6

1 OPP

2 Bill Frizzell (Texas Bar No. 07484500) Frizzell Law Firm

3 305 South Broadway, Suite 404 Tyler, Texas 75702

4 Tel: 903-595-1921

5 Fax: 903-595-4383

Appearing Pro Hac Vice

David R. Koch (Nevada Bar No. 8830) 7 Steven B. Scow (Nevada Bar No. 9906) 8 KOCH & SCOW, LLC

11500 S. Eastern Ave., Suite 210 9 Henderson, Nevada 89052

10 Tel: 702-318-5040

Fax: 702-318-5039

11

Attorneys for Plaintiff 12

13

14

15 CMKM DIAMONDS, INC.,

Electronically Filed 05/11/2011 04:21 :48 PM

CLERK OF THE COURT

DISTRICT COURT CLARK COUNTY, NEVADA

16 17

18 19 URBAN CASAVANT; THE UAlC 2005

IRREVOCABLE TRUST; MIKE

20 WILLIAMS; DESHA WN L. WAYNE; BRIAN DVORAK; lAMES KINNEY;

21 GINGER GUIERREZ; P.A. HOLDINGS, 22 INC.; BUCKO LLC; DONALD ROGER GLENN; EDWARDS ANGELL PALMER 23 AND DODGE LLP; RENDAL

24 WILLIAMS; CIERRA WILLIAMS; MONTE VERDE INTERNATIONAL 25 HOLDINGS LLC; PATRICIA E.

DECOSTA; DOES 5-20; and ROES 3-20, 26

Plaintiff,

vs.

27 28

Defendants.

CASE NO: A540161 DEPT NO: XI

PLAINTIFF'S OPPOSITION TO EAPD'S MOTION TO STRIKE PLAINTIFF'S FIRST AMENDED DISCLOSURES OF DOCUMENTS AND WITNESSES

Hearing Date:

Hearing Time:

May 31, 2011 9:00 a.m.

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1 2

PlaintiffCMKM Diamonds, Inc. ("CMKM") opposes the EAPD Defendants'

3 Motion to Strike Plaintiff s First Amended Disclosures of Documents and Witnesses with

4 the following memorandum of points and authorities. 5

MEMORANDUM OF POINTS AND AUTHORITIES

6 7

I. Introduction

8 Plaintiff CMKM served its First Amended Disclosure of Documents and Witnesses

9 at the end of the discovery period, adding two individuals as testifying witnesses, both of 10

whom are well known to the EAPD Defendants. As described herein, certain events

11

occurred near the end of the discovery period necessitating the addition of these witnesses. 12

13 Notwithstanding their inclusion, CMKM has agreed to withdraw one of the witnesses. The

14 other witness is CMKM's corporate representative, whose role at the company has recently 15

changed. EAPD has been aware of this witness and his role at the company for several

16

months. CMKM asks the Court to deny the motion to strike, as the addition of the final 17

18 witness was neither a surprise nor does it prejudice the EAPD Defendants.

19 20 21 22 23 24

A.

II. Factual Background

Certain Individuals within CMKM Were Assisted by Roger Glenn and Others in Defrauding CMKM and Hence Causing Damage to CMKM

and Its Investors

Numerous individuals, including many of the named Co-Defendants in this case,

25

engaged in actions that have brought indictments from a federal court grand jury as well as

26

legal action by the SEC. A review of the acts set out in the indictment and the SEC's 27

28 allegations against the liable parties reveals that attorney Brian Dvorak illegally issued

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1 opinion letters authorizing the issuance of billions of shares of free trading CMKM stock. 2 In mid June of 2004, the Defendant Roger Glenn was hired by CMKM to bring the

3

company back to reporting status. Mr. Glenn was hired at a time when the transfer agent

4

5 refused to accept the opinion letters of Mr. Dvorak and requested that Mr. Glenn validate

6 Dvorak's opinion letters. Mr. Glenn accommodated the transfer agent and authored 7 opinion letters validating and referencing Mr. Dvorak's opinion letters thus directly 8

causing the issuance of billions of shares of CMKM stock as free trading securities. This

9

10 free trading stock was issued directly to the insiders perpetrating the fraud against CMKM.

11 In both the SEC actions and the federal grand jury indictment, these illegal opinion letters

12 validated by Roger Glenn were cited as significant events resulting in the criminal actions 13

and enforcement proceedings.

14 15

B.

Procedural History

16 In March of 2007, CMKM's new management began a long course of cooperation

17 with the Department of Justice, the FBI, the SEC and the IRS to assist in making the 18

responsible persons accountable. Contrary to the assertions ofEAPD, this lawsuit has

19

20 never lay dormant. When new management took over, those that defrauded the company

21 ceased cooperation. Few records were left with new management from the departing

22 CEO, and gathering company records from insiders and former accountants and attorneys, 23

including Roger Glenn, proved an almost impossible task due to ongoing criminal

24

25 investigations and SEC enforcement activity. Eventually through litigation, CMKM's new

26 management was able to obtain bank records, stock trading records, stock issuance

27 28

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1 records, and numerous depositions taken by the SEC. These records provided the 2 information that gave rise to the claims asserted against Glenn and EAPD.

3

4

III. ARGUMENT

5 6 7 8 9

10 with Mr. Cook in relation to a St. George Metals, Inc. transaction. At page 210 of this

A.

CMKM Agrees to Withdraw Sherwood Cook as a Testifying Witness

The addition of Sherwood Cook as a witness became necessary when Roger Glenn

testified at his own deposition on April 12, 2011, that he was unsure of his correspondence

11 deposition Mr. Glenn stated, "I am pretty sure that I did the initial draft and sent them to a 12 lawyer named Sherwood Cooke who sent back, apparently, threw mine in the garbage can 13

and sent back something that was completely unacceptable." In the discovery of this case,

14

15 CMKM has never received from Mr. Glenn's attorneys any such records purportedly from

16 Sherwood Cook as referenced in Mr. Glenn's testimony. But in order to avoid any

17 unnecessary delay as complained of by EAPD, CMKM agrees to remove Mr. Cook as a 18

testifying witness. CMKM agrees to such removal without waiving any right it may have

19

20 to seek documentation purportedly sent to Mr. Glenn (then counsel to CMKM) from the

21 appropriate custodian of records at Mr. Cook's office or wherever such records might be

22 found. 23

B. Justice Requires that Plaintiff Be Permitted to Include Jim Lowden as a

24 25 26

Testifying Witness

Jim Lowden has been the CFO of CMKM since July of 2009. Attorneys for Roger

27 Glenn have discussed matters with Jim Lowden directly since his hiring in July of 2009. 28

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1 Jim Lowden attended the deposition of Roger Glenn as the company representative on

2 April 12, 2011 that occurred in New York, New York. EAPD does not (and cannot) claim 3

surprise at the addition of Mr. Lowden.

4 5

Mr. Lowden has been the primary officer of CMKM since Kevin West announced

6 his resignation in January of 20 11. While Mr. West remains a witness and valuable

7 consultant to the company, he does not maintain day-to-day possession and control over 8

the large volume of business records possessed by company. Many of these records will

9

10 be introduced as evidence in the trial of this case. Mr. Lowden will be the official

11 corporate representative and custodian of records with day-to-day control over all 12 company records.

13

Mr. Lowden is also a potential witness in the area of damages suffered by CMKM

14

15 as the damages caused by Defendants continue to be incurred on a daily basis. Daily

16 problems continue to arise over the issuance and cancellation of shares that are related to

17 CMKM's damage calculations, and CMKM continues to incur attorney fees in all matters 18

being pursued by the company. Mr. Lowden's addition as a witness does not prejudice the

19

20 Defendant. Mr. Lowden is available for deposition at any reasonable time and place and

21 Defendant's were told of such availability. Mr. Lowden's testimony would not be

22 necessary but for the resignation ofMr. West and the ongoing damage matters of which 23

Mr. West is not attending to since his resignation.

24

25 26 remarks by EAPD counsel regarding CMKM's damage expert Lou Straney. CMKM

Plaintiff takes strong exception and hereby enters this response to the unfounded

27 designaged Lou Straney, a well recognized author and expert in the field of damages in 28

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1 securities fraud matters, as one of its experts. Mr. Straney submitted a well-documented

2 report supporting his opinions on damages incurred by CMKM. Mr. Straney was recently

3 4 5 EAPD remarks "CMKM may be unhappy about that deposition, but that does not entitle

deposed by EAPD' s attorneys. In the concluding paragraph of this Motion to Strike,

6 them to conjure up a new damages witness the night discovery closes." To the contrary, 7 Mr. Straney was extremely effective and he supported every conclusion he made in this

8 9 10 deposition. The decision to add Mr. Lowden had had nothing to do with the testimony by

case. His qualifications to make such opinions were never questioned during the

11 Lou Straney.

12 13 14 15 Mr. Lowden both as the Custodian of Records of CMKM and as the corporate

IV. CONCLUSION

F or all of the foregoing reasons, Plaintiff requests that CMKM be allowed to call

16 representative to testify as to damage matters within his knowledge.

17 18 19 20 21 22 23 24 25 26 27 28

Dated: May 10, 2011

FRIZZELL LAW FIRM

By: lsi Bill Frizzell Bill Frizzell

Attorney for Plaintiff CMKM Diamonds, Inc.

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1

Las Vegas, NV 89169

CERTIFICATE OF SERVICE

2

Pursuant to NRCP 5(b), I certify that on ay 11, 2011, I caused the following 3 documents entitled: PLAINTIFF'S OPPOSITION TO EAPD'S MOTION TO STRIKE PLAINTIFF'S FIRST AMENDED DISCLOSURES OF DOCUMENTS

4 AND WITNESSES to be served as follows:

5 6 7 8 9

10 11 12 13 14

15 I declare under penalty of perjury under the laws of the State of Nevada that the above is

true and correct. Executed on May 11, 2011 at Henderson, Nevada.

[ X] by placing same to be deposited for mailing in the United States Mail, in a sealed envelope upon which first class postage was

prepaid in Henderson, Nevada; andlor

[ ] Pursuant to EDCR 7.26, to be sent via facsimile; andlor

[ ] hand-delivered to the attorney(s) listed below at the address indicated below:

[ ] to be delivered overnight via an overnight delivery service in lieu of delivery by mail to the addressee (s).

James R. Condo Patricia Lee Refo Andrew Stone

Snell & Wilmer LLP

400 E. Van Buren Phoenix, AZ 85004-2202

Alex L. Fugazzi Snell & Wilmer LLP

3883 Howard Hughes Pkwy Suite 1100

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lsi

Marti Reich

Marti Reich

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