Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-01724/USCOURTS-caed-2_07-cv-01724-29/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 12:22 Securities Fraud

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE )

COMMISSION, )

)

Plaintiff, ) 2:07-cv-01724-GEB-CMK

)

v. ) ORDER

)

SECURE INVESTMENT SERVICES, INC.; )

AMERICAN FINANCIAL SERVICES, INC.; )

LYNDON GROUP, INC.; KIMBERLY )

SNOWDEN; and LINDA NEUHAUS, in her )

capacity as the administrator and )

personal representative of the )

estate of Donald Neuhaus, )

)

Defendants. )

)

On July 17, 2008, Receiver Michael J. Quilling (“the

Receiver”) filed a motion in which he seeks an order requiring two

insurance companies to transfer Donald Neuhaus’s (“Neuhaus”) interests

in five insurance policies to the Receiver. Plaintiff Securities and

Exchange Commission, Defendant Kimberly Snowden and Examiner Steven A.

Harr filed non-oppositions to the motion. 

In October 2007, the Receiver and Neuhaus negotiated a

compromise and settlement agreement in which Neuhaus agreed to execute

any documentation required to transfer his individual interests in

Case 2:07-cv-01724-GEB-CMK Document 278 Filed 08/12/08 Page 1 of 3
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insurance policies to the Receiver. (Mot. at 2:4-9; Order Authorizing

Compromise & Settlement Agreement, Oct. 25, 2007 (Dkt. #67).) As

administrator and personal representative of Neuhaus’s estate, Linda

Neuhaus signed forms (“transfer requests”) transferring Neuhaus’s

ownership and beneficiary interests in, inter alia, three multipleowner insurance policies (i.e., policies with numerous fractional

owners) provided by Transamerica Occidental Life Insurance Company

(“Transamerica”) and two multiple-owner policies provided by United of

Omaha Life Insurance Company (“United”). (Mot. at 2:10-3:4.) 

The transfer requests were submitted to Transamerica and

United, but at the time the motion was filed, Transamerica had

transferred only Neuhaus’s ownership interests in the policies to the

Receiver, and has refused to transfer Neuhaus’s beneficiary interests. 

(Id. at 3:7-9.) United has refused to transfer any of Neuhaus’s

interests to the Receiver. (Id. at 3:9-10.) Transamerica and United

have informed the Receiver that they will only transfer Neuhaus’s

remaining interests in these policies to the Receiver upon (1) written

consent from all owners of fractional interests in the policies, or

(2) a court order directing Transamerica and United to honor the

transfer requests without written consent from all owners of

fractional interests in the policies. (Id. at 3:11-14.)

The Receiver argues that the other fractional owners of the

policies “do not have a legitimate reason to oppose this motion

because none can claim Neuhaus’ beneficiary interest in these or any

other policies.” (Id. at 3:19-21.) Further, the Receiver asserts the

order it now seeks “would serve the receivership[] [estate’s] best

interests because it increases receivership assets without spending

the time and money to obtain written consent from nearly 110 other

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owners.” (Id. at 3:21-23.) Counsel for the Receiver declares he has

received letters from Transamerica and United stating they do not

oppose entry of an order compelling them to transfer Neuhaus’s

interests in the policies at issue to the Receiver. (Decl. of Brent

J. Rodine in Supp. of Mot., Exs. 1-2.) Since the transfer of

Neuhaus’s interests to the Receiver has already been approved, and the

requested order appears necessary to effectuate that approval, the

motion is granted and the hearing on this motion set for August 25,

2008 is vacated.

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that (1)

Transamerica Occidental Life Insurance Company shall execute all

transfers of interests from Donald Neuhaus, Linda Neuhaus, or entities

formerly under their control to the Receiver without the written

consent of the other owners of policy number 92252406, policy number

60025185 and policy number 60057369 or third parties; and (2) United

of Omaha Life Insurance Company shall execute all transfers of

interests from Donald Neuhaus, Linda Neuhaus, or entities formerly

under their control to the Receiver without the written consent of the

other owners of policy number BU1099709 and policy number BU1099720 or

third parties.

Dated: August 12, 2008

 

GARLAND E. BURRELL, JR.

United States District Judge

Case 2:07-cv-01724-GEB-CMK Document 278 Filed 08/12/08 Page 3 of 3