Free Reply to Response to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 01-CV-0275-JLK DOMINICK PAOLONI, et al., Plaintiffs, vs. DONALD I. GOLDSTEIN, et al., Defendants, and NBSA, LLC, et al., Relief Defendants. _____________________________________________________________________________ REPLY MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT ______________________________________________________________________________ APPLICATION OF THE FED.R.CIV.P. 56 STANDARD MANDATES ENTRY OF SUMMARY JUDGMENT Fed.R.Civ.P. 56(c) provides in pertinent part the following: The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(e) provides in pertinent part: When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest on the mere allegations or denials of the adverse party's pleadings, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against the adverse party.

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In support of Plaintiffs' Motion for Summary Judgment, Plaintiffs have submitted (a) the evidence produced at the May 24-25, 2001 hearing upon Jamie Goldstein and others' Motion to Clarify or Dissolve Preliminary Injunction (Docket Entry Nos. 69, 70, 71, 80, and 90); (b) the Court's ruling on May 25, 2001 at the conclusion of the hearing upon the Motion to Clarify or Dissolve Preliminary Injunction in which the Court found ". . . testimony is virtually uncontradicted and overwhelming and the preliminary injunction will stand as it was issued, without modification."; (c) the Preliminary Injunction of June 21, 2002 and the findings contained therein (Docket Entry No. 296); (d) the exhibits admitted into evidence during the May 24-25, 2001 hearings (Docket Entry No. 71); (e) the Court hearing of October 18, 2002, in which, after hearing evidence, the Court found Jamie Goldstein in contempt for failure to comply with, among other things, the Preliminary Injunction of June 21, 2002 (Docket Entry Nos. 406 and 412); (f) the deposition of Jamie Goldstein of October 1, 2002, together with the exhibits to such deposition; (g) the Amended Preliminary Injunction of December 14, 2004 and the findings contained therein (Docket Entry No. 704); (h) documents attached as Exhibits 2 through 28 to the Statement of Undisputed Facts; and (i) Affidavit of Rocky K. Smith in support of Motion for Summary Judgment against Jamie Goldstein. In accordance with Fed.R.Civ.P. 56(a) and (e), the Plaintiffs have properly brought and supported the Motion for Summary Judgment satisfying the requisite standard that there is no genuine issue of material fact and that the Plaintiffs are entitled to judgment as a matter of law (Fed.R.Civ.P. 56(c)). Jamie Goldstein has failed to contest any of the evidence, both testimonial and documentary from the May 24-25, 2001 hearing, to contest any of the evidence from the October 18, 2002 hearing, to contest any of the findings of the Preliminary Injunctions of June

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21, 2002 and December 14, 2004, or to contest any statement of undisputed fact set forth in the Statement of Undisputed Facts. Under the applicable standard (Fed.R.Civ.P. 56(e)), Jamie Goldstein has failed to respond to Plaintiffs' Motion for Summary Judgment in accordance with Fed.R.Civ.P. 56, and Plaintiffs are entitled to judgment as requested in this matter. (Fed.R.Civ.P. 56(e)). The purpose of Rule 56 is to enable a party who believes that there is no genuine dispute as to a specific fact essential to the other side's case to demand at least one sworn statement of that fact before the lengthy process of litigation continues. Schenck v. Edwards, 921 F. Supp. 679, 682 (E.D. Wash. 1996), aff'd 133 F.3d 929 (9th Cir. 1998). After the movant successfully discharges his initial burden of demonstrating absence of material issues of fact, the burden shifts to the non-movant to establish, by going beyond the pleadings, that there indeed exists an issue material to the non-movant's case. Telfair v. Gilberg, 868 F. Supp. 1396, 1400 (D. Ga. 1994), aff'd 87 F.3d 1330 (11th Cir. 1996). The non-movant must present affirmative evidence of material factual conflicts to defeat a properly supported motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257, 106 S.Ct. 2505, 2514-15, 91 L.Ed.2d 202 (1986). If the non-movant's response to the motion for summary judgment consists of nothing more than conclusory allegations, the Court must enter summary judgment for the movant. Peppers v. Coates, 887 F.2d 1493, 1498 (11th Cir. 1989). A proper summary judgment motion may be opposed with any of the evidentiary material listed in Fed.R.Civ.P. 56(c). The Court may consider pleadings, depositions, answers to interrogatories, admissions on file, affidavits, oral testimony, matters subject to judicial notice, stipulations and concessions and other materials admissible in evidence or otherwise usable at trial to resolve the motion for summary judgment.

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Clay v. Equifax, Inc., 762 F.2d 952, 956 (11th Cir. 1985); Fed.R.Civ.P. 56(c). To defeat a motion for summary judgment, the opposing party must produce substantial evidence of a genuine dispute as to a material fact. Curran v. Bane, 183 BR 9, 10 (D. Mass. 1995). The Response filed by Jamie Goldstein attempts to advance procedural objections already resolved by the United States Bankruptcy Court for the Southern District of Florida and to compartmentalize the evidence offered in support of the Motion for Summary Judgment, arguing that each separate piece of evidence in and of itself is insufficient to grant summary judgment. As discussed below, the United States Bankruptcy Court for the Southern District of Florida has resolved the procedural objections. Furthermore, it is the totality of the evidence in support of the Motion for Summary Judgment against Jamie Goldstein which, over a significant number of years, has never been contested by Jamie Goldstein, that provides more than adequate support for the granting of the Motion for Summary Judgment. Jamie Goldstein has failed to show there exists a genuine issue of material fact as to Plaintiffs' claim for imposition of a constructive trust and equitable lien and the Plaintiffs are entitled to summary judgment upon such claim. JAMIE GOLDSTEIN HAS FAILED TO SHOW HOW DISCOVERY WOULD YIELD A GENUINE ISSUE OF MATERIAL FACT PRECLUDING SUMARY JUDGMENT Jamie Goldstein argues that summary judgment is inappropriate based upon a need for discovery. This is based solely upon the affidavit of Jamie Goldstein's counsel, Michael J. Pankow. Mr. Pankow avers that discovery is necessary with respect to (1) the specifics of misrepresentations allegedly made by Jamie Goldstein, (2) matters related to the Assignment of Claims and Tolling Agreements, and (3) a defense of in pari delicto Neither Jamie Goldstein nor his counsel provide support that there exists or would exist, if given an opportunity to conduct discovery, a genuine issue of material fact with respect to any of these matters.

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With respect to the asserted need for discovery regarding fraud, the Court has heard significant evidence of the fraud engaged in not only by Jamie Goldstein but others at the May 24-25, 2001 hearing. At that hearing, Jamie Goldstein was represented by competent counsel. Jamie Goldstein failed to appear for that hearing. Jamie Goldstein failed to present any evidence to contradict any of the evidence presented against him. Even now, Jamie Goldstein does not file an affidavit denying any of the evidence previously adduced against him in court hearings, contained in his deposition, or contained in documents in support of this Motion for Summary Judgment. Absent Jamie Goldstein presenting some evidence of a genuine issue of material fact in accordance with Fed.R.Civ.P. 56(c), there is no basis upon which to deny the Motion for Summary Judgment on an allegation of need to do discovery concerning whether Jamie Goldstein engaged in the fraudulent scheme to sell viatical settlement contracts. Each and every Assignment of Claims and Tolling Agreement has been previously provided to Jamie Goldstein's counsel. Jamie Goldstein's counsel has had more than adequate time to determine whether they have been executed. Further, Jamie Goldstein fails to identify in what manner discovery concerning the Assignment of Claims and Tolling Agreements would have any bearing on the determination of the Motion for Summary Judgment. Finally, Jamie Goldstein presents no evidence in accordance with Fed.R.Civ.P. 56 that the Assignment of Claims and Tolling Agreements create any genuine issue of material fact regarding resolution of the constructive trust/equitable lien claim. Jamie Goldstein asserts discovery is needed with respect to a defense of in pari delicto, arguing that the Plaintiffs, who hold the Assignment of Claims from the purchasers of viatical settlement contracts, participated in the sales process and thus their claims would be barred by a

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defense of in pari delicto. Perhaps Jamie Goldstein misunderstands the application of the in pari delicto defense. It is upon the claims of the purchasers of viatical settlement contracts, which are currently held by the Plaintiffs, that Plaintiffs seek summary judgment. Jamie Goldstein does not assert that the purchasers of the viatical settlement contracts are in pari delicto with anyone involved in the sale of the viatical settlement contracts. Furthermore, whether purchasers of viatical settlement contracts may have claims against the Plaintiffs who sold them viatical settlement contracts is not a defense available to Jamie Goldstein to the Motion for Summary Judgment. Finally, Jamie Goldstein sought and, with the consent of the Plaintiffs, was granted more than two months worth of extensions of time in which to reply to the Motion for Summary Judgment. At no time was there ever any assertion that additional time to respond to the Motion for Summary Judgment was needed to conduct any kind of discovery. The conclusory assertion that discovery is necessary to adequately respond to the Motion for Summary Judgment is disingenuous and a delaying tactic. The matters upon which Jamie Goldstein seeks discovery are within the knowledge of Jamie Goldstein or involve legal issues. The failure of Jamie Goldstein to address those matters within his knowledge by way of affidavit or otherwise in accordance with Fed.R.Civ.P. 56 is demonstrative of the lack of credibility of the argued for need for discovery. THE COURT CAN PROPERLY CONSIDER AN ADVERSE INFERENCE AGAINST JAMIE GOLDSTEIN. PLAINTIFFS HAVE PROPERLY SUPPORTED THEIR SUMMARY JUDGMENT MOTION INDEPENDENT OF HIS FIFTH AMENDMENT ASSERTIONS Contrary to Jamie Goldstein's assertions, Plaintiffs do not rely solely upon Jamie Goldstein's assertion of his Fifth Amendment right against self-incrimination, which he utilized

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in part during his deposition of October 1, 2002. In undisputed fact number 1, Plaintiffs state: "In addition to the Court's determinations as outlined above . . .,"1 Jamie Goldstein was an active participant in the scheme to sell viatical settlement contracts in the ABG Program and Reliance Program. Plaintiffs then cite to the deposition of Jamie Goldstein, p. 60, ln. 14-p. 82, ln. 3. During certain portions of such deposition testimony, Jamie Goldstein asserted his Fifth Amendment right against self-incrimination. However, the undisputed fact that Jamie Goldstein was an active participant in the scheme to sell the viatical settlement contracts in the ABG Program and Reliance Program was not based solely upon Jamie Goldstein's Fifth Amendment assertion in his deposition, but upon the evidence from the May 24-25, 2001 hearing, the findings contained in the Preliminary Injunctions of June 21, 2002, and December 14, 2004, answers provided in Jamie Goldstein's deposition which were not Fifth Amendment assertions, the October 18, 2002 contempt hearing, and exhibits 2 through 28 of the Statement of Undisputed Facts. Undisputed facts 5, 6, 7, 9, 10 and 11 refer to Jamie Goldstein's status as an officer, director and shareholder of particular corporations, the purpose of those corporations and his receipt of substantial monies from those corporations. Jamie Goldstein's status as an officer, director, shareholder of certain entities and the purported purpose of those entities, i.e., to hide monies obtained from the sale of viatical settlement contracts is not a material fact related to determination of the Motion for Summary Judgment. Furthermore Exhibits 2 through 28 to the Statement of Undisputed Facts establish Jamie Goldstein's connection to the scheme to sell

The Court determinations outlined above were (a) the testimonial and documentary evidence at the May 24-25, 2001 hearing, (b) the Preliminary Injunction of June 21, 2002, and (c) the October 18, 2002 contempt hearing.

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viatical settlement contracts in the ABG Program and Reliance Program and his receipt of substantial amounts of money from such sales. Finally, paragraphs 13, 14, and 15 cite to Jamie Goldstein's deposition in which he asserted his Fifth Amendment right against self-incrimination with respect to his involvement in the purchase of an office building. However, deposition exhibit 6, independent of Jamie

Goldstein's assertion of his Fifth Amendment privilege, establishes his connection to such purchase and the receipt of funds. Even the authority cited by Jamie Goldstein acknowledges that it is proper for the Court to consider a Fifth Amendment assertion when a motion for summary judgment is otherwise properly supported. See In Re Caucus Distributors, Inc., 83 BR 921, 926 (E.D. Va. 1988) (only if the United States is able to establish there is no genuine issue as to any material fact from the basis of the evidence submitted in compliance with Rule 56 can we then consider whether adverse inferences are appropriate). Also see Pedrina v. Chun, 906 F.Supp. 1377, 1398 (D. Hawaii 1995) (the court may draw adverse inference from the refusal of any of the defendants to answer questions in response to probative evidence offered against them), aff'd 97 F.3d 1296. The citation to Jamie Goldstein's Fifth Amendment assertions in his deposition and the inferences to be drawn therefrom are only supportive of the other evidence establishing Jamie Goldstein's involvement in the fraudulent sale of viatical settlement contracts in the ABG Program and the Reliance Program, and his receipt of substantial money from such fraudulent scheme. It is, therefore, proper for the Court to consider such adverse inference as Plaintiffs have otherwise properly supported such facts and evidence.

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THE COURT CAN PROPERLY CONSIDER THE TESTIMONIAL AND DOCUMENTARY EVIDENCE FROM THE MAY 24-25, 2001 HEARING Contrary to Jamie Goldstein's arguments, this Court can consider and utilize the evidence of the May 24-25, 2001 hearing and the findings of the Preliminary Injunctions in determination of the Motion for Summary Judgment. Jamie Goldstein cites National Labor Relations Board v. Aker Industries, Inc., 460 F.2d 649 (10th Cir. 1972), Mayo v. Lakeland Highlands Canning Co., 390 U.S. 310 (1940) and Boise Cascade Int'l, Inc. v. Northern Minnesota Pulp Wood Producers Ass'n, 294 F.Supp. 1015 (D. Minn. 1968) for the proposition that the Court may not consider evidence from a preliminary injunction hearing to determine a motion for summary judgment. None of these three cases involved a motion for summary judgment and thus they are all inapplicable. The case of Progress Development Corp. v. Mitchell, 286 F.2d 222 (7th Cir. 1961) cited by Jamie Goldstein did deal with a grant of summary judgment by the district court, however, the grant of summary judgment was based solely upon evidence adduced at a preliminary hearing which is far from the situation in the present motion for summary judgment. In determining a motion for summary judgment, the Court may consider pleadings, depositions, answers to interrogatories, admissions on file, affidavits, oral testimony, matters subject to judicial notice, stipulations and concessions, and other materials admissible in evidence or otherwise usable at trial. Clay v. Equifax, Inc., 762 F.2d at 956. Clearly, this includes oral testimony and evidence from court hearings. Under Fed.R.Civ.P. 56(c), the movant's burden is to establish no genuine issue of material fact through any of the above means. Once this burden is established, the non-moving party must similarly respond demonstrating there is a genuine issue for trial in order to avoid summary judgment.

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PLAINTIFFS' PREVIOUS EFFORTS TO ENFORCE THE SETTLEMENT AGREEMENT DO NOT PRECLUDE PURSUING THE CONSTRUCTIVE TRUST AND EQUITABLE LIEN CLAIM Jamie Goldstein next contends that because Plaintiffs have previously sought to enforce the November 1, 2001 court-ordered Settlement Agreement, they are now precluded from proceeding upon any of their claims contained in the Second Amended Complaint against Jamie Goldstein. Jamie Goldstein neglects to inform the Court of the following provision of such court-ordered Settlement Agreement. Further, Plaintiffs may pursue any and all available remedies to enforce the provisions of this Agreement, and/or may declare this Agreement void (retaining all benefits received hereunder) and reinstitute all claims pending, as of the date immediately preceding the date of this Agreement, in the Denver litigation. (See Docket Entry 155, Order Approving Settlement Agreement and Entry of Order, Settlement Agreement, Article V, paragraph C, p. 11.) Thus, pursuant to this Court's Order, the Plaintiffs may both pursue remedies under the Settlement Agreement as well as reinstitute and pursue pending claims. Section XIX.A. of the Settlement Agreement supports such conclusion. Under Section XIX.A., it is only upon full and complete satisfaction of the terms of the Settlement Agreement by the Reliance Defendants, which includes Jamie Goldstein that the claims against Jamie Goldstein and others would be dismissed. All claims of the Second Amended Complaint against Jamie Goldstein are still pending. It is because of Jamie Goldstein's discharge in his bankruptcy proceeding that Plaintiffs have been precluded from pursuing these claims. As a result of the Order Granting Viatical

Administrators, et al. Motion for Relief from Automatic Stay Pursuant to 11 U.S.C. § 362(d),

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entered in Jamie Goldstein's bankruptcy proceeding, Plaintiffs are now able to pursue their constructive trust and equitable lien claim against Jamie Goldstein. Jamie Goldstein incorrectly cites to this Court the case of Singer Housing Co. v. Seven Lakes Venture, 466 F.Supp. 369 (D. Colo. 1979) asserting that an agreement addressing and resolving prior claims acts as an accord and satisfaction and discharge is all prior obligations. In fact, what Singer held was the following in that regard: Where parties have entered into an agreement and a dispute arises as to the relative rights and obligations thereunder, a later substituted agreement addressing and resolving that issue acts as an accord and satisfaction and discharges all obligations under the initial agreement. Id. at p. 377. In this case there was no original agreement between the Plaintiffs and Jamie Goldstein and a later substituted agreement by which Plaintiffs are now bound. Instead, there was a civil action based upon violations of RICO, Florida state RICO, fraud, for preliminary injunction and for constructive trust and equitable lien. There was then a court-ordered

Settlement Agreement which expressly permits Plaintiffs to both seek enforcement of the Settlement Agreement, accepting all benefits received under the Settlement Agreement, and pursue claims in the Second Amended Complaint in the event of failure to perform under the Settlement Agreement. Furthermore, in this case based upon the Defendants, including Jamie Goldstein's, bankruptcy discharge, Plaintiffs cannot further pursue enforcement of the Settlement Agreement and at this point in time their only remedy against Jamie Goldstein is constructive trust and equitable lien. The pursuit of the constructive trust and equitable lien claim of the Second Amended Complaint is consistent with this Court's Order, which permits the Plaintiffs to pursue enforcement of the Settlement Agreement and/or their claims against Defendants, including

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Jamie Goldstein.

Finally, enforcement of the Settlement Agreement and pursuit of the

constructive trust and equitable lien claims are not inconsistent remedies. See Carpenter v. Donohoe, 388 P.2d 399, 401 (Colo. 1964) (pursuing both fraud and breach of warranty remedies is not inconsistent). JAMIE GOLDSTEIN HAS FAILED TO DEMONSTRATE THE POSSIBLE EXISTENCE OF ANY GENUINE ISSUE OF MATERIAL FACT CONCERNING THE ASSIGNMENT OF CLAIMS AND TOLLING AGREEMENTS Jamie Goldstein contends summary judgment should not be granted so as to permit him time to investigate the Assignment of Claims and Tolling Agreements pursuant to which the Plaintiffs have brought claims in this matter. All executed Assignment of Claims and Tolling Agreements were provided to Jamie Goldstein's counsel on February 16, 2006 pursuant to his informal request. Thus, contrary to Jamie Goldstein's counsel's assertions, he has had more than adequate time to determine that the Assignment of Claims and Tolling Agreements have been executed. The weight of public authority supports the freedom to contract so that "a party is bound by an agreement fairly and voluntarily entered into, notwithstanding that it was unwise or disadvantageous to him." St. Frances Reg'l. Med. Cnt. v. Blue Cross Blue Shield, 810 F.Supp. 1209, 1218 (D. Kan. 1992) aff'd 49 F.3d 1460 (10th Cir. 1995). Jamie Goldstein does not even suggest the existence of any fact or circumstance, which might be a basis for voiding the Assignment of Claims and Tolling Agreements. To the extent Jamie Goldstein believes that state law other than Colorado determines the validity of the Assignment of Claims and Tolling Agreement, they have had time to review the

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Assignment of Claims and Tolling Agreements, which do have choice of law provisions.2 However, Jamie Goldstein cites nothing under any federal law as would pertain to the RICO claims, or state law as pertains to state law claims, which would invalidate or even suggest that the Assignment of Claims and Tolling Agreements are not valid. RICO treble damage claims are assignable. National Mortgage Equity Corp. Mortgage Pool Certificate Security Litigation, 636 F.Supp. 1138, 1151, 1152-56 (C.D. Cal. 1986). Furthermore, other than assignments involving matters of personal trust and confidence or for personal services, which are not involved in the pending claims, Colorado law favors assignments of rights of action. Brown v. Gray, 227 F.3d 1287, 1294 (10th Cir. 2000). Failing to present any evidence or legal authority that the

Assignment of Claims and Tolling Agreements pursuant to which the Plaintiffs bring the constructive trust and equitable lien claims are not valid, Jamie Goldstein has failed to meet his burden under Fed.R.Civ.P. 56 that a genuine issue of material fact exists regarding the Assignment of Claims. THE IN PARI DELICTO DOCTRINE IS NOT A DEFENSE TO THE SUMMARY JUDGMENT MOTION Jamie Goldstein asserts that the Plaintiffs may be in pari delicto with Jamie Goldstein in the fraudulent sale of viatical settlement contracts to purchasers of viatical settlement contracts. He goes on to suggest that this may be a defense to the constructive trust and equitable lien claims of the purchasers of the viatical settlement contracts. The illogic of this position is that Jamie Goldstein does not contend that the purchasers of the viatical settlement contracts are in pari delicto with Jamie Goldstein or in pari delicto with the Plaintiffs. It is the claims of the

Any question concerning the assignability of the constructive trust and equitable lien claim is solely legal and requires no fact discovery.

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purchasers of the viatical settlement contracts assigned to the Plaintiffs, which are the subject of the constructive trust and equitable claim lien claims pursued against Jamie Goldstein. It is not the Plaintiffs who are pursuing their own claims against Jamie Goldstein on the constructive trust/equitable lien theory in this Motion for Summary Judgment. Jamie Goldstein has presented no evidence that the purchasers of viatical settlement contracts were in pari delicto with Jamie Goldstein and thus the doctrine would not bar the granting of this summary judgment motion. The case of Sherwood & Roberts-Yakima, Inc. v. Leach, 409 P.2d 160 (Wash. 1965), which Jamie Goldstein cites in support of applying the in pari delicto doctrine to the facts of this case, is inapplicable. The Sherwood decision was based on the fact that the plaintiff was fully aware of defendant's general operation and had a history of business dealings with the defendant and thus found the plaintiff in pari delicto with the defendant. In this case, the purchasers of the viatical settlement contracts were not fully aware of the Defendant's general operation and had no history of business dealings with Defendant Jamie Goldstein and others. The purchasers of the viatical settlement contracts were, in fact, not in pari delicto with Jamie Goldstein and other members of the fraudulent scheme to sell viatical settlement contracts and the defense does not preclude summary judgment. Although irrelevant to the Motion for Summary Judgment, Jamie Goldstein contends that the State of Washington found Plaintiffs, Great Northern Financial Services, Inc., Anthony Horpel and Larry Johnson, violated various Washington securities laws by selling viatical settlement contracts in the Reliance Program. In support of this, Jamie Goldstein attaches as Exhibit J-1 the Statement of Charges and Notice of Intent to Enter Order to Cease and Desist. This is nothing more than an administrative complaint. In fact, the matter was resolved by

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consent without any admission or denial of wrongdoing on the part of Great Northern Financial Services, Inc. and Anthony Horpel. See attached Exhibit 29. No order was entered against Larry Johnson. THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHEN DISTRICT OF FLORIDA HAS RESOLVED ALL OF THE BANRUPTCY PROCEEDING ISSUES Jamie Goldstein contends that pursuit of the constructive trust and equitable lien claim in this Court violates his bankruptcy discharge. The fallacy of this claim (which is well known to Jamie Goldstein and his counsel) is that the United States Bankruptcy Court for the Southern District of Florida, in Jamie Goldstein's bankruptcy proceeding, expressly granted to the Plaintiffs relief from the 524(a)(2) injunction to proceed in this Court with the determination of their constructive trust and equitable lien claims. On June 17, 2005 United States Bankruptcy Judge Paul G. Hyman stated the following regarding Plaintiffs' Motion for Relief from Automatic Stay Pursuant to 11 U.S.C. § 362(d): I am going to grant the relief. I do not belief res judicata is applicable here. There was no assertion, settlement or resolution of any right, title or interest of the Colorado creditors to any claim of funds in the hands of the debtor that is not property of the estate. The Eleventh Circuit has made clear that a lien to property is not extinguished by virtue of the discharge of the debtor, and the settlement [Trustee's settlement with Jamie Goldstein] is not any sort of resolution of the individual debtor's claims to the money. It was merely a resolution of the estate's claims against the debtor and resolution of potential 523 and 723 actions. And I find there is an appropriate forum to resolve these equitable liens or constructive trusts that are not property of the estate. And so ­ and frankly, I tend to agree with Mr. Bakst it probably isn't ­ there probably is no need to seek relief from stay since the monies are not property of the estate. So I am going to grant the motion. Mr. Bakst take care of the order. See Exhibit 30, p. 17, ln. 22-p. 18, ln. 15. Subsequently, on July 8, 2005, United States Bankruptcy Judge Paul G. Hyman signed the Order Granting Creditors Viatical Administrators,

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Inc., et al. Motion for Relief from Automatic Stay Pursuant to 11 U.S.C. § 362(d) in which the court again stated: The court finds that there is an appropriate forum to resolve these equitable liens or constructive trusts that are not property of the estate. The court finds that there is probably no need to seek relief from the automatic stay since the monies are not property of the estate but is granting same in an abundance of caution. The court's ruling is not an order that any funds be turned over to the Colorado court. Instead, the Colorado creditors have been given relief from the automatic stay and the permanent injunction of 11 U.S.C. § 524 to pursue any constructive trust and equitable lien and any assets that are not assets of the estate. See Exhibit 31 attached hereto. Jamie Goldstein's argument that the Motion for Summary Judgment and proceedings upon the constructive trust and equitable lien claim violate either the automatic stay provisions of 11 U.S.C. § 362(d) or the injunction provisions of 11 U.S.C. § 524(a)(2) of the Bankruptcy Code have been rendered moot by the rulings of the United States Bankruptcy Court for the Southern District of Florida in his own bankruptcy proceeding. Jamie Goldstein also argues that the court-approved settlements consisting of the Settlement and Compromise of Controversy Among the Trustee, Viatical Administrators, Inc., the Denver Group and Viatical Liquidity, LLC of April 10, 2003 (the "Trustee Settlement Agreement") and the Settlement and Compromise of Controversy Among the Trustee and Individual Debtors of January 15, 2004 (the "Debtor's Settlement Agreement") is res judicata as to the Plaintiffs' constructive trust and equitable lien claims. This issue has also been resolved by the United States Bankruptcy Court for the Southern District of Florida. At the June 17, 2005 hearing upon Viatical Administrators, Inc.'s Motion for Stay Relief, Jamie Goldstein's counsel argued that the Debtor's Settlement Agreement Between rendered res judicata the current constructive trust and equitable lien claim. As cited above, the Court specifically rejected the

applicability of res judicata to the Plaintiffs' claims against property that is not part of the

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bankruptcy estate such as is at issue here.

Further, the Court agreed that in the Trustee

Settlement Agreement, the Plaintiffs herein did nothing more than give up their rights under 11 U.S.C. § 523 and § 723, which do not affect their ability to pursue the constructive trust and equitable lien claims in this action. Thus, pursuant to the rulings of the United States Bankruptcy Court of the Southern District of Florida in Jamie Goldstein's bankruptcy proceeding, his argument of res judicata is moot. THE SETTLEMENT BETWEEN PLAINTIFFS AND THE TRUSTEE IS IRRELEVANT TO THE SUMMARY JUDGMENT MOTION Finally, and no less lacking in merit than Jamie Goldstein's other arguments, he asserts that because the Plaintiffs and the Trustee have entered into an agreement with respect to division of the $550,000, such precludes summary judgment. The agreement, which Jamie Goldstein attaches as Exhibit M-1, is contingent upon Plaintiffs prevailing on their Motion for Summary Judgment. In the event Plaintiffs prevail upon their Motion for Summary Judgment, establishing that Plaintiffs are entitled to the $550,000, the agreement between the Plaintiffs and the Trustee only resolves any claims which the Trustee may then have as to such money in the hands of the Plaintiffs. It in no way adversely impacts Jamie Goldstein as he has then already lost the right to the money. CONCLUSION The standard for ruling upon a motion for summary judgment is clear. Once Plaintiffs have properly supported a motion for summary judgment by way of showing there is no genuine issue of material fact, the motion must be granted, if appropriate, unless Defendant brings forth by way of facts as would be admissible in evidence demonstrating a genuine issue of material fact. Jamie Goldstein has wholly failed to do so.

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Jamie Goldstein has not even filed an affidavit contesting any of the facts and evidence, which Plaintiffs have put forth in support of their Motion for Summary Judgment. Failing to do so, the grant of summary judgment is appropriate. Respectfully submitted March 23, 2006. DILL DILL CARR STONBRAKER & HUTCHINGS, P.C.

/s/ John A. Hutchings John A. Hutchings Robert A. Dill 455 Sherman Street, Suite 300 Denver, Colorado 80203 Telephone: (303) 777-3737 Facsimile: (303) 777-3823 ATTORNEYS FOR PLAINTIFFS

CERTIFICATE OF SERVICE I hereby certify that on March 23, 2006, I electronically filed the foregoing REPLY MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT with the Clerk of Court using CM/ECF System, which will send notification of such filing to the following e-mail addresses: [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

and I hereby certify that I have mailed the REPLY MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT to the following non-CM/ECF participants by depositing same in the United States mail, postage prepaid, addressed to the following on March 23, 2006: Bruce I. Kravitz, Esq. 1870 Forest Hill Boulevard Suite 211 West Palm Beach, Florida 33406 Lee Twyford 1471 SW 14th Street Boca Raton, Florida 33486

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Larry K. Griffis, Esq. Jaffe, Raitt, Heuer & Weiss, P.C. 27777 Franklin Road, Suite 2500 Southfield, Michigan 48034-8214 John P. Barbee, Trustee 1555 Indian River Boulevard, Suite 111 Vero Beach, Florida 32960 Michael Goldberg, Esq. Akerman Senterfitt 350 East Las Olas Boulevard Suite 1600 Ft. Lauderdale, Florida 33301

Robert S. Harrison, Esq. Matthew D. Klakulak, Esq. Robert Harrison & Associates, PLC 240 East Merrill Street Birmingham, Michigan 48009 Gary Hoskie Professional Consultants & Managers, Inc. 1706 Surfside Drive Hutchinson Island, Florida 34949

Mr. Isadore Cohen 1920 East Hallandale Boulevard Suite 626 Hallandale, Florida 33009

/s/ Charlene Huffman

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