Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_04-cv-02037/USCOURTS-casd-3_04-cv-02037-9/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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- 1 - 04-CV-2037W

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE

COMMISSION,

Plaintiff,

CASE NO. 04-CV-2037 W (LSP)

ORDER (1) APPROVING

SETTLEMENT WITH OLETA

MUNDIS AND (2) MODIFYING

APPLICABLE STAYS TO

ALLOW OLETA MUNDIS TO

FORECLOSE ON HER

SECURITY INTEREST IN

CERTAIN REAL PROPERTY

v.

LEARN WATERHOUSE, INC.,

RANDALL T. TREADWELL, RICK

D. SLUDER, LARRY C. SATURDAY,

and ARNULFO M. ACOSTA,

Defendants.

Pending before the Court is the Receiver’s motion for an order (1) approving the

settlement agreement with Oleta Mundis, and (2) modifying applicable stays to allow

Mundis to foreclose on her security interest in certain real property (the “Motion”).

The Court decides the matter on the papers submitted and without oral argument. See

Civil Local Rule 7.1(d.1). For the reasons stated below, the Court GRANTS the

Motion (Doc. No. 479).

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Case 3:04-cv-02037-W-DHB Document 506 Filed 06/11/08 Page 1 of 4
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- 2 - 04-CV-2037W

On October 12, 2004, the Securities and Exchange Commission filed this lawsuit

for violation of the federal securities laws. The lawsuit involves an alleged ongoing

“prime bank” Ponzi scheme perpetrated by Learn Waterhouse, Inc. (“LWI”).

On the same day the lawsuit was filed, this Court issued a temporary restraining

order freezing all assets related to, among others, LWI and defendant Randall T.

Treadwell (the “Freeze Order”), and appointing Thomas F. Lennon as the temporary

receiver for LWI and its subsidiaries and affiliates. On November 1, 2004, the Court

issued a preliminary injunction order that continued in effect the terms of the TRO, and

converted the Receiver’s appointment to that of a permanent receiver.

Before this lawsuit was filed, Treadwell purchased certain real property commonly

known as 47 Cardinal Road, Savannah, Chatham County, Georgia (the “Property”)

from Oleta Mundis. In connection with the purchase, Mundis holds a first priority deed

of trust on the Property (“Security Deed”) securing the purchase price owed by

Treadwell (the “Treadwell Obligation”). Mundis planned to fund her retirement with

the payments from Treadwell. 

In September 2005, Treadwell stopped making payments to Mundis.

Additionally, the Receiver learned that payments Mundis had received before and after

the entry of the Freeze Order came from funds obtained from LWI investors.

Accordingly, the Receiver asserted an interest in the Property and demanded the return

of all payments Mundis received after entry of the Freeze Order.

On or about February 8, 2008, the Receiver and Mundis resolved their dispute

and executed a settlement agreement (the “Settlement Agreement”). Under the terms

of the agreement, Mundis will return to the Receiver all payments against the Treadwell

Obligation received after entry of the Freeze Order, which total $17,388, and Mundis

will pay an additional $5,000 to the Receiver to offset certain litigation expenses. The

Settlement Agreement is contingent on this Court’s approval and modification of all

applicable stays to allow Mundis to foreclose on her security interest on the Property.

Accordingly, on February 15, 2008, the Receiver filed the Motion. 

Case 3:04-cv-02037-W-DHB Document 506 Filed 06/11/08 Page 2 of 4
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1

The Court denied Treadwell’s request for appointment of counsel. (See Doc. No. 501.)

2

To date, neither Treadwell nor any other party has filed an opposition or a request for

an extension of time to file an opposition to the Motion.

- 3 - 04-CV-2037W

On March 18, 2008, Treadwell filed a “Notice of Motion and Motion for Order

(A) Oppose Motion Disapproving Settlement with Oleta Mundis; (B) Against

Foreclosure on Security Interest in Real Property.” (Doc. No. 484.) In the document,

Treadwell asserts that his family resides in the Property, and he requests appointment

of civil counsel.1

 

As a result of Treadwell’s filing, the Receiver requested a continuance of the

hearing on the Motion to allow the Receiver an opportunity to investigate Treadwell’s

claim that the Property is his family’s primary residence. Accordingly, on April 10,

2008, this Court continued the hearing date to June 9, 2008. The order also set May

12, 2008 as the deadline for opposing the Motion, and specifically warned that failure

to file an opposition “may result in the motion being granted.” (Doc. No. 494.) 

No opposition was filed.2

 

On June 2, 2008, the Receiver filed a Notice of Non-Opposition, confirming that

the Receiver had not received an opposition to the Motion. (See Doc. No. 505.)

Additionally, the Receiver submitted the Declaration of B.K. Logan, Jr., who inspected

and conducted an investigation into the Property. (See Doc. No. 504.) The declaration

refutes Treadwell’s claim that the Property is his family’s primary residence. In light of

the foregoing, and having considered the Settlement Agreement, as well as the

Receiver’s Motion and all papers submitted in support thereof, the Court finds that the

settlement is in the best interests of the receivership estate, and is fair and reasonable.

Accordingly, the Court GRANTS the Motion (Doc. No. 479) and ORDERS as

follows:

1. The Settlement Agreement between the Receiver and Jillane M. Thomas,

Attorney-in-Fact for Oleta Mundis, which is attached to the Receiver’s

Memorandum of Points and Authorities (Doc. 479-2) as Exhibit A, is

approved.

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- 4 - 04-CV-2037W

2. The preliminary injunction order entered on November 1, 2004, the order

granting Defendant Randall T. Treadwell’s motion to stay entered on

November 17, 2005, and any other applicable stays ordered in this case are

hereby modified to allow Oleta Mundis to take all appropriate steps to

foreclose on the Security Deed, and to pursue any other rights and

remedies regarding the Property.

IT IS SO ORDERED.

DATED: June 11, 2008

Hon. Thomas J. Whelan

United States District Judge

Case 3:04-cv-02037-W-DHB Document 506 Filed 06/11/08 Page 4 of 4