der Section 754. Regardless, the Local Ac-
tion Doctrine is Irrelevant in the Context
of the Receivership Jurisdiction Granted
under Sections 754 and 1692.
Petitioner's second argument regarding the local
action doctrine also fails to meet the standards for
review because (1) it rests on a faulty constitutional
+)
premise, and (2) the local action doctrine is irrelevant
9
3U
in the context of receivership jurisdiction under
Sections 754 and 1692
A. Petitioner's Local Action Doctrine Argu-
ment is Based on a Faulty Constitutional
Premise, Making Review Improper.
As this Court has recognized, arguments based
on tenuous constitutional premises are unworthy of
review. See Brennan v, U.S. Postal Serv., 439 U.S
1345, 1846 (1978) (recognizing that arguments based
on tenuous constitutional premises are unlikely to be
granted review). Petitioner’s local action doctrine ar-
vument fails to meet the standards for review be
cause it is based on the faulty premise that Congress
lacks the power to set the courts jurisdiction.
In the first part of its Petition, Petitioner cor
rectly acknowledges that Sections 754 and 169?
authorize federal district courts to exercise intra-
district in rem jurisdiction over property located
elsewhere in the context of receivership proceedings
se +
As the courts have recognized, ““Together, [Sections
754 and 1692] give a receivership court both in rem
and in personam jurisdiction in all distmcts where
property of the receivership estate may be located.”
Warfield v. Arpe, CIVA 3:05CV1457 R, 2007 WL
249467, at *11 (N.D. Tex. Feb. 22, 2007) (quoting
Quilling v. Stark, 3:05-CV-1976-L, 2006 WI, 1683442
at *38 (N.D. Tex. June 19, 2006) (citing Visi
Comme'ns, Inc., 74 F.3d at 290; Harle, 657 F.2d at
31
But then Petitioner conveniently ignores its own
admission and the law in its second argument,
contending instead that the local action doctrine
alone governs jurisdiction in cases such as this one.
Petitioner cannot change Congress’s jurisdictional
mandate under Sections 754 and 1692 by ignoring it,
and this Court should not entertain such a consti-
tutionally specious argument by granting review.
As the Court has repeatedly recognized, only
Congress has the power to determine the jurisdiction
of federal courts, and as such, state jurisdictional
matters at common-law, including the “local action
doctrine,” are simply irrelevant in the federal re-
ceivership context. Bowles v. Russell, 551 U.S. 205,
212-13 (2007) (stating that “Within constitutional
bounds, Congress decides what cases the federal
courts have jurisdiction to consider. Because Congress
decides whether federal courts can hear cases at all,
it can also determine when, and under what con-
ditions, federal courts can hear them.”); Kontrick v.
Ryan, 540 U.S. 443, 452 (2004) (stating that “Only
Congress may determine a lower federal court’s
subject-matter jurisdiction.”). Indeed, it is difficult to
imagine a more constitutionally tenuous premise
than the one underlying Petitioner’s local action doc-
trine argument: that Congress lacks the power to set
the courts’ jurisdiction. Because Petitioner’s second
argument is based on such a tenuous premise, it
wholly faiis to meet the standard for review. See
Brennan, 439 U.S. at 1346. Moreover, this argument
fails to meet the standards of review under Supreme
o2
Court Rule 10 because Petitioner is merely con-
tending that the local action doctrine has been
improperly applied. See U.S. Sup. Cr. R. 10.
B. Regardless, the Local Action Doctrine is
Irrelevant in the Context of the Re-
ceivership Jurisdiction Granted under
Sections 754 and 1692.
Petitioner’s local action doctrine argument fails
to merit review because the local action doctrine is
irrelevant in the context of the receivership jurisdic-
tion granted under Sections 754 and 1692. Long
Beach openly admits the application of Sections 754
and 1692 to provide a receiver and receivership court
with jurisdiction over property located in other
districts, including orders affecting such property. As
discussed above, the Receiver complied with the nec-
essary statutory requirements. Thus, the local action
doctrine is totally inapplicable.
The territorial jurisdiction of the receivership
court extends to any district where property of the
receivership estate may be located, even if the
property is located in different states across the
nation. See Haile, 657 F.2d at 822, 824; Cook, 2001
WL 803791, at *2; Select Creations, Inc., 852 F. Supp.
at 780-81. The result is that Sections 754 and 1692
make all actions in the receivership court “local,”
since the geographic jurisdiction of the court is ex-
tended to anywhere receivership property is located.
The broad jurisdictional reach of receivership courts
33
comports with the broad jurisdiction of the receiver
itself over receivership property. Cuitronelle-Mobile
Gathering, Inc., 934 F.2d at 1186-87 (holding receiver
had power to assert authority over property in foreign
country under order allowing such action as to both
personal and real property).
Like the bankruptcy court, the receivership
court’s exercise of in rem jurisdiction creates a fiction
that estate property is legally located in the district of
the court. See In re Simon, 153 F.3d 991, 996 (9th Cir.
1998) (recognizing that the bankruptcy court’s exer-
cise of in rem jurisdiction over the debtor’s property
essentially creates a fiction that the property—re-
gardless of actual location—is legally located within
the jurisdictional boundaries of the district in which
the court sits); Haile, 657 F.2d at 823; Warfield, 2007
WL 549467, at *11 (recognizing that Sections 754 and
1692 provide for in rem jurisdiction in all districts
where receivership property is located). And like the
bankruptcy court, the receivership court’s power even
extends to property located in other countries.
French, 440 F.3d at 151; Gucci, 309 B.R. at 681:
Citronelle-Mobile Gathering, Inc., 934 F.2d at 1186-87
(holding receiver had power to assert authority over
property in foreign country under order allowing such
action as to both personal and real property). Without
the far-reaching jurisdictional grants provided by
Congress, the bankruptcy and receivership processes
would be utterly unworkable. Petitioner invites the
Court to limit the jurisdictional reach of the
receivership court to the district in which it sits,
34
which would wreak havoc on that system and require
federal receivers to hopscotch across the country,
creating utter chaos. The Court should reject that
invitation.
The jurisdiction granted under Sections 754 and
1692 is well-recognized by the courts, and renders the
local action doctrine inapplicable in this context.
Ultimately, Petitioner’s complaint is that Sections
754 and 1692 have been misapplied, which is an
insufficient basis for review under Supreme Court
Rule 10. U.S. Sup. Ct. R. 10. Indeed, review of this
case is even less appropriate given that the only real
issue involved is a narrow priority of claims dispute
between the parties under Texas law.
Ill. Petitioner’s Implied Preemption Argument
also Fails to Meet Review Standards Be-
cause it Neither Presents a State/Federal
Conflict nor an Issue of First Impression.
Any Conflict with the Local Action Doc-
trine Imagined by Long Beach is Based in
Sections 754 and 1692, Congressional Man-
dates that Trump the Local Action Doc-
trine, a Concept of Common Law.
Petitioner’s implied preemption argument also
fails to meet any standard for this Court’s review.
Federal courts have recognized, consistently with this
Court’s jurisprudence, that the jurisdictional reach of
Sections 754 and 1692 confer jurisdiction on the
receivership court “irrespective of any other factor
35
which would normally determine jurisdiction.”
See Haile, 657 F.2d at 822.
This case law is well-established, and Petitioner
does not even attempt to distinguish it. Petitioner
acknowledges the applicability of these statutes, but
attempts to raise the notion of “preemption” by citing
to case law concerning federal preemption of state
law. Preemption, however, is not at issue. Petitioner
challenges a federal] court’s exercise of jurisdiction
over the Marquette Property, but Congress legislated
the jurisdictional boundaries of federal receivership
courts under Sections 754 and 1692, extending juris-
diction over persons and property to other jurisdic-
tions and extending the geographic boundaries of the
receivership court to where receivership property is
located.
Sections 754 and 1692 make the federal receiver-
ship system workable. To lhmit the jurisdictional
reach of the receivership court to the district in which
it sits, as Petitioner proposes, would destroy that
system and the purpose of the statutes. Only Con-
gress has the power to determine the jurisdiction of
federal courts, and as such, state jurisdictional laws,
including the “local action doctrine,” have no rele-
vance in the receivership context presented here. See
Bowles, 551 U.S. at 212-13; Kontrick, 540 U.S. at 452.
The concept of implied preemption simply has noth-
ing to do with the effect of Sections 754 and 1692 on
the local action doctrine, which is merely a common-
law concept of in rem jurisdiction subject to alteration
by Congressional mandate. Indeed, any conflict with
the local action doctrine is based in Sections 754 and
36
1692, which trump the local action doctrine regard-
less, and not in the Dallas Appeals Court’s decision.
Because the case law is in harmony and the
jurisdictional reach of Sections 754 and 1692 has long
been recognized, Petitioner’s implied preemption ar-
gument presents neither a state/federal conflict nor
an issue of first impression requiring review under
Supreme Court Rule 10. U.S. Sup. Cr. R. 10; Rice, 349
U.S. at 79.
CONCLUSION
For the foregoing reasons, Long Beach’s Petition
for a Writ of Certiorari should be denied, and the
Receiver should be granted such and further relief, at
?
law or in equity, to which he may be justly entitled.
Respectfully submitted,
KAREN L. HART
Counsel of Record
RANDALL K. LINDLEY
Ross A. WILLIAMS
BELL NUNNALLY & MARTIN LLP
3232 McKinney Avenue, Suite 1400
Dallas, Texas 75204-2429
Telephone: (214) 740-1400
Telecopier: (214) 740-5744
karenh@bellnunnally.com
Attorneys for Respondent
Robb Evans, as Receiver
for TLC America, Inc.
App. 1
Dressler Rein Evans & Sestanovich LLP
Sixteenth Floor
1925 Century Park East
Los Angeles, CA 90067
Tel (310) 551-3100
Fax (310) 551-0238 Received October 13, 2000
October 11, 2000
By Federal Express
Clerk, United States District Court
Northern District of Texas, Dallas Division
1100 Commerce
Room 14A20
Dallas, TX 75242
Re: Securities and Exchange Commission v.
TLC Investments and Trade Co., et al.
USDC Calif. Central District Case No. SACV
00-960-DOC (EEx)
Miscellaneous Case Under 28 U.S.C §$ 754
To whom it may concern:
This office represents Robb Evans, Receiver, in
the above-captioned matter. Enclosed please find
certified copies of the following documents:
1. Complaint For Violations of the Federal
Securities Laws;
2. Temporary Restraining Order’ and
Orders (1) Freezing Assets; (2) Appointing a
Temporary Receiver; (3) for Repatriation; (4)
Prohibiting the Destruction of Documents;
(5) Granting Expedited Discovery; (6) for
Accountings; and Order to Show Cause Re
App. 2
Preliminary Injunction and Appointment of a
Permanent Receiver
In accordance with 28 U.S.C. § 754, these
documents are being filed in all districts in which
property subject to this proceeding may be located.
There is no case or proceeding pending in your
district for which a filing fee has previously been
paid. A check for $20.00 for a miscellaneous filing fee
is enclosed.
Please conform the enclosed face sheets and
return them to me at your earliest convenience. A
self-addressed, stamped envelope is provided. Please
contact me at (310) 551-3100 x236 if you have any
questions in this regard. Thank you for your assis-
Lance.
Very truly yours,
/s/ Judi S. Ehrlich
Judi S. Ehrlich
App. 3
[SEAL]
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
SECURITIES AND
EXCHANGE COMMISSION,
Plaintiff,
vs.
TLC INVESTMENTS &
TRADE CO., TLC AMERICA,
INC. dba BREA DEVELOP-
MENT COMPANY, TLC
BROKERAGE, INC., dba
TLC MARKETING, TLC
DEVELOPMENT, INC., TLC
REAL PROPERTIES, RLLP-1,
CLOUD & ASSOCIATES
CONSULTING, INC.,
ERNEST F. COSSEY,
GARY W. WILLIAMS AND
THOMAS G. CLOUD,
Defendants.
Case No. SACV O0-
960 DOC (EEx)
TEMPORARY RE-
STRAINING ORDER
AND ORDERS: (1)
FREEZING ASSETS;
(2) APPOINTING A
TEMPORARY RE-
CEIVER; (3) FOR
REPATRIATION; (4)
PROHIBITING THE
DESTRUCTION OF
DOCUMENTS; (5)
GRANTING EXPE-
DITED DISCOVERY;
(6) FOR ACCOUNT-
INGS; AND ORDER
TO SHOW CAUSE
RE PRELIMINARY
INJUNCTION AND
APPOINTMENT OF
A PERMANENT RE-
CEIVER
This matter came to be heard upon Plaintiff
Securities and Exchange Commission’s (“Commission”)
App. 4
Ex Parte Application for a Temporary Restraining
Order and Orders: Freezing Assets, Appointing a
Temporary Receiver, Repatriating Assets, Prohibiting
Destruction of Documents, Granting Expedited Dis-
covery, for Accountings and to Show Cause Re
Preliminary Injunction, and Appointment of a Perma-
nent Receiver (the “Application”).
* oi
IT IS FURTHER ORDERED that Robb Evans
be appointed as temporary receiver of TLC, TLC
America, TLC Brokerage, TLC Development, TLC
Real Properties, and their subsidiaries and affiliates,
with full powers of an equity receiver, including, but
not limited to, full power over alk funds, assets,
collateral, premises (whether owned, leased, occupied,
or otherwise controlled), choses in action, books,
records, papers and other property belonging to or in
the possession of or control of TLC, TLC America,
TLC Brokerage, TLC Development, TLC Real Prop-
erties, and any of their subsidiaries and affiliates,
including any partnerships and joint ventures for
which TLC, TLC America, TLC Brokerage, TLC
Development, or TLC Real Properties is the Man-
aging General Partner, and that such receiver is
immediately authorized, empowered and directed:
A. to have access to and to collect and take
custody, control, possession, and charge of all
funds, assets, collateral, premises (whether
owned, leased, occupied, or otherwise con-
trolled), choses in action, books, records,
papers and other property of TLC, TLC
App. 5
America, TLC Brokerage, TLC Development,
TLC Real Properties, and their subsidiaries
and affiliates, with full power to sue, fore-
close, marshal, collect, receive, and take into
possession all such property;
to have control of, and to be added as the sole
authorized signatory for, all accounts of TLC,
TLC America, TLC Brokerage, TLC Develop-
ment, TLC Real Properties, and their sub-
sidiaries and affiliates, including all accounts
over which TLC, TLC America, TLC Broker-
age, TLC Development, TLC Real Properties
and any of their employees or agents, have
signatory authority, at any bank, title com-
pany, escrow agent, financial institution or
brokerage firm which has possession, cus-
tody or control of any assets or funds of TLC,
TLC America, TLC Brokerage, TLC Develop-
ment, TLC Real Properties, or which main-
tains accounts over which TLC, TLC America,
TLC Brokerage, TLC Development, TLC Real
Properties and/or any of their employees or
agents have signatory authority;
to conduct such investigation and discovery
as may be necessary to locate and account for
all of the assets of TLC, TLC America, TLC
Brokerage, TLC Development, TLC Real
Properties and their affiliates and to engage
and employ attorneys, accountants and other
persons to assist in such investigation and
discovery;
to take such action as is necessary and
appropriate to preserve and take control of
and to prevent the dissipation, concealment,
H
App. 6
or disposition of any assets of TLC, TLC
America, TLC Brokerage, TLC Development,
TLC Real Properties and their affiliates;
to make an accounting, as soon as
practicable, to this Court and the Commis-
sion of the assets and financial condition of
TLC, TLC America, TLC Brokerage, TLC
Development, TLC Real Properties and the
client assets under their management, and
to file the accounting with the Court and
deliver copies thereof to all parties;
to make such payments and disbursements
from the funds and assets taken into custody,
control, and possession or thereafter received
by him or her, and to incur, or authorize the
making of such agreements as may be
necessary and advisable in discharging his or
her duties as temporary receiver;
to employ attorneys and others to investigate
and, where appropriate, to institute, pursue,
and prosecute all claims and causes of action
of whatever kind and nature which may now
or hereafter exist as a result of the activities
of present or past employees or agents of
TLC, TLC America, TLC Brokerage, TLC
Development, and TLC Rea} Properties; and
to have access to and monitor all mail of
TLC, TLC America, TLC Brokerage, TLC
Development, and TLC Real Properties in
order to review such mail which he or she
deems relates to the business of TLC, TLC
America, TLC Brokerage, TLC Development,
and ‘TLC Real Properties and the discharging
of his or her duties as temporary receiver.
App 7
VII.
[IT IS FURTHER ORDERED that Defendants
TLC, TLC America, TLC Brokerage, TLC Develop
ment, TLC Real Properties, Cossey, Williams and
their officers, agents, servants, employees and
attorneys, and any other persons who are in custody,
possession or control of any
to entertain any suitable application or motion for
additional relief within the jurisdiction of this Court.
ITIS SO ORDERED
DATED: October 4, 2000
TIME: _7_ o'clock p.m
s/ David O. Carter __ i i
UNITED STATES DISTRICT JUDGE
Presented by:
/s/ Marianne Wisner
Marianne Wisner
Attorney for Plaintiff
Securities and Exchange Commission
(Filed October 5. 2000 — CA)
(Filed Oct. 13, 2000 — TX)
App. 8
Dressler Rein Evans & Sestanovich LLP
Sixteenth Floor
1925 Century Park East
Los Angeles, CA 90067
‘Tel (310) 551-3100
Fax (310) 551-0238 Received January 2, 2001
December 20, 2000
Clerk, United States Distnct Court
Northern District of Texas, Dallas Division
1100 Commerce
Room 14A20
Dallas, TX 75242
Re: Securities and Exchange Commission v.
‘I'LC Investments and Trade Co., et al.,
USDC Case No. SACV 00-960-DOC (EEx)
Miscellaneous Case Under 28 U.S.C. $ 754
Your Reference Number: #300MC-100
To whom it may concern:
This office represents Robb Evans, Receiver, in
the above-captioned matter. On October 11, 2000, we
sent you certified copies of (1) Complaint For
Violations of the Federal Securities Laws, and (2)
Temporary Restraining Order and Orders (1) Freez-
ing Assets; (2) Appointing a Temporary Receiver; (3)
for Repatriation; (4) Prohibiting the Destruction of
Documents; (5) Granting Expedited Discovery; (6) for
Accountings; and Order to Show Cause Re Pre-
liminary Injunction and Appointment of a Permanent
Receiver. In accordance with 28 U.S.C. § 754, those
documents were filed in all distmects in which
property subject to this proceeding may be located.
App. 9
A Miscellaneous Filing Fee of $20.00 was provided.
Your office thereafter confirmed that the documents
were filed on 10/13/00 and assigned Misc. File
Number #300MC-100.
On November 1, 2000, the Court issued an
“Order of Preliminary Injunction and Orders (1)
Freezing Assets; (2) Appointing a Receiver; (3)
Prohibiting the Destruction of Documents; (4) for
Accountings; (5) for Repatriation, and (6) for Expe-
dited Discovery”. A certified copy of the November 1,
2000 Order (which appoints Robb Evans as Per-
manent Receiver) is now enclosed for inclusion with
Misc. File Number #300MC-100.
Please conform the enclosed face sheet and
return it to me at your earliest convenience. A self-
addressed, stamped envelope is provided. Please
contact me at (310) 551-3100 x236 if you have any
questions in this regard. Thank you for your assis-
tance.
Very truly yours,
/s/ Judi S. Ehrlich
Judi S. Ehrlich
Enclosures
App. 10
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
SOUTHERN DIVISION
SECURITIES AND Case No. SACV 00-
EXCHANGE COMMISSION, |960-DOC (EEx)
Plaintiff, [PROPOESEB] ORDER
in OF PRELIMINARY
INJUNCTION AND
TLC INVESTMENTS & ORDERS: (1) FREEZ-
TRADE CoO., et al. ING ASSETS; (2)
Defendants. APPOINTING A
RECEIVER; (3) PRO-
HIBITING THE DE-
STRUCTION OF DOC-
UMENTS; (4) FOR
ACCOUNTINGS; (5)
FOR REPATRIATION
OF ASSETS; AND
(6) FOR EXPEDITED
DISCOVERY
(Filed Nov. 1, 2000
=A)
This matter came to be heard on October 30,
2000, upon the Court’s Order To Show Cause Re
Preliminary Injunction And Appointment Of A Per-
manent Receiver (“OSC”), issued on October 4, 2000
and filed on October 5, 2000. The OSC is included in
the Court’s Temporary Restraining Order and Orders:
Freezing Assets, Appointing a Temporary Receiver,
Repatriating Assets, Prohibiting Destruction of Docu-
ments, Granting Expedited Discovery, for Accountings
App. 11
and to Show Cause Re Preliminary Injunction, and
Appointment of a Permanent Receiver (“TRO”).
a * *
[Names And Bank Number Omitted In Printing]
VIL.
IT IS FURTHER ORDERED that Robb Evans be
appointed as receiver of TLC, TLC America, TLC
Brokerage, TLC Development, TLC Real Properties,
and their subsidiaries and affiliates, with full powers
of an equity receiver, including, but not limited to,
full power over all funds, assets, collateral, premises
(whether owned, leased, occupied, or otherwise
controlled), choses in action, books, records, papers
and other property belonging to or in the possession
of or control of TLC, TLC America, TLC Brokerage,
TLC Development, TLC Real Properties, and any of
their subsidiaries and affiliates, including any
partnerships and joint ventures for which TLC, TLC
America, TLC Brokerage, TLC Development, or TLC
Real Properties is the Managing General Partner,
and that such receiver is immediately authorized,
empowered and directed:
A. to have access to and to collect and take
custody, control, possession, and charge of all
funds, assets, collateral, premises (whether
owned, leased, occupied, or otherwise con-
trolled), choses in action, books, records,
papers and other property of TLC, TLC
America, TLC Brokerage, TLC Development,
D.
App. 12
TLC Real Properties, and their subsidiaries
and affiliates, with full power to. sue,
foreclose, marshal, sell, liquidate, collect,
receive, and take into possession all such
property;
to have control of, and to be added as the sole
authorized signatory for TLC, TLC America,
TLC Brokerage, TLC Development, TLC
Real Properties, and their subsidiaries and
affiliates, including all accounts over which
TLC, TLC America, TLC Brokerage, TLC
Development, TLC Real Properties and any
of their officers, employees or agents, have
signatory authority, at any bank, title
company, escrow agent, financial institution
or brokerage firm which has_ possession,
custody or control of any assets or funds of
TLC, TLC America, TLC Brokerage, TLC
Development, TLC Real Properties, or which
maintains accounts over which TLC, TLC
America, TLC Brokerage, TLC Development,
TLC Real Properties and/or any of their
officers, employees or agents have signatory
authority;
to conduct such investigation and discovery
as may be necessary to locate and account for
all of the assets of TLC, TLC America, TLC
Brokerage, TLC Development, TLC Real
Properties and their affiliates and to engage
and employ attorneys, accountants and other
persons to assist in such investigation and
discovery;
to take such action as is necessary and
appropriate to preserve and take control of
App. i3
and to prevent the dissipation, concealment,
or disposition of any assets of TLC, TLC
America, TLC Brokerage, TLC Development,
TLC Real Properties and their affiliates;
to make an accounting, aS soon as prac-
ticable, to this Court and the Commission of
the assets and financial condition of TLC,
TLC America, TLC Brokerage, TLC Develop-
ment, TLC Real Properties and the client
assets under their management, and to file
the accounting with the Court and deliver
copies thereof to all parties;
to make such payments and disbursements
from the funds and assets taken into custody,
control, and possession or thereafter received
by him or her, and to incur, or authorize the
making of such agreements as may be
necessary and advisable in discharging his or
her duties as receiver;
to employ attorneys and others to inves-
tigate, advise and, where appropriate, to
institute, pursue, and prosecute all claims
and causes of action of whatever kind and
nature which may now or hereafter exist as a
result of the activities of present or past
employees or agents of TLC, TLC America,
TLC Brokerage, TLC Development, and TIC
Real Properties; and
to have access to and monitor all mail of
TLC, TLC America, TLC Brokerage, TLC
Development, and TLC -Real Properties in
order to review such mail which he deems
relates to the business of TLC, TLC America,
App. 14
TLC Brokerage, TLC Development, and TLC
Real Properties and the discharging of his
duties as receiver;
to exercise all of the powers of TLC, TLC
America, TLC Brokerage, TLC Development,
and TLC Real Properties and their officers,
directors, employees, representatives, or
persons who exercise similar powers and
perform similar duties;
VIII.
IT IS FURTHER ORDERED that Defendants
TLC, TLC America, TLC Brokerage, TLC Develop-
ment, TLC Real Properties, Cossey, Williams and
their officers, agents, servants, employees and
attorneys, and any other persons who are in custody,
possession or control of any assets, collateral, books,
records, papers or other property of TLC,
ok ake ok
requests for lving expenses if and when their
financial situations change. Further, Defendants
Cossey and Williams may also renew their requests
for attorneys’ fees after they submit full accountings
to the Court, the Receiver, and the Commission.
XXII.
IT IS FURTHER ORDERED that this Court
shall retain jurisdiction over this action for the
purpose of implementing and carrying out the terms
of all orders and decrees which may be entered herein
App. 15
and to entertain any suitable application or motion
for additional relief within the jurisdiction of this
Court.
IT IS SO ORDERED.
DATED: Octeber _, November 1, 2000
/s/ David O. Carter
HONORABLE DAVID O. CARTER
UNITED STATES DISTRICT JUDGE
Presented by:
/s/ Marianne Wisner
MARIANNE WISNER
Attorney for Plaintiff
Securities and Exchange Commission
App. 16
NOTICE OF LIS PENDENS
(Filed Jul. 23, 2002)
STATE OF TEXAS § 1919765
§ 07/24/02 3359469 $11.00
COUNTY OF DALLAS &§ Miscellaneous Real Estate
NOTICE IS HEREBY GIVEN that Case No.,
01-6466, styled ROBB EVANS, as Receiver for TLC
America, Inc., Plaintiff v. James F. Garro, an indi-
vidual; David Price, an individual; Paul Chovanec,
an individual; Allison-McCloskey Escrow Co., a
California corporation; Navajo Capital, Inc., a
Wyoming corporation; Siena Financial Ltd., a British
Virgin Islands corporation; Camelot International,
LLC, a Wyoming limited liability company; Merlin
Financial, LLC, a Wyoming limited liability company;
The Lancelot foundation, a Wyoming nonprofit
company; Appaloosa International, Inc., a Wyoming
corporation; Citation Financial Management, Inc., a
Wisconsin corporation; Durham Capital Group, Inc., a
Nevada corporation; & Fortress Financial Ltd., a
British Virgin Islands corporation, Defendants; was
commenced in the United States District Court for
the Central District of California on July 27, 2001
and is now pending in such court.
The action seeks to establish an interest or a
right in real property situated in Dallas County,
Texas, and described as follows:
App. 17
7843 Marquette Street, Dallas, Texas 75225-4400
Caruth Village Phase 2
Blk R/5450 LT 10
VOL 99209/6210 DD 102399 CO-DALLAS
The action is for fraud and deceit; aiding and
abetting; conversion; money had and received; negli-
gence; breach of fiduciary duty; and constructive
fraud.
SIGNED this 17 day of July, 2002.
/s/ Charles M. Silverman
Charles M. Silverman
STATE OF TEXAS
COUNTY OF HARRIS
Subscribed and sworn to before me this 17 day of
July , 2002 by Charles M. Silverman.
WITNESS my hand and official seal.
/s/ Susan D. Stroud
Notary Public in and For the State of Texas
My commission expires: 5-20-03
App. 18
FF $31.00 GF#686146. T ATC/mo
After Recording 1932820
Please Return To: 08/02/02 3377095
LONG BEACH MORT- Deed of Trust $31.00
GAGE COMPANY
P.O. BOX 201085
STOCKTON, CA 95202
[Space Above This Line For Recording Data]
Loan No: 4585154 Data ID: 278
Borrower: DAVID H. PRICE
THIS SECURITY INSTRUMENT SECURES
AN EXTENSION OF CREDIT AS DEFINED BY
SECTION 50(a)(6), ARTICLE XVI OF
THE TEXAS CONSTITUTION.
TEXAS HOME EQUITY SECURITY INSTRUMENT
(Cash Out — First Lien)
This Security Instrument is not intended to
finance Borrower’s acquisition of the Property.
THIS SECURITY INSTRUMENT is made on
July 24, 2002. The grantor is DAVID H. PRICE AND
WIFE, CAROL M. PRICE
(“Borrower’”).
The trustee is TROY GOTSCHALL, whose address
is 1100 TOWN AND COUNTRY ROAD, #1600,
ORANGE, CA 92868
(“Trustee”).
The beneficiary is LONG BEACH MORTGAGE COM-
PANY, A CORPORATION,
App. 19
which is organized and existing under the laws of the
State of DELAWARE, and whose address is 1100
TOWN & COUNTRY ROAD, #900, ORANGE, CA
92868
(“Lender”).
Borrower owes Lender the principal sum of
FOUR HUNDRED THOUSAND and NO/100
Dollars (U.S. $ 400,000.00). This debt is an extension
of credit as defined by Section 50(a)(6), Article XVI of
the Texas Constitution (referred to herein as the
“Extension of Credit”) and is evidenced by Borrower’s
note dated the same date as this Security Instrument
(the “Note”), which provides for monthly payments,
with the full debt, if not paid earlier, due and payable
on August 1, 2032. This Security Instrument secures
to Lender: (a) the repayment of the debt evidenced by
the Note, with interest, and all renewals, extensions
and modifications of the Note; (b) the payment of all
other sums, with interest, advanced under Paragraph
7 to protect the security of this Security Instrument;
and (c) the performance of Borrower’s covenants and
agreements under this Security Instrument and the
Note. For this purpose, Borrower irrevocably grants
and conveys to Trustee, in trust, with power of sale,
the following described property located in DALLAS
County, Texas:
BEING LOT 10, BLOCK R/5450 OF
CARUTH VILLAGE ADDITION, PHASE II,
AN ADDITION TO THE CITY OF DALLAS,
DALLAS COUNTY, TEXAS, ACCORDING
TO THE PLAT THEREOF RECORDED
App. 20
IN VOLUME 98008, PAGE 1458, MAP
RECORDS, DALLAS COUNTY, TEXAS.
which has the address of 7843 MARQUETTE STREET,
[Street]
DALLAS, TEXAS 75225 (“Property Address”).
[City] (Zip Code]
TEXAS HOME EQUITY SECURITY INSTRUMENT
(Cash Out — First Lien) Fannie Mae/Freddie Mac
UNIFORM INSTRUMENT
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.