Amtrust Bank et al v. Lewis et al

Filing 316

ORDER. IT IS ORDERED that 261 the Renewed Motion for an Order Holding Judgment Debtor Lewis in Contempt is GRANTED. IT IS FURTHER ORDERED that 293 the Objection to the Order to Show Cause is DENIED AND OVERRULED. IT IS FURTHER ORDERED tha t 299 the Motion to Strike is DENIED as moot. IT IS FURTHER ORDERED that Rex H. Lewis shall appear before this Court on 5/7/18, at 11:00 a.m. for a status conference. See Order for additional deadlines. Signed by Judge James C. Mahan on 3/23/2018. (Copies have been distributed pursuant to the NEF - ADR)

Case 2:10-cv-00439-JCM-VCF Document 314 Filed 03/21/18 Page 1 of 6

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Abran E. Vigil, Esq.
Nevada Bar No. 7548
Maria A. Gall, Esq.
Nevada Bar No. 14200
Joseph P. Sakai, Esq.
Nevada Bar No. 13578
BALLARD SPAHR LLP
1980 Festival Plaza Drive, Suite 900
Las Vegas, Nevada 89135
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]

Attorneys for Plaintiffs/Counterdefendants Iota Violet, LLC; Iota
Coral, LLC; Iota Cinnamon, LLC;
10 Iota Red, LLC; and Iota Royal, LLC
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UNITED STATES DISTRICT COURT

[phone] FAX [phone]

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LAS VEGAS, NEVADA 89135

BALLARD SPAHR LLP

1980 FESTIVAL PLAZA DRIVE, SUITE 900

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DISTRICT OF NEVADA
FDIC as Receiver for AMTRUST BANK,
f/k/a Ohio Savings Bank, a federal
Case No. 2:10-cv-00439-JCM-VCF
savings bank; IOTA VIOLET, LLC, an
Arizona limited liability company; IOTA
CORAL, LLC, an Arizona limited liability
company; RECOVEREDGE, LP, a
Delaware limited partnership; IOTA
ORDER FINDING REX H. LEWIS IN
CINNAMON, LLC, a Nevada limited
CONTEMPT OF COURT
liability company; IOTA RED, LLC, a
Nevada limited liability company; and
IOTA ROYAL, LLC, a Nevada limited
liability company;

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Plaintiffs/Counter-defendants,

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v.

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REX H. LEWIS, an individual,
CORRALES PETERS LLC, an Arizona
limited liability company; BARTLETT
SUNRISE, LLC, an Arizona limited
liability company; COTTONGIN, LLC, a
Nevada limited liability company;
MIDWAY CORNMAN, LLC, an Arizona
limited liability company; PEBBLE
CIMARRON LLC, a Nevada limited
liability company; MESA VERDE, INC.,
a Nevada limited liability company;
JONAH LLC, a Nevada limited liability
company; REGENA TEEPEE, LLC, a

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DMWEST #11312378 v2

Case 2:10-cv-00439-JCM-VCF Document 314 Filed 03/21/18 Page 2 of 6

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Nevada limited liability company; HH
INV, LLC, a Nevada limited liability
company; OMEGA VISTA, LLC, a
Nevada limited liability company;
ALPHA VISTA, LLC, a Nevada limited
liability company; and DOE
DEFENDANTS I through X, inclusive;
Defendants/Counter-claimants.

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Reply in support thereof (ECF No. 267), as well as the Transcript of Proceedings for

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the evidentiary hearing held before Magistrate Judge Ferenbach on October 16, 2017

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[phone] FAX [phone]

Judgment Debtor Lewis’s Response thereto (ECF No. 264), the Judgment Creditors’

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LAS VEGAS, NEVADA 89135

Order Holding Judgment Debtor Rex H. Lewis in Contempt (ECF No. 261), the

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BALLARD SPAHR LLP

Presently before the Court are the Judgment Creditors’ Renewed Motion for an

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1980 FESTIVAL PLAZA DRIVE, SUITE 900

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(ECF No. 288) and Judge Ferenbach’s Order to Show Cause and Certification of Facts

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(ECF No. 286) resulting from that hearing. Also before the Court are Judgment

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Debtor Lewis’s Objection to the Order to Show Cause and Certification of Facts (ECF

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No. 293), the Judgment Creditors’ Response thereto (ECF No. 298) and Motion to

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Strike (ECF No. 299), the Judgment Debtor Lewis’s Response to the Motion to Strike

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(ECF No. 300), and the Judgment Creditors’ Reply in Support of the Motion to Strike

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(ECF No. 301). The Show Cause Hearing took place on March 19, 2018, at which

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time, and after having fully reviewed the record before it, the Court provided

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Judgment Debtor Lewis an opportunity to present new testimony and evidence along

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with an additional offer of proof from his attorney to demonstrate why Lewis should

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not be held in contempt. The Court further entertained and considered arguments of

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counsel, who were allowed to fully present arguments in support of their respective

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positions (see ECF No. 306).

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Accordingly, having been fully apprised of the facts and circumstances before

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it, the Court hereby finds Rex H. Lewis IN CONTEMPT of this Court’s Orders

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compelling him to provide full and complete discovery (ECF Nos. 88 & 146) and now

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orders as follows:
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Case 2:10-cv-00439-JCM-VCF Document 314 Filed 03/21/18 Page 3 of 6

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Contempt (ECF No. 261) is GRANTED.

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The Renewed Motion for an Order Holding Judgment Debtor Lewis in

2.

The Objection to the Order to Show Cause (ECF No. 293) is DENIED

AND OVERRULED.

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3.

The Motion to Strike (ECF No. 299) is DENIED as moot.

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4.

The Court accepts the facts certified to it by Magistrate Judge

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Ferenbach (see ECF No. 286).

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5.

The Court further finds that the Judgment Debtor Lewis has not shown

cause why he should not be held in contempt.

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6.

The Court further finds the Judgment Debtor Lewis’s explanations,

[phone] FAX [phone]

offers of proof, positions, and arguments of counsel demonstrate that the Judgment

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LAS VEGAS, NEVADA 89135

BALLARD SPAHR LLP

1980 FESTIVAL PLAZA DRIVE, SUITE 900

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Debtor has created an artificial mechanism, or ruse, by which to try to avoid

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compliance with this Court’s Orders. Cf. FTC v. Affordable Media, 179 F.3d 1228,

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1239–40 (9th Cir. 1999) (“It is readily apparent that the [judgment debtors’] inability

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to comply with the district court’s repatriation order is the intended result of their

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own conduct-their inability to comply and foreign trustee’s refusal to comply appears

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to be the precise goal of the [judgment debtors’] trust.”); (see also ECF Nos. 88 and

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146).

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7.

Judgment Debtor Lewis is sanctioned $500.00 per day until he

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demonstrates that he has produced all documents and information related to the

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Holder Trust as requested by the Judgment Creditors in post-judgment discovery,

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including, without limitation, the following:

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a.

All documents relating to the formation of the Holder Trust,

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including the Memorandum of the Settlors referenced in the trust

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deed.

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b.

All trustee reports.

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c.

All due diligence questionnaires and responses thereto.

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Case 2:10-cv-00439-JCM-VCF Document 314 Filed 03/21/18 Page 4 of 6

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d.

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All services and compensation agreements between any trustee of
the Holder Trust and its beneficiaries and/or settlors.

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e.

All asset schedules.

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f.

All charts or diagrams showing the current or former relationship

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between the Holder Trust and its domestic and foreign

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subsidiaries and investment vehicles.

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g.

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sheets, general ledgers, and bank reconciliation.
h.

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[phone] FAX [phone]

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i.
j.

statements

and

other

records

of

distributions

to

or

All tax returns and supporting statements for the Holder Trust,
such as K-1s, 3520 forms, and 8825 forms.

k.

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All

contributions from the Holder Trust.

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All wire transfer records for wire transfers to or from the Holder
Trust.

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LAS VEGAS, NEVADA 89135

BALLARD SPAHR LLP

1980 FESTIVAL PLAZA DRIVE, SUITE 900

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All financial statements, including, without limitation, balance

All bank and brokerage statements for accounts held by the
Holder Trust.

l.

All

correspondence

or

evidence

thereof,

including

e-mail

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correspondence and any memoranda or other memorialization of

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phone calls or in-person meetings, between the Holder Trust

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(including its trustee(s)) and:

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i.

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ii.

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Rex Lewis
Its settlors or beneficiaries, including, without limitation,
beneficiaries past and present;

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iii.

Christine Schwab;

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iv.

Schwab Business Services;

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v.

Robert Nagy;

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vi.

F.R. Jenkins;

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vii.

Lindsey Cooper;
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Case 2:10-cv-00439-JCM-VCF Document 314 Filed 03/21/18 Page 5 of 6

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viii.

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ix.

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x.

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xi.

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m.

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Woman LLC; and
Any banking or brokerage institutions holdings funds for

All documents related to the Holder Trust that required its
trustee(s) authorization and/or signature.

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n.

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All documents authorizing any person or entity other than the
Holder Trust’s trustee(s) to transact business on behalf of the

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Holder Trust.

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8.

Rex H. Lewis shall pay the $500.00 per day sanction by wire transfer to

[phone] FAX [phone]

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LAS VEGAS, NEVADA 89135

BALLARD SPAHR LLP

Six Kids Trust;

Holder Trust and subsidiary entities.

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1980 FESTIVAL PLAZA DRIVE, SUITE 900

Apollo LLC;

a trust account held by the Judgment Creditors’ counsel of record, Ballard Spahr

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LLP, by 4:00 p.m. each business day, and any monies accrued over non-business days

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shall be paid by 4:00 p.m. the next business day (e.g., on a Monday following a non-

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holiday weekend, Lewis shall pay by 4:00 p.m. $1,500.00, the total of the $500.00

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sanction as accrued for Saturday, Sunday, and Monday). 1

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9.

The $500.00 per day sanction shall begin to accrue as of March 19, 2018,

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and the first payment of all accrued monies shall be paid by 4:00 p.m. of the first

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business day following the entry of this Order.

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10.

Concurrent with each transfer of monies, counsel of record for Rex Lewis

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shall provide a written certification consistent with Fed. R. Civ. P. 26(g) identifying

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the source of the funds, including the source from which the funds originated,

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whether that source is a natural person, organization, bank or investment account,

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safe deposit box, or otherwise, and any intermediary transferee/transferor of the

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funds, whether that intermediary is a natural person, bank or investment account,

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Ballard Spahr LLP is to have provided wire instructions to Lewis’s counsel no later
than 5:00 p.m. on March 21, 2018.

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Case 2:10-cv-00439-JCM-VCF Document 314 Filed 03/21/18 Page 6 of 6

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organization, or otherwise. If the funds originated from the disposition of an asset,

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including without limitation real or personal property, the written certification must

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identify that asset and how Lewis obtained control to dispose of or otherwise

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monetize it.

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11.

Pursuant to Rule 37(b)(2)(A)(vii) of the Federal Rules of Civil Procedure

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and this Court’s contempt powers, the $500 per day is a fine and shall not be

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deducted from the principal amounts of this Court’s outstanding judgment against

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Lewis. See United States v. United Mine Workers of Am., 360 U.S. 258, 303–04

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(1947).

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Rex H. Lewis shall appear before this Court on May 7, 2018, at 11:00

[phone] FAX [phone]

a.m. for a status conference to determine whether he continues to be in contempt of

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LAS VEGAS, NEVADA 89135

BALLARD SPAHR LLP

1980 FESTIVAL PLAZA DRIVE, SUITE 900

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this Court’s orders, including this Order, at which time the Court may impose further

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sanctions for any continuing contempt, including, without limitation, incarceration

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pending his compliance with this Court’s orders.

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IT IS SO ORDERED:

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JAMES C. MAHAN
UNITED STATES DISTRICT JUDGE
DATED:

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3/23/2018