08/19/2008 351 RESPONSE to Motion re: 346 MOTION to Intervene In Jewelry Dispute.. Document filed by The Estate Department, Inc.. (Schoeppl, Carl) (Entered: 08/19/2008)
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Doc 351
Extract
RESPONSE OF INTERVENOR, THE ESTATE DEPARTMENT, INC., TO
RECEIVER’S MOTION TO INTERVENE IN JEWELRY DISPUTE
Pursuant to Rule 24 of the Federal Rules of Civil Procedure, The Estate Department, Inc. (“TED”), by and through its undersigned counsel, hereby responds to the Receiver’s Motion to Intervene in Jewelry Dispute (the “Receiver’s Motion to Intervene”), Document 346, and states as follows:
The Receiver seeks to intervene in the jewelry dispute between Intervenor, TED, and the SEC so that she can “assert a claim to at least a portion of the jewelry at issue to the degree that the jewelry was purchased with funds of Universal Express.” Receiver’s Motion to Intervene, Document 346, at 1. But the Receiver — asserting the interests of Universal Express, Inc.(“Universal Express”) — has virtually no protectable interest in the disputed jewelry because the funds allegedly “stolen” by Altomare from Universal Express were transferred to Les Bijoux in exchange for jewelry purchased by Altomare and his wife. The Altomares then sold that jewelry, along with other pieces not purchased from Les Bijoux, to third party, TED, who purchased it for fair value (paying $571,000) and in good faith. All of the Altomare jewelry was then wrongfully seized from TED by the SEC and is the subject of the present dispute between TED and the SEC.
This Court has already rejected the SEC’s contention that the jewelry was “stolen” property belonging to Universal Express to which Altomare could not pass title:
The SEC’s initial contention that Altomare did not, under any circumstances, have title to convey the jewelry is unconvincing. Assuming the SEC’s allegations to be true, Altomare stole money from Universal Express, not jewelry from Les Bijoux. That allegedly stolen money was then used to purchase some (but not all) of the jewelry. . . . The SEC nowhere contends that Les Bijoux did not properly have title to the jewelry sold to Altomare, or that Altomare stole the jewelry from Les Bijoux. Although Altomare may have held the jewelry subject to a constructive trust in favor of Universal Express, TED, as long as it was a good faith purchaser for value, would have taken good title to the property free of any constructive trust. . . . In such case, Universal Express still would have recourse against Altomare for the proceeds of the sale of that jewelry, and all would come full circle, as Universal Express would have an interest superior to Altomare in a sum of money, which is in effect the money that Altomare allegedly stole from Universal Express in the first place, having converting it once from cash to jewels, and then again from jewels to cash.
Order, Document 312, at 12-13 (footnotes and citations omitted).
Resolution of the dispute between the SEC and TED will turn on whether the SEC can demonstrate that TED did not purchase the Altomare jewelry in good faith and/or for fair value. TED contends that the SEC cannot make such a showing and that TED will be deemed the rightful owner of the jewelry. Only if the SEC proves that TED was not a purchaser in good faith and/or fair value will the Receiver have any rights whatsoever in the jewelry and the Receiver’s rights can be adjudicated at that time.
In the Receiver’s Motion to Intervene, the Receiver contends that “as between Mr. Altomare and Universal Express, title to a significant portion jewelry was in Universal Express” and
“Universal Express has a claim to that portion, if TED’s claim is rejected.” Receiver’s Motion to Intervene, Document 346, at 2 (emphasis added). Accordingly, the Receiver acknowledges that any rights that Universal Express has to the jewelry should be addressed at a later time, after the dispute between the SEC and TED is resolved:
The Receiver is aligned with the SEC in alleging that TED’s claim should be rejected and will defer to the SEC to litigate this issue. The division of the jewelry or proceeds from its sale between the SEC and the Receiver, if the SEC is successful, can be dealt with at a later time.
Id.
TED’s interest lies in having the dispute over the jewelry resolved, and the jewelry returned to TED, as soon as possible. The unwarranted and unjustified seizure of the jewelry from TED by the SEC has caused TED significant hardship since not only is TED out the $571,000 it paid to the Altomares for the jewelry, but it has lost possession of the jewelry and, since it is in the business of buying and selling estate jewelry, it needs to turn over its inventory in a prompt manner. In addition, of course, TED has been forced to expend very substantial attorney’s fees and costs to protect its rights in the jewelry in the present proceeding.
The issues have been fully briefed and the parties (TED and the SEC) are preparing for the evidentiary hearing ordered by the Court. To the extent that the Receiver’s intervention would result in duplicative or additional briefing/argument by the Receiver — and commensurate expense to TED in order to respond to such briefing — or any additional presentation of evidence at the hearing or in any delay in having this matter resolved, TED opposes the Receiver’s intervention. To the extent that the Receiver, as stated in her Motion to Intervene, “will defer to the SEC to litigate this issue . . .,” TED does not object to such intervention but does question the necessity for intervention at this time by the Receiver.
WHEREFORE, TED, by and through its undersigned counsel, requests that the Court:
A. Deny the Receiver’s Motion to Intervene;
B. In the alternative, grant the Receiver’s Motion to Intervene on the condition that the Receiver defer entirely to the SEC to litigate all issues relating to TED’s rights in the jewelry and that the Receiver is not permitted to submit any briefs, argument or evidence in connection with the resolution of the dispute between the SEC and TED as to TED’s rights in the jewelry; and
C. Grant such other and further relief as this Court deems just and proper.
Dated: August 19, 2008 Respectfully submitted,
Boca Raton, Florida
s/ Carl F. Schoeppl, Esq. (CS7917)
Carl F. Schoeppl, Esq.
Counsel for Intervenor,
The Estate Department, Inc.
SCHOEPPL & BURKE, P.A.
4651 North Federal Highway
Boca Raton, Florida 33431-5133
Telephone: (561) 394-8301
Facsimile: (561) 394-3121
E-Mail: carl@schoepplburke.com |
