Defendant Response To Special MasterResponseCal. Super. - 1st Dist.January 13, 2011~1 3 1 a J 0 10 11 12 13 14 1S 16 17 18 19 20 21 22 23 24 25 26 27 28 Douglas R. Hanson 2555 Flores Street, Suite 555 San Mateo, CA 94403 Telephone: ~~ (650) 207-5263 Facsimile: (650) 655-7696 Email: dougbayside@yahoo.com In pro per for Defendant DOUGLAS R. HANSON SUPERIOR COURT OF THE ST FOR THE COUNTY OF 8 The People of the State of California, by and through the California Corporations Commissioner, Plaintiffs, Vv. Investco Management & Development LLC eral. | Detendants, Defendant Douglas R. H. Donell’s October 21, 2016 Case N ELECTRONICALLY FILED Superior Court of California, County of San Francisco 11/30/2016 Clerk of the Court BY: SANDRA SCHIRO Deputy Clerk ATE OF CALIFORNIA AN FRANCISCO o. CGC-11-507316 DEFENDANT.S RESPONSE TO SPECIAL in n MAY ERS PETITION FOR INSTRUCTIONS RE: 1. 2, 3. ISPOSAL OI REAL PROPERTY UATRANTEE: AND L C INVESTIGATIONS OF POTENTIAL q LAIMS DATE; December 6, 2016 TIME; DEPT: 1 9:30.a.m. 302 anson files this response in opposition to Special Master James >etition for Instructions Re: (1) Disposition of Real Property; (2) Guarantee; and (3) Investigation of Potential Claims (the “Petition™). DEFENDANT’S RESPONSE TO SPECIAL MAST i {R’S PETITION FOR INSTRUCTIONS hh Be W N o e 3 On I. FACTUAL BACKGROUND This case dates back to September 2007 when a letter from the Department of Business Oversight ('DBO”) was received by Investco Management & Development (“IMD”). The letter was answered by the IMD attorney stating that IMD was and would continue to be in full compliance with the SEC regulations. On 2/18/2009, a Desi st & Refrain Order (“D&R") was issued and a Complaint was filed 1/21/2011 by the DBO (CGC 11-507316). A Confidential Settlement Agreement (the “Agreement”) was reached 5/11/2012 with a Stipulated Order enforcing the Agreement. Two Complaints were filed in August 2013, CGC 13-533809 and RG 13691329, naming the same defendants 5 and citing the same allegations in the DBO Complaint (CGC 11- 507316. In December 2013 the defendants filed a Motion to Modify the interlocutory Judgment (CGC 13-533809) ¢ amended Order ("Amended ind the DBO filed a Joinder. The Motion was denied and an Order”) was issued 7/09/2014. The Agreement states on page 8 Section 17 that: “The terms of this Settlement Agreement may not be mod the Party against whom the fied or waived except by a written instrument duly executed by | modification is asserted.” Hanson and Thompson did not sign anything and did not agree to the Guarantee. Theyiwere told that the Amended Order would only increase expense they agreed to let cases go a s. that would be taken out of the funds to be transferred and gainst them. | On 10/14/2014 the Amended Order was appealed (A143316) and the award of | attorney fees to Mr. Hornstein was appealed, (A143307 & A143406). | There is a Case Management Conference scheduled for 2/08/2017, Dept. 610 (CGC- 13-533809) for status of the 2/17/2017, Dept. 10 (CGC 1 Judgment, On October 11, 2016 the Agreement had been chs | Appealand a Case Management Conference scheduled for | 1-507316) for the status of the Appeal and status of Final Hanson and Thompson informed Plaintiff that they believed | nged and therefore the Amended Order set it aside. The Agreement was changed as stated by the Court in the transcript provided by Plaintiff on DEFENDANT'S RE SPONSE TO SPECIAL MASTER'S PETITION FOR INSTRUCTIONS 1] ~~ y n Re W N page 8 linel7 where the Court stated “Well, it’s being changed” The Appeal (A143316) and scheduled Case Management Conferences will present this position. If. DEFENDANT'S RESPONSE TO SPECIAL MASTER'S REQUEST FOR INSTRUCTIONS A. Disposition of Real Property Defendant is in opposition to the Special Master's request for instructions regarding | the disposition of the real property held by the LLCs. There is a Case Management Conference scheduled for 2/08/2017, (CGC-13-533809) for status of the Appeal and a Case Management Conference sch reduled for 2/17/2017, (CGC 11-507316) for the status of the Appeal and status of Final Judgment. The time diffefence between this December 6, 2016 petition for instructions and critical for the sale of the pr¢ The Court should not time. It isnot in the best inte when the properties are con the scheduled Case Management Conferences in February is not perties. instruct the special Master to list or sell the real property at this rests of the investors to sell in the current market, especially sidered to be in Receivership. Several Members of Investco AV11 have stated that the properties are debt free and should not be under the con claim they should have a say and willing to self manage th Plaintiff has stated it “favors trol of a Receiver and there is no reason to sell at this time. They in their investment. Several of the LLC Members are capable eir LLC, and they believe they can save money by doing so. The an outcome that protects each investor's interest equally”. Exhibit A is a summary of the Special Master's Monthly Interim Reports detailing the expenses incurred. There wa from IMD to the Special Mas July 9, 25014 through Septe they can reduce the holding and property tax bills...” was to sell at this time. ) ) s over $3.5 million in the LLC accounts that was turned over ter. The administrative and Special Master fees incurred from nber 30, 2016 was $ 206,141 and investors have said they think costs. “It doesn’t take a rocket scientist to pay annual LLC fees stated by one investor; But more important, they do not want DEFENDANT'S RESPONSE TO SPECIAL MASTER’S PETITION FOR INSTRUCTIONS 2] po O N Y 0 ~~ N e W N DD No Do Na 2 No No No No - - - - - pt pt -_- - - 0 ~ aN Wn + Ww No - oo oO oo ~ J [@ ) [9 ] fa La bd For k B. The Guarantee The Defendant oppo: es the Court affirmation of the Guarantee because the Court does not need to instruct the Special Master on theiGuarantee at this time. Additional information will be presented to the Court for the Case Management Conferences scheduled for 2/08/2017, (CGC-13-533¢ (CGC-11-507316) for the stat Hanson and Thompsc 09) for status of the Appeal and scheduled for 2/17/2017, | us of the Appeal and status of Final Judgment. n said they would not have signed the Agreement if the properties were to be sold as-is by a third party. There would only be land speculators purchasing in that situation at low prices. The sale was supposed to be a joint venture or sale | to a developer as stated int escrow at the time of the Ag 1e Court transcript. IMD was a developer, had five properties in | eement and was in negotiations with other developers. C. Investigation of Potential Claims The Defendant oppos es instructing the Special Master to Investigate Potential Claims. This was never one of the responsibilities of the Special Master and it can be a very expensive and time consumi receiver organization the ent DBO resulting inthe Agreem Dated: November 30, 2016 ng process. The Special Master is not the person nor is the ity to accomplish this investigation. It was done once by the ent, and was very expensive forall the parties. Respectively submitted, By" Le A fl rirsinir DOUGLAS R. HANSON in Pro Per 4 DEFENDANT'S RES PONSE TO SPECIAL MASTER'S PETITION FOR INSTRUCTIONS 3] 10 11 12 14 15 16 17 18 19 21 22 23 24 23 26 27 28 Exhibit A is a summary of the EXHIBIT A | : Special Master's Monthly Interim Reports detailing the expenses incurred through his office since taking over management of the LLCs for the period July 9, 2014 through ¢ from IMD to the Special Mas ter. The current bank balances are $2,779,824. september 30, 2016. There was also $3,546,908 funds moved Investment Management Fees Other Funds Professi {Admin Legal Special Total Total Taxes and [Cash Moved |Cash end of Entity RE Av22 onal Expenses [Fees Master Mgmt Expenses jAccountingifrom IMD {Period Investco AV7LLC |S 6191S 20|S 2500 S 1,158 1S 3.8581 4524 47 1S 4,556 | S 27 Investco AVE LLC S om 4S oe 18 3 Investco AVILLC |S 653 S 2,800 S$ 1904S 47041S 11235|$ 5873|S 11,432) 6S 198 Investco AVIO LLC | $ 5594 1S 2211S 6600 S 9344S 161651% 30,103{S 83441S 168186 S 137,653 Investco AV11 LLC | S 544518 2311S 6,600 S 5851S 1267215 266821S 85651S 183253 $ 161,705 Investco AVIZ LLC | S$ 4043 |S 9B |S 6,600 S 6197S 13,7651 S 335401 § 1572615 105542] § 71,668 Investco AV14 LLC | § 5148 |S 1,115 S$ 6,600 S$ 9316'S 17,0311 S 32262 1S 10,0835 200878 | $ 168,318 Investco AV1S LLC S 21S 6,600 $ 7,683 |S 14504|S 229481S 8444S 194,746 S 171,645 Investco AVI6 LLC | S 4596 1S 2111S 6600 S 6003S 1282515 2584915 8428 1S 139621 |% 114,583 Investco AVIS LLC | § 9,166 S 6,600 S 644315 13,043] S$ 43,553 |S 21,344 | S$ 309,158! $ 265,800 'nvestco AV719LLC S 66481625274 'S 34,0945 66,016 $102,275 5 36259 S 781,358 | $ 331,058 investco AV20 LLC S 662815107218 79541$ 15653 |S 53,851 1S 38198 |S 731,183 |S 677,840 Investco AV21 LLC S$ 662815107215 872051S 159041 $ 33,1711$ 17,266 S 711,995] $ 679,327 S 35270 S 3,168 | $ 71,404 | $27,417 | S 104,152.1.5 206,141 | $ 419,993 |.& 178,581 | $3,546,908 | $ 2,779,824 Investco AV19 includes the s includes a distribution of dev AV19 down to $331,057.79 f rom the funds transferted of $781,358.45. ale that was initiated by IMD for a portion of the property and | elopment funds in the |.LC bringing the cash balance in Investco DEFENDANTS RES 4] PONSE TO SPECIAL MASTER'S PETITION FOR INSTRUCTIONS PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO At the time of service, | was over 18 years of age and not a party to this action. My address is 3355 Kimberly Way, San Mateo, California 94403. On November 30, 2016, | served true copies of the following document (s) described as NOTICE OF HEARING AND PETITION OF JAMES H. DONELL, SPECIAL MASTER, FOR INSTRUCTIONS RE: DISPOSITION OF REAL PROPERTY; GUARANTEE; AND INVESTIGATION OF POTENTIAL CLAIMS; MEMORANDUM OF POINTS AND AUTHORITIES P o n = [1] By United States mail, by addressing an envelope to the above-named person (s) as indicated above, and placed in the envelope a true copy of said documents, and by then sealing and depositing said envelope on that same day with postage thereon fully prepaid, in the United States mail at San Francisco, California, where is located the office of the person by and for whom said service is made. | am aware that on motion of the party served, service is presumed invalid of postal cancellation date of postage meter date is more than one day after the date of deposit for mailing in affidavit. | [ By an Express Service Carrier, (a gisrantesd next day delivery service), a true copy of the above-stated documents (s) in an envelope or package designated by said carrier and addressed to the person (s) on whom it is to be served, the envelope or package was mailed the same day with shipment costs thereon fully prepaid i in the ordinary course of business. [1 By Facsimile Transmission, of said document (8) from fax telephone number 650-655- 7696 to the above named person (s) at the fax number(s) indicated above. This transmission was reported as complete and without error. I] By Personal Service, | delivered said document (s) by hand to the above-named person(s) as indicated above in the manner provided i in FRCIivP 5(b) or CCP §1011. [Xi By Electronic Service using One Legal on November 30, 2016 to the person(s) listed below at their electronic address(s): | declare under penalty of perjury under the laws of the State of California that the above is true and correct. : Executed on November 30, 20186, at San Mateo, California ’ Kelly L. Hansof ' PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF SAN FRANCISCO At the time of service, | was over 18 years of age and not a party to this action. My address is 3355 Kimberly Way, San Mateo, California: 94403. On November 30, 2016, | served true copies of the following document (s) described as NOTICE OF HEARING AND PETITION OF JAMES H, DONELL, SPECIAL MASTER, FOR INSTRUCTIONS RE: DISPOSITION OF REAL PROPERTY: GUARANTEE; AND INVESTIGATION OF POTENTIAL CLAIMS: MEMORANDUM OF POINTS AND AUTHORITIES by addressing an envelope to the above-named person (s) as [1 By United States mail, indicated above, and placed in the envelope a true copy of said documents, and by then sealing and depositing said envelope on that same day with postage thereon fully prepaid, in the United States mail at San Francisco, California where is located the office of the person by and for whom said service is made. | am aware that on motion of the party served, service is presumed invalid of postal cancellation date of postage meter date is more than one day after the date of deposit for mailing in affidavit. h o b o [] By an Express Service Carrier, (a guaranteed next day delivery service), a true copy of the above-stated documents (s) in an envelope or package designated by said carrier and addressed to the person (s) on whom it is to be served; the envelope or package was mailed the same day with shipment costs thereon fully prepaid in the ordinary course of business. [1 By Facsimile Transmission, of said document (s) from fax telephone number 650-655- 7696 to the above named person (s) at the fax number(s) indicated above. This transmission was reported as complete and without error: | [1] By Personal Service, | delivered said document (s) by hand to the above-named person(s) as indicated above in the manner provided in FRCivP 5(b) or CCP §1011. [Xi By Electronic Service using One Legal on November 30, 2016 to the person(s) listed below at their electronic address(s): I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on November 30, 2016, at San Mateo, California. 4 Kelly L. Hanson / SERVICE LIST Danielle Stoumbos, Attorney for Plaintiff Danielle stoumbos@cdbo.ca.gov Douglas M. Gooding Doug.gooding@dbo.ca.gov Byron Maldo, Attorney for Special Master Jim Donell bmoldo@ECJLAW.COM Jim Donell, Special Master James donell@fedreceiver.com Douglas Hanson, Defendant dougbayside@yahoo.com Steven G. Thompson, Defendant stevebayside@yahoo.com Val Hornstein, Counsel for Interested Parties val@hornsteinlaw.com Christopher P. Epsha c.epsha@sbcaglobal.net Alan W. Sparer asparer@sparerlaw.com Phil Layzer admin@sparerlaw.com Marc Haber Marc Haber@sparerlaw.com Andrew R. Martin Amartin94122@yahoo.com Barry D. LeBendig bdlebenbdig@comecast.net
