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United States v. Carn

United States District Court, D. Nevada

November 4, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
KELLY D. CARN, Defendant.

          ORDER

          ELAYNA J. YOUCHAH, UNITED STATES MAGISTRATE JUDGE.

         Before the Court is the Motion for Writ of Attachment and Objection to Attorney Liens (the “Motion”) filed by George D. Karalis (ECF No. 158). The Court is also in receipt of Defendant Kelly D. Carn's Opposition to the Motion (ECF No. 160), the Supplement to the Motion filed by Dr. Karalis (ECF No. 162), and the Motion for Joinder to Defendant's Opposition to the Karalis Motion filed by Craig K. Perry & Associates (EFC No. 163). The Motion for Joinder (ECF No. 163) is granted. The Motion for Writ of Attachment and Objection to Attorney Liens (ECF No. 158) is granted in part and denied in part. The reasons are set forth below.

         BACKGROUND

         This is not Dr. Karalis' first attempt to obtain the return or value of property seized by the United States in the underlying criminal case. At a minimum, Dr. Karalis previously filed a Lien Against Award to Defendant (ECF No 114) and a Motion for Writ of Attachment (ECF No. 120), both of which he sought to withdraw (ECF No. 141), without giving a reason, and which were withdrawn on November 15, 2017 (ECF No. 142) after the Court issued an Order and Report and Recommendation on the lien and motion (ECF No. 133 filed on August 15, 2017). Currently, in addition to stating that the attorney liens (ECF Nos. 153 and 154) are invalid, Dr. Karalis seeks a writ of attachment in the amount of $20, 000 based on a settlement agreement entered into between Dr. Karalis and Carn, for the same amount, resolving a civil dispute filed in the federal court (Case No. 2:12-cv-0064) by Dr. Karalis against Carn (the “Civil Dispute”). ECF 158 at 3:8-9. The Civil Dispute was dismissed by the Court on November 28, 2017. Id. at 158-1, page 18 of 41. To date, Dr. Karalis has not been paid any portion of the $20, 000 due under the agreement with Carn.

         The unexecuted settlement agreement Dr. Karalis attaches to his Motion as an exhibit states, in pertinent part, that the settlement amount is to be paid by The Gun Vault, and that:

Karalis will become a judgment creditor of Gun Vault and will be entitled to claim as a liquidated creditor and not an undisputed creditor. In the event Gun Vault or Carn are successful in recovery of any property through a 41(g) motion in Federal Court case number 2:13-cr-346 . . ., and should that property be sold consistent with the Court Order and any amounts recovered through those sales, the same will be credited to Karalis as a judgment creditor consistent with preference as set forth in the appropriate statutes.

Id. at page 12 of 41 (emphasis added).

         Dr. Karalis argues that if his writ of attachment is denied by the Court “it is certain he will never recover anything.” ECF No. 158 at 3:12-13. In support of his Motion, Dr. Karalis cites NRS 200.5092 (an Elder Abuse statute), NRS 31.013 and 31.020 (pertaining to writs of attachment), Federal Rule of Civil Procedure 54 and 64, and 28 C.F.R. § 9.6. Dr. Karalis argues that the attorney's liens, filed respectively on October 9 and 16, 2018, will not be prejudiced by his writ, which should be superior to the liens, because the attorneys were aware of his settlement with Carn, were aware that there were only 13 guns to be marketed, that the fair market value of those guns would never cover the liens and his settlement, [1] he has a higher priority claim than the liens, and, in any event, the attorney liens are invalid. ECF No. 158 at 4:22-13:22.

         Also attached as an exhibit to the Motion is Dr. Karalis' “Affidavit, ” which is signed as a declaration under “penalty of perjury.” ECF No. 158-1, pp 34-40 of 41. In the Affidavit, Dr. Karalis states the amount of his claim ($20, 000), the basis for his claim (a settlement agreement reached in a separate civil action for this same sum, which has not been paid), and that “it is probably impossible for Karalis to obtain satisfaction of his SETTLEMENT AGREEMENT's $20, 000 award if Karalis fails to obtain the $20, 000” through his writ. Id. at 158-1, p. 35. Dr. Karalis also states that the money he seeks is in an “escrow-type account maintained” by the Clerk of Court, and that the account is funded through proceeds of sales made by the consignee approved by the Court to sell 13 firearms seized by the Government. Id. at 36. In his Affidavit, Dr. Karalis again argues that his “claim takes priority over any attorney liens filed in the instant action.” Id. at 37. Finally, Dr. Karalis claims that if there is not enough money to pay him the $20, 000 he seeks, he will take the remainder in goods, but he clearly would prefer “cash/money, not goods.” Id.

         In opposition to Dr. Karalis' Motion, Carn argues that Dr. Karalis' citations to law and statutory authority is misplaced, and that the attorneys' liens filed were properly perfected and are superior to Dr. Karalis' claims. ECF No. 160. Mr. Van, one of Carn's former attorneys who filed a lien, points out that NRS 18.015 is the proper statutory authority for the attorneys' liens filed, the requirements of that statute were followed in this case, his lien was filed on October 16, 2018, that Muije, Ltd v. North Las Vegas Cab Co., 799 P.2d 559, 561 (Nev. 1990) holds that “once a net judgment is determined, then the attorney's lien is superior to any later lien asserted against the judgment, ” and that Dr. Karalis fails to demonstrate that his settlement agreement with Carn is automatically a lien with a perfected interest superior to his attorney lien. ECF No. 160.

         The motion filed by Craig K. Perry joins in each of the arguments filed by Mr. Van and adds that he, Mr. Perry, was not involved in the settlement agreement between Dr. Karalis and Carn, and that he also filed a Notice of Lien that was properly noticed as required by statute. ECF No. 163.

         DISCUSSION

         NRS 18.015 is titled “Lien for attorney's fees: Amount; perfection; enforcement.” This ...


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