Default judgement sought against Gilmond & Napier
Following the denial of motions to dismiss clawback litigation filed against them, Trudy Gilmond and Jerry Napier have ceased co-operating with the court-appointed Receiver.
In response, Zeek Rewards Receiver has now requested the court enter default judgement against both of them.
Gilmond and Napier’s respective motions to dismiss were denied last December.
The duo had also filed a troll’ish counter-claim, demanding the Receiver pay them $947,000.
The counter-claim was also denied by Judge Mullen back in January.
As the clawback case progressed, February saw class-certification granted. This meant that Gilmond and Napier, along with their fellow top Zeek investors, would now represent all of the net-winners in clawback litigation.
In granting the Receiver’s Motion for Class Certification, the Court held that all Named Defendants, including Ms. Gilmond and her company, would need to “provide the Receiver with any and all evidence of their financial status and the location of all net winnings received from ZeekRewards, including deposition testimony as to the same.”
For Trudy Gilmond, here’s how that went down:
The Receiver noticed Defendants’ deposition for April 3, 2015 in Vermont, Ms. Gilmond’s state of residence.
Gilmond’s lawyer withdrew from the case after she was served with notification of the deposition, with the Receiver then ensuring service by personally serving her via email (the address obtained from her former lawyer).
In spite of the Court’s Order and repeated notice, Ms. Gilmond has refused to appear for her noticed deposition.
When the deposition was first noticed, Ms. Gilmond refused to confirm through counsel that she would appear for the deposition.
Then, once her former counsel withdrew from the case, the Receiver attempted on March 18, 2015 to confirm directly with her that she would appear.
On March 23rd, Gilmond sent the Receiver the following response:
In communications with Ms. Gilmond, the Receiver offered to be flexible on the logistics of the deposition if another date was more convenient for Ms. Gilmond.
But, the Receiver further explained to Ms. Gilmond that if she did not appear, the Receiver planned to move the Court for an Entry of Judgment against her and her company for the full amount of her net winnings plus interest.
Ms. Gilmond’s only response was that she would not attend the deposition.
Later on March 23, 2015, the Receiver again offered to conduct the deposition on a different day if it was more convenient for
Ms. Gilmond. Id.Now, a month later, the Receiver has never even received a response to this March 23 email.
Well gee, I wonder why one of Zeek’s top Ponzi pimps objects to being deposed as to her fraudulently obtained winnings.
Luckily for the interests of justice, whether Trudy Gilmond objects to being deposed is neither here nor there.
In sum, it seems clear that Ms. Gilmond does not intend to appear for a deposition or produce the related requested documents. She has offered no explanation for her refusal to appear or otherwise defend the action.
Accordingly, it is appropriate for the Receiver to move the Court for judgment against Ms. Gilmond and her company and the alternative relief requested.
With Napier and Gilmond working in cahoots, Napier’s situation is pretty much identical to Gilmond’s.
Napier’s lawyer also withdrew from the case after an initial deposition notice was served. The Receiver then attempted to confirm the date of the deposition with Napier himself, with this email the only response received:
Before default judgment is granted, both Gilmond and Napier have been given one last chance to explain themselves.
Proposed orders submitted by the Receiver request the pair appear before the court ‘no later than May 15, 2015 and show cause as to why judgment should not be entered against‘ them.
If Judge Mullen grants the proposal and Gilmond and Napier fail to rock up (or if Mullen just goes ahead and grants default judgement), Gilmond and Napier will have judgement entered against them for the amounts they stole.
When combined with interest, this amounts to $2.12 million for Gilmond and $2.04 million for Napier.
One question I have is what does this mean for the class certification? Both Gilmond and Napier are supposed to be representing the rest of the net-winners who refuse to pay up.
What does them getting steam-rolled in court mean for the other net-winners? Or, with default judgement rendered against them, are Gilmond and Napier simply struck off the class-certification representatives list, leaving those who still believe they can win to fight it out?
Either way you have to wonder what’s going on in the mind’s of these two. Instead of just paying up when they were caught, they now owe an additional 21% over what they stole.
The remaining Zeek Rewards Ponzi heroes would do well to consider that number, as it’s only going to rise the longer they draw this mess out.
Failing Gilmond and Napier making what is bound to be a comical appearance before the North Carolina court, it’s expected that default judgement will be entered against them.
Clawback litigation against the rest of the Zeek Rewards net-winner class continues…
Footnote: Our thanks to Don@ASDUpdates for providing a copy of the Zeek Recevier’s 23rd of April requests for default judgement.
this is what the order granting class certification [101.pdf]said:
1] in august 2014, receiver bell had supplied an interrogatory to net winners asking them questions like – what were their total earnings in zeek, how was the money spent/invested etc.
2] the named net winners all refused to give any information to the receiver citing that – they did not have details as they had no access to the zeek backoffice accounts, they did not believe zeek was ponzi, and the the person who may have information to this effect will be the zeek lawyers [kaplan/grimes]
3] the court has not commented on this refusal of netwinners to provide answers to bells interrogatory.
4] fast forward to the class certification, it is clear that gilmond/napier are part of the class certification.
5] in the order granting class certification the court has asked defendants to “provide the Receiver with any and all evidence of their financial status and the location of all net winnings received from ZeekRewards, including deposition testimony as to the same”.
the court has made this demand, for the purpose of helping decide how much the receiver needs to pay for ‘defense’ costs of the class and to aid in any settlement negotiation.
6] gilmond/napier are sticking to the ‘blank stare’ reply they gave to bells interrogatory in 2014 – we don’t know nothing. zeek is not ponzi.
7] gilmond/napier obviously are not interested in any settlement, which means they want to pursue the case.
8] i really have no idea what judge mullen will do with this. gilmond/napier have not said they are leaving the ‘class’, they just don’t want to provide any information.
9] in 101.pdf the court says ‘it fully expects’ such cooperation from named defendants, but did not ‘order it’. it was not about ‘avoiding default judgments’, but about deciding ‘payment of defense counsel’ and aiding ‘settlement’.
10] can the court pass default judgment against defendants who’s matter is still pending trail?
wait and watch, is the best stance for this question.
The question is… did they already flee the country? You can answer email from anywhere, and even use VPN to make you appear to be at your home sending email from there when you’re couple continents away.
It seems the advantage to Gilmond and Napier is that they avoid lying or disclosing the whereabouts of funds and can’t be forced to contribute money towards the class defense.
Meanwhile default judgement is entered against them and they have to give up even more than they stole.
How is that an advantage?
when people engage in legal battles, there may be pros and cons to decisions made by parties along the way. if the ‘class’ loses this trial, then anyways gilmond and napier will have money judgments entered against them.
the named defendants did not provide any info against bell’s interrogatories in 2014, and have no intention of doing so now, either in part as hoss says, to not disclose any info that can be used against them later, and to avoid taking any burden of class litigation costs.
if this case goes to appeal , the length of time and costs will be very high, so why not let the receiver carry all the costs!! notice how gilmond and napier dropped their expensive lawyers the moment the question about class costs and payments began?
gilmond and napier will reply to bell’s motion which is asking for default judgment to be entered against them. let’s see what excuse they drum up for failing to comply with judge mullens ‘full expectation’ of their cooperation with bell.
but i am not fully convinced about the strength of bells motion here either.
Its not, but avoiding discovery, deposition and disclosure may be.
Update: Judge Mullen has ordered Napier and Gilmond to appear before the court on May 27th, to explain why default judgement should not be entered against them.
If they don’t show up it’ll get entered against them by default.