Federal Deposit Insurance Corporation v. Global Industrial Management LLC et al

Filing 87

ORDER denying 71 defendants Mark Arciero, William L. Newland, Thompson-Dodson Farms, LLC, Keith Dodson, and Gerald Ray Smith's Motion for Reconsideration (as more fully set out in order). Signed by Honorable Vicki Miles-LaGrange on 1/8/2013. (ks)

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver of FIRST
STATE BANK OF ALTUS,
ALTUS, OKLAHOMA,
Plaintiff,
vs.
GLOBAL INDUSTRIAL
MANAGEMENT, LLC;
FRED DON ANDERSON;
MARK ARCIERO;
WILLIAM L. NEWLAND;
THOMPSON-DODSON FARMS, LLC;
KEITH DODSON; and
GERALD RAY SMITH,
Defendants.

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Case No. CIV-11-686-M

ORDER
Before the Court is defendants Mark Arciero, William L. Newland, Thompson-Dodson
Farms, LLC, Keith Dodson, and Gerald Ray Smith’s (collectively “Defendants”) Motion for
Reconsideration, filed October 26, 2012. On November 14, 2012, plaintiff filed its response, and
on November 21, 2012, Defendants filed their reply. Based upon the parties’ submissions, the Court
makes its determination.
Defendants move this Court to reconsider its September 17, 2012 order granting summary
judgment to plaintiff and its subsequent Amended Judgment filed on September 28, 2012 on the
basis that there is new evidence from the Oklahoma Department of Securities which supports that
the loans at issue are exempt from the requirements of 12 U.S.C. § 1823(e) and the D’Oench1

1

D’Oench, Duhme & Co. v. Fed. Deposit Ins. Corp., 315 U.S. 447 (1942).

doctrine. Specifically, Defendants assert that they received notice that the Oklahoma Department
of Securities issued on October 25, 2012 an order that it was initiating an investigation into First
State Bank of Altus, Oklahoma (“FSB”), Altus Ventures, and Paul H. Doughty (“Doughty”) for
selling unregistered securities, including the life settlement contracts at issue in the instant case.
Defendants contend that because the Oklahoma Department of Securities has opened this active
investigation into FSB, Altus Ventures, and Doughty for the sale of unregistered securities,
Defendants’ claims are, therefore, not “agreements” and, thus, are not subject to § 1823 and
D’Oench, and that liability would arise from FSB’s failure to register a security in accordance with
Oklahoma law.
Plaintiff asserts that Defendants have failed to show that any “newly discovered evidence”
warrants reconsideration of the judgment.2 Specifically, plaintiff asserts that the Oklahoma
Department of Securities’ mere opening of an investigation does not constitute evidence of anything
that could support a defense or counterclaim against anyone; the opening of the investigation neither
proves nor tends to prove that the loans for which Defendants are liable were, in fact, unregistered
securities under Oklahoma law. Plaintiff further asserts that the opening of the investigation is
merely cumulative of other evidence that Defendants had prior to the Court’s order and judgment.
Finally, plaintiff asserts that the fact that the Oklahoma Department of Securities had opened an
investigation is not evidence that would probably produce a different result if the Court considered
it.

2

Plaintiffs also assert that Defendants’ motion is not timely. Because the Court finds that
Defendants have failed to show that there is newly discovered evidence that warrants
reconsideration, the Court finds it unnecessary to determine whether Defendants’ motion is timely.
2

To be eligible for relief based upon newly discovered evidence, the moving party must show:
“(1) the evidence was newly discovered since the trial; (2) the moving party was diligent in
discovering the new evidence; (3) the newly discovered evidence [was] not merely cumulative or
impeaching; (4) the newly discovered evidence is material; and (5) that a new trial with the newly
discovered evidence would probably produce a different result.” Dronsejko v. Thornton, 632 F.3d
658, 670 (10th Cir. 2011) (internal quotations and citation omitted). Having carefully reviewed the
parties’ submissions, the Court finds that Defendants have not made the requisite showing.
Specifically, the Court finds that the newly discovered evidence is merely cumulative of other
evidence that Defendants had at the time of the briefing on plaintiff’s motion for summary judgment
and the Court’s entry of judgment. When it commenced this action, plaintiff provided to Defendants
the Credit Memorandum prepared by Doughty that describes the collateral arrangement Defendants
now seek to allege is a sale of an unregistered security.3 Further, it appears that as early as January
13, 2011, Defendants’ counsel had in his possession the FDIC Supervisory Insights publication
which included a case study of FSB’s Senior Life Settlement loans to these Defendants. See January
13, 2011 letter from Todd Taylor to Stanley Jutkowitz, attached as Exhibit 3 to Plaintiff’s Brief in
Opposition to Defendants’ Motion for Reconsideration. The publication described the loan
transactions at issue in this case and clearly put Defendants on notice that they might involve
violations of securities law. The fact that the Oklahoma Department of Securities has opened an

3

Defendants even referenced the Credit Memorandum in their prior briefing on the motion
for summary judgment.
3

investigation into this matter is merely cumulative of the above evidence and is but merely one more
piece of evidence regarding whether the loans in question violated the securities laws.4
While Defendants had the above-referenced evidence at the time they filed their response
brief, Defendants never argued in their response to plaintiff’s motion for summary judgment that the
loans were unregistered securities and were not subject to § 1823 or D’Oench.5 A motion for
reconsideration is not appropriate to “advance arguments that could have been raised in prior
briefing.” Servants of the Paraclete v. John Does I-XVI, 204 F.3d 1005, 1012 (10th Cir. 2000).
Because Defendants could have, and perhaps should have, raised the issue of whether the loans were
unregistered securities and, thus, were not agreements and were not subject to § 1823 or D’Oench,
the Court finds that Defendants may not raise this issue for the first time in a motion for
reconsideration.
Accordingly, the Court DENIES Defendants’ Motion for Reconsideration [docket no. 71].
IT IS SO ORDERED this 8th day of January, 2013.

4

The Court would note the weight of the newly discovered evidence is relatively minimal as
the Oklahoma Department of Securities has only opened an investigation and has made absolutely
no finding regarding the propriety of these loans.
5

It appears that Defendants were aware of this issue. In their Counterclaim, Defendants
alleged that FSB “failed to conduct proper due diligence and confirm the legitimacy of the
transactions with state and federal regulations.” Defendants’ Answer and Counterclaim [docket no.
15] at p. 9, ¶ 17.
4