ACCEPTED
01-15-00423-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
5/8/2015 10:13:28 AM
CHRISTOPHER PRINE
CLERK
No. 01-15-00423-CV
FILED IN
1st COURT OF APPEALS
HOUSTON, TEXAS
In the Court of Appeals
5/8/2015 10:13:28 AM
For the First Judicial District of Texas
CHRISTOPHER A. PRINE
Houston, Texas Clerk
In re 8650 Frisco, LLC; Estilo Gaucho Brazilian Steakhouse; Mandona, LLC;
Galovelho, LLC; Bahtche, LLC; Claudio Nunes; and David Jeiel Rodrigues,
Relators
The Honorable Jaclanel McFarland,
133rd Judicial District Court of Harris County, Texas, Respondent
Arising out of Cause No. 2014-10896
Real Parties in Interest’s Response to Motion for Emergency Temporary
Relief to Stay Action by the Trial Court
Hawash Meade Gaston Stephens & Domnitz, Dykema Cox Smith
Neese & Cicack LLP PLLC
Andrew K. Meade Kelly D. Stephens David Kinder
State Bar No. 24032854 State Bar No. 19158300 State Bar No. 11432550
Samuel B. Haren P.O. Box 79734 112 East Pecan Street,
State Bar No. 24059899 Houston, Texas 77279 Suite 1800
2118 Smith Street 281-394-3287 (phone) San Antonio, Texas
Houston, Texas 77002 832-476-5460 (fax) 78205
713-658-9001 (phone) kstephens@stephensdom 210-554-5500 (phone)
713-658-9011 (fax) nitz.com 210-226-8395 (fax)
ameade@hmgnc.com
sharen@hmgnc.com
Background
Real Parties in Interest (“Los Cucos”) have a pending claim against Relators
(“8650 Frisco”) for breach of the parties’ settlement agreement (the “Settlement
Agreement”). See Exhibit 1, Fourth Amended Petition at ¶¶ 32–40. Under the
Settlement Agreement, 8650 Frisco is required to pay $900,000 to Los Cucos over
a period of five years. Id. at ¶ 33. Los Cucos’ suit against 8650 Frisco is premised,
in part, on 8650 Frisco’s refusal to execute a promissory note and UCC-1 form.
See id. at ¶¶ 34–36. As a result, Los Cucos has taken-on an unbargained-for credit
risk. The magnitude of this risk—and the attendant harm and damages resulting
therefrom—hinges on 8650 Frisco’s financial condition. Los Cucos seeks damages
and, in the alternative, specific performance of 8650 Frisco’s obligation to execute
the relevant documents. See id. at ¶ 42; Exhibit 2, Supplement to Fourth Amended
Petition at ¶ 3.
Over a year ago, Los Cucos requested that 8650 Frisco produce certain
financial and accounting documents (the “Financial Documents”). The Court
ordered 8650 Frisco to produce the Financial Documents on June 13, 2014; July
28, 2014; April 1, 2015; and April 27, 2015. See Exhibit 3, Hearing Transcript at
23:2–4; Exhibit 4, Order on Third Motion to Compel; Exhibit 5, Order Granting in
Part and Denying in Part Motion to Enforce the Court’s Order; Exhibit 6, Order
Granting Plaintiffs’ Third Motion to Enforce the Court’s Order (the “April 27
1
Order”). The last of these four orders included (1) a monetary sanction of $1,000
and (2) a finding conclusively establishing the irreparable harm element of Los
Cucos’ specific performance claim. See Exhibit 6, April 27 Order.
Los Cucos believes that 8650 Frisco still has not complied with the April 27
Order. See Exhibit 7, Fourth Motion to Enforce the Court’s Order and for
Sanctions. Los Cucos has filed yet another motion to enforce the trial court’s order;
that motion is set for hearing on May 18, 2015. See Exhibit 8, Notice of Hearing.
Discussion
8650 Frisco’s Motion for Emergency Temporary Relief to Stay Action by
the Trial Court (the “Motion”) is factually incorrect and legally insufficient. As
demonstrated below, the Motion should be denied in its entirety and the trial court
should be permitted to continue working toward a resolution of this case.
I. 8650 Frisco’s Motion misstates the facts.
8650 Frisco’s Motion contains numerous factual misstatements. First, 8650
Frisco flatly asserts that the Financial Documents “have no relevance to the live
pleading on file with the trial court.” Motion at ¶ 7. This is incorrect as 8650
Frisco’s financial condition is relevant to assessing the harm/damages caused by
8650 Frisco’s breach of the Settlement Agreement.1
1
In fact, 8650 Frisco has a pending no-evidence motion for summary judgment on this exact
issue, and Los Cucos requires the Financial Documents in order to fully respond thereto. See
Exhibit 9, No-Evidence Motion for Summary Judgment at ¶ 13; Exhibit 10, Los Cucos’
Supplemental Response at 1–2.
2
8650 Frisco next complains that the trial court “conclusively establish[ed] an
unpleaded issue in favor of [Los Cucos].” Motion at ¶ 8. This is a reference to the
irreparable harm element of Los Cucos’ request for specific performance. Compare
Exhibit 6, April 27 Order and Exhibit 2, Supplement to Fourth Amended Petition
at ¶ 3. In both its Motion and its petition for writ of mandamus, 8650 Frisco
appears to have simply forgotten that Los Cucos has sought specific performance.
8650 Frisco further complains that it had already produced the Financial
Documents “twice previously.” Motion at ¶ 9. If this were true, 8650 Frisco could
avoid any harm—let alone irreparable harm—by simply sending the documents to
a courier and having the courier hand deliver those documents before the May 18,
2015 hearing. In truth, however, the April 27 Order was issued precisely because
8650 Frisco’s prior attempts at production were incomplete. 8650 Frisco has not
produced the requested Financial Documents, and any future complete production
would be the first.
8650 Frisco next complains that the trial court signed the April 27 Order “in
the presence of Counsel for [Los Cucos] but outside the presence of [8650
Frisco’s] attorney.” Motion at ¶ 10. Because 8650 Frisco’s attorney chose to
appear telephonically, the entire hearing occurred outside of his presence.
Moreover, despite the nefarious implication 8650 Frisco seeks to make, the Court
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merely signed the proposed order filed by Los Cucos with its Motion to Enforce.
Compare Exhibit 6, April 27 Order and Exhibit 11, Proposed Order.
Finally, 8650 Frisco complains that Los Cucos’ Fourth Motion to Enforce
the Court’s Order “demanded that the [trial court] strike [8650 Frisco’s] pleadings
for failure to comply” with the April 27 Order. Motion at ¶ 12. But Exhibit B to the
Motion plainly states that the only sanctions requested are (1) a monetary sanction
for the attorneys’ fees incurred in obtaining the Financial Documents, (2) an order
to 8650 Frisco and its attorneys to show cause as to why they should not be held in
contempt, and (3) an order barring 8650 Frisco from conducting further discovery.
See Motion Exhibit B at 6, 50. While such sanctions are admittedly harsh, they are
not requests to strike 8650 Frisco’s pleadings.
II. 8650 Frisco has not shown irreparable harm.
8650 Frisco has shown that it disagrees with the trial court’s orders. It has
not shown that it faces irreparable harm unless the trial court’s proceedings are
stayed. Should the May 18, 2015 hearing go forward, 8650 Frisco is not threatened
with the loss of any property, the expiration of any deadlines, or the striking of its
pleadings. 8650 Frisco merely complains that, absent a stay, it will be required to
appear at a hearing on a motion which 8650 Frisco believes it should win. If that
were the standard for irreparable harm, every hearing could produce a petition for
4
writ of mandamus, and every petition for writ of mandamus would result in a stay
of the trial court’s proceedings.
Conclusion
8650 Frisco has not accurately characterized this case, nor has it shown that
failure to stay the trial court would cause it any harm. Los Cucos prays that the
Court deny the Motion and grant Los Cucos all other relief to which it is entitled.
Respectfully submitted,
Hawash Meade Gaston
Neese & Cicack LLP
/s/ Samuel B. Haren
Andrew K. Meade
State Bar No. 24032854
Samuel B. Haren
State Bar No. 24059899
2118 Smith Street
Houston, Texas 77002
713-658-9001 (phone)
713-658-9011 (fax)
ameade@hmgnc.com
sharen@hmgnc.com
Stephens & Domnitz, PLLC
Kelly D. Stephens
State Bar No. 19158300
P.O. Box 79734
Houston, Texas 77279-9734
281-394-3287 (phone)
832-476-5460 (fax)
kstephens@stephensdomnitz.com
5
Dykema Cox Smith
David Kinder
State Bar No. 11432550
112 East Pecan Street, Suite 1800
San Antonio, Texas 78205
210-554-5500 (phone)
210-226-8395 (fax)
Attorneys for Real Parties in
Interest
Certificate of Compliance
Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), this document
contains 1,062 words, not including portions excluded under Texas Rule of
Appellate Procedure 9.4(i)(1).
/s/ Samuel B. Haren
Samuel B. Haren
Certificate of Service
I hereby certify that a true and correct copy of the foregoing was served on
the following via electronic service on May 8, 2015:
James C. Mosser
Nicholas D. Mosser
Paul J. Downey
Mosser Law PLLC
2805 Dallas Parkway, Suite 220
Plano, Texas 75093
/s/ Samuel B. Haren
Samuel B. Haren
6
Cause No. 2014-10896
Los Cucos Mexican Cafe VIII, Inc.; In the District Court of
Los Cucos Mexican Cafe IV, Inc.;
Manuel Cabrera; and Sergio Cabrera,
Plaintiffs
v.
Harris County, Texas
8650 Frisco, LLC d/b/a Estilo Gaucho
Brazilian Steakhouse; Mandona,
LLC; Galovelho, LLC; Bahtche,
LLC; Claudio Nunes; and David Jeiel
Rodrigues,
Defendant 133rd Judicial District
Plaintiffs’ Fourth Amended Petition
Plaintiffs Los Cucos Mexican Cafe VIII, Inc.; Los Cucos Mexican Cafe IV, Inc.; Manuel
Cabrera; and Sergio Cabrera file this Fourth Amended Petition against defendants 8650 Frisco,
LLC d/b/a Estilo Gaucho Brazilian Steakhouse; Mandona, LLC; Galovelho, LLC; Bahtche,
LLC; Claudio Nunes a/k/a Alex Nunes; and David Jeiel Rodrigues:
Discovery Level
1. The plaintiffs intend to conduct discovery under Level 3 of Rule 190.3 of the
Texas Rules of Civil Procedure.
2. The plaintiffs seek damages within the jurisdictional limits of this Court,
including monetary relief over $1,000,000.
Parties
3. Plaintiff, Los Cucos Mexican Cafe VIII, Inc. (“Los Cucos VIII”), is a Texas
Corporation with its principal place of business in Houston, Harris County, Texas.
4. Plaintiff, Los Cucos Mexican Cafe IV, Inc. (“Los Cucos IV”), is a Texas
Corporation with its principal place of business in Harris County, Texas.
Exhibit 1 A-1
5. Plaintiff, Manuel Cabrera, is an individual who resides in Austin County, Texas.
6. Plaintiff, Sergio Cabrera, is an individual who resides in Harris County, Texas.
7. Defendant, 8650 Frisco, LLC (“8650 Frisco”), is a Texas limited liability
company doing business as Estilo Gaucho Brazilian Steakhouse. It has been served and appeared
herein.
8. Defendant, Mandona, LLC (“Mandona”), is a Texas limited liability company. It
has been served and appeared herein.
9. Defendant, Galovelho, LLC (“Galovelho”), is a Texas limited liability company.
It has been served and appeared herein.
10. Defendant, Bahtche, LLC (“Bahtche”), is a Texas limited liability company. It has
been served and appeared herein.
11. Defendant, Claudio Nunes a/k/a Alex Nunes (“Nunes”), is an individual citizen of
Texas. He has been served and appeared herein.
12. Defendant, David Jeiel Rodrigues (“Rodrigues”), is an individual citizen of
Texas. He has been served and appeared herein.
Jurisdiction and Venue
13. Venue is proper under TEX. CIV. PRAC. & REM. CODE § 15.002(a)(1) because a
substantial part of the events giving rise to this lawsuit occurred within this county. More
specifically, Plaintiffs and Defendants negotiated and entered into, on the record, an agreement
to settle the underlying complaints of Plaintiffs. The negotiations leading to this settlement took
place in the offices of Hawash, Meade Gaston Neese & Cicack, LLP, located at 2118 Smith
Street, Houston, Harris County, Texas 77002.
14. Jurisdiction is proper in this Court because the parties are all Texas residents and
the amount in controversy is within the jurisdictional limits of the court.
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Factual Background
15. Manuel Cabrera and Sergio Cabrera are brothers with significant experience in
creating, owning, and operating restaurants. The brothers are the owners and operators of a
number of Mexican restaurants branded and known as “Los Cucos Mexican Cafe”. Each
restaurant is a separate legal entity registered with the State of Texas. Los Cucos VIII and Los
Cucos IV are two of these entities.
16. Manuel Cabrera, Sergio Cabrera, David Jeiel Rodrigues, and Claudio Nunes
(collective, the “Partners”) agreed to create and operate a restaurant together. The plan and
agreement was to create a Brazilian churrascaria-style restaurant in the Dallas, Texas area.
The Underlying Background
I. The initial agreement.
17. After a series of negotiations, the Partners agreed that, inter alia: (1) each partner
would obtain a 25% interest in the restaurant; (2) Manuel Cabrera and Sergio Cabrera
(individually or through entities subject to their control) would contribute $600,000 for start-up
capital; (3) David Jeiel Rodrigues and Claudio Nunes would contribute “sweat equity” by
contributing personal services to the creation and operation of the restaurant; (4) Manuel Cabrera
and Sergio Cabrera (individually or through entities subject to their control) would guarantee a
lease for the restaurant; (5) all intellectual property, including trademarks would be held together
with the restaurant; and (6) the Partners would share control, profits, and losses equally, but
would receive no other salary from the restaurant.
II. Excess contributions and attempted renegotiation.
18. As work progressed on the restaurant, additional capital was needed. At David
Jeiel Rodrigues’ and Claudio Nunes’ request, Manuel Cabrera and Sergio Cabrera (individually
or through entities subject to their control) increased their contributions. The Cabreras’ total
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contributions eventually equaled more than $948,000. In addition, Manuel Cabrera and Sergio
Cabrera (individually or through entities subject to their control) paid for and/or loaned
equipment and furniture (including two large, expensive, and difficult-to-obtain Brazilian grills)
worth over $60,000 to the enterprise.
19. To account for the unanticipated and additional contributions, the Partners
attempted to negotiate a way for Manuel Cabrera and Sergio Cabrera (individually or through
entities subject to their control) to receive preferential distributions until their initial
contributions were repaid, subject to a small guaranteed distribution to David Jeiel Rodrigues
and Claudio Nunes.
III. Creation of the corporate structure and the Restaurant operations.
20. While the Partners negotiated a new distribution structure, the Partners agreed to
form 8650 Frisco as the holding company for the Restaurant. Each of the four Partners was to
own 25% of 8650 Frisco. David Jeiel Rodrigues and Claudio Nunes created defendant Galovelho
to hold their 50% ownership interest in 8650 Frisco and the Restaurant. Sergio Cabrera and
Manual Cabrera designated Los Cucos VIII to hold their 50% ownership interest in 8650 Frisco
and the Restaurant.
21. 8650 Frisco then entered into a lease agreement for restaurant space, which Sergio
Cabrera and Manuel Cabrera personally guaranteed.
22. David Jeiel Rodrigues and Claudio Nunes also desired to create a holding
company to manage 8650 Frisco, but the parties did not agree on this structure. Instead, David
Jeiel Rodrigues and Claudio Nunes formed Mandona to hold their collective 50% interest in the
management of 8650 Frisco. Manuel Cabrera and Sergio Cabrera did not form a holding
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company to hold their collective 50% control over 8650 Frisco, but continued to hold control in
their individual capacities.
23. The Partners then opened bank accounts for 8650 Frisco and granted all of the
Partners access to the accounts.
24. Despite lengthy negotiations, it now appears that the Partners were and are unable
to agree on new distribution terms to take into account the Cabreras’ (or entities under their
control) substantial excess contributions. Instead, the Partners continued to operate as general
partners or joint venturers up and until the defendants removed the plaintiffs from the enterprise
and began to deny the plaintiffs’ ownership interest in 8650 Frisco and the restaurant.
IV. The defendants’ exclusion of the plaintiffs.
25. Thanks to the contributions from Manuel Cabrera and Sergio Cabrera
(individually or through entities subject to their control), 8650 Frisco opened the Estilo Gaucho
Brazilian Steakhouse (the “Restaurant”) in February of 2013.
26. 8650 Frisco is currently operated by David Jeiel Rodrigues and Claudio Nunes,
individually, and (upon information and belief) through their entities Mandona, Galovelho, and
Bahtche. The defendants have collectively refused to recognize the plaintiffs as co-owners of
8650 Frisco and the Restaurant, and have collectively excluded the plaintiffs from the operations,
control, distributions, and profits of 8650 Frisco and the Restaurant.
27. On information and belief, the defendants are distributing and/or diverting
$40,000 or more per month from 8650 Frisco and the Restaurant to themselves or their
designees. This is a violation of the parties’ agreement and the defendants’ duties as partners
and/or joint venturers.
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28. On further information and belief, the defendants registered the Restaurant’s
“Estilo Gaucho” trademark in the name of Bahtche and/or transferred the trademark to Bahtche
without the plaintiffs’ consent, in violation of the parties’ agreement, and in breach of the
defendants’ duties as partners and/or joint venturers.
29. The plaintiffs have not received any distributions from the Restaurant’s
operations. Instead, the defendants have attempted to steal the plaintiffs’ contributions by
denying the plaintiffs any distributions or benefits of ownership. For example, the defendants
have:
transferred and/or laundered 8650 Frisco’s cash from bank accounts to
which the plaintiffs had access to new accounts to which the plaintiffs
have no access;
denied the plaintiffs access to 8650 Frisco’s new bank accounts;
failed to hold and/or give notice of meetings for 8650 Frisco;
denied the plaintiffs access to the Restaurant’s premises;
fired 8650 Frisco’s long-time accountant in favor of an account who, upon
information and belief, is controlled by the defendants;
denied the plaintiffs access to 8650 Frisco’s books and records;
denied the plaintiffs’ interest in 8650 Frisco;
distributed 8650 Frisco’s cash to themselves but not to the plaintiffs;
used equipment loaned to 8650 Frisco for the defendants’ own benefit and
refusing to return such equipment after demand was made; and
transferring the assets of 8650 Frisco to entities owned or controlled by the
defendants such as Bahtche.
30. The plaintiffs have made written demands for return of their money and property
and for an accounting. The defendants have refused. Instead, the defendants continue to use the
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plaintiffs’ property and the fruits of the plaintiffs’ contributions while simultaneously pretending
that the plaintiffs are owed nothing in the transaction.
The Underlying Causes of Action
31. The Plaintiffs sued Defendants alleging as causes of action: Breach of Contract,
Coversion, Breach of Fiduciary Duty, Fraud/Fraudulent Inducement, Civil Conspiracy, Aiding,
Abetting and Participation in Breach of Fiduciary Duty, Corporate Veil Piercing, Unjust
Enrichment, Quantum Meruit, and Money Had and Received and for an Accounting.
The Rule 11 Settlement Agreement
32. On or about August 5, 2014, while in the midst of taking the Court Ordered
depositions of the Defendants at the offices of Hawash Meade Gaston Neese & Cicack, LLP,
located at 2118 Smith Street, Houston, Harris County, Texas 77002, the parties entered into a
settlement negotiation and on August 5, 2014, entered into a Rule 11 Settlement Agreement on
the record. On August 6, 2014, the Defendants filed the Rule 11 Agreement with the Court.
33. The key elements of the agreement were:
A. Defendant 8650 Frisco, LLC d/b/a Estilo Gaucho Brazilian Steakhouse was to
pay to Cabrera Brothers II, LP, the amount of $900,000.00. The terms of
payment were $60,000.00 was to be paid upon completion of the paperwork
formalizing the settlement and the remainder to be paid monthly over 5 years at
6.7% interest. The initial payment under the note was to be due on October 1,
2014;
B. The Defendants further agreed to enter into “standard bank-type
documentation” for the note to include a “note or promissory note, a deed of trust,
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appropriate UC-1s to the extent Plaintiff determine it’s necessary, an assignment
of the lease and any assets related to the restaurant;
C. Time would be of essence in the agreements, and there would no cure time for
any default;
D. In the case of default, there was to be a $10.00 paid up license fee for use of
the name of the restaurant limited to that location; and,
E. The individual Defendants would not be liable under the note.
Plaintiffs ask that the Court take judicial notice of the Transcript of the Rule 11
Settlement Statement filed in this cause by the Defendants on August 6, 2014.
34. In August and September of 2014, Plaintiffs prepared and forwarded documents
to the Defendants for review and suggestion. These documents included a formal settlement
agreement which included the release of the individual Defendants, a promissory note, a UCC-1
listing as collateral for the note the assets of the restaurant; an assignment of interest in the lease,
all as required by the Rule 11 Agreement.
35. The Defendants made a number of suggestions to change these documents, most
of which were then included in the documents. Not all of Defendants changes were accepted,
most notably Plaintiffs refused to accept a venue selection clause in the documents requiring
venue of any action based on a breach of the agreement in Collin County, Texas.
36. Defendants have and continue to refuse to execute the settlement agreement or the
note and security documents as required by the Rule 11 Agreement.
37. On or about October 1, 2014, the Defendants did make the $60,000.00 down
payment and the first monthly payment under the proposed terms of the note. And, have made
the monthly payments through the January 1, 2015 payment as of the time of this filing.
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38. On or about October 9, 2014, Plaintiffs notified the Defendants that they were in
default of the settlement agreement absent the execution of the settlement agreement, the note,
the deed of trust and the appropriate security documents.
39. On or about October 10, 2014, Plaintiffs again notified the Defendants of the
default, ask for additional complaints about the documents as provided and made an offer to
change the documents to address the lone identified bone of contention (venue).
40. To date, Defendants have not responded to this request.
Causes of Action
I. Breach of Contract
41. The Defendants have breached the Rule 11 Agreement by failing to execute the
formal settlement agreement, the promissory note and the appropriate security documents as set
forth in the Rule 11 Agreement. By so doing, the Defendants are denying the Plaintiffs the
protection agreed to in case of default under payments of the amount agreed to.
Relief Requested
42. The plaintiffs seek judgment jointly and severally against all Defendants for
actual damages in the amount of $900,000.00 as agreed to under the Rule 11 agreement with
credit to be given for the amounts paid.
43. The plaintiffs seek their attorney’s fees and costs incurred in prosecuting these
claims.
44. The plaintiffs seek pre and post judgment interest and the maximum rate allowed
by law.
45. The plaintiffs seek all other relief, at law or in equity, to which the plaintiffs may
be entitled.
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Respectfully Submitted,
Stephens & Domnitz, PLLC
/s/ Kelly D. Stephens
Kelly D. Stephens
State Bar No. 19158300
P.O. Box 79734
2118 Smith Street
Houston, Texas 77279-9734
281-394-3287 (phone)
832-476-5460 (fax)
kstephens@stephensdomnitz.com
Hawash Meade Gaston
Neese & Cicack LLP
Andrew K. Meade
State Bar No. 24032854
Jeremy M. Masten
State Bar No. 24083454
Samuel B. Haren
State Bar No. 24059899
2118 Smith Street
Houston, Texas 77002
713-658-9001 (phone)
713-658-9011 (fax)
ameade@hmgnc.com
jmasten@hmgnc.com
sharen@hmgnc.com
Cox Smith Matthews Incorporated
David Kinder
State Bar No. 11432550
112 East Pecan Street, Suite 1800
San Antonio, Texas 78205
210-554-5500 (phone)
210-226-8395 (fax)
dkinder@coxsmith.com
Attorneys for Plaintiffs
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Certificate of Service
A true and correct copy of the foregoing has been served on all counsel of record via ECF
on January 21, 2014.
James C. Mosser
Nicholas D. Mosser
Mosser Law PLLC
17110 Dallas Pky, Suite 290
Dallas, Texas 75248
/s/ Kelly D Stephens
Kelly D. Stephens
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2/23/2015 8:37:36 PM
Chris Daniel - District Clerk Harris County
Envelope No. 4254256
By: JIMMY RODRIGUEZ
Filed: 2/23/2015 8:37:36 PM
Cause No. 2014-10896
Los Cucos Mexican Cafe VIII, Inc.; In the District Court of
Los Cucos Mexican Cafe IV, Inc.;
Manuel Cabrera; and Sergio Cabrera,
Plaintiffs
v.
Harris County, Texas
8650 Frisco, LLC d/b/a Estilo Gaucho
Brazilian Steakhouse; Mandona,
LLC; Galovelho, LLC; Bahtche,
LLC; Claudio Nunes; and David Jeiel
Rodrigues,
Defendants 133rd Judicial District
Supplement to Plaintiffs’ Fourth Amended Petition
1. Plaintiffs file this Supplement to Plaintiffs’ Fourth Amended Petition (the
“Supplement”) to clarify the relief requested in Plaintiffs’ Fourth Amended Petition (the
“Petition”). The Supplement does not replace the Petition.
2. Plaintiffs believe that the Petition gives fair notice of Plaintiffs’ need and request
for specific performance of the Rule 11 settlement agreement. See Stafford v. S. Vanity
Magazine, Inc., 231 S.W.3d 530, 535 (Tex. App.—Dallas 2007, pet. denied).
3. Out of an abundance of caution, Plaintiffs hereby expressly plead that, in the
event damages are not awarded in this action, (1) Defendants’ refusal to execute a promissory
note, settlement agreement, and other security agreements would constitute an irreparable harm
by exposing Plaintiffs to a credit risk they specifically contracted to avoid and (2) Plaintiffs
respectfully request that the Court order specific performance of Defendants’ obligations under
the Rule 11 settlement agreement, including, without limitation, the execution of a promissory
note, a settlement agreement, and a dismissal of its pending claim for declaratory relief.
Exhibit 2 A-12
Respectfully submitted,
Stephens & Domnitz, PLLC
/s/ Kelly D. Stephens
Kelly D. Stephens
State Bar No. 19158300
P.O. Box 79734
2118 Smith Street
Houston, Texas 77279-9734
281-394-3287 (phone)
832-476-5460 (fax)
kstephens@stephensdomnitz.com
Hawash Meade Gaston
Neese & Cicack LLP
Andrew K. Meade
State Bar No. 24032854
Jeremy M. Masten
State Bar No. 24083454
Samuel B. Haren
State Bar No. 24059899
2118 Smith Street
Houston, Texas 77002
713-658-9001 (phone)
713-658-9011 (fax)
ameade@hmgnc.com
jmasten@hmgnc.com
sharen@hmgnc.com
Cox Smith Matthews Incorporated
David Kinder
State Bar No. 11432550
112 East Pecan Street, Suite 1800
San Antonio, Texas 78205
210-554-4400 (phone)
210-226-8395 (fax)
dkinder@coxsmith.com
Attorneys for Plaintiffs
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Certificate of Service
A true and correct copy of the foregoing has been served on all counsel of record via
electronic service on February 23, 2015.
James C. Mosser
Nicholas D. Mosser
Mosser Law PLLC
17110 Dallas Pky, Suite 290
Dallas, Texas 75248
/s/ Samuel B. Haren
Samuel B. Haren
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MOTION TO COMPEL
1
1 REPORTER'S RECORD
VOLUME 1 OF 1 VOLUME
2 TRIAL COURT CAUSE NO. 2014-10896
3
4 LOS CUCOS MEXICAN CAFE VIII( IN THE DISTRICT COURT OF
INC.;LOS CUCOS MEXICAN (
5 CAFE IV,INC.; MANUEL (
CABRERA;AND SERGIO CABRERA (
6 (
VS. ( HARRIS COUNTY, TEXAS
7 (
8650 FRISCO,LLC D/B/A ESTILO
8 GAUCHO BRAZILIAN (
STEAKHOUSE; MANDONA,LLC; (
9 GALOVELHO,LLC;BAHTCHE, (
LLC; CLAUDIO NUNES; AND (
10 DAVID JEIEL RODRIGUES ( 133rd JUDICIAL DISTRICT
11 _______________________________________________________
12
MOTION TO TRANSFER
13 _______________________________________________________
14
15 On the 23rd day of June, 2014, the following
16 proceedings came on to be held in the above-titled and
17 numbered cause before the Honorable JACLANEL McFARLAND,
18 Judge Presiding, held in Houston, Harris County, Texas.
19 Proceedings reported by computerized stenotype
20 machine.
21
22
23 DARLENE STEIN
OFFICIAL COURT REPORTER
24 133RD DISTRICT COURT
HARRIS COUNTY, TEXAS
25
DARLENE STEIN
Exhibit 3 A-15
MOTION TO COMPEL
2
1 APPEARANCES
2 Mr. Andrew K. Meade
SBN 24032854
3 Mr. Samuel B. Haren
SBN 24059899
4 2118 Smith Street
Houston, Texas 77002
5 Telephone: (713)658-9001
Telephone: (713)658-9011 (Fax)
6 Attorney for Plaintiffs
7
Mr. Nicholas D. Mosser
8 SBN 24075405
Mr. James Mosser
9 SBN 00789784
17110 Dallas Parkway, Suite 290
10 Dallas, Texas97 75248
Telephone:) (972)733-3223
11 Telephone: (972)267-5072
Attorney for Defendants
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DARLENE STEIN
A-16
MOTION TO COMPEL
3
1 CHRONOLOGICAL INDEX
2 June 23, 2014
3 PAGE
4 Proceedings............................... 4
5 Argument by Mr. Meade..................... 6
6 Argument by Mr. Mosser.................... 11
7 Proceedings concluded..................... 25
8 Reporter's Certificate.................... 26
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DARLENE STEIN
A-17
MOTION TO COMPEL
4
1 (P R O C E E D I N G S)
2 June 23, 2014
3
4 THE COURT: This is Cause No. 2014-10896.
5 And if everyone would announce who they are and who they
6 represent, please.
7 MR. MEADE: Andrew Meade and Sam Haran for
8 the Plaintiffs.
9 THE COURT: Mr. Mosser, if you'll announce
10 who you are and who you represent, please.
11 MR. MOSSER: I'm sorry?
12 THE COURT: Announce who you are and who
13 you represent.
14 MR. MOSSER: Yes, ma'am. This is James
15 Mosser, Mosser Law Firm, PLLC, appearing telephonically
16 on behalf of all Defendants.
17 THE COURT: Okay. I will tell you that I
18 don't have the motions in front of me. My law clerks
19 have gone to get them. For some reason, even though you
20 are on the docket, they thought it had been pulled. So,
21 anyway, but I'm going to let y'all go ahead and start. I
22 think it's Plaintiff's motions. So, I'm going to let
23 them go ahead and start while the law clerks are bringing
24 in the actual written motions.
25 MR. MEADE: All right. Your Honor, if
DARLENE STEIN
A-18
MOTION TO COMPEL
5
1 you'll recall, this is a -- my client supplied about
2 $950,000 in some equipment for a restaurant --
3 MR. MOSSER: Your Honor, if he could get
4 closer to the microphone or speak up louder, it would be
5 easier to hear.
6 THE COURT: Yeah. Well, I'll put the
7 phone a little closer. But, you know, have you got a
8 storm in Dallas? Is that the problem or what? You know,
9 when you don't show up, it's -- we can only do the best
10 we can do.
11 You know, that's why when I practiced law,
12 I didn't depend on Southwest. Now, going to committee
13 meetings, I depended on Southwest a lot. I was on a lot
14 of Baptist boards that met over on North Washington, the
15 Baptist building. But when I had a case, I usually drove
16 down the night before or drove up or drove west or east or
17 wherever I was going.
18 MR. MEADE: And -- and for convenience,
19 Your Honor, we will try to set hearings in the case on
20 Fridays and Mondays to make that more convenient.
21 THE COURT: Well, we don't have hearings
22 on Fridays. So, they have to be on Mondays.
23 MR. MEADE: Mondays.
24 And so, the situation that we've got
25 here -- Your Honor will recall that we had previously
DARLENE STEIN
A-19
MOTION TO COMPEL
6
1 noticed depositions for early May of the Defendants, that
2 those depositions had been quashed. So, we set a Motion
3 to Compel. The Court ordered the depositions to occur in
4 June. We agreed on dates that were put into the Court's
5 order, which was June 9th and 10th for six depositions to
6 occur.
7 On the Sunday before -- June 9th was a
8 Monday. 10th was a Tuesday. On the Sunday before,
9 Mr. Mosser left a message on Mr. Stephen's phone, saying
10 that he wouldn't be attending the depositions nor would
11 his clients because -- and they subsequently filed a
12 motion. Mr. Mosser apparently has a nervous system injury
13 of some sort that he came down with the day before the
14 depositions. And there is nobody else within his
15 four-person law firm who's qualified to sit in a chair and
16 defend a deposition.
17 He then went and set his Motion to Transfer
18 Venue, offered us some dates in late July that -- or --
19 that conflict with a trial that I have in Judge
20 Englehart's court. And then when I rejected those dates,
21 offered dates in August.
22 And we have run into a problem now, which
23 is that I leave the country on Saturday for two and a half
24 weeks. I get back and have five days to prepare for a
25 week-long trial in Judge Englehart's court. And then at
DARLENE STEIN
A-20
MOTION TO COMPEL
7
1 the end of the week that I'm in trial with Judge Englehart
2 is their Motion to Transfer Venue. We have taken the
3 position, which is correct under the rules, that discovery
4 should not be and cannot be, in fact, abated while a
5 Motion to Transfer Venue is pending.
6 They have taken the position and even set
7 for today and then withdrew a Motion to Stay all
8 proceedings while they have the opportunity to have that
9 Motion to Transfer Venue heard.
10 We're going to have to take these
11 depositions before the Motion to Transfer Venue hearing.
12 We need them ordered and compelled, and we need the Motion
13 to Transfer Venue hearing pushed back till that can
14 happen.
15 But we also need Mr. Mosser or his clients
16 to pay the costs of the depositions that were ordered -- I
17 took Certificates of Nonappearance on all six
18 depositions -- and that they ought to have to bear the
19 cost on each of those.
20 The next issue that we have is as you'll
21 recall, we have an accountant that worked for the company
22 in New Braunfels and then a new accountant in Dallas. We
23 had the -- the letter and correspondence where they said,
24 you know, turn over all records and destroy all in your
25 possession. And -- and we had to move to compel the
DARLENE STEIN
A-21
MOTION TO COMPEL
8
1 accountant to produce the records from New Braunfels, and
2 he did produce the records to us.
3 But we have also asked for certain
4 financial records, including tax records and other
5 financial documents from the Defendants themselves; and
6 soon we will -- and, also, their new accountant, who will
7 soon have to come down on a Motion to Compel, as well,
8 although that's not part of today.
9 The -- the other issue that is part of
10 today is their responses and objections to our requests
11 for production, which deal with the financial and tax
12 records.
13 Starting with the tax records, there are
14 numerous reasons why as members of the company and --
15 that -- that we're entitled to the tax records of an LLC.
16 First of all, the statute allows it.
17 Second, we need to prepare our own tax
18 returns.
19 Third, how they chose to characterize our
20 capital contributions, the proportion of what is
21 characterized as a loan and capital contribution and all
22 of that is going to be relevant to the parties' agreement
23 or disagreement about our membership status and -- and how
24 much money is owed in terms of -- our position is that
25 part of the money was loaned and part of it was a capital
DARLENE STEIN
A-22
MOTION TO COMPEL
9
1 contribution, and -- and they may or may not disagree,
2 although they haven't disclosed their theory of the case
3 to us at all in any way. That will be relevant, those tax
4 records.
5 The other financial records, which include
6 bank account statements, we're -- we're entitled to the
7 books and records, again, of the company; but, also, these
8 bank account statements are going to be relevant to
9 whether distributions -- because under the -- under the
10 limited liability company act, under the partners' oral
11 agreement, and under the written agreements that were
12 exchanged, we would be entitled to distributions of
13 distributable cash.
14 None have been made to us. We believe some
15 have been made to the Defendants, substantial
16 distributions, and that there is distributable cash. We
17 believe that, but we don't have the records to show it,
18 and the bank statements will go a long ways towards that.
19 What we've met with to date is an objection
20 every step of the way and resistance even to Court-ordered
21 depositions. And -- and the objection that was made, for
22 example, to the accountant's records was that objection of
23 privilege that the Texas courts don't recognize. Well, it
24 was made again in response to requests for production
25 after the Court had already ruled on the objection in
DARLENE STEIN
A-23
MOTION TO COMPEL
10
1 relation to the accountant.
2 They made other objections; for example,
3 objecting that the Texas Finance Code provides the
4 exclusive means to get bank account statements, even bank
5 account statements of a party. I -- I assure you that I
6 will go to the bank, under the Texas Finance Code, and get
7 the bank statements separately. But that doesn't
8 alleviate the obligation of a party to produce those bank
9 statements.
10 So, a recommendation in -- in one of my
11 motions is really -- it's really -- we're asking for the
12 relief but sort of recommending a path for the Court,
13 would be to appoint a discovery master in the case. I
14 don't mind coming down here once a week, and I suspect we
15 will be back here again in a week. And I'll tell you why.
16 You know, we had these grills. I -- I
17 don't know if you remember the -- the unique grills.
18 Well, we have reason to believe that the grills have been
19 destroyed. And I've asked for an inspection of the
20 collateral, of -- of the property. They haven't responded
21 to it. I'm going to be asking the Court for it and
22 probably having to move it to compel.
23 When these depositions do occur, I suspect
24 I'm going to meet with a series of objections and probably
25 instructions to the witness not to answer and that sort of
DARLENE STEIN
A-24
MOTION TO COMPEL
11
1 thing. And I -- and we can have the depositions in your
2 chambers. I leave it to the Court's discretion of how we
3 deal with these issues; but I would rather, if we can
4 avoid it -- and I -- I know that judges, including
5 yourself, don't like us coming down here all the time on
6 Motions to Compel. I would like to avoid them, if
7 possible. And so, the appointment of a discovery master
8 is one suggestion to do that.
9 And I'll let Mr. Mosser respond.
10 THE COURT: Mr. Mosser?
11 MR. MOSSER: Yes, ma'am.
12 THE COURT: You may respond.
13 Hello?
14 MR. MOSSER: Yes, ma'am. I'm right here.
15 THE COURT: Where -- you want to respond?
16 MR. MOSSER: Oh, yes, ma'am. I surely
17 will. Thank you.
18 May it please the Court? Let me go
19 backwards a little bit here. Let's start with the grills
20 are being destroyed, which is a false statement made by
21 counsel. It has become custom in this case. The problem
22 is we sent notice to counsel that he should come and pick
23 up the grills, and counsel told us they weren't going to
24 pick up the grills.
25 So, we told them if they leave the grills
DARLENE STEIN
A-25
MOTION TO COMPEL
12
1 that they claim they loaned to my clients, we told them,
2 If you don't pick them up, we'll just put them in storage;
3 and you can pay the storage bill when you get here.
4 Nobody said they were going to destroy them, and it's just
5 outrageous that he would say those kinds of things.
6 As for bank accounts, the Finance Code does
7 provide the method by which he can obtain the bank
8 accounts. But let's assume he doesn't want to do that and
9 I'm required to deliver bank accounts. If the Court will
10 recall, he mentioned that he held a deposition on written
11 questions for Mr. -- I can't remember the accountant's
12 name -- Hal Holtman, I think -- to produce all the records
13 he had related to anything with my clients.
14 Now, if you will recall from the -- the
15 Temporary Injunction hearing, Mr. Holtman went and
16 testified on everything we told him he shouldn't be
17 testifying on; and then he subsequently, based on comment
18 from counsel this morning, delivered all the documents he
19 had to the Plaintiff's lawyers in this case. That
20 includes the tax returns, all bank statements, all the
21 income statements, all the financial statements,
22 everything related to the business until Mr. Holtman was
23 fired.
24 Now, the Court ordered that. Mr. Holtman
25 turned them over, over our objection. So, I don't think
DARLENE STEIN
A-26
MOTION TO COMPEL
13
1 that we're required to produce records in a duplicitous
2 manner that have already been produced by the accountant
3 in this case.
4 And, secondly, those documents were
5 produced to opposing counsel who has yet to this day
6 served them on us. When he gets discovery from whatever
7 source it's from, he's required to serve everybody in the
8 lawsuit, all parties, a copy of that discovery. He has
9 not done so. So, I don't have any.
10 Going back to the top of the complaint from
11 opposing counsel, I'm 69 years old; and I can't help it if
12 my sacral iliac joint gets sprained, inflamed, bruised,
13 and strained. I can't do anything about that. We
14 immediately notified, upon determination that I was
15 immobile, that this deposition had to be reset or
16 postponed.
17 I think it's outrageous that I can't even
18 pick up the phone and call a counsel for a medical problem
19 that he won't reset depositions for or even respond to the
20 telephone calls. I think it's outrageous that they file
21 motions claiming that they've had a conference with
22 opposing counsel, which is plainly false. They didn't
23 have any conference with us. In fact, they filed these
24 motions and then claimed that they had a conference after
25 they filed the motion.
DARLENE STEIN
A-27
MOTION TO COMPEL
14
1 As for offering dates, we offer to set a
2 date in July; and understanding trial schedules, as I do,
3 I was required to file a Motion to Continuance on -- let's
4 see -- that date that he wanted to do these, the 16th,
5 17th, somewhere in there because I had a special setting.
6 I had to go into that court and request the Court reset
7 the special setting in that case because of my sacral
8 iliac sprain.
9 I don't under -- I suppose five years ago
10 when I had my quadruple bypass surgery, opposing counsel
11 would complain because that was just an excuse. These are
12 not excuses. These are real-live things. We've offered a
13 second set of dates. Counsel didn't even respond to them.
14 Now, counsel also says that we don't -- we
15 should take depositions to get proof for the Motion to
16 Transfer Venue. I don't think the Motion to Transfer
17 Venue is set for today, but he puts it in his -- in his
18 response or his Third Amended Motion to Compel, and I
19 don't understand. He believes that the testimony given in
20 open court on the record and sworn to by his clients can't
21 be used in Motion to Transfer Venue. At some point in
22 time, the Court will have to rule on that motion; and I
23 will be happy to defend that issue.
24 As for costs, counsel fails to properly
25 prepare any cost statements, hasn't made any cost
DARLENE STEIN
A-28
MOTION TO COMPEL
15
1 statements, hasn't suffered from any problems other than
2 my sacral iliac joint sprain; and I don't think he would
3 like me sitting in his conference room, taking the
4 narcotics that I was taking and the side effects that go
5 with it.
6 So, he has all of the financial records we
7 believe that exist, delivered by Holtman over our
8 objection. He did not properly serve the accountant --
9 the new accountant in Texas, which is more than 150 miles
10 and -- away, and he doesn't have a right to get anything
11 from him.
12 And as for tax records from the LLC,
13 they're not members. They never have been members.
14 They're not members. They rejected the opportunity to
15 become a member, and that's clear testimony in the
16 Temporary Injunction hearing.
17 So, I think I've covered the waterfront.
18 But as far as tax returns, the State of Texas has made
19 very clear by the Supreme Court and the Court of Appeals
20 in Houston -- I think every Court of Appeals has said it
21 is an abuse of discretion requiring the disclosure of
22 Federal income tax returns if other documents can provide
23 the information necessary.
24 But in order to even search out and get
25 that information, opposing counsel is required to provide
DARLENE STEIN
A-29
MOTION TO COMPEL
16
1 the relevancy and materiality that's necessary as to his
2 claims. He has none. He hasn't presented any. He hasn't
3 asked for any. He hasn't said a single word that shows
4 that a tax return, a financial statement, or any of these
5 other intrusive and burdensome matters are necessary for
6 his claims. And the Court should deny his motions in
7 total.
8 Thank you.
9 THE COURT: When do you want to take the
10 depositions?
11 MR. MEADE: Well --
12 MR. MOSSER: I'm sorry, Judge?
13 THE COURT: I'm -- I'm asking your
14 opposing counsel when he wants to take the depositions.
15 MR. MEADE: I knew you were going to ask
16 that, and I think the simplest answer to that is before
17 the Motion to Transfer Venue is heard.
18 THE COURT: Okay.
19 MR. MEADE: The more complex answer is
20 after the week of the 21st of July because I have a trial
21 that entire week. But we are set number one. So, we
22 will go; and I will be done that week because it's a
23 breach of contract case.
24 So, following that week, I only have one
25 day that I have a -- I have a deposition currently set
DARLENE STEIN
A-30
MOTION TO COMPEL
17
1 that I'm defending on the 28th of July. Otherwise, I am
2 wide open to -- to take these depositions.
3 THE COURT: Okay. Counsel, you heard
4 that, I assume. So, pick a date after his trial in Judge
5 Englehart's court and not on July -- what?
6 MR. MEADE: 28th.
7 THE COURT: -- 28th that you can produce
8 your people for depositions.
9 MR. MOSSER: I'm looking at the calendar
10 now, Judge.
11 THE COURT: Okay.
12 MR. MOSSER: I would recommend August 4th
13 and 5th, and I -- I would like to also add, Judge, that
14 four of the depositions that were set, two of them -- on
15 two separate days, two of them were set at exactly the
16 same time. And then the next day, two more were set at
17 exactly the same time, which I would discourage that
18 concept as appropriate.
19 MR. MEADE: And -- and here would be my
20 response. If Mr. Mosser would cooperate with me --
21 MR. MOSSER: But the 4th and the 5th are
22 good with me, Judge.
23 MR. MEADE: If Mr. Mosser would cooperate
24 with me a little bit and let me know -- these are an
25 individual -- two individuals and four corporate
DARLENE STEIN
A-31
MOTION TO COMPEL
18
1 representatives who may be, and I suspect will be, those
2 same individuals -- could all be taken possibly at the
3 same time or concurrently with each other. But
4 Mr. Mosser hasn't identified who are -- who's going to be
5 the corporate representative. So, I don't know how else
6 to do it.
7 If he will identify who will be the
8 corporate representatives for those entities, I will
9 notice the -- the depositions so that they don't conflict
10 timewise with one other another.
11 MR. MOSSER: As you previously noticed,
12 the doc -- the areas of inquiry, Mr. Rodriguez will be
13 the deponent.
14 MR. MEADE: On all, Mr. Mosser?
15 MR. MOSSER: Yes.
16 MR. MEADE: Okay. Then I will -- I will
17 set it up so that they don't conflict with one another.
18 MR. MOSSER: Thank you.
19 THE COURT: Okay. So, pick, the 4th of
20 the 5th of August?
21 MR. MEADE: It will be both, Your Honor.
22 THE COURT: Oh, both.
23 MR. MEADE: Yeah.
24 THE COURT: Okay. All right. The
25 depositions are set for the 4th and the 5th. And
DARLENE STEIN
A-32
MOTION TO COMPEL
19
1 Plaintiff's counsel will send notice, but they are now
2 set. He'll send notice as to time and place, I assume,
3 which I assume you've already -- where -- where are they
4 going to be?
5 MR. MEADE: Well, as Mr. Mosser doesn't
6 have an office here in Houston --
7 THE COURT: Okay.
8 MR. MEADE: -- I'm just going to do them
9 at my offices here in Houston, Your Honor.
10 THE COURT: Right. And I presume that's
11 okay with you, Mr. Mosser?
12 MR. MOSSER: Oh, yes, ma'am, that's fine
13 with me.
14 THE COURT: Okay. Now, as to fees of the
15 nonappearance, I'm not going to order anything at this
16 time. I will consider it later as the case progresses,
17 depending on how discovery goes. So, I will just hold
18 that under advisement.
19 What else was there?
20 MR. MEADE: The objections, which I think
21 lie in the Third Motion to Compel, which are Motions to
22 Compel the responses to discovery that ask for a
23 variety -- it's -- it's a variety of financial
24 information, including bank statements and -- and tax
25 returns.
DARLENE STEIN
A-33
MOTION TO COMPEL
20
1 THE COURT: Mr. Mosser, have -- does your
2 client have the bank statements?
3 MR. MOSSER: I'm sorry, Judge?
4 THE COURT: Does your client have the bank
5 statements?
6 MR. MOSSER: I think Mr. Holtman has them,
7 and opposing counsel has collected everything Holtman
8 has. And I would like the Court to order opposing
9 counsel to deliver those documents that he got from the
10 third-party witness Holtman to us.
11 THE COURT: Well, let me ask -- that --
12 that wasn't my question.
13 MR. MOSSER: I understand.
14 THE COURT: My question is: Does your
15 client have them?
16 MR. MOSSER: No. I think -- I think
17 Holtman has them all.
18 THE COURT: So, your client didn't keep a
19 copy?
20 MR. MOSSER: Nobody sends out copies of
21 bank statements any more, Judge.
22 THE COURT: Sure they do. I get them
23 every month.
24 MR. MOSSER: I appreciate that, Your
25 Honor. Let me put it a different way. Many businesses
DARLENE STEIN
A-34
MOTION TO COMPEL
21
1 do not get bank statement in paper form.
2 THE COURT: Well, do they get them
3 electronically where they can print them out?
4 MR. MOSSER: My understanding, Your Honor,
5 is that Holtman has all the bank statements.
6 THE COURT: So, your client doesn't get
7 the e-mail saying, Your bank statement is ready to be
8 printed out; or they can't go in and print it out?
9 MR. MOSSER: I haven't made that
10 particular inquiry.
11 THE COURT: Yeah.
12 MR. MOSSER: Because they're with the bank
13 and the accountant.
14 THE COURT: Well, my guess is your client
15 has access to them by -- if they -- if they're not like
16 me and they don't pay to get a paper statement or get a
17 paper statement, they get an e-mail saying, Your bank
18 statement is online. And you just log in, and you can
19 print it out.
20 MR. MOSSER: I understand what the Court
21 is saying, but my suggestion is that they already have
22 all of that stuff. They got it from Holtman.
23 MR. MEADE: Your Honor, if I -- if I could
24 add one -- as Your Honor may recall, they -- the
25 Defendants fired Mr. Holtman, who is the CPA, from the
DARLENE STEIN
A-35
MOTION TO COMPEL
22
1 company in March, terminated my client's access and his
2 access to all of the bank accounts. Then -- then hired a
3 new accountant located up in Dallas and identified him as
4 the new CPA, to which Holtman was supposed to and did
5 send all of the information.
6 As far as account statements, the -- it's
7 an ongoing duty, in fact, and they -- they have the
8 duty -- even if, in fact, we had gotten all of the
9 information and -- and Mr. Mosser has just said he doesn't
10 actually know what we've gotten. Even if had gotten all
11 of the information, it wouldn't alleviate their
12 responsibility to produce it, too, because, for example,
13 we might be missing a page of a bank statement. We might
14 want to use a 173, you know, authentication means for the
15 documents.
16 But there are certainly post termination of
17 Mr. Holtman, zero financial records that we have access to
18 but that the Defendants have access, custody, and control
19 over those documents exclusively; and that's what we're
20 asking for.
21 THE COURT: Okay. So --
22 MR. MEADE: Their current accountant has
23 all of it, and they have all of it.
24 THE COURT: All right.
25 MR. MOSSER: Well, we don't really know
DARLENE STEIN
A-36
MOTION TO COMPEL
23
1 that.
2 THE COURT: Well, I'm going to overrule
3 your objections and tell you to produce it if it's
4 available to you.
5 MR. MOSSER: From the time that Holtman
6 was terminated? Because they already have everything
7 else.
8 THE COURT: No. Just from what they've
9 requested.
10 MR. MOSSER: And will you order them to
11 deliver us what Holtman has?
12 MR. MEADE: I don't need to be ordered to,
13 Your Honor. I will -- I haven't had him even ask me. If
14 you send me a letter asking for it --
15 THE COURT: Well, he's asking now. Send
16 it to him.
17 MR. MEADE: I'll send it to him, Your
18 Honor.
19 THE COURT: Yeah. I'm not going to order
20 him, but he -- he said on the record now he's going to
21 send you copies of it.
22 MR. MEADE: Well, in fact, if it's
23 easiest, I will upload it onto FPT link; and you can
24 download it from your computer today.
25 THE COURT: You want to do that, Counsel?
DARLENE STEIN
A-37
MOTION TO COMPEL
24
1 MR. MOSSER: Which kind of link?
2 THE COURT: I don't know. It's over my
3 head.
4 MR. MEADE: I will suggest a couple of
5 means by which I can deliver the documents to you,
6 Mr. Mosser.
7 THE COURT: He will -- he will get them to
8 you.
9 MR. MEADE: You can choose the most
10 convenient means to you.
11 THE COURT: Okay. On the -- I've looked
12 at the interrogatories, your objections are overruled.
13 What else have we got?
14 MR. MEADE: The requests for production
15 objections that were --
16 THE COURT: Yeah, and they're overruled,
17 also.
18 Anything else?
19 MR. MEADE: And -- nothing else unless
20 Your Honor -- and I -- and from what Your Honor said
21 earlier, I think you're not inclined to appoint a master
22 at this --
23 THE COURT: I'm not.
24 MR. MEADE: -- point in the discovery.
25 So, I won't --
DARLENE STEIN
A-38
Motion to Compel
25
1 THE COURT: And we will reset --
2 MR. MEADE: -- belabor the point.
3 THE COURT: -- the motion for change of
4 venue until after the deposition.
5 MR. MEADE: Thank you, Your Honor.
6 Nothing else today.
7 THE COURT: Anything else?
8 MR. MOSSER: No, Your Honor.
9 THE COURT: Counsel, I hope you feel
10 better. I know --
11 MR. MOSSER: Thank you very much, Judge.
12 THE COURT: I know how it feels to get
13 older, but...
14 MR. MOSSER: I appreciate it, Judge.
15 THE COURT: Okay. Thank you.
16 MR. MOSSER: Yes, ma'am.
17 MR. MEADE: Thank you. Have a good week,
18 Your Honor.
19 THE COURT: Thank you.
20 (Proceedings concluded.)
21
22
23
24
25
DARLENE STEIN
A-39
Motion to Compel
26
1 STATE OF TEXAS
2 COUNTY OF HARRIS
3 I, DARLENE STEIN, Official Court Reporter in and
4 for the 133rd District Court of Harris, State of
5 Texas, do hereby certify that the above and foregoing
6 contains a true and correct transcription of all
7 portions of evidence and other proceedings requested
8 in writing by counsel for the parties to be included
9 in this volume of the Reporter's Record in the
10 above-styled and numbered cause, all of which
11 occurred in open court or in chambers and were
12 reported by me.
13 I further certify that this Reporter's Record of
14 the proceedings truly and correctly reflects the
15 exhibits, if any, offered by the respective parties.
16 I further certify that the total cost for the
17 preparation of this Reporter's Record is $312.00 and
18 was paid by Mr. Andrew Meade.
19
/s/Darlene Stein_________
20 DARLENE STEIN, CSR
Texas CSR 2557
21 Official Court Reporter
133rd District Court
22 Harris County, Texas
201 Caroline, 11th Floor
23 Houston, Texas 77002
Telephone: (713) 368-6402
24 Expiration: 12/31/2014
25
DARLENE STEIN
A-40
Exhibit 4 A-41
A-42
Exhibit 5 A-43
Exhibit 6 A-44
A-45
5/4/2015 2:00:20 PM
Chris Daniel - District Clerk Harris County
Envelope No. 5138641
By: JIMMY RODRIGUEZ
Filed: 5/4/2015 2:00:20 PM
Cause No. 2014-10896
Los Cucos Mexican Cafe VIII, Inc.; In the District Court of
Los Cucos Mexican Cafe IV, Inc.;
Manuel Cabrera; and Sergio Cabrera,
Plaintiffs
v.
Harris County, Texas
8650 Frisco, LLC d/b/a Estilo Gaucho
Brazilian Steakhouse; Mandona,
LLC; Galovelho, LLC; Bahtche,
LLC; Claudio Nunes; and David Jeiel
Rodrigues,
Defendant 133rd Judicial District
Plaintiffs’ Fourth Motion to Enforce the Court’s Order and for Sanctions
The Court has ordered Plaintiffs to produce certain financial documents on four separate
occasions. Defendants have refused to do so. Plaintiffs request that the Court obviate the need for
further document production by striking Defendants’ pleadings.
Background
At a June 23, 2014 hearing, the Court orally ordered Defendants to produce certain
financial documents. Exhibit 1, Transcript of Motion to Compel Hearing at 23:2–9. Defendants
pretended that, they “ha[d] never been served with an order from the court to produce
documents,” they were not required to do so. Exhibit 2 Letter from Mosser to Stephens. On July
28, 2014, the Court again ordered Defendants to produce all responsive documents “by August 1,
2014.” Exhibit 3, Order on Plaintiffs’ Third Motion to Compel. Defendants improperly served an
inadequate production. On March 30, 2015, the Court ordered Defendants a third time to produce
all responsive documents “by 5:00 p.m. on Wednesday, April 1, 2015.” Exhibit 4, Order on
Plaintiffs’ Second Motion to Enforce the Court’s Order. Defendants again violated the Court’s
order by making a woefully incomplete production.
Exhibit 7 A-46
On the morning of Monday, April 27, the Court ordered Defendants to (1) produce all
responsive documents and (2) pay a $1,000 sanction. Exhibit 5, Order Granting Plaintiffs’ Third
Motion to Enforce the Court’s Order. The Court further ordered that, “[s]hould Defendants fail to
comply with this order within forty-eight hours of the signature hereof, Defendants and their
attorneys of record will be asked to personally appear and show cause as to why they should be
held in contempt of this Court.” Id. Once again, Defendants ignored this order.
On Thursday, April 30, Plaintiffs informed Defendants of their failure to comply with the
Court’s order and demanded production of the documents and payment of the sanction before
noon on Monday, May 4. Exhibit 6, Letter from Haren to Mosser. At 4:50 p.m. on Friday,
May 1, Defendants sent the following response:
Exhibit 7, Letter from Mosser to Stephens. Even though the order was available from the Court’s
office and through the District Clerk’s website, Plaintiffs forwarded a copy of the order to
Defendants on Sunday, May 3. Exhibit 8, Letter from Haren to Mosser.
Background
The Court has ordered Defendants to produce certain documents on four separate
occasions. Defendants have refused or failed to comply all four times. Defendants’ most recent is
excuse is that they were not “served” a copy of the Court’s order. See Exhibit 7, Letter from
Mosser to Stephens As the Court may recall, this was the same explanation Defendants offered
2
A-47
for their failure to comply with the original order compelling production. See Exhibit 2, Letter
from Mosser to Stephens. This excuse was invalid both times it was made. Regardless of
whether Defendants “served” a copy of the Court’s order, “[t]he law charges all parties and their
lawyers with notice of all orders and judgments that the court renders in the case.” Welborn
Mortg. Corp. v. Knowles, 854 S.W.2d 328, 331 (Tex. App.—Dallas 1993, writ denied). For this
reason alone, Defendants are deemed to have known the contents of the Court’s order.
Moreover, “[t]he law charges one who has knowledge of facts that would cause a prudent
man to inquire further with notice of the facts that, by use of ordinary intelligence, he would
have learned.” Id. Defendants appeared at the April 27 hearing telephonically, so they were
aware that the Court ordered them to produce documents and pay a sanction. Defendants were
further aware that copies of the order could have been easily obtained by calling the Court’s
clerk or by visiting the District Clerk’s website. A reasonably prudent attorney who was ordered
to pay a sanction and produce documents would make an effort to obtain such orders rather than
remaining deliberately ignorant.
Further, Defendants received actual notice at 1:57 p.m. on April 30 that the Court had
signed an order requiring Defendants produce documents and pay a sanction within 48 hours.
See Exhibit 6, Letter from Haren to Mosser. Thus, Defendants had at least 94 hours between
receipt of actual notice of the terms of the Court’s order and the filing of this motion.
As a sanction for Defendants’ fourth failure to comply with the Court’s order, Plaintiffs
ask the Court to order that:
Defendants’ attorneys pay Plaintiffs a sanction for all attorneys’ fees incurred in
attempting to obtain the requested documents;
Defendants and their attorneys appear and show cause as to why they should not be
held in contempt; and
Defendants be disallowed from conducting any discovery in this case.
3
A-48
Plaintiffs are hopeful that such a sanction will be sufficient to ensure future compliance
with the Court’s orders and Defendants’ obligations under the Texas Rules of Civil Procedure.
Conclusion
Defendants continue to ignore the Court’s orders. Plaintiffs pray that the Court further
sanction Defendants and order Defendants and their attorneys to show cause as to why they
should not be held in contempt. Plaintiffs further pray for all other relief to which they are
entitled.
Respectfully submitted,
Hawash Meade Gaston
Neese & Cicack LLP
/s/ Samuel B. Haren
Andrew K. Meade
State Bar No. 24032854
Jeremy M. Masten
State Bar No. 24083454
Samuel B. Haren
State Bar No. 24059899
2118 Smith Street
Houston, Texas 77002
713-658-9001 (phone)
713-658-9011 (fax)
ameade@hmgnc.com
jmasten@hmgnc.com
sharen@hmgnc.com
Stephens & Domnitz, PLLC
Kelly D. Stephens
State Bar No. 19158300
P.O. Box 79734
Houston, Texas 77279-9734
281-394-3287 (phone)
832-476-5460 (fax)
kstephens@stephensdomnitz.com
4
A-49
Cox Smith Matthews Incorporated
David Kinder
State Bar No. 11432550
112 East Pecan Street, Suite 1800
San Antonio, Texas 78205
210-554-5500 (phone)
210-226-8395 (fax)
Attorneys for Plaintiffs
Certificate of Conference
I sent two letters to opposing counsel in an effort to obtain the documents and payment
without further judicial intervention. I further tripled the time for compliance from the two days
allowed by the Court to six. Despite this, Defendants still have not complied with the Court’s
order.
/s/ Samuel B. Haren
Samuel B. Haren
Certificate of Service
A true and correct copy of the foregoing has been served on all counsel of record via
electronic service on May 4, 2015.
James C. Mosser
Nicholas D. Mosser
Mosser Law PLLC
17110 Dallas Pky, Suite 290
Dallas, Texas 75248
/s/ Samuel B. Haren
Samuel B. Haren
5
A-50
MOTION TO COMPEL
1
1 REPORTER'S RECORD
VOLUME 1 OF 1 VOLUME
2 TRIAL COURT CAUSE NO. 2014-10896
3
4 LOS CUCOS MEXICAN CAFE VIII( IN THE DISTRICT COURT OF
INC.;LOS CUCOS MEXICAN (
5 CAFE IV,INC.; MANUEL (
CABRERA;AND SERGIO CABRERA (
6 (
VS. ( HARRIS COUNTY, TEXAS
7 (
8650 FRISCO,LLC D/B/A ESTILO
8 GAUCHO BRAZILIAN (
STEAKHOUSE; MANDONA,LLC; (
9 GALOVELHO,LLC;BAHTCHE, (
LLC; CLAUDIO NUNES; AND (
10 DAVID JEIEL RODRIGUES ( 133rd JUDICIAL DISTRICT
11 _______________________________________________________
12
MOTION TO TRANSFER
13 _______________________________________________________
14
15 On the 23rd day of June, 2014, the following
16 proceedings came on to be held in the above-titled and
17 numbered cause before the Honorable JACLANEL McFARLAND,
18 Judge Presiding, held in Houston, Harris County, Texas.
19 Proceedings reported by computerized stenotype
20 machine.
21
22
23 DARLENE STEIN
OFFICIAL COURT REPORTER
24 133RD DISTRICT COURT
HARRIS COUNTY, TEXAS
25
DARLENE STEIN
Exhibit 1 A-51
MOTION TO COMPEL
2
1 APPEARANCES
2 Mr. Andrew K. Meade
SBN 24032854
3 Mr. Samuel B. Haren
SBN 24059899
4 2118 Smith Street
Houston, Texas 77002
5 Telephone: (713)658-9001
Telephone: (713)658-9011 (Fax)
6 Attorney for Plaintiffs
7
Mr. Nicholas D. Mosser
8 SBN 24075405
Mr. James Mosser
9 SBN 00789784
17110 Dallas Parkway, Suite 290
10 Dallas, Texas97 75248
Telephone:) (972)733-3223
11 Telephone: (972)267-5072
Attorney for Defendants
12
13
14
15
16
17
18
19
20
21
22
23
24
25
DARLENE STEIN
A-52
MOTION TO COMPEL
3
1 CHRONOLOGICAL INDEX
2 June 23, 2014
3 PAGE
4 Proceedings............................... 4
5 Argument by Mr. Meade..................... 6
6 Argument by Mr. Mosser.................... 11
7 Proceedings concluded..................... 25
8 Reporter's Certificate.................... 26
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
DARLENE STEIN
A-53
MOTION TO COMPEL
4
1 (P R O C E E D I N G S)
2 June 23, 2014
3
4 THE COURT: This is Cause No. 2014-10896.
5 And if everyone would announce who they are and who they
6 represent, please.
7 MR. MEADE: Andrew Meade and Sam Haran for
8 the Plaintiffs.
9 THE COURT: Mr. Mosser, if you'll announce
10 who you are and who you represent, please.
11 MR. MOSSER: I'm sorry?
12 THE COURT: Announce who you are and who
13 you represent.
14 MR. MOSSER: Yes, ma'am. This is James
15 Mosser, Mosser Law Firm, PLLC, appearing telephonically
16 on behalf of all Defendants.
17 THE COURT: Okay. I will tell you that I
18 don't have the motions in front of me. My law clerks
19 have gone to get them. For some reason, even though you
20 are on the docket, they thought it had been pulled. So,
21 anyway, but I'm going to let y'all go ahead and start. I
22 think it's Plaintiff's motions. So, I'm going to let
23 them go ahead and start while the law clerks are bringing
24 in the actual written motions.
25 MR. MEADE: All right. Your Honor, if
DARLENE STEIN
A-54
MOTION TO COMPEL
5
1 you'll recall, this is a -- my client supplied about
2 $950,000 in some equipment for a restaurant --
3 MR. MOSSER: Your Honor, if he could get
4 closer to the microphone or speak up louder, it would be
5 easier to hear.
6 THE COURT: Yeah. Well, I'll put the
7 phone a little closer. But, you know, have you got a
8 storm in Dallas? Is that the problem or what? You know,
9 when you don't show up, it's -- we can only do the best
10 we can do.
11 You know, that's why when I practiced law,
12 I didn't depend on Southwest. Now, going to committee
13 meetings, I depended on Southwest a lot. I was on a lot
14 of Baptist boards that met over on North Washington, the
15 Baptist building. But when I had a case, I usually drove
16 down the night before or drove up or drove west or east or
17 wherever I was going.
18 MR. MEADE: And -- and for convenience,
19 Your Honor, we will try to set hearings in the case on
20 Fridays and Mondays to make that more convenient.
21 THE COURT: Well, we don't have hearings
22 on Fridays. So, they have to be on Mondays.
23 MR. MEADE: Mondays.
24 And so, the situation that we've got
25 here -- Your Honor will recall that we had previously
DARLENE STEIN
A-55
MOTION TO COMPEL
6
1 noticed depositions for early May of the Defendants, that
2 those depositions had been quashed. So, we set a Motion
3 to Compel. The Court ordered the depositions to occur in
4 June. We agreed on dates that were put into the Court's
5 order, which was June 9th and 10th for six depositions to
6 occur.
7 On the Sunday before -- June 9th was a
8 Monday. 10th was a Tuesday. On the Sunday before,
9 Mr. Mosser left a message on Mr. Stephen's phone, saying
10 that he wouldn't be attending the depositions nor would
11 his clients because -- and they subsequently filed a
12 motion. Mr. Mosser apparently has a nervous system injury
13 of some sort that he came down with the day before the
14 depositions. And there is nobody else within his
15 four-person law firm who's qualified to sit in a chair and
16 defend a deposition.
17 He then went and set his Motion to Transfer
18 Venue, offered us some dates in late July that -- or --
19 that conflict with a trial that I have in Judge
20 Englehart's court. And then when I rejected those dates,
21 offered dates in August.
22 And we have run into a problem now, which
23 is that I leave the country on Saturday for two and a half
24 weeks. I get back and have five days to prepare for a
25 week-long trial in Judge Englehart's court. And then at
DARLENE STEIN
A-56
MOTION TO COMPEL
7
1 the end of the week that I'm in trial with Judge Englehart
2 is their Motion to Transfer Venue. We have taken the
3 position, which is correct under the rules, that discovery
4 should not be and cannot be, in fact, abated while a
5 Motion to Transfer Venue is pending.
6 They have taken the position and even set
7 for today and then withdrew a Motion to Stay all
8 proceedings while they have the opportunity to have that
9 Motion to Transfer Venue heard.
10 We're going to have to take these
11 depositions before the Motion to Transfer Venue hearing.
12 We need them ordered and compelled, and we need the Motion
13 to Transfer Venue hearing pushed back till that can
14 happen.
15 But we also need Mr. Mosser or his clients
16 to pay the costs of the depositions that were ordered -- I
17 took Certificates of Nonappearance on all six
18 depositions -- and that they ought to have to bear the
19 cost on each of those.
20 The next issue that we have is as you'll
21 recall, we have an accountant that worked for the company
22 in New Braunfels and then a new accountant in Dallas. We
23 had the -- the letter and correspondence where they said,
24 you know, turn over all records and destroy all in your
25 possession. And -- and we had to move to compel the
DARLENE STEIN
A-57
MOTION TO COMPEL
8
1 accountant to produce the records from New Braunfels, and
2 he did produce the records to us.
3 But we have also asked for certain
4 financial records, including tax records and other
5 financial documents from the Defendants themselves; and
6 soon we will -- and, also, their new accountant, who will
7 soon have to come down on a Motion to Compel, as well,
8 although that's not part of today.
9 The -- the other issue that is part of
10 today is their responses and objections to our requests
11 for production, which deal with the financial and tax
12 records.
13 Starting with the tax records, there are
14 numerous reasons why as members of the company and --
15 that -- that we're entitled to the tax records of an LLC.
16 First of all, the statute allows it.
17 Second, we need to prepare our own tax
18 returns.
19 Third, how they chose to characterize our
20 capital contributions, the proportion of what is
21 characterized as a loan and capital contribution and all
22 of that is going to be relevant to the parties' agreement
23 or disagreement about our membership status and -- and how
24 much money is owed in terms of -- our position is that
25 part of the money was loaned and part of it was a capital
DARLENE STEIN
A-58
MOTION TO COMPEL
9
1 contribution, and -- and they may or may not disagree,
2 although they haven't disclosed their theory of the case
3 to us at all in any way. That will be relevant, those tax
4 records.
5 The other financial records, which include
6 bank account statements, we're -- we're entitled to the
7 books and records, again, of the company; but, also, these
8 bank account statements are going to be relevant to
9 whether distributions -- because under the -- under the
10 limited liability company act, under the partners' oral
11 agreement, and under the written agreements that were
12 exchanged, we would be entitled to distributions of
13 distributable cash.
14 None have been made to us. We believe some
15 have been made to the Defendants, substantial
16 distributions, and that there is distributable cash. We
17 believe that, but we don't have the records to show it,
18 and the bank statements will go a long ways towards that.
19 What we've met with to date is an objection
20 every step of the way and resistance even to Court-ordered
21 depositions. And -- and the objection that was made, for
22 example, to the accountant's records was that objection of
23 privilege that the Texas courts don't recognize. Well, it
24 was made again in response to requests for production
25 after the Court had already ruled on the objection in
DARLENE STEIN
A-59
MOTION TO COMPEL
10
1 relation to the accountant.
2 They made other objections; for example,
3 objecting that the Texas Finance Code provides the
4 exclusive means to get bank account statements, even bank
5 account statements of a party. I -- I assure you that I
6 will go to the bank, under the Texas Finance Code, and get
7 the bank statements separately. But that doesn't
8 alleviate the obligation of a party to produce those bank
9 statements.
10 So, a recommendation in -- in one of my
11 motions is really -- it's really -- we're asking for the
12 relief but sort of recommending a path for the Court,
13 would be to appoint a discovery master in the case. I
14 don't mind coming down here once a week, and I suspect we
15 will be back here again in a week. And I'll tell you why.
16 You know, we had these grills. I -- I
17 don't know if you remember the -- the unique grills.
18 Well, we have reason to believe that the grills have been
19 destroyed. And I've asked for an inspection of the
20 collateral, of -- of the property. They haven't responded
21 to it. I'm going to be asking the Court for it and
22 probably having to move it to compel.
23 When these depositions do occur, I suspect
24 I'm going to meet with a series of objections and probably
25 instructions to the witness not to answer and that sort of
DARLENE STEIN
A-60
MOTION TO COMPEL
11
1 thing. And I -- and we can have the depositions in your
2 chambers. I leave it to the Court's discretion of how we
3 deal with these issues; but I would rather, if we can
4 avoid it -- and I -- I know that judges, including
5 yourself, don't like us coming down here all the time on
6 Motions to Compel. I would like to avoid them, if
7 possible. And so, the appointment of a discovery master
8 is one suggestion to do that.
9 And I'll let Mr. Mosser respond.
10 THE COURT: Mr. Mosser?
11 MR. MOSSER: Yes, ma'am.
12 THE COURT: You may respond.
13 Hello?
14 MR. MOSSER: Yes, ma'am. I'm right here.
15 THE COURT: Where -- you want to respond?
16 MR. MOSSER: Oh, yes, ma'am. I surely
17 will. Thank you.
18 May it please the Court? Let me go
19 backwards a little bit here. Let's start with the grills
20 are being destroyed, which is a false statement made by
21 counsel. It has become custom in this case. The problem
22 is we sent notice to counsel that he should come and pick
23 up the grills, and counsel told us they weren't going to
24 pick up the grills.
25 So, we told them if they leave the grills
DARLENE STEIN
A-61
MOTION TO COMPEL
12
1 that they claim they loaned to my clients, we told them,
2 If you don't pick them up, we'll just put them in storage;
3 and you can pay the storage bill when you get here.
4 Nobody said they were going to destroy them, and it's just
5 outrageous that he would say those kinds of things.
6 As for bank accounts, the Finance Code does
7 provide the method by which he can obtain the bank
8 accounts. But let's assume he doesn't want to do that and
9 I'm required to deliver bank accounts. If the Court will
10 recall, he mentioned that he held a deposition on written
11 questions for Mr. -- I can't remember the accountant's
12 name -- Hal Holtman, I think -- to produce all the records
13 he had related to anything with my clients.
14 Now, if you will recall from the -- the
15 Temporary Injunction hearing, Mr. Holtman went and
16 testified on everything we told him he shouldn't be
17 testifying on; and then he subsequently, based on comment
18 from counsel this morning, delivered all the documents he
19 had to the Plaintiff's lawyers in this case. That
20 includes the tax returns, all bank statements, all the
21 income statements, all the financial statements,
22 everything related to the business until Mr. Holtman was
23 fired.
24 Now, the Court ordered that. Mr. Holtman
25 turned them over, over our objection. So, I don't think
DARLENE STEIN
A-62
MOTION TO COMPEL
13
1 that we're required to produce records in a duplicitous
2 manner that have already been produced by the accountant
3 in this case.
4 And, secondly, those documents were
5 produced to opposing counsel who has yet to this day
6 served them on us. When he gets discovery from whatever
7 source it's from, he's required to serve everybody in the
8 lawsuit, all parties, a copy of that discovery. He has
9 not done so. So, I don't have any.
10 Going back to the top of the complaint from
11 opposing counsel, I'm 69 years old; and I can't help it if
12 my sacral iliac joint gets sprained, inflamed, bruised,
13 and strained. I can't do anything about that. We
14 immediately notified, upon determination that I was
15 immobile, that this deposition had to be reset or
16 postponed.
17 I think it's outrageous that I can't even
18 pick up the phone and call a counsel for a medical problem
19 that he won't reset depositions for or even respond to the
20 telephone calls. I think it's outrageous that they file
21 motions claiming that they've had a conference with
22 opposing counsel, which is plainly false. They didn't
23 have any conference with us. In fact, they filed these
24 motions and then claimed that they had a conference after
25 they filed the motion.
DARLENE STEIN
A-63
MOTION TO COMPEL
14
1 As for offering dates, we offer to set a
2 date in July; and understanding trial schedules, as I do,
3 I was required to file a Motion to Continuance on -- let's
4 see -- that date that he wanted to do these, the 16th,
5 17th, somewhere in there because I had a special setting.
6 I had to go into that court and request the Court reset
7 the special setting in that case because of my sacral
8 iliac sprain.
9 I don't under -- I suppose five years ago
10 when I had my quadruple bypass surgery, opposing counsel
11 would complain because that was just an excuse. These are
12 not excuses. These are real-live things. We've offered a
13 second set of dates. Counsel didn't even respond to them.
14 Now, counsel also says that we don't -- we
15 should take depositions to get proof for the Motion to
16 Transfer Venue. I don't think the Motion to Transfer
17 Venue is set for today, but he puts it in his -- in his
18 response or his Third Amended Motion to Compel, and I
19 don't understand. He believes that the testimony given in
20 open court on the record and sworn to by his clients can't
21 be used in Motion to Transfer Venue. At some point in
22 time, the Court will have to rule on that motion; and I
23 will be happy to defend that issue.
24 As for costs, counsel fails to properly
25 prepare any cost statements, hasn't made any cost
DARLENE STEIN
A-64
MOTION TO COMPEL
15
1 statements, hasn't suffered from any problems other than
2 my sacral iliac joint sprain; and I don't think he would
3 like me sitting in his conference room, taking the
4 narcotics that I was taking and the side effects that go
5 with it.
6 So, he has all of the financial records we
7 believe that exist, delivered by Holtman over our
8 objection. He did not properly serve the accountant --
9 the new accountant in Texas, which is more than 150 miles
10 and -- away, and he doesn't have a right to get anything
11 from him.
12 And as for tax records from the LLC,
13 they're not members. They never have been members.
14 They're not members. They rejected the opportunity to
15 become a member, and that's clear testimony in the
16 Temporary Injunction hearing.
17 So, I think I've covered the waterfront.
18 But as far as tax returns, the State of Texas has made
19 very clear by the Supreme Court and the Court of Appeals
20 in Houston -- I think every Court of Appeals has said it
21 is an abuse of discretion requiring the disclosure of
22 Federal income tax returns if other documents can provide
23 the information necessary.
24 But in order to even search out and get
25 that information, opposing counsel is required to provide
DARLENE STEIN
A-65
MOTION TO COMPEL
16
1 the relevancy and materiality that's necessary as to his
2 claims. He has none. He hasn't presented any. He hasn't
3 asked for any. He hasn't said a single word that shows
4 that a tax return, a financial statement, or any of these
5 other intrusive and burdensome matters are necessary for
6 his claims. And the Court should deny his motions in
7 total.
8 Thank you.
9 THE COURT: When do you want to take the
10 depositions?
11 MR. MEADE: Well --
12 MR. MOSSER: I'm sorry, Judge?
13 THE COURT: I'm -- I'm asking your
14 opposing counsel when he wants to take the depositions.
15 MR. MEADE: I knew you were going to ask
16 that, and I think the simplest answer to that is before
17 the Motion to Transfer Venue is heard.
18 THE COURT: Okay.
19 MR. MEADE: The more complex answer is
20 after the week of the 21st of July because I have a trial
21 that entire week. But we are set number one. So, we
22 will go; and I will be done that week because it's a
23 breach of contract case.
24 So, following that week, I only have one
25 day that I have a -- I have a deposition currently set
DARLENE STEIN
A-66
MOTION TO COMPEL
17
1 that I'm defending on the 28th of July. Otherwise, I am
2 wide open to -- to take these depositions.
3 THE COURT: Okay. Counsel, you heard
4 that, I assume. So, pick a date after his trial in Judge
5 Englehart's court and not on July -- what?
6 MR. MEADE: 28th.
7 THE COURT: -- 28th that you can produce
8 your people for depositions.
9 MR. MOSSER: I'm looking at the calendar
10 now, Judge.
11 THE COURT: Okay.
12 MR. MOSSER: I would recommend August 4th
13 and 5th, and I -- I would like to also add, Judge, that
14 four of the depositions that were set, two of them -- on
15 two separate days, two of them were set at exactly the
16 same time. And then the next day, two more were set at
17 exactly the same time, which I would discourage that
18 concept as appropriate.
19 MR. MEADE: And -- and here would be my
20 response. If Mr. Mosser would cooperate with me --
21 MR. MOSSER: But the 4th and the 5th are
22 good with me, Judge.
23 MR. MEADE: If Mr. Mosser would cooperate
24 with me a little bit and let me know -- these are an
25 individual -- two individuals and four corporate
DARLENE STEIN
A-67
MOTION TO COMPEL
18
1 representatives who may be, and I suspect will be, those
2 same individuals -- could all be taken possibly at the
3 same time or concurrently with each other. But
4 Mr. Mosser hasn't identified who are -- who's going to be
5 the corporate representative. So, I don't know how else
6 to do it.
7 If he will identify who will be the
8 corporate representatives for those entities, I will
9 notice the -- the depositions so that they don't conflict
10 timewise with one other another.
11 MR. MOSSER: As you previously noticed,
12 the doc -- the areas of inquiry, Mr. Rodriguez will be
13 the deponent.
14 MR. MEADE: On all, Mr. Mosser?
15 MR. MOSSER: Yes.
16 MR. MEADE: Okay. Then I will -- I will
17 set it up so that they don't conflict with one another.
18 MR. MOSSER: Thank you.
19 THE COURT: Okay. So, pick, the 4th of
20 the 5th of August?
21 MR. MEADE: It will be both, Your Honor.
22 THE COURT: Oh, both.
23 MR. MEADE: Yeah.
24 THE COURT: Okay. All right. The
25 depositions are set for the 4th and the 5th. And
DARLENE STEIN
A-68
MOTION TO COMPEL
19
1 Plaintiff's counsel will send notice, but they are now
2 set. He'll send notice as to time and place, I assume,
3 which I assume you've already -- where -- where are they
4 going to be?
5 MR. MEADE: Well, as Mr. Mosser doesn't
6 have an office here in Houston --
7 THE COURT: Okay.
8 MR. MEADE: -- I'm just going to do them
9 at my offices here in Houston, Your Honor.
10 THE COURT: Right. And I presume that's
11 okay with you, Mr. Mosser?
12 MR. MOSSER: Oh, yes, ma'am, that's fine
13 with me.
14 THE COURT: Okay. Now, as to fees of the
15 nonappearance, I'm not going to order anything at this
16 time. I will consider it later as the case progresses,
17 depending on how discovery goes. So, I will just hold
18 that under advisement.
19 What else was there?
20 MR. MEADE: The objections, which I think
21 lie in the Third Motion to Compel, which are Motions to
22 Compel the responses to discovery that ask for a
23 variety -- it's -- it's a variety of financial
24 information, including bank statements and -- and tax
25 returns.
DARLENE STEIN
A-69
MOTION TO COMPEL
20
1 THE COURT: Mr. Mosser, have -- does your
2 client have the bank statements?
3 MR. MOSSER: I'm sorry, Judge?
4 THE COURT: Does your client have the bank
5 statements?
6 MR. MOSSER: I think Mr. Holtman has them,
7 and opposing counsel has collected everything Holtman
8 has. And I would like the Court to order opposing
9 counsel to deliver those documents that he got from the
10 third-party witness Holtman to us.
11 THE COURT: Well, let me ask -- that --
12 that wasn't my question.
13 MR. MOSSER: I understand.
14 THE COURT: My question is: Does your
15 client have them?
16 MR. MOSSER: No. I think -- I think
17 Holtman has them all.
18 THE COURT: So, your client didn't keep a
19 copy?
20 MR. MOSSER: Nobody sends out copies of
21 bank statements any more, Judge.
22 THE COURT: Sure they do. I get them
23 every month.
24 MR. MOSSER: I appreciate that, Your
25 Honor. Let me put it a different way. Many businesses
DARLENE STEIN
A-70
MOTION TO COMPEL
21
1 do not get bank statement in paper form.
2 THE COURT: Well, do they get them
3 electronically where they can print them out?
4 MR. MOSSER: My understanding, Your Honor,
5 is that Holtman has all the bank statements.
6 THE COURT: So, your client doesn't get
7 the e-mail saying, Your bank statement is ready to be
8 printed out; or they can't go in and print it out?
9 MR. MOSSER: I haven't made that
10 particular inquiry.
11 THE COURT: Yeah.
12 MR. MOSSER: Because they're with the bank
13 and the accountant.
14 THE COURT: Well, my guess is your client
15 has access to them by -- if they -- if they're not like
16 me and they don't pay to get a paper statement or get a
17 paper statement, they get an e-mail saying, Your bank
18 statement is online. And you just log in, and you can
19 print it out.
20 MR. MOSSER: I understand what the Court
21 is saying, but my suggestion is that they already have
22 all of that stuff. They got it from Holtman.
23 MR. MEADE: Your Honor, if I -- if I could
24 add one -- as Your Honor may recall, they -- the
25 Defendants fired Mr. Holtman, who is the CPA, from the
DARLENE STEIN
A-71
MOTION TO COMPEL
22
1 company in March, terminated my client's access and his
2 access to all of the bank accounts. Then -- then hired a
3 new accountant located up in Dallas and identified him as
4 the new CPA, to which Holtman was supposed to and did
5 send all of the information.
6 As far as account statements, the -- it's
7 an ongoing duty, in fact, and they -- they have the
8 duty -- even if, in fact, we had gotten all of the
9 information and -- and Mr. Mosser has just said he doesn't
10 actually know what we've gotten. Even if had gotten all
11 of the information, it wouldn't alleviate their
12 responsibility to produce it, too, because, for example,
13 we might be missing a page of a bank statement. We might
14 want to use a 173, you know, authentication means for the
15 documents.
16 But there are certainly post termination of
17 Mr. Holtman, zero financial records that we have access to
18 but that the Defendants have access, custody, and control
19 over those documents exclusively; and that's what we're
20 asking for.
21 THE COURT: Okay. So --
22 MR. MEADE: Their current accountant has
23 all of it, and they have all of it.
24 THE COURT: All right.
25 MR. MOSSER: Well, we don't really know
DARLENE STEIN
A-72
MOTION TO COMPEL
23
1 that.
2 THE COURT: Well, I'm going to overrule
3 your objections and tell you to produce it if it's
4 available to you.
5 MR. MOSSER: From the time that Holtman
6 was terminated? Because they already have everything
7 else.
8 THE COURT: No. Just from what they've
9 requested.
10 MR. MOSSER: And will you order them to
11 deliver us what Holtman has?
12 MR. MEADE: I don't need to be ordered to,
13 Your Honor. I will -- I haven't had him even ask me. If
14 you send me a letter asking for it --
15 THE COURT: Well, he's asking now. Send
16 it to him.
17 MR. MEADE: I'll send it to him, Your
18 Honor.
19 THE COURT: Yeah. I'm not going to order
20 him, but he -- he said on the record now he's going to
21 send you copies of it.
22 MR. MEADE: Well, in fact, if it's
23 easiest, I will upload it onto FPT link; and you can
24 download it from your computer today.
25 THE COURT: You want to do that, Counsel?
DARLENE STEIN
A-73
MOTION TO COMPEL
24
1 MR. MOSSER: Which kind of link?
2 THE COURT: I don't know. It's over my
3 head.
4 MR. MEADE: I will suggest a couple of
5 means by which I can deliver the documents to you,
6 Mr. Mosser.
7 THE COURT: He will -- he will get them to
8 you.
9 MR. MEADE: You can choose the most
10 convenient means to you.
11 THE COURT: Okay. On the -- I've looked
12 at the interrogatories, your objections are overruled.
13 What else have we got?
14 MR. MEADE: The requests for production
15 objections that were --
16 THE COURT: Yeah, and they're overruled,
17 also.
18 Anything else?
19 MR. MEADE: And -- nothing else unless
20 Your Honor -- and I -- and from what Your Honor said
21 earlier, I think you're not inclined to appoint a master
22 at this --
23 THE COURT: I'm not.
24 MR. MEADE: -- point in the discovery.
25 So, I won't --
DARLENE STEIN
A-74
Motion to Compel
25
1 THE COURT: And we will reset --
2 MR. MEADE: -- belabor the point.
3 THE COURT: -- the motion for change of
4 venue until after the deposition.
5 MR. MEADE: Thank you, Your Honor.
6 Nothing else today.
7 THE COURT: Anything else?
8 MR. MOSSER: No, Your Honor.
9 THE COURT: Counsel, I hope you feel
10 better. I know --
11 MR. MOSSER: Thank you very much, Judge.
12 THE COURT: I know how it feels to get
13 older, but...
14 MR. MOSSER: I appreciate it, Judge.
15 THE COURT: Okay. Thank you.
16 MR. MOSSER: Yes, ma'am.
17 MR. MEADE: Thank you. Have a good week,
18 Your Honor.
19 THE COURT: Thank you.
20 (Proceedings concluded.)
21
22
23
24
25
DARLENE STEIN
A-75
Motion to Compel
26
1 STATE OF TEXAS
2 COUNTY OF HARRIS
3 I, DARLENE STEIN, Official Court Reporter in and
4 for the 133rd District Court of Harris, State of
5 Texas, do hereby certify that the above and foregoing
6 contains a true and correct transcription of all
7 portions of evidence and other proceedings requested
8 in writing by counsel for the parties to be included
9 in this volume of the Reporter's Record in the
10 above-styled and numbered cause, all of which
11 occurred in open court or in chambers and were
12 reported by me.
13 I further certify that this Reporter's Record of
14 the proceedings truly and correctly reflects the
15 exhibits, if any, offered by the respective parties.
16 I further certify that the total cost for the
17 preparation of this Reporter's Record is $312.00 and
18 was paid by Mr. Andrew Meade.
19
/s/Darlene Stein_________
20 DARLENE STEIN, CSR
Texas CSR 2557
21 Official Court Reporter
133rd District Court
22 Harris County, Texas
201 Caroline, 11th Floor
23 Houston, Texas 77002
Telephone: (713) 368-6402
24 Expiration: 12/31/2014
25
DARLENE STEIN
A-76
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