¶2 The file in this matter is vast and the instant motion for partial summary judgment as to defendants Richard P. Curran and Inland Capital only is over 900 pages in length. The course of conduct entered into by defendants Richard P. Curran and Inland Capital Corporation is clearly outlined in the record and there are no material disputes of fact as to these defendants. That course of conduct was in direct violation of the securities law of the United States, the securities law of the State of Arizona and of the common law of the State of Arizona.
¶3 The undisputed facts in this record reveal the following pattern of fraud and deceit. These defendants developed in the state of Arizona a land development known as Cochise College Park. They conducted a nationwide sales campaign to induce individuals from throughout the world to purchase lots in this development. As a direct adjunct to these sales the defendants discounted and marketed themselves and through others the paper that represented the alleged mortgages and contracts of sale signed by the various lot purchasers. They also discounted and marketed notes and mortgages from other land promoters that operated in this state.
¶4 This Court is vested with sole jurisdiction as to the claims under Rule 10b-5 (17 C.F.R. § 240.10b-5), 15 U.S.C. §§ 78j(b) and 78aa. See, Clark v. Watchie, 513 F.2d 994 (9th Cir. 1975).
¶5 Not only did these defendants fail to register these securities with the Securities and Exchange Commission and the State of Arizona, they also knowingly misrepresented the very nature of the notes and mortgages that they marketed to the plaintiff class. In furtherance of their scheme to defraud, these defendants sold notes on lots that had never in fact been purchased by any real person. They concealed that fraud by making the initial contract payments from the funds provided through the sale of the notes and mortgages at their face value. They conducted the same subterfuge in reference to contracts that were rescinded by the buyers of the lots. In addition to nonexistent and rescinding notemakers the defendants themselves became purported lot buyers and makers of the notes in question. All of the above was financed by the defendants, in fact repaying to the note or mortgage holders a small percentage of the capital amount that they invested in those instruments.
¶6 In addition to that which is outlined above, the defendants knowingly and materially misrepresented these securities as being secured by realty mortgages. That was not the fact. At the time of the sale of the notes no real property mortgages involved in this action had in fact been recorded on the lots underlying the notes. Hall v. Security Planning, 371 F.Supp. 7 (D.Ariz. 1974).
¶7 Defendants furthered their fraud by marketing over $20,000,000 in unregistered securities (notes) through secondary agents. These defendants also sold such unregistered securities from other developments in the amount of $3,000,000.
¶8 All of these actions were in direct contravention of the securities law of the United States. In particular the defendants have violated and are liable under 15 U.S.C. §§ 77o, 78t and Rule 10b-5 (17 C.F.R. 240.10b-5). These defendants have violated and are liable under A.R.S. §§ 44-1991, 2001, 2003. The actions of these defendants also constituted common law fraud under the laws of this state. See, Safeway Portland Emp. Fed. Cr. Un. v. Wagner & Co., Inc., 501 F.2d 1120 (9th Cir. 1974).
¶9 While summary judgment is not the usual order of things in a securities action of this nature, it is warranted in this case. The usual problem is one of scienter, Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976). The instant record provides ample uncontested proof as to that and all other elements of *408 such an action as it relates to these defendants. The Court also notes that these defendants have not responded to this motion and have failed to provide the Court with any circumstances that would change the picture this record paints.
¶10 These defendants’ course of conduct was so filled with knowing and wilful fraud that punitive damages are also called for in the instant factual situation. Price v. Hartford Accident and Indemnity Co., 108 Ariz. 485, 502 P.2d 522 (1972); cf., Goodman v. Poland, 395 F.Supp. 660 (D.Md.1975).
¶11 As noted earlier the Court has also found these defendants liable under A.R.S. § 44-1991. Pursuant to A.R.S. §§ 44-1201, 2001, interest will be charged against these defendants in the amount of 6% a year and attorney’s fees are awarded at a rate of 10% as a surcharge of actual damages awarded in the instant action to the plaintiff class.
¶12 Relief
¶13 The parties listed in paragraphs 1 and 2 of this judgment have already demonstrated the amounts in which they were damaged. The remainder of the plaintiff class is awarded partial summary judgment on the question of liability. They must file with this Court proof of damages before they can be awarded same pursuant to this order.
¶14 JUDGMENT
¶15 IT IS ORDERED, ADJUDGED AND DECREED:
¶16 1. That the following-named members of plaintiff class have judgment jointly and severally against defendants Richard P. Curran and Inland Capital Corporation and recover of said defendants the amounts shown on the securities identified by contract number following each plaintiff’s name, plus interest at the rate of 6% per annum from June 5, 1972 until paid.
¶17 NAME CONTRACT NO. BALANCE DUE
¶18 ARNOLD, Rev. Adam & Ruth 6963 $2,884.90
¶19 7603 7.035.92
¶20 BALODIMOS, Pelagia M. 7498 3,973.50
¶21 BELL, W. 8055 5.751.00
¶22 BOOTH, H. & D. 9125 4.418.92
¶23 BRYAN, P. 8788 4,710.90
¶24 CARLSON, H. 5329 4.654.74
¶25 5455 2.948.69
¶26 5470 3.599.24
¶27 CHEAREY (CHERREY),M. & L. 8659 7.796.25
¶28 COLLINS, Herman & R. 6613 5,171.04
¶29 7330 5.467.00
¶30 CONRAD, P. 5133 4,471.20
¶31 CYCOWSKI, J. & M. 8503 3,837.78
¶32 8506 2.856.70
¶33 DEPHYSSIER, S. & G. 6248 2,457.60
¶34 6342 2.675.75
¶35 6344 2,761.15
¶36 6349 3,997.38
¶37 EGGER, B. & M. 5861 4.528.92
¶38 5999 2,360.56
¶39*409 NAME CONTRACT NO. BALANCE DUE
¶40 ELG, G. & E. 2139 $ 950.88
¶41 2140 330.00
¶42 2142 1.007.40
¶43 2143 150.45
¶44 2154 478.20
¶45 2166 738.80
¶46 2462 520.00
¶47 FETTMAN, Dov & Sarah 7655 3.192.76
¶48 7660 3.778.40
¶49 7678 3.694.04
¶50 7683 3,970.62
¶51 FREAS, H & B 5570 5.792.70
¶52 GARAND, E. & J. 7467 2.984.94
¶53 7469 3.015.80
¶54 GRABE, E. & B. 6447 3.414.95
¶55 GRAHAM, Walter J. 7398 3.873.76
¶56 7403 3,719.98
¶57 HAHN, Rosetta 5271 1.249.80
¶58 5272 1.249.80
¶59 HALL, Erma 6108 3.923.70
¶60 6125 4.036.90
¶61 6126 4.392.96
¶62 6681 4,960.22
¶63 6682 5,143.50
¶64 6683 5,027.25
¶65 HARRIS, R. & A. 5702 5.686.40
¶66 HARPER, B. 7061 4.973.44
¶67 8624 5,093.84
¶68 8677 4.731.90
¶69 8678 6.129.80
¶70 8687 4.670.05
¶71 8723 5.050.40
¶72 8724 5,302.92
¶73 9037 7,421.00
¶74 JACKSON, S. 2816 26.00
¶75 2817 26.00
¶76 2928 51.34
¶77 2932 1.322.44
¶78 2951 1,281.28
¶79 3786 741.00
¶80 6824 2,164.68
¶81 8301 2.427.60
¶82 JONES, D. 4083 2,910.82
¶83 4145
¶84 4153 2.163.24
¶85 4154 2.163.24
¶86 4167 2.666.24
¶87 4171 2.053.60
¶88 4173 1,838.74
¶89 4181 1,701.15
¶90*410 NAME CONTRACT NO. BALANCE DUE
¶91 KLINE, F. & M. 3010 $1,220.12
¶92 3988 2.585.19
¶93 4393 2.595.60
¶94 5197 2,511.36
¶95 7122 2.852.29
¶96 KOBELT, W. & M. 3668 41.16
¶97 3915 2.881.76
¶98 6262 3.721.24
¶99 KONAGEL, Estate (Koster) 5486
¶100 5622 701.20
¶101 5685 3,904.48
¶102 5727 5,689.62
¶103 6115 5.812.30
¶104 6192 1.020.60
¶105 6228 9,069.42
¶106 6399 991.24
¶107 KRUEGER, J. 3215 2.504.44
¶108 3217 2.379.32
¶109 3227 2,737.41
¶110 LARKIN, I. 6c T. 7181 5,320.14
¶111 7776 4,140.64
¶112 8360 3.536.25
¶113 LARROVY, V. 6c E. 5929 3.460.20
¶114 5937 4,836.52
¶115 5941 2.058.44
¶116 LINDBERG, P.. 6c Ann 8576 4.850.30
¶117 MERKLE, C. 8716 2,902.18
¶118 8725 4.346.00
¶119 MILEY, I. 6408 1,688.34
¶120 MILLER, G. 6c M. 7344 5.211.32
¶121 7349 3.870.79
¶122 7351 3.870.79
¶123 MILLER, R. 8709 4,094.57
¶124 MOEHLE, C. 6764 3,108.74
¶125 6792 2.852.40
¶126 MORRIS, G. 6c C. 6320 5.430.00
¶127 6670 5.574.80
¶128 MONACELLI, F. 6c M. 8387 5,031.72
¶129 8401 4.608.40
¶130 8412 4,555.93
¶131 MYERS, L. 4485 213.14
¶132 O’GRADY, M. 7565 4,089.04
¶133 7598 4,440.59
¶134 7612 3.061.76
¶135 O'TOOLE, J. 6c J. 7582 5,076.24
¶136*411 NAME CONTRACT NO. BALANCE DUE
¶137 PERION, Dr. L. 6 E. 5468 $ 3,311.08
¶138 5567 3.601.68
¶139 PODANY, R. & H. 5812 958.20
¶140 REDDISH, E. & L. 5270 5,003.18
¶141 ORHRER, N. & V. 6166 3.286.86
¶142 SAMPOGNARO, 3, & E. 4939 490.60
¶143 4953 4.206.15
¶144 5026 3,170.64
¶145 5027 3,010.10
¶146 5028 3,194.62
¶147 5029 1,564.88
¶148 5030 1.286.87
¶149 5031 2,354.85
¶150 5032 3,106.03
¶151 5039 827.63
¶152 5108 2,055.12
¶153 5112 1,474.98
¶154 5114 2,074.02
¶155 5123 776.32
¶156 5330 3.928.50
¶157 5496 3,025.80
¶158 5498 1,700.47
¶159 5501 2.249.70
¶160 5502 2.249.70
¶161 5514 3.973.50
¶162 5720 3,267.55
¶163 6378 2.173.50
¶164 6848 2,525.79
¶165 7583 3,564.78
¶166 7779 3,398.46
¶167 SCHWAB, Eulah 7606 5.011.16
¶168 7729 8,765.52
¶169 SERAN, E. & E. 4501 3.067.68
¶170 537Ó 3,600.00
¶171 5651 3.425.30
¶172 5652 3.425.30
¶173 5730 3,495.54
¶174 SIMONSON, Carol (Boise) 7656 5,862.20
¶175 SIRAVO, P. & E. 6109 734.87
¶176 6132 3,531.75
¶177 SLACK, A. & M. 5844 1,914.56
¶178 6710 4.104.00
¶179 9344 2.746.80
¶180 SMITH, J. & A. 8926 4,786.61
¶181 8931 4.960.80
¶182 8932 4,738.40
¶183 8934 4.439.80
¶184 8950 3,863.89
¶185 8951 4.215.00
¶186 8958 4,671.27
¶187*412 NAME'CONTRACT HO. BALANCE DUE
¶188 SMITH, J. & A. 8959 $5,285.72
¶189 (continued) 8963 4,802.41
¶190 8987 3.576.27
¶191 8999 4.390.40
¶192 9023 4,099.48
¶193 9024 5,031.72
¶194 9030 4.613.60
¶195 9036 . 4,668.51
¶196 9198 4,789.77
¶197 SONNENFELD, M. 8064 6.425.80
¶198 SOTTILE, S. & R. 5345 2.909.40
¶199 5452 1.902.81
¶200 SPENCE, E. 6531 2.838.40
¶201 6627 1.901.60
¶202 SPILDE PROFIT SHARING TRUST 4623 4,493.92
¶203 STREETER, M. & M. 5458 2,938.69
¶204 5505 3,168.85
¶205 TANGHE, A. & B. 7149 3.856.44
¶206 7163 7,513.66
¶207 7164 7.611.24
¶208 7165 7.416.08
¶209 VECCHIONE, F. & T. 8390 3.414.95
¶210 WALKER, E. & M. 7020 4.046.24
¶211 WAMBERG, D. & F. 5400 2.286.45
¶212 5457 2.658.96
¶213 WEBB, J. & A. 8512 3,444.58
¶214 8526 3,608.10
¶215 8535 3.017.28
¶216 WHITE, J. 7214 4.992.00
¶217 7950 3,979.23
¶218 7951 4.021.60
¶219 8928 7,767.12
¶220 8977 4.496.00
¶221 8998 4,478.88
¶222 9038 4,472.16
¶223 WITTWER, R. & G. 6634 3,021.47
¶224 6637 1,701.74
¶225 6640 3.595.56
¶226 6641 3.595.56
¶227 6642 3,820.52
¶228 6644 5,171.04
¶229 6646 2,151.80
¶230 6647 3.483.08
¶231 6649 3,115.50
¶232 6651 3.063.40
¶233 6652 2,737.02
¶234 6653 3,855.91
¶235*413 NAME CONTRACT NO. BALANCE DUE
¶236 WOODARD, G. & H. 5433 $3,948.40
¶237 5442 2.203.67
¶238 5444 2,675.15
¶239 5445 3,413.70
¶240 5448 1,865.88
¶241 5451 1,910.31
¶242 5915 2,360.05
¶243 6172 867.85
¶244 9144 4.839.68
¶245 Total $768,397.14
¶246 2. That the following-named members of plaintiff class have judgment jointly and severally against defendants Richard P. Curran and Inland Capital Corporation and recover of said defendants the amount shown following each plaintiff’s name plus interest at the rate of 6% per annum from June 5, 1972 until paid:
¶247 NAME AMOUNT
¶248 A. & G. ECKLES $2,457.20
¶249 M. & M. SELLBERG 2,403.04
¶250 B. & E. JOHNSON 2.511.36
¶251 U. & L. RHEAUME 2.457.20
¶252 W. & H. UPDEGRAFF 2.511.36
¶253 M. HEAD 2.447.20
¶254 BEN DIBBLE 2.511.36
¶255 H. & A. JOY 2.511.36
¶256 CLAIR & CO. 2.511.36
¶257 C. & M. DANDURANT 2.457.20
¶258 H. & G. HORTON 2.511.36
¶259 G. PARKER 2.457.20
¶260 W. M. & R. BROWN 4.894.85
¶261 W. & F. J00STEN 4.894.85
¶262 F. & E. FARAGE 2.511.36
¶263 W. & B, NIEHAUS 2.457.20
¶264 J. & G. BUFFALOW 2.511.36
¶265 C. LOUGH 2.511.36
¶266 H. HANSON 4.894.85
¶267 H. LARSON & M. MOBECK 5.003.18
¶268 5.003.18 J. & M. LEHR
¶270 G. VANDERLUGT, Contract No. 5238 $5,003.18
¶271 G. VANDERLUGT, Contract No. 5239 5,003.18
¶272 (23 contracts)
¶273 Total $74,435.75
¶274 3. That the remaining members of the plaintiff class, as has been established by the records of this court, as note purchasers listed on the summary filed with this Court as Docket Item # 920 on or about February 4, 1974 deleting therefrom only those persons who asked to be excluded from the class action and did not subsequently withdraw their exclusion, and including persons who are not identified in Docket # 920 but who filed a request to be included in plaintiff class, have partial summary judgment against defendants Curran and Inland Capital Corp. jointly and severally and recover therefrom the sum representing the total damages to plaintiff class upon further hearings on the issue of damages alone with interest on such sum at the rate of 6% per annum until paid. The members of the plaintiff class shall have judgment as to the costs of the class action to date as delineated in paragraph 4 of this judgment.
¶275 4. That as additional damages, the plaintiff class have judgment against Richard P. Curran and Inland Capital Corporation, jointly and severally, and recover therefrom the sum of $826,288.00 as costs of accounting, title searches, counsel fees and receivership costs heretofore incurred or paid by plaintiffs pursuant to this Court’s order of November 17, 1972 appointing a receiver and judgment of January 23, 1974, Hall v. Security Planning Service, Inc., 371 F.Supp. 7 (D.Ariz.1974).
¶276 5. That plaintiffs have judgment against defendants Richard P. Curran and Inland Capital Corporation, jointly and severally, and recover as exemplary damages the sum of $300,000.
¶277 6. That plaintiffs named in paragraphs 1 and 2 of this order have judgment against defendants Richard P. Curran and Inland Capital Corporation, jointly and severally, and recover therefrom as and for attorneys’ fees the sum of $84,283.28. In addition to this amount the remaining members of plaintiff class are awarded a 10% surcharge for attorneys’ fees for any damages proven in the future pursuant to paragraph 3 of this judgment.
¶278 7. That any funds awarded herein and recovered from defendants by the plaintiff class shall be held in trust for a period of one year or until otherwise ordered by this Court. Such funds shall be disbursed at the end of such period in a sum proportionate to the claims proven in this court and shown by the records of Wayne Brown & Co., as of that date. Such funds shall be paid out after surcharge for necessary costs and expenses of disbursement in the amount and manner as may be approved by the Court. Counsel for the plaintiff class shall be allowed 10% of any recovery hereunder until such time as the full amount of attorney’s fees herein or heretofore awarded him are paid.
¶279 8. Plaintiffs are awarded their additional costs incurred in this action to be taxed to defendants Richard P. Curran and Inland Capital Corporation, jointly and severally, in the manner usually provided for taxing costs in this court in the amount to be approved by the Court upon submission.
¶280 9. The Clerk is directed to forthwith enter this judgment as a final judgment in accordance with rule 54(b) F.R.C.P. and to mail copies to all counsel presently of record or presently parties appearing pro per.