ACCEPTED
03-16-00230-CV
10897417
THIRD COURT OF APPEALS
AUSTIN, TEXAS
5/31/2016 3:31:15 PM
JEFFREY D. KYLE
CLERK
NO. 03-16-00230-CV
IN THE COURT OF APPEALS FILED IN
3rd COURT OF APPEALS
FOR THE THIRD DISTRICT OF TEXAS AUSTIN, TEXAS
AT AUSTIN 5/31/2016 3:31:15 PM
___________________________________________________________
JEFFREY D. KYLE
Clerk
TEXAS HALO J4T MANAGEMENT, LLC, ET AL.
Appellant,
vs.
DAVID STEAKLEY, ET AL
Appellees.
___________________________________________________________
On Appeal from the
98th Judicial District Court, Travis County, Texas
Trial Court Cause No. D-1-GN-15-004109
___________________________________________________________
HALO FUND MANAGER APPELLEES’ OPPOSITION TO
APPELLANT’S “NOTICE OF INTENT TO DISMISS”
___________________________________________________________
REAGAN D. PRATT
State Bar No. 00788218
Pratt & Flack, LLP
1331 Lamar, Suite 1250
Houston, Texas 77010
Telephone: (713) 936-2402
Facsimile: (713) 481-0231
Attorneys for Appellees David Steakley,
Andrew Clark, William Wheelock, and
Robert Tucci
Appellees David Steakley, Andrew Clark, William Wheelock, and Robert
Tucci (the “Halo Fund Managers”) ask the Court to not dismiss this appeal until
Appellant has had an opportunity to consider the waiver offered herein.
Background Facts
Appellant Victor Elgohary is a serial pro se litigant who happens to be an
attorney. He has filed at least 15 lawsuits on his own behalf over the last few
years. This is at least the fourth time that Elgohary has personally sued someone
for allegedly defaming him, and at least the third time that he has asserted personal
claims against a non-profit corporation while purporting to bring the suit
derivatively on behalf of the non-profit. Two of his prior defamation suits were,
just like this one, against former co-workers who allegedly questioned his
competence and professionalism. Despite sanctions and attorneys’ fees awards
issued against him in prior suits, Elgohary continues to abuse the courts with
vindictive litigation.
This time, Elgohary purported to sue on behalf of Houston Angel Network,
Inc. (“HAN”),1 a non-profit, volunteer-run corporation; an affiliated entity, Texas
Halo Fund I, LLC (“Halo Fund”), and two of Halo Fund’s subsidiaries. He
claimed to have authority to act for those entities even though he had held no office
with HAN since it declined to renew his officer position in January 2014, and he
1
HAN has recently changed its name to “The Houston Texas Angel Network, Inc.”
2
was removed from any roles with the Halo Fund entities—by the unanimous vote
of all those voting—in April 2015. He filed this suit in retribution for that firing,
naming as defendants all 14 of the real directors and managers of those entities.
The Appellants identified above as the Halo Fund Managers are the real
Halo Fund managers, who had successfully sought Elgohary’s removal from the
board of managers.
Elgohary also purported to sue derivatively on behalf of the Halo entities,
based on the fact that he is one of 67 members of the Halo Fund.
The Trial Court Judgment
The Defendants challenged Elgohary’s suit with a Rule 12 motion to show
authority, plea to the jurisdiction and motion to dismiss. After an evidentiary
hearing, the trial court granted the Defendants’ motions. The court ordered that
Elgohary could not appear as an attorney in this cause, and that his pleadings
should be stricken. The court expressly found that Elgohary lacked standing to sue
derivatively on behalf of any of the purported plaintiff entities “because he cannot
fairly and adequately represent the interests of any of those entities in a derivative
lawsuit,” and because he did not make an adequate written demand to the entities
before filing the suit. See Exhibit A.
3
Elgohary’s “Notice of Intent to Dismiss”
On May 13, 2016, the clerk of this court wrote to Elghoary about his failure
to pay for the clerk’s record that he had asked the district clerk to prepare. The
clerk notified Elgohary that his failure to make payment arrangements might result
in the dismissal of his appeal.
Elgohary responded on May 18, advising the Court that he no longer wished
to pursue this appeal because “Appellants” have refiled certain claims in Harris
County District Court, and “have also made a new derivative demand upon certain
Appellees.” By “Appellants,” Elgohary apparently means himself, personally.
The Halo Fund Managers Waive Reliance on
Elgohary’s Failure to Make Demand
Elgohary apparently believes that by dismissing this appeal he can avoid the
collateral estoppel effect of the trial court’s finding that “he cannot fairly and
adequately represent the interests of any of [the subject] entities in a derivative
lawsuit.” By making a “new derivative demand,” he apparently believes that he
can re-litigate the issue of his suitability as a derivative plaintiff, in a new venue.
Elgohary’s understanding of the law of collateral estoppel in incorrect. To
avoid any doubt, however, the Halo Fund Managers hereby waive any argument in
this appeal that the trial court’s order as to Elghohary’s lack of standing to bring a
derivative action against them can be sustained solely on his failure to make an
adequate written demand. The Halo Fund Managers stipulate, for the purpose of
4
this appeal, that the trial court’s order as to Elghohary’s lack of standing to bring
derivative claims against them should be affirmed only on the basis that Elgohary
cannot fairly and adequately represent the interests of any of the subject entities in
a derivative lawsuit.
Request for Elgohary to Have an Opportunity to Respond
In light of this waiver and stipulation, the Halo Fund Managers ask the court
to give Elgohary a further opportunity to decide whether he wants to continue this
appeal, or dismiss it.
Respectfully Submitted,
PRATT & FLACK LLP
By: /s/ Reagan D. Pratt
Reagan D. Pratt
State Bar No. 00788218
4306 Yoakum Blvd., Suite 500
Houston, Texas 77006
Telephone: (713) 936-2402
Facsimile: (713) 481-0231
Email: rpratt@prattflack.com
Attorney for Appellees,
David Steakley, et al.
5
CERTIFICATE OF SERVICE
I hereby certify that I caused a true and correct copy of the foregoing to be
served on the following counsel of record on this the 27th day of May, 2016.
Victor S. Elgohary
6406 Arcadia Bend Court
Houston. TX 77041
Telephone: 281-858-0014
Email: victor@velgohary.com
Mitchell D. Savrick
David A. Buono II
The Overlook at Gaines Ranch
4330 Gaines Ranch Loop, #150
Austin TX 78735
Email: mitchell@ssjmlaw.com
Email: david@ssjmlaw.com
Thomas A. Zabel
Zabel Freeman
1135 Heights Boulevard
Houston, TX 77008
Email: tzabel@zflaw.com
/s/ Reagan D. Pratt
Reagan D. Pratt
6
Filed in The District Court
of Travis County, Texas
JAN 13 2016
CAUSE NO. D-1-GN-15-004109 At ~~ 'L/f AM.
Velva L. Price, District 'clerk
TEXAS HALO J4T MANAGEMENT, § IN THE DISTRICT COURT OF
LLC, ct al. §
§
w. § TRAVIS COUNTY, TEXAS
§
HOUSTON ANGEL NETWORK, INC., §
ctd. § 98TH JUDICIAL DISTRICT
ORDER ON DEFENDANTS'
MOTIONS TO SHOW AUTHORJTY, PLEAS TO THE JURJSDICTION,
and MOTIONS TO DISMISS
On this day came to be heard the Defendants' Motions to Show Authority, Pleas to the
Jurisdiction and Motions to Dismiss.
The Court finds that Victor Elgohary has not sustained his burden of proving that he has
been authorized, by any of the entities named as plaintiffs in this cause, to file suit on behalf of
those entities. Therefore, pursuant to Rule 12 ofthe Texas Rules of Civil Procedure, it is
ORDERED that Victor Elghohary may not appear as attorney in this cause. It is further
ORDERED that the pleadings filed by Victor Elgohary in this cause be STRJCKEN.
In addition and alternatively, the Comt finds that Victor Elghohary lacks standing to
bring any of the claims described in his pleadings. Among other things, Elgohary lacks standing
(either individually or derivatively) to assert claims on behalf of any of the entities for which he
purports to sue (Texas Halo J4T Management, LLC, Texas Halo J4T Affiliate Fund, LLC, Texas
Halo Fund I, LLC, and Houston Angel Network, Inc.) because he lacks authority to act on behalf
of those entities; because he has no individual standing to assert claims for damages allegedly
done to those entities; because he cannot fairly and adequately represent the interests of any of
those entities in a derivative lawsuit, due to his personal claims against the entities for damages
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and attorneys' fees; because he did not make an adequate written demand to the entities before
filing this purported derivative suit; and, with respect to two of those entities, because those
entities never bought or sold the securities which are the subject to their purported claims.
Accordingly, the Defendants' Pleas to the Jurisdiction and Motions to Dismiss are
GRANTED. It is therefore
ORDERED that all claims of all purported plaintiffs are DISMISSED for lack of subject
matter jurisdiction.
This is a final judgment, disposing of all parties and all claims. Any and all relief sought
in this case and not granted herein is denied.
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