Redacted Rico Default Motion

PHILIP M. BALLIF, ESQ.
Nevada Bar No. 002650
3773 Howard Hughes Parkway
Third Floor South
Las Vegas, Nevada 89109
Telephone: (801) 415-3000
ATTORNEY FOR DEFENDANT

UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

ROBERT MORROW PLAINTIFF

V. NO. CV-S-04-1269-RCJ-LRL

GARY COLOMBO, MICHAEL JENKINS
DANIEL ELLIS, WALTER CASTILLO
MARTINEZ, RAMON C. SANTANA, all
Individuals; FRETUS FIDUCIA, LLC; ZAG,
LLC; ARQUEST, INC.; DOES 1-30; and DOES 1- DEFENDANTS
30

EMERGENCY MOTION AND MEMORANDUM
IN SUPPORT OF MOTION TO SET ASIDE
SUMMARY JUDGMENT AND FOR LEAVE
TO AMMEND OR WITHDRAW RESPONSE
TO ADMISSIONS

Comes the Defendant, WALTER CASTILLO MARTINEZ, by counsel, and

for his motion to Set Aside Summary Judgment states as follows:

1. On July 5th, 2006, Plaintiff Robert Morrow filed a Motion for Summary

Judgment in this Court.

2. The Motion for Summary Judgment stated as grounds for the granting the

judgment only that Mr. Castillo did not respond to Plaintiff’s Request for

Admissions.

3. This Court granted the Plaintiff’s Motion for Summary Judgment through

its order entered on September 26, 2007. Pursuant to Federal Rule of Civil

Procedure 60(b)(6), Mr. Castillo requests that this Court set aside the

Judgment entered on September 26, 2007.

4. Fed. R. Civ. P. 60(b)(6) allows the Court to set aside a final judgment for

“any other reason justifying relief from the operation of the judgment.”

5. Mr. Castillo has been unable to respond to any pleadings or motions

including the Request for Admissions, due to the fact that he has never

received any notification of the filings, has not been represented by

counsel and has not been present in the United States.

6. The extraordinary circumstances of Mr. Castillo’s situation provide a

justification under Federal Rule of Civil Procedure 60(b)(6) for setting

aside the September 26,2007 order granting judgment.

7. Mr. Castillo also requests this Court to grant him leave to withdraw his

default admissions and enter a new response.

FACTS

In support of his motion to set aside judgment Mr. Castillo states the

following:

1. On July 5th, 2007, the Plaintiff filed a Motion for Summary Judgment on all

claims against Walter Castillo-Martinez.1 Plaintiff stated that Mr. Castillo

had not responded to Admissions served on him on February 1, 2006. 2

Plaintiff cited Federal Rule of Civil Procedure 36(a) to support his

assertion that the admissions were all admitted due to the fact that Mr.

Castillo did not respond within the thirty (30) day allotted time period.3 Due

to the lack of response by Mr. Castillo, in accordance with Fed. R. Civ. P.

36(a), this Court determined that Mr. Castillo had admitted all of the

admissions listed in the request.

2. On September 26, 2007, this Court entered an order granting summary

judgment against Mr. Castillo on all R.I.C.O. and Conversion claims and

awarded the Plaintiff $10,000,000 in damages.

3. Mr. Castillo did not have the capacity to respond to either the Request for

Admissions or the Motion for Summary Judgment. Mr. Castillo did not

have representation and was not present in the United States to respond.

There has been no communication between Mr. Castillo and any counsel

up to this point due to extraordinary circumstances. Mr. Castillo has been

the target of attempts on his life and has been living in Europe to escape

harm. Mr. Castillo has been unable to remain at a single, fixed address

and has been forced to constantly relocate.

1
Plaintiff’s Motion for Summary Judgment, P.4 attached hereto as Exhibit 1.
2
Plaintiff’s Motion for Summary Judgment, P.4.
3
Id.

4. On April 20, 2005, Mr. Castillo received a letter from a person claiming to

be a special agent with the Las Vegas Office of the Federal Bureau of

Investigation.4 Upon receiving this letter, Mr. Castillo became suspicious

and retained Charles Rivers and Associates to investigate its legitimacy.

The investigation revealed that there was no F.B.I. investigation involving

Mr. Castillo and that all of the claims made in the letter were false. The

letter commanded Mr. Castillo to appear at Thursday, May 19th, 2005 at 9

A.M. at 700 East Charlseton Blvd. in Las Vegas. 5 Charles Rivers and

Associates appeared at the location instead of Mr. Castillo. While there,

they observed a suspicious van circling the area. Men entered and exited
6
the vehicle in a manner that suggested they were looking for someone.

Mr. Castillo justifiably believed that the letter was part of a conspiracy to

end his life. Based on the investigators opinion and advice, Mr. Castillo left

the country.

5. After fleeing to safety, Mr. Castillo had the letter examined by a forensics

expert, David R. Browne. Mr. Browne determined the letter to be a

forgery.7 This corroborated the evidence gathered by the private

investigators and confirmed that Mr. Castillo was in imminent danger.

4
April 20, 2008 Letter from “Special Agent David E. Marks” attached hereto as
Exhibit 2.
5
Affidavit of Jennifer Culotta attached hereto as Exhibit 3.
6
Id.
7
Forensics Report of David Browne P.9, attached hereto as Exhibit 4.

6. As a result of an actual F.B.I. investigation, criminal R.I.C.O. indictments

were handed down against Defendants Jenkins, Ellis and Colombo.8 With

this information Mr. Castillo felt safe enough to reestablish meaningful

contact with attorneys here in the United States to pursue his defense in

this case.

SUMMARY OF LAW

Fed. R. Civ. P. 60 allows a court to grant relief to a party against whom a

judgment has been entered. The Rule provides several grounds for relief from a

judgment including fraud and mistake. Castillo seeks relief under Rule 60(b)(6)

which states:

…(6) any other reason justifying relief from the operation of the

judgment. the motion shall be made within reasonable time

United States Federal Courts have been uniform in their treatment of

motions for relief under this Rule and granted relief only when the circumstances

surrounding the request are extraordinary in nature. 9 A motion to set aside under

this section must also be filed within a reasonable time after the entry of

judgment. 10

In addition to being extraordinary in nature and timely filed, the party must

show injury and circumstances that were out of its control that prevented it from

8
U.S. District Court Crim. Indictment attached hereto as Exhibit 5.
9
Liljeburg v. Health Services Acquisition Corp., 486 U.S. 847, 864 (1988); U.S. v.
Alpine Land and Resevoir, Co., 984 F.2d 1047, 1049 (9 th Cir. 1993).
10
In re Pacific Far East Lines, Inc., 889 F.2d 242, (9th Cir. 1989).

defending the action.11 Additionally, the court has an interest in finality of the

judgment that must be balanced against the interests of the movant. 12

Mr. Castillo’s reason for seeking relief is extraordinary in nature and timely

filed considering the extraordinary nature of the impediments to his participation

in his defense. Mr. Castillo was unable to respond to any court filings due to his

exile and has been injured by the imposition of a $10,000,000 judgment against

him.

I. The circumstances surrounding Mr. Castillo’s failure to respond
to the Summary Judgment were extraordinary and completely out
of his control.

In U.S. v. Karahalias Judge Learned Hand set forth what circumstances
13
are adequate grounds for relief under Fed. R. Civ. P. 60(b)(6). After becoming

a naturalized citizen Karahalias returned to Greece to retrieve his wife and bring

her back to the United States. Because of World War II and his wife’s critical

illness, he was unable to return to the United States for 17 years. As a result, he

could not defend against the denaturalization action brought against him in his

absence. The court determined that an attorney could not have adequately

defended against the action without Kalaharias’ presence. The court further held

under Fed. R. Civ. P. 60(b)(6), that his inability to return to the United States

could be adequate grounds for relief from the denaturalization decision. See

Klapprott v. U.S., 335 U.S. 601, 613 (1949)(The Supreme Court determined that

a defendant’s circumstances were grounds for relief when he was prevented

11
U.S. v. Washington, 394 F.3d 1152, 1157 (9th Cir. 2005).
12
See Id. at 1161.
13
U.S. v Karahalias, 205 F.2d 331, 333 (2nd Cir. 1953).

from making a defense because he was incarcerated and gravely ill. The

Supreme Court compared his situation to not being notified of a judgment at all.);

See also James v. U.S., 215 F.R.D. 590,594 (E.D. Cal. 2002)(The court found

that the attorney had lied to his client and assured him that he was continuing

representation. The attorney then disappeared after the action had been

dismissed. The court found this abandonment of a client by his attorney to be an

extraordinary situation worthy of relief under Rule 60(b)(6).

Mr. Castillo’s circumstances are even more extraordinary than those that

have been granted relief in the precedent cases. The circumstances surrounding

Karahalias are perhaps the most analogous to case at bar. As in Karahalias,

Fretus’ Director, Mr. Castillo, could not return to the United States and defend

against the default judgment because he was in fear of losing his life. It is evident

from the facts that Mr. Castillo’s life was in imminent danger. This fear prevented

him from returning to the United States, contacting an attorney and defending the

action.

The Ninth Circuit has granted relief under circumstances that are less

extraordinary than those here. See James v. United States, 215 F.R.D. 590, 594

(E.D. Cal. 2002); See also Cmty. Dental Services v. Tani, 282 F.3d 1164, 1170-

71 (9th Cir. 2002)(where the court vacated judgments based on an attorney’s

abandonment of representation and misrepresentation to the client.)

II. Mr. Castillo’s Motion to Set Aside Summary Judgment has been
filed within a reasonable time.

Fed. R. Civ. P. 60(b) states in part that a motion to set aside a judgment

under this rule must be made within a reasonable time. However, the timeliness

of the motion is determined by the facts of each individual case. In United States

v. Holtzman, the Ninth Circuit found a 60(b)(6) motion timely filed 5 years after

judgment. 762 F.2d 720 (9 th Cir. 1989)( The movant incorrectly interpreted an

injunction and upon discovering his mistake immediately moved to vacate the

judgment). The 2nd Circuit in U.S. v. Cirami, granted the motion to vacate two

years after the decision was entered for a simple case of attorney negligence. 14

In Karahalias, the court granted the movant’s motion to set aside seventeen

years after judgment was entered.15

Mr. Castillo files this motion a little less than one year after judgment was

entered against him. The circumstances of Mr. Castillo’s case warrant such a

long period. Mr. Castillo, was unable to return to the U.S. to respond to pleadings

or to facilitate his defense to the entry of default judgment. As in Karahalias, Mr.

Castillo was unable to defend the case for fear of death.16

It is also important to note that Mr. Castillo filed this motion to set aside

judgment as soon as the threats to him had dissipated. Mr. Castillo’s discovery of

a legitimate, F.B.I. investigation into R.I.C.O. activities and indictments of

14
563 F.2d 26, 32 (2nd Cir. 1977)
15
U.S. v. Karahalias, 205 F.2d 331, 333 (2nd Cir. 1953)
16
Karahalias feared that his wife would die if he returned and similarly Mr.
Castillo feared his own death.

conspirators gave him reason to believe he could safely appear to defend the

case.

III. The extraordinary nature of Mr. Castillo’s circumstances and
reason for his delay in filing the motion outweigh the interests of
the court in the finality of its judgment.

Though courts have an interest in the finality of their judgments, it must be

balanced against the interests of the movant. 17 Courts will view the motion to set

aside the judgment more favorably if granting the motion would lead to an

adjudication on the merits.18

In Cirami v. U.S., the 2nd Circuit Court of Appeals found that the great

financial interests of the movant outweighed the court’s interest in finality.19 There

the movant would have been assessed $271,000.00 in back taxes as a result of

the default judgment. 20. Mr. Castillo’s loss as result of the summary judgment in

the case at bar are almost 40 times that of the defendant in Cirami.

The 2nd Circuit found in Cirami that the great financial interests of the

movant outweighed the court’s interest in finality.21 There the movant stood to be

assessed $271,000 in back taxes as a result of the default judgment. 22 Here the

Court has entered a $30,000,000 default judgment against Fretus. Unlike in U.S.

v. Wasington, where reopening the case would have destroyed carefully crafted

plans for fishing rights here the court’s interests in finality are minimal. The trial of

17
See U.S. v. Washington, 394 F.3d 1152, 1157 (9th Cir. 2005).
18
See SEC v. Seaboard Corp., 666 F.2d 414, 417 (9th Cir. 1982).
19
563 F.2d 26, 35 (2nd Cir. 1977).
20
Id. at 29.
21
563 F.2d 26, 35 (2nd Cir. 1977)
22
Id. at 29.

the matter, while set for trial, has not begun. The Plaintiff would not be prejudiced

by allowing Fretus to participate since he will already be trying the case against

other defendants.

IV. Mr. Castillo should be allowed to withdraw his default answer to
admissions and enter a new response.

According to Fed. R. Civ. P. 36(b), a court can grant leave for a party to

withdraw or amend its answer to admissions. Section (b) of the rule states as

follows:

[T]he court may permit withdrawal or amendment when the
presentation of the merits of the action will be subserved thereby
and the party who obtained the admission fails to satisfy the court
that withdrawal or amendment will prejudice that party in
maintaining the action or defense on the merits.

This rule favors a determination of the action on the merits.23 In a situation

where the admissions satisfy the elements of a claim and the court has not had

to decide the case on the merits, this rule operates to favor the withdrawal of the

admission.24

In Hadley, the defendant did not respond in the allotted time so the

admissions were taken to be admitted.25 The admissions essentially proved the

government’s case and there was no need to hear the case on the merits. 26 The

23
See Hadley v. U.S., 45 F.3d 1345, 1348 (9th Cir. 1995).
24
Id.
25
Hadley, 45 F.3d at 1348.
26
Id.

court granted Hadley’s motion to withdraw his admissions because Fed. R. Civ.

P. 36(b) favors a motion to withdraw so that the court can hear the merits of the

case.27 Just as in Hadley, Mr. Castillo’s default admissions made the case for the

Plaintiff and enabled him to win a summary judgment. A withdrawal of the

admissions would allow the court to hear the case on the merits.

The party who obtained the admissions must not be prejudiced by the

withdrawal.28 However, it is that party’s burden to prove that it has suffered

prejudice.29 The party would be prejudiced if it would have difficulty presenting

evidence during trial because it now had to prove what had previously been

admitted.30 However, if the party who obtained the admissions had evidence

covering the issues admitted, then there is no prejudice.31

The government in Hadley suffered no prejudice from the motion to

withdraw admissions.32 It already had evidence on the two issues that were

admitted and was not forced to go out and obtain evidence. 33 The government

did not meet its burden of showing prejudice. 34 The plaintiff in the case at bar

also has all of the evidence he needs. A trial on the same exact issues that were

admitted is being held. In its preparation for trial against the other defendants, the

Plaintiff would have had to obtain the same evidence as it would require to try the

case against Mr. Castillo.

27
28
Id.
29
30
Id. at 1349
31
Hadley, 45 F.3d at 1349-50.
32
Hadley, 45 F.3d at 1349-50.
33
Id.
34
Hadley, 45 F.3d at 1349-50.

V. Conclusion

This Court should consider the reasons for Castillo’s failure to respond

extraordinary considering Mr. Castillo’s life was in jeopardy. Taking into account

the extraordinary nature of Mr. Castillo’s position, one year is a very reasonable

time within which to file for relief from a judgment under Fed R. Civ. P 60(b)(6).

For the foregoing reasons Mr. Castillo’s motion to set aside the summary

judgment should be granted.

Considering under the circumstances that the Court’s interests in finality of

this judgment are minimal and the Plaintiff is not unduly prejudiced, setting aside

the default judgment and allowing Castillo to participate is a small burden

compared to Castillo’s current liability for the $10,000,000 summary judgment.

Finally, the Court should allow Mr. Castillo to withdraw his motion pursuant

to Fed. R. Civ. P. 36(b). The court should favor trying the case on the merits.

Also, the plaintiff cannot show prejudice because he should already have the

same evidence prepared for his trial against other defendants as he would need

to try the case against Mr. Castillo.

Wherefore, Mr. Castillo respectfully requests that this Court set aside its

September 26, 2007 Order Granting Summary Judgment against him and allow

Mr. Castillo to withdraw his default admissions.

Respectfully Submitted,

s/ PHILLIP M. BALLIF, ESQ._____
Howard Hughes Parkway
Third Floor South
Telephone: (702) 862-3300

NOTICE OF ELECTRONIC FILING

I hereby certify that on September 19th, 2008 I electronically filed with the clerk of
the court by using the CM/ECF system, which will send a notice of electronic
filing to the following:

mferrario@kkbrf.com, amoore@kkbrf.com, dcastleberry@swlaw.com,

sforbes@kkbrf.com, tcowden@kkbrf.com, wbryson@kkbrf.com.

CERTIFICATE OF MAILING

I hereby certify that service of the foregoing EMERGENCY MOTION

AND MEMORANDUM IN SUPPORT OF MOTION TO SET ASIDE DEFAULT

JUDGMENT was made on the ______ day of _____________ , 2008 by

depositing a true copy of the same for mailing at Jeffersonville, Indiana,

addressed to each of the following:

Arquest Inc.
C/O Paul Miller, Esq.
2845 North Ave.
Grand Junction, CO 81501

Gary Colombo
P.O. Box 33712
Las Vegas, NV 89133

Daniel R. Ellis
P.O. Box 21044
St. Catharines, ON L2M7X2

Michael Jenkins
C/O Paul Miller
2845 North Ave.
Grand Junction, CO 81501

s/ PHILLIP M. BALLIF__________
Howard Hughes Parkway
Third Floor South
Telephone: (702) 862-3300

INDEX OF EXHIBITS

Exhibit 1: Plaintiff’s Motion for Summary Judgment.......……………………1-7
Exhibit 2: April 20, 2008 Letter from “Special Agent David E. Marks”….. 1-2
Exhibit 3: Affidavit of Jennifer Culotta...............................................................
Exhibit 4: Forensics Report of David Richard Browne……………………. 1-10
Exhibit 5: U.S. District Court Crim. Indictment

Redacted Rico Default Motion

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Similar to Redacted Rico Default Motion

Similar to Redacted Rico Default Motion (20)

Redacted Rico Default Motion