# Opposition Brief — Long Beach Mortgage Co. v. Evans > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1869%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 2010 - **Citation:** 561 U.S. 1006 ## Text 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 CTE ERIN Fr BED oo vessnccedsecenvctaevisocssccrsss 1 CORPORATE DISCLOSURE STATEMENT ........ 1] gr OW Et Bt ty ~ yy SERPS ene m nen een aaron ane ill Pe CP PAE Ee wid cs vcctvevesscesncssvectexcnaranees v1 "PAR eas CO BAS TREC BGS sinsscccccncascnccsccsascasvcversass Vill CONSTITUTIONAL AND STATUTORY PROVI- SR BE IY Bos ose cach ctcsasssanacinsnevecénsacecncscnws STATEMENT OF THE CASE...................ccccecceeceee DE I iiidiivivcccvevenedccinsscsiniawcnavinace I. Robb Evans is Appointed Receiver for the Assets of TLAC America, INC. ........ 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 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1869%3A2. Public record. Not legal advice.