Burton Kahn v. Helvetia Asset Recovery, Inc.

Opinion

ACCEPTED 04-14-00569-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 3/17/2015 7:29:49 PM KEITH HOTTLE CLERK

NO. 04-14-00569-CV

FILED IN 4th COURT OF APPEALS IN THE COURT OF APPEALS SAN ANTONIO, TEXAS 3/17/2015 7:29:49 PM FOR THE FOURTH DISTRICT OF TEXASKEITH E. HOTTLE Clerk

AT SAN ANTONIO

BURTON KAHN,

Appellant, v.

HELVETIA ASSET RECOVERY, INC.,

Appellee.

BRIEF OF APPELLEE

Werner A. Powers Lisa S. Barkley State Bar No. 16218800 State Bar No. 17851450 HAYNES AND BOONE LLP HAYNES AND BOONE LLP 2323 Victory Avenue, Suite 700 112 E. Pecan, Suite 1200 Dallas, Texas 75219 San Antonio, Texas 78205 Telephone: (214) 651-5000 Telephone: (210) 978-7427 Facsimile: (2 14) 651-5940 Facsimile: (210) 554-0427 werner.powers@haynesboone.com lisa.barkley@haynesboone.com

Counsel for Appellee

ORAL ARGUMENT NOT REQUESTED

IDENTITY OF PARTIES AND COUNSEL

Appellee certifies that the following is a complete list of the parties,

attorneys and any other person who has any interest in the outcome of this lawsuit:

Appellant: Burton Kahn

Attorneys for Appellant: Appellant has represented himself pro se since December 14, 2013. His previous counsel was:

L. Terry George1 Fort Worth, Texas

Jay R. Petterson Jay R. Petterson, Attorney at Law, PLLC 12274 Bandera Road, Suite 210 Helotes, Texas 78023

Kathleen A. Cassidy Goodman Law Office of Kathleen Cassidy Goodman 12274 Bandera Road, Suite 210 Helotes, Texas 78023

Richard H. Sommer 8610 N. New Braunfels Ave., Suite 309 San Antonio, Texas 78217

Robert W. Wachsmuth Zachary J. Fanucci Robert Wachsmuth & Associates 9311 San Pedro, Suite 707 San Antonio, Texas 78216

1 Mr. George died on June 29, 2014.

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Appellee: Helvetia Asset Recovery, Inc.

Attorneys for Appellee: Werner A. Powers State Bar No. 16218800 Haynes and Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Telephone: (214) 651-5000 Facsimile: (214) 651-5940 werner.powers@haynesboone.com

Lisa S. Barkley State Bar No. 17851450 Haynes and Boone, LLP 112 E. Pecan, Suite 1200 San Antonio, Texas 78205 Telephone: (210) 978-7427 Facsimile: (210) 554-0427 lisa.barkley@haynesboone.com

Other Interested Parties: Paradiv Corporation c/o Appellant Appellant formed Paradiv Corporation on or about September 3, 2013 and dissolved it on or about February 18, 2014.

Puerto Verde, Ltd., a corporation formed in The Bahamas c/o counsel for Appellee Puerto Verde, Ltd. is Helvetia’s sole shareholder. Robert Ripley is Puerto Verde’s sole shareholder.

Trial Judge: Hon. Michael Mery, 37th Judicial District

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RELATED LITIGATION

The following litigation matters are related to this appeal:

I. APPEALS IN THE FOURTH COURT OF APPEALS:

1. Appeal No. 04-14-00012-CV Burton Kahn v. Helvetia Asset Recovery, Inc. (Cause No. 2013-CI- 18355)

Kahn appealed the trial court’s December 2013 temporary injunction. The Court dismissed the interlocutory appeal on July 16, 2014 as moot, after the trial court entered a permanent injunction as part of its June 11, 2014 final judgment.

The Court denied Kahn’s motion for reconsideration, motion for en banc reconsideration, and plea for justice and fairness. Kahn sought further review by the Texas Supreme Court as noted below.

2. Appeal No. 04-14-00258-CV In re a Purported Lien or Claim Against Helvetia Asset Recovery, Inc. (Cause No. 2013-CI-18394)

Under Helvetia’s name, Kahn appealed the trial court’s December 2013 order setting aside a judicial finding that Helvetia filed fraudulent warranty deeds. The Court dismissed the appeal on August 20, 2014 for lack of jurisdiction because the order was neither final nor an appealable interlocutory order.

3. Appeal No. 04-14-00319-CV Burton Kahn v. Helvetia Asset Recovery, Inc. (Cause No. 2013-CI- 18355)

Kahn appealed the trial court’s April 2014 order allowing the registry of the court to distribute funds to Helvetia that Kahn had been ordered to deposit in December 2013. On Kahn’s motion, the Court dismissed this appeal on July 9, 2014.

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4. Appeal No. 04-14-00357-CV In re a Purported Lien or Claim Against Helvetia Asset Recovery, Inc. (Cause No. 2013-CI-18394)

Kahn appealed the trial court’s April 2014 final judgment and order of sanctions. The appeal was advanced for submission on January 6, 2015.

II. APPEALS IN THE TEXAS SUPREME COURT:

1. Case No. 14-0821 Burton Kahn v. Helvetia Asset Recovery, Inc.

The Texas Supreme Court denied Kahn’s petition for review on February 13, 2015, without requesting briefing from Helvetia. (The Fourth Court of Appeals dismissed this appeal, Appeal No. 04-14- 00012-CV, on July 16, 2014).

III. BANKRUPTCY COURT PROCEEDINGS:

1. In re: Burton M. Kahn, Debtor, Case No. 14-50980, United States Bankruptcy Court for the Western District of Texas, San Antonio Division.

Kahn filed for Chapter 7 bankruptcy on April 14, 2014. On October 17, 2014, the bankruptcy judge approved the Chapter 7 trustee’s request for authorization to sell Kahn’s non-exempt assets, claims and causes of action to Helvetia, including his defensive appellate rights in the instant appeal. As referenced below, Kahn has appealed this order to the United States District Court for the Western District of Texas.

2. In re: Burton M. Kahn, Debtor, Helvetia Asset Recovery, Inc. v.

Burton M. Kahn, Adversary Proceeding Case No. 14-5052, United States Bankruptcy Court for the Western District of Texas, San Antonio Division.

Helvetia’s motion for summary judgment, requesting that the bankruptcy court find that its two state court judgments against Kahn are nondischargeable, is pending.

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IV. APPEALS IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS:

1. In re: Burton M. Kahn, Debtor, Helvetia Asset Recovery, Inc. v.

Burton M. Kahn, Civil Action No. 5:14-CV-1109-HLH.

As referenced above, Kahn appealed the bankruptcy judge’s October 17, 2014 order approving the Chapter 7 trustee’s sale to Helvetia of Kahn’s non-exempt assets, claims and causes of action, including the instant appeal. Kahn filed his appellant’s brief on February 10, 2015, and Helvetia filed its appellee’s brief on February 24, 2015.

V. BEXAR COUNTY DISTRICT COURT LITIGATION:

1. Burton Kahn v. Joabert Development Company and John Ripley, Cause No. 2013-CI-17012, 37th Judicial District, Bexar County, Texas.

The trial court entered a final judgment dismissing Kahn’s claims with prejudice on November 6, 2014.

2. Paradiv Corporation and [Helvetia Asset Recovery, Inc.] v.

ACSBLDR and Robert Ripley, Cause No. 2013-CI-17889, 166th Judicial District, Bexar County Texas. (Burton Kahn filed this action under Helvetia’s name).

All claims have been dismissed and Helvetia filed a notice of nonsuit on July 24, 2014.

3. Burton Kahn v. Robert Ripley, et al., Cause No. 2014-CI-3453, 225th Judicial District, Bexar County, Texas. (This action was severed from Cause No. 2013-CI-18355 in May 2014.)

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TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL ............................................................ i

RELATED LITIGATION ....................................................................................... iii

TABLE OF CONTENTS ......................................................................................... vi

TABLE OF AUTHORITIES ................................................................................... ix

DEFINITIONS AND ABBREVIATIONS .......................................................... xviii

STATEMENT OF THE CASE .............................................................................. xix

STATEMENT REGARDING ORAL ARGUMENT ........................................... xxi

RECORD REFERENCES .................................................................................... xxii

ISSUES PRESENTED......................................................................................... xxiv

JURISDICTION.........................................................................................................1

STATEMENT OF FACTS ........................................................................................2

A. After Helvetia terminated Kahn, he took Helvetia’s money and real property ........................................................................2

B. Kahn’s Lien Suit lays groundwork for his claim to own Helvetia’s stock .....................................................................................4

C. Kahn is sanctioned $253,416 in the final judgment entered in the Lien Suit .........................................................................7

D. Kahn filed a Chapter 7 bankruptcy petition; the automatic stay is modified to allow this suit and the Lien Suit to proceed to judgment and appeal ............................................................8

E. Helvetia is awarded almost $2 million in the trial of the underlying suit .......................................................................................9

SUMMARY OF THE ARGUMENT ......................................................................10

ARGUMENT AND AUTHORITIES ......................................................................11

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I. Because Helvetia acquired Kahn’s right to prosecute this appeal Kahn lacks standing, depriving this Court of jurisdiction .............................11

II. Standard of Review........................................................................................15

III. The Court did not err in applying collateral estoppel ....................................17

A. Kahn failed to provide a concise argument or supporting citations to the record or legal authority and so has waived his claim ..................................................................................17

B. Kahn failed to make any offer of proof for evidence he claimed should have been admitted and so has failed to preserve error .......................................................................................19

C. Kahn misconstrues the doctrine of collateral estoppel........................20

D. Despite Kahn’s appeal of the Sanctions Judgment, it is final for purposes of collateral estoppel ..............................................24

E. Kahn’s conclusory allegations about the merits of the Sanction Judgment are waived ............................................................26

IV. The trial court properly denied Kahn’s motion for JNOV ............................27

A. Jury Question No. 2 – Misappropriation and Lost Profit damages caused by Breach of Fiduciary Duty and “Money Had and Received.” ...............................................................29

1. Uncontroverted evidence shows Kahn misappropriated at least $721,166 ............................................30

a. Kahn misappropriated at least $392,202.87 from Helvetia in 2013 .....................................................30

b. Kahn misappropriated $380,166 in 2012 .......................32

2. The evidence supports the jury’s finding that Kahn caused Helvetia to incur $133,000 in lost profits .....................34

3. The evidence supports the jury’s award of punitive damages and attorneys’ fees .....................................................37

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V. Kahn failed to preserve any error about witnesses he claimed were not allowed to testify.............................................................................37

VI. The Court did not abuse its discretion in striking Kahn’s untimely-filed Amended Counterclaim .........................................................39

VII. Kahn’s vague “catch-all” issue fails to specify any alleged error by the trial court .............................................................................................41

VIII. Because Kahn’s Brief overall violates appellate rules and law, he has waived appellate review .....................................................................42

CONCLUSION ........................................................................................................49

CERTIFICATE OF COMPLIANCE WITH RULE 9.4 ..........................................50

CERTIFICATE OF SERVICE ................................................................................51

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TABLE OF AUTHORITIES

CASES

Aguilera v. Aguilera, No. 04-13-00034-CV, 2014 WL 769445 (Tex. App.—San Antonio May 6, 2013, orig. proceeding) (mem. op.) ........................................................ 41

Alaniz v. State, No. 04-13-00118-CR, 2014 WL 954545 (Tex. App.—San Antonio July 18, 2013, no pet.)......................................................................................... 46

Barr v. Resolution Trust Corp., 837 S.W.2d 627 (Tex. 1992) .............................................................................. 21

Basic Energy Serv., Inc. v. D-S-B Props., Inc., 367 S.W.3d 254 (Tex. App.—Tyler 2011, no pet.) ............................................ 20

Bay Area Healthcare Grp., Ltd. v. McShan 239 S.W.3d 231 (Tex. 2007) (per curiam) ......................................................... 15

Bay, Inc. v. Ramos, 139 S.W.3d 322 (Tex. App.—San Antonio 2004, pet. denied) .......................... 28

In re Bishop, No. 07-12-00455-CV, 2013 WL 6529304 (Tex. App.—Amarillo Dec. 4, 2013, no pet.) .......................................................................................... 41

Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547 (Tex. 2000)................................................................................. 11

BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002)................................................................................. 25

Bobbora v. Unitrin Ins. Servs., 255 S.W.3d 331 (Tex. App.—Dallas 2008, no pet.) .......................................... 19

Bolling v. Farmers Branch Indep. Sch. Dist., 315 S.W.3d 893 (Tex. App.—Dallas 2010, no pet.) .......................................... 45

Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816 (Tex. 1984) .............................................................................. 21

ix

Bright v. Addison, 171 S.W.3d 588 (Tex. App.—Dallas 2005, pet. dism’d) ................................... 28

In re C.Z.B., 151 S.W.3d 627 (Tex. App.—San Antonio 2004, no pet.) ................................ 48

Cain v. Bain, 709 S.W.2d 175 (Tex. 1986) .............................................................................. 28

Canton-Carter v. Baylor Coll. of Medicine, 271 S.W.3d 928 (Tex. App.—Houston [14th Dist.] 2008, no pet.) ............. 46, 48

Citizens Nat’l Bank v. Allen Rae Invs., Inc., 142 S.W.3d 459 (Tex. App.—Fort Worth 2004, no pet.)................................... 44

City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) ......................................................................... 16, 28

Crawford v. McDonald, 88 Tex. 626, 33 S.W. 325 (1895) ....................................................................... 16

In re Croft, 737 F.3d 372 (5th Cir. 2013) ........................................................................12, 13

Croucher v. Croucher, 660 S.W.2d 55 (Tex. 1983)................................................................................. 27

Daniel v. Falcon Interest Realty Corp., 190 S.W.3d 177 (Tex. App.—Houston [1st Dist.] 2005, no pet.) ...................... 48

Douglas v. Delp, 987 S.W.2d 879 (Tex. 1999) .............................................................................. 12

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238 (Tex.1985)................................................................................ 15

In re Educators Grp. Health Trust, 25 F.3d 1281 (5th Cir. 1994) .............................................................................. 12

E-Z Mart Stores, Inc. v. Ronald Holland’s A-Plus Transmission & Auto., Inc., 358 S.W.3d 665 (Tex. App.—San Antonio 2011, pet. denied) .......................... 20

x

ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867 (Tex. 2010) ........................................................................30, 36

First State Bank v. Keilman, 851 S.W.2d 914 (Tex. App.—Austin 1993, writ denied)................................... 29

Fletcher v. Minn. Mining & Mfg. Co., 57 S.W.3d 602 (Tex. App.—Houston [1st Dist.] 2001, pet. denied .................. 19

Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41 (Tex. 1998)...........................................................................28, 34

Fredonia State Bank v. American Life Ins., 881 S.W.3d (Tex. 1994)................................................................................42, 46

In re Guardianship of Winn, 372 S.W.3d 291 (Tex. App.—Dallas 2012, no pet.) ..............................41, 42, 46

Greenberg Traurig of N.Y., P.C. v. Moody, 161 S.W.3d 56 (Tex. App.—Houston [14th Dist.] 2004, no pet.) ..................... 16

Greenhalgh v. Service Lloyds Ins. Co., 787 S.W.2d 938 (Tex. 1990) .............................................................................. 40

Greenstein, Logan & Co. v. Burgess Mktg., Inc., 744 S.W.2d 170 (Tex. App.—Waco 1987, writ denied) .................................... 38

Gulf States Utils. Co. v. Low, 79 S.W.3d 561 (Tex. 2002)...........................................................................29, 36

Halmos v. Bombardier Aerospace Corp., 314 S.W.3d 606 (Tex. App.—Dallas 2010, no pet.) .......................................... 40

Hernandez v. Hernandez, 318 S.W.3d 464 (Tex. App.—El Paso 2010, no pet.) ........................................ 47

Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80 (Tex. 1992)...........................................................................34, 36

Houston Pipeline Co. LP v. Bank of Am., N.A., 213 S.W.3d 418 (Tex. App.—Houston [1st Dist.] 2006, no pet.) ...................... 12

xi

Houtex Ready Mix Concrete & Materials v. Eagle Constr. & Envt’l Servs. L.P., 226 S.W.3d 514 (Tex. App.—Houston [1st Dist.] 2006, no pet.) ...................... 40

Huckaby v. A.G. Perry & Son, Inc., 20 S.W.3d 194 (Tex. App.—Texarkana 2000, pet. denied) ............................... 16

J.J. Gregory Gourmet Servs., Inc. v. Antone’s Import Co., 927 S.W.2d 31 (Tex. App.—Houston [1st Dist.] 1995, no writ) ....................... 24

John G. & Marie Stella Kenedy Mem’l Found. v. Dewhurst, 90 S.W.3d 268 (Tex. 2002)................................................................................. 21

Kane v. Nat’l Union Fire Ins. Co., 535 F.3d 380 (5th Cir. 2008) .............................................................................. 12

Keyes Helium Co. v. Regency Gas Servs., L.P., 393 S.W.3d 858 (Tex. App.—Dallas 2012, no pet.) ....................................18, 44

King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) .............................................................................. 28

King v. Deutsche Bank Nat’l Trust Co., No. 04-12-00605-CV, 2013 WL 3871067 (Tex. App.—San Antonio July 24, 2013, no pet.) .......................................................................... 45

Lone Star Gas Co. v. State, 137 Tex. 279, 153 S.W.2d 681 (1941) ............................................................... 25

Lott v. First Bank, No. 04-13-00531-CV, 2014 WL 4922896 (Tex. App.—San Antonio Oct. 1, 2014, no pet.) (mem. op.) ...................................................18, 44

Lowry v. Croft (In re Croft), 2012 BL 321154 (W.D. Tex. Dec. 10, 2012) ..................................................... 13

Lucky Merk, LLC v. Greenville Landmark Venture, Ltd., No. 05-12-00848-CV, 2014 WL 4261204 (Tex. App.—Dallas Aug. 28, 2014, no pet.) (mem. op.)..................................................................... 41

Ludlow v. DeBerry, 959 S.W.2d 265 (Tex. App.—Houston [14th Dist.] 1997, no writ) ................... 37

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Lueg v. Lueg, 976 S.W.2d 308 (Tex. App.—Corpus Christi 1998, pet. denied) ...................... 48

In re M.S., 115 S.W.3d 534 (Tex. 2003) .............................................................................. 20

Mancorp, Inc. v. Culpepper, 802 S.W.2d 226 (Tex. 1990) .............................................................................. 27

Mansfield State Bank v. Cohn, 573 S.W.2d 181 (Tex. 1978) .............................................................................. 44

Mayberry v. Tex. Dep’t of Agric., 948 S.W.2d 312 (Tex. App.—Austin 1997, writ denied)................................... 29

McInnes v. Yamaha Motor Corp., 673 S.W.2d 185 (Tex. 1984) .............................................................................. 39

Mensa-Wilmot v. Smith Int’l, 312 S.W.3d 771 (Tex. App.—Houston [1st Dist.] 2009, no pet) ....................... 40

Mid-Continent Cas. Co. v. Safe Tire Disposal Corp., 2 S.W.3d 393 (Tex. App.—San Antonio 1999, no pet.) .................................... 21

In re Moore, 608 F.3d 253 (5th Cir. 2010) .............................................................................. 12

Morrill v. Cisek, 226 S.W.3d 545 (Tex. App.—Houston [1st Dist.] 2006, no pet.) ...................... 47

In re N.R.C., 94 S.W.3d 799 (Tex. App.—Houston [14th Dist.] 2002, pet. denied) ......... 38, 39

Nguyen v. Kosnoski, 93 S.W.3d 186 (Tex. App.—Houston [14th Dist.] 2002, no pet.) ...............47, 48

Niera v. Frost Nat’l Bank, No. 04-09-00224-CV, 2010 WL 816191 (Tex. App.—San Antonio Mar. 10, 2010, pet. denied) (mem. op.) ........................................................18, 44

Plummer v. Reeves, 93 S.W.3d 930 (Tex. App.—Amarillo 2003, pet. denied) ................................. 47

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Potter v. GMP, L.L.C., 141 S.W.3d 698 (Tex. App.—San Antonio 2004, pet. dism’d) ......................... 29

Quick v. City of Austin, 7 S.W.3d 109 (Tex. 1998)................................................................................... 25

Quinney Elec., Inc. v. Kondos Entm’t, Inc., 988 S.W.2d 212 (Tex. 1999) .............................................................................. 21

Republic Underwriters Ins. Co. v. Mex.-Tex., Inc., 150 S.W.3d 423 (Tex. 2004) .............................................................................. 48

Saenz v. Saenz, No. 04-14-00033-CV, 2014 WL 6687284 (Tex. App.—San Antonio Aug. 14, 2014, no pet.) ......................................................................... 48

Schade v. Tex. Workers’ Comp. Comm’n, 150 S.W.3d 542 (Tex. App.—Austin 2004, pet. denied) ................................... 25

Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1 (Tex. 1986)................................................................................... 24

In re S.I. Acquisition, Inc., 817 F.2d 1142 (5th Cir. 1987) ............................................................................ 12

Sink v. Sink, 364 S.W.3d 340 (Tex. App.—Dallas 2012, no pet.) .......................................... 19

Shull v. United Parcel Serv., 4 S.W.3d 46 (Tex. App.—San Antonio 1999, pet. denied) ................................ 45

Southwest Country Enters., Inc. v. Lucky Lady Oil Co., 991 S.W.2d 490 (Tex. App.—Fort Worth 1999, pet. denied) ............................ 19

State v. Cent. Expressway Sign Assocs., 302 S.W.3d 866 (Tex. 2009) .............................................................................. 20

State v. Wood Oil Distrib., Inc., 751 S.W.2d 588 (Tex. 1986) .............................................................................. 16

Sw. Bell Tel. Co. v. Public Util. Comm’n, 571 S.W.2d 503 (Tex. 1978) .............................................................................. 25

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Sweed v. City of El Paso, 195 S.W.3d 784 (Tex. App.—El Paso 2006, no pet.) ........................................ 46

SWEPI, L.P. v. Camden Resources, Inc., 139 S.W.3d 332 (Tex. App.—San Antonio 2004, pet. denied) .......................... 21

Tanner v. Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828 (Tex. 2009) .............................................................................. 28

Tesoro Petroleum Corp. v. Nabors Drilling USA, Inc., 106 S.W.3d 118 (Tex. App.—Houston [1st Dist.] 2002, pet. denied) ............... 46

Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440 (Tex. 1993) .............................................................................. 11

Texas Dep’t of Pub. Safety v. Petta, 44 S.W.3d 575 (Tex. 2001)................................................................................. 21

Texas Instruments, Inc. v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276 (Tex. 1994) .............................................................................. 34

Valadez v. Avitia, 238 S.W.3d 843 (Tex. App.—El Paso 2007, no pet.) ..................................45, 48

Valenciana v. Hereford Bi-Products Mgmt., Ltd., No. 07-05-00051-CV, 2005 WL 3803144 (Tex. App.—Amarillo Feb. 24, 2005, no pet.) ........................................................................................ 12

Van Dyke v. Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381 (Tex. 1985) .............................................................................. 21

Vela v. Wagner & Brown, Ltd., 203 S.W.3d 37 (Tex. App.—San Antonio 2006, no pet.) .................................. 29

Vickery v. Comm’n for Lawyer Discipline, 5 S.W.3d 241 (Tex. App.—Houston [14th Dist.] 1999, pet. denied) ................. 16

Wal-Mart Stores, Inc. v. McKenzie, 997 S.W.2d 278 (Tex. 1999) .............................................................................. 20

Walker v. Gutierrez, 111 S.W.3d 56 (Tex. 2003)................................................................................. 15

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Walker v. Packer, 827 S.W.2d 833 (Tex.1992)................................................................................ 15

Washington v. Bank of New York, 362 S.W.3d 583 (Tex. App.—Dallas 2012, no pet.) .......................................... 44

Williams v. Tooke, 116 S.W.2d 1114 (Tex. Civ. App.—Texarkana 1938, writ dism’d) .................. 16

Witherspoon v. Johnson, No. 04-06-00403-CV, 2007 WL 3171304 (Tex. App.—San Antonio, Oct. 31, 2007, pet. denied) (mem. op.) ................................................ 46

WorldPeace v. Comm’n for Lawyer Discipline, 183 S.W.3d 451 (Tex. App.—Houston [14th Dist.] 2005, pet. denied) ....... 18, 44

Yarbrough’s Dirt Pit, Inc. v. Turner, 65 S.W.3d 210 (Tex. App.—Beaumont 2001, no pet.) ...................................... 26

STATUTES AND RULES TEX. CONST. ART. V.................................................................................................. 25

11 U.S.C. § 363 ......................................................................................................... 8

11 U.S.C. § 541 ........................................................................................................ 12

11 U.S.C. § 541(a)(1) ............................................................................................... 12

11 U.S.C. § 704 .......................................................................................................... 8

11 U.S.C. § 704(a)(1) ............................................................................................... 14

TEX. CIV. PRAC. & REM. CODE § 51.001.................................................................. 25

TEX. GOV’T CODE § 51.903..............................................................................3, 4, 22

TEX. R. APP. P. 33.1 ................................................................................................. 42

TEX. R. APP. P. 38.1(e) ............................................................................................. 42

TEX. R. APP. P. 38.1(h) .......................................................................................42, 45

TEX. R. APP. P. 38.1(i)........................................................................................42, 47

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TEX. R. APP. P. 33.1(a) ............................................................................................. 20

TEX. R. APP. P. 33.1(a)(1) ........................................................................................ 19

TEX. R. APP. P. 33.1(a)(1)(A)-(B) ............................................................................ 20

TEX. R. APP. P. 33.1(a)(2)(A) ................................................................................... 20

TEX. R. APP. P. 38.1 .........................................................................18, 27, 31, 42, 45

TEX. R. APP. P. 38.1(i).............................................................................................. 45

TEX. R. APP. P. 38.1 (f) ......................................................................................45, 48

TEX. R. APP. P. 38.1(g) .......................................................................................45, 48

Tex. R. Civ. 63 ......................................................................................................... 40

TEX. R. EVID. 103(a)(2)................................................................................19, 37, 39

FED. R. BANKR. P. 6004 ............................................................................................. 8

RESTATEMENTS

RESTATEMENT (SECOND) OF JUDGMENTS § 13 (1982) .............................................. 24

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DEFINITIONS AND ABBREVIATIONS

“Brief” or “Br.” - Refers to the brief filed by Appellant Burton Kahn.

“Lien Suit” - Refers to the lawsuit In re a Purported Lien or Claim Against Helvetia Asset Recovery, Inc., Cause No. 2013-CI-18394, filed November 5, 2013, 224th Judicial District, Bexar County, Texas. Burton Kahn filed this suit under Helvetia’s name, claiming that Helvetia’s sales of real estate lots in September and October 2013, after it terminated Kahn’s employment, were fraudulent.

“Lien Order” - The order signed by the Hon. John Gabriel on November 5, 2013 as part of the Lien Suit, after an ex parte hearing.

“Sanctions Judgment” - Refers to the trial court’s April 1, 2014 Final Judgment and Order of Sanctions entered in the Lien Suit, and the basis of collateral estoppel rulings by the trial court in the underlying lawsuit. Kahn’s appeal of the Sanctions Judgment to the Fourth Court of Appeals, No. 04-14-00357-CV, is pending.

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STATEMENT OF THE CASE

Nature of the Case: Helvetia owns and sells real estate lots to homebuilders in Bexar County, Texas. Burton Kahn was president of Helvetia from 2009 until he was terminated in August 2013. In retaliation, Kahn transferred over $340,000 from Helvetia’s bank account to his own control, recorded fraudulent warranty deeds purporting to convey all of Helvetia’s 200 plus real estate lots in the Key Largo subdivision in Converse, Texas to his separate corporation, filed a fictitious lawsuit under Helvetia’s name, and created a fake stock certificate identifying himself as Helvetia’s sole shareholder. Helvetia sued Kahn in November 2013 for his misconduct. In December 2013, the trial court temporarily enjoined Kahn from taking additional actions under Helvetia’s name. In the separate fictitious lawsuit brought by Kahn, the trial court entered a final judgment in April 2014 sanctioning Kahn over $253,000 for, among other things, falsely claiming he owned Helvetia’s stock.

Course of the Proceedings: In May 2014, a unanimous jury found in Helvetia’s favor on all questions submitted. It awarded over $800,000 in actual damages, $900,000 in exemplary damages and over $280,000 in attorneys’ fees. The trial court entered a final judgment on June 11, 2014 incorporating the damages awards and also permanently enjoining Kahn from acting under Helvetia’s name. (3CR185.) On May 27, 2014, Kahn filed a Motion for Judgment Notwithstanding the Verdict. He filed an amended motion on June 1, and a second amended motion on July 7. (3CR41, 228, 652.) The motions were denied. (4CR442.) Kahn also filed a motion for new trial on July 7, and it was denied. (3CR237, 4CR441.) Kahn filed a notice of appeal on August 7, 2014. (4CR444.)

xix

On October 17, 2014, Helvetia purchased Kahn’s appellate rights in this appeal from the Chapter 7 bankruptcy trustee. Kahn has appealed the bankruptcy court’s order approving the sale. The appeal has been briefed.

Disposition of the Case: The Court dismissed Helvetia’s motion to dismiss the litigation on jurisdictional grounds on January 9, 2015. Kahn filed his appellant’s brief with this Court on February 5, 2015.

xx

STATEMENT REGARDING ORAL ARGUMENT

Helvetia does not believe oral argument is necessary. This case turns on

whether Kahn has standing to pursue this appeal in light of Helvetia’s purchase of

his defensive appellate rights from the bankruptcy trustee, whether Kahn has either

preserved any error, or shown any error by the trial court, and whether Kahn has

waived error by filing a brief that violates Texas appellate rules and law,

determinations that can be made from the parties’ briefing.

xxi

RECORD REFERENCES

Volumes 1 to 8 of the Reporter’s Record, filed October 20, 2014, will be cited as follows:

[Vol.]RR[page]

Volume 9 of the Reporter’s Record, filed the same day, will be cited as follows:

9RR[page]

The page number refers to the “pdf” page number in Volume 9 of the Reporter’s Record. The entire Volume 9 is composed of trial exhibits, and the pages are not individually numbered, making it necessary to use the “pdf” number.

The Clerk’s Record, filed October 8, 2014, will be cited as follows:

[Vol.]CR[page]

The Supplemental Clerk’s Record, filed December 5, 2014, will be cited as follows:

[Vol.]SCR[page]

In addition, to the extent the Court finds it appropriate, Helvetia incorporates

by reference its Appellee’s Brief in the separate appeal brought by Kahn, and

presently pending before the Court, In re a Purported Lien or Claim Against

Helvetia Asset Recovery, Inc., No. 04-14-00357-CV. Helvetia filed its Appellee’s

Brief on November 3, 2014.

The Lien Suit was the underlying trial court matter for that appeal, and Kahn

appealed the trial court’s Sanctions Judgment. The Lien Suit and the Sanctions

Judgment gave rise to the trial court’s invoking collateral estoppel in the trial

xxii

underlying this appeal. Kahn has appealed the issue of collateral estoppel in this

appeal.

xxiii

ISSUES PRESENTED

ISSUE NO. 1: As a threshold matter, because Helvetia has purchased Kahn’s appellate rights in this appeal from the bankruptcy estate Kahn lacks standing to pursue this appeal; consequently, the Court lacks jurisdiction and the appeal should be dismissed.

ISSUE NO. 2: Kahn failed to preserve error of the trial court’s evidentiary rulings, and otherwise failed to show the trial court abused its discretion by invoking collateral estoppel to bar the parties’ relitigation of the ownership of Helvetia’s stock that was already resolved in the Lien Suit.

ISSUE NO. 3: Because under legal and factual sufficiency analyses the evidence supported the jury’s findings, the trial court properly denied Kahn’s motion for JNOV.

ISSUE NO. 4: Appellant failed to preserve error in his complaint the trial court improperly excluded witness testimony, and otherwise failed to show the trial court abused its discretion in rulings disallowing witness testimony.

ISSUE NO. 5: The trial court did not abuse its discretion by striking Kahn’s untimely-filed amended counterclaim.

ISSUE NO. 6: Kahn failed to preserve error in his complaint he was not allowed to introduce evidence of financial data, and the subject data is inadmissible hearsay.

ISSUE NO. 7: The appeal should be dismissed because Kahn’s Brief violates TEX. R. APP. P. 38.1. and other appellate rules and law.

xxiv

JURISDICTION

This Court lacks jurisdiction to hear this appeal. On October 17, 2014, the

Hon. Craig A. Gargotta, United States Bankruptcy Court for the Western District

of Texas, approved the Chapter 7 bankruptcy trustee’s motion to sell all of Kahn’s

non-exempt assets, claims and causes of action to Helvetia, including Kahn’s rights

in this appeal.2 The sale was finalized effective the same day.3 Kahn has appealed

the order approving the sale to the United States District Court for the Western

District of Texas.4 Kahn filed his appellant’s brief on February 10, 2015 and

Helvetia filed its appellee’s brief on February 24, 2015.5

As a result of the sale, Kahn has no standing to prosecute this appeal.

Accordingly the Court lacks jurisdiction. Helvetia provides further jurisdictional

argument as part of its Issue No. 1.

2 The October 17, 2014 order approving the sale is attached as Appendix 1.

3 The Chapter 7 Trustee’s Bill of Sale and Quit Claim Deed, effective October 17, 2014, is attached as Appendix 2. 4 Kahn’s October 31, 2014 Notice of Appeal is attached as Appendix 3.

5 Helvetia’s February 24, 2015 appellee’s brief is attached as Appendix 4, without exhibits.

2

STATEMENT OF FACTS

A. After Helvetia terminated Kahn, he took Helvetia’s money and real property.

Helvetia is a Texas corporation. (5RR67-68.) Its sole shareholder is Puerto

Verde, Ltd., a corporation organized in The Bahamas (“Puerto Verde”). (5RR60;

9RR263-64.) Robert Ripley (“Ripley”) owns Puerto Verde. (5RR60, 65; 9RR263-

264.)

Puerto Verde capitalized Helvetia and acquired its 1,000 shares of stock in

2007 with a $1.2 million cash infusion. (5RR60-62, 65-67; 9RR12-13, 263-264.)

Kahn personally oversaw the transaction. (5RR133-36; 9RR12-13, 15-23.)

Helvetia used the funds to acquire over 200 real estate lots in the Key Largo

subdivision in Converse, Texas. (5RR60-61; 9RR263-64.) Helvetia sells its

residential lots to homebuilders. (4RR211-12; 9RR264.)

Helvetia hired Kahn in late 2009 and terminated him for misconduct on

August 26, 2013. (9RR264.) Ripley replaced Kahn and continued Helvetia’s

operations. (9RR295.) The company sold six lots in September and October 2013,

and Ripley signed and recorded the conveyancing warranty deeds as president of

Helvetia. (9RR194-218.)

Kahn had been Helvetia’s sole signatory on bank accounts. (4RR8, 71, 98-

99.) After Ripley gained access, it became obvious Kahn had drained the accounts

dry. (9RR70-71, 264.) Kahn took $50,000 three weeks before he was terminated,

3

and over $340,000 in the days just after. Id.; (4RR64-67, 71-73; 9RR34, 70-73.)

For several weeks Kahn rapidly moved the money around to bank accounts under

his control. (4RR48-58, 62-81, 92-99, 104-10; 9RR34, 70-73, 264.)

After taking Helvetia’s cash, Kahn next turned his attention to Helvetia’s

valuable inventory of real estate lots, worth over $1 million. In September and

October 2013, Kahn recorded warranty deeds in the Bexar County records that

purported to convey all of Helvetia’s lots to his newly-created corporation, Paradiv

Corporation (“Paradiv”) for no consideration. (4RR110-19; 9RR75-83; 265.)

Kahn signed the warranty deeds as “president” of Helvetia. (9RR76, 79, 82.)

Helvetia promptly sought relief against Kahn under TEX. GOV’T CODE

§ 51.903 on October 21, 2013 by filing the action In re: A Purported Lien or Claim

against Helvetia Asset Recovery, Inc. in Bexar County district court. (9RR353-

80.) In an October 23 ex parte hearing permitted by the statute the Hon. David

Canales declared Kahn’s warranty deeds fraudulent and set them aside.6

(9RR296.)

By then it was apparent Kahn intended to takeover Helvetia from its owner

and sole shareholder Puerto Verde. Consequently, on November 4, 2013, Helvetia

sued Kahn and Paradiv for damages and injunctive relief to enjoin Kahn from

6 Judge Canales presides over the 73rd District Court, Bexar County, Texas; a copy of the October 23, 2103 Order is attached as Appendix 5.

4

further misconduct using Helvetia’s name.7 (1CR168, 221.) That lawsuit gives

rise to this appeal.

B. Kahn’s Lien Suit lays groundwork for his claim to own Helvetia’s stock.

Ignoring Helvetia’s request to schedule an injunction hearing, Kahn sued

Helvetia the next day, November 5, 2013, under TEX. GOV’T CODE § 51.903 (the

“Lien Suit”) with a pleading virtually identical to Helvetia’s § 51.903 suit against

Kahn. (4RR60-61; 9RR91-165, 263, 271-272.) Even the style was identical, In

re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc., to make it

appear Helvetia authorized Kahn to file the lawsuit. Id. Kahn’s lawyers signed the

pleading as “Attorney for Movant, Helvetia Asset Recovery, Inc.” and Kahn

signed the supporting affidavit as “president” of Helvetia. (9RR98-100.)

Although the Lien Suit ostensibly attacked the validity of the six warranty

deeds Helvetia had recorded for its lot sales in September and October 2013, Kahn

used the suit to challenge Puerto Verde’s original acquisition of Helvetia’s stock in

2007. (9RR271-72.) Kahn retained a widely discredited handwriting expert,

Curtis Baggett, to testify by affidavit that the stock certificate Helvetia issued to

Puerto Verde in 2007 was forged. (9RR158-65, 268-70.) Kahn personally signed

an affidavit with additional destructive testimony about Helvetia’s corporate

7 A copy of Plaintiff’s Original Petition and Application for Temporary and Permanent Injunctive Relief is attached as Appendix 6.

5

documents, including similar allegations that the stock certificate Helvetia issued

to Puerto Verde was “a fraudulent document” and was “clearly a forgery.”

(9RR98-100.)

These allegations paved the way for Kahn’s next unlawful steps in claiming

ownership of Helvetia. First, contrary to Helvetia’s books and records, Kahn

“concluded” Helvetia never sold its stock to Puerto Verde or anyone, and

implausibly had been operating since inception without any shareholders.

(4RR180-83, 9RR90.) Equally inconceivable, Kahn claimed Helvetia’s lack of

shareholders provided him the opportunity to step in and buy its stock. (4RR59;

9RR266.) At that time, in 2013, Helvetia’s net worth was well in excess of $1

million due to Puerto Verde’s infusion of $1.2 million in cash in 2007, and

enhanced by six years of operations. (4RR88-89; 9RR60, 266.) Kahn ignored the

company’s current value and instead claimed to “buy” Helvetia’s stock for just

$1,000, a price less than .01% of its value. (4RR58-60, 81-83; 9RR51-52.) Kahn

then created a fake stock certificate showing he was Helvetia’s sole shareholder.

(5RR81-83; 9RR53.) He dated the certificate September 7, 2013, a mere twelve

days after he had been fired from the company for misconduct. Id.

The Hon. John Gabriel heard Kahn’s Lien Suit the morning it was filed on

November 5 in an ex parte proceeding and entered an order finding Helvetia’s six

warranty deeds were fraudulent (the “Lien Order”). (9RR166-68.) Neither the

6

Lien Suit nor the Lien Order mentioned Judge Canales’ October 23, 2013 Order

that found Kahn’s warranty deeds purporting to convey all of Helvetia’s property

to his sole control were fraudulent. (9RR91-168.)

Helvetia promptly sought to set aside the Lien Order and requested sanctions

against Kahn and his attorney for filing the fictitious Lien Suit under Helvetia’s

name and without its authority. (4RR174; 9RR291.) On November 15, 2013, the

parties filed a Rule 11 agreement in both the Lien Suit and the case underlying this

appeal, agreeing to seek orders from the trial court in the Lien Suit setting aside the

Lien Order, and temporarily enjoining Kahn from acting on behalf of Helvetia as

part of this action. (4RR141-48, 163-68; 9RR84-87, 263, 274-75; 1CR1-4.)

Shortly thereafter Kahn disavowed the Rule 11 agreement and discharged his legal

counsel. (3RR63l; 4RR144; 9RR274.)

Helvetia immediately reset its motion to set aside the Lien Order in the Lien

Suit, and to enter a temporary injunction against Kahn in this suit. (4RR142-68.)

The Hon. Karen Pozza held a 3-day evidentiary hearing on both issues in

December 2013, where Kahn was represented by new legal counsel. Id.

Judge Pozza entered orders that (1) set aside the Lien Order; (9RR172-74)

(2) enjoined Kahn from acting on behalf of Helvetia (9RR321-36) and (3) ordered

Kahn to deposit money he had taken from Helvetia into the registry of the Court.

7

Id. Kahn deposited the sum of $291,280.51 into the court registry. (3CR81, 85-

86.)

C. Kahn is sanctioned $253,416 in the final judgment entered in the Lien Suit.

On somewhat of a parallel track, the Lien Suit proceeded to a final judgment

with the adjudication of the only remaining issue, Helvetia’s sanctions motion.

After a 3-day evidentiary hearing, the Hon. Martha Tanner entered a Final

Judgment and Order of Sanctions on April 1, 2014, sanctioning Kahn and his

attorney for $253,416 (the “Sanctions Judgment”). (9RR261-90.) The trial court

found:

 Puerto Verde owned Helvetia, and paid for its stock. (9RR263-64, 268, 271.)

 There was no evidence Kahn owned Helvetia’s stock. His legal arguments were groundless and his claim of ownership constituted a fraud on the court and on Helvetia. (9RR262, 266-70, 272, 274, 280, 282, 287.)

 The court gave no weight to Kahn’s persistence that forged or fraudulent documents allowed him to buy Helvetia’s stock. (9RR268- 70.)

 Puerto Verde contributed approximately $1.2 million in cash in 2007 to capitalize Helvetia and to acquire all 1,000 shares of its stock. The investment was not a “loan.” (9RR263-68, 271.)

 After Helvetia terminated Kahn’s employment, Kahn emptied Helvetia’s bank accounts, transferring approximately $300,000 to other bank accounts he controlled. (9RR264.)

8

The trial court denied Kahn’s motion for reconsideration on April 11, 2014.8

Kahn appealed the Sanctions Judgment in No. 04-14-00357-CV, and the appeal is

pending before the Court.

D. Kahn filed a Chapter 7 bankruptcy petition; the automatic stay is modified to allow this suit and the Lien Suit to proceed to judgment and appeal.

Kahn filed a pro se voluntary Chapter 7 bankruptcy petition on April 14,

2014. (1CR475.) The bankruptcy court partially lifted the automatic stay on April

28, 2014 to allow this suit and the Lien Suit to proceed to judgment and appeal.9

On August 29, 2014, the Chapter 7 bankruptcy Trustee moved for

authorization from the bankruptcy court to sell Kahn’s non-exempt assets, claims

and causes of action to Helvetia for $10,000, pursuant to 11 U.S.C. §§ 363 and 704

and FED. R. BANKR. P. 6004.10 After notice and a hearing the bankruptcy court

entered an order on October 17, 2014 authorizing the sale as in the best interest of

the estate, and found Kahn lacked standing to object to the sale.11 The order

expressly includes the sale of Kahn’s defensive appellate rights in this appeal. Id.

8 See Appendix 7.

9 See Appendix 8.

10 See Appendix 9.

11 See Appendix 1.

9

The sale transaction closed effective that same day.12 Kahn appealed the order and

the appeal has been briefed.13

E. Helvetia is awarded almost $2 million in the trial of the underlying suit.

The Hon. Michael Mery conducted the jury trial in the present suit beginning

May 12, 2014. (2RR1-3.) Shortly after midnight that day Kahn served Helvetia

with an amended counterclaim. (2RR4-6; 2CR350.) Judge Mery granted

Helvetia’s motion to strike the untimely pleading. (2RR14.) The trial court also

found that collateral estoppel barred the parties from relitigating issues already

fully litigated in the Lien Suit, including ownership of Helvetia’s stock. (2RR66-

68, 100, 101, 107, 109.)

A jury was seated. As part of the trial, Helvetia introduced substantial and

competent evidence establishing that Kahn breached his fiduciary duty owed to

Helvetia, he took money belonging to Helvetia, he slandered Helvetia’s title, his

conduct constituted theft, and was committed maliciously and intentionally. The

jury returned its unanimous verdict on May 21, 2014 in favor of Helvetia.

(7RR16-19; 3CR26.)

The trial court denied Kahn’s various post-trial motions that sought to set

aside the jury’s verdict, including his motion for judgment notwithstanding the

12 See Appendix 2.

13 See Appendix 3 and 4.

10

verdict. (3CR228, 4CR441-43.) Judge Mery entered a Final Judgment on June 11,

2014, awarding Helvetia actual damages in excess of $800,000, punitive damages

of $900,000, attorneys’ fees and costs, and pre- and post-judgment interest.

(3CR185.) The Final Judgment accounted for the funds the registry of the court

distributed to Helvetia on May 22, 2014 by crediting that amount against the total

amount of damages owed by Kahn. (3CR186.) The Final Judgment also

permanently enjoined Kahn from taking actions under Helvetia’s name.

(3CR187.)

SUMMARY OF THE ARGUMENT

This Court lacks jurisdiction because Kahn has no standing to pursue this

appeal. Upon filing for bankruptcy, Kahn’s appellate rights became vested

exclusively with the bankruptcy trustee, and those rights were sold to Helvetia in a

sale approved by the bankruptcy court.

Two court orders in the record best detail the basis of Kahn’s misconduct

towards Helvetia: (1) the trial court’s supplemental temporary injunction, and

(2) the trial court’s Sanctions Judgment, entered in the parallel case also on appeal.

(9RR261, 328.) The trial court here properly invoked collateral estoppel based on

detailed and annotated findings in the Sanctions Judgment that Kahn has no

ownership or other rights to Helvetia. The Sanctions Judgment incorporated

evidence from the temporary injunction proceedings.

11

Kahn failed to preserve error in his complaints about evidentiary rulings by

failing to offer the evidence or by identifying a ruling denying a proffer. The trial

court properly denied Kahn’s JNOV because ample competent evidence supports

the verdict, and the trial court did not abuse its discretion by striking Kahn’s

amended counterclaim filed the day of trial.

ARGUMENT AND AUTHORITIES

I. Because Helvetia acquired Kahn’s right to prosecute this appeal Kahn lacks standing, depriving this Court of jurisdiction.

As a threshold matter, because Kahn lacks standing to pursue this appeal the

Court lacks jurisdiction, and the appeal should be dismissed. Subject-matter

jurisdiction is essential to the authority of a court to decide a case and is never

presumed. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443-44

(Tex. 1993); see also Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553-54 (Tex.

2000). Standing is a necessary component of subject-matter jurisdiction and

cannot be waived. Blue, 34 S.W.3d at 553-54; see also Texas Ass’n of Bus., 852

S.W.2d at 443 (explaining that concept of standing arises from separation of

powers and constitutional prohibition on the issuance of advisory opinions).

Kahn’s filing of a voluntary petition for bankruptcy impacts the issues of

standing and jurisdiction in the instant appeal due to the creation of the bankruptcy

estate. When a debtor like Kahn voluntarily files a petition for bankruptcy, an

“estate” is created, comprised of “all legal or equitable interests of the debtor in

12

property as of the commencement of the case.” 11 U.S.C. § 541. This includes

causes of action or legal claims that belonged to the debtor before the petition was

filed. 11 U.S.C. § 541(a)(1); Douglas v. Delp, 987 S.W.2d 879, 882 (Tex. 1999);

Houston Pipeline Co. LP v. Bank of Am., N.A., 213 S.W.3d 418, 424-25 (Tex.

App.—Houston [1st Dist.] 2006, no pet.); Kane v. Nat’l Union Fire Ins. Co., 535

F.3d 380, 385 (5th Cir. 2008); see also, In re Moore, 608 F.3d 253, 257-58 (5th

Cir. 2010) (quoting In re S.I. Acquisition, Inc., 817 F.2d 1142, 1149 (5th Cir.

1987). It also extends to a debtor’s defensive appellate rights. In re Croft, 737

F.3d 372, 375 (5th Cir. 2013) (citing In re Educators Grp. Health Trust, 25 F.3d

1281, 1284 (5th Cir. 1994)); see also, Valenciana v. Hereford Bi-Products Mgmt.,

Ltd., No. 07-05-00051-CV, 2005 WL 3803144, *1 (Tex. App.—Amarillo Feb. 24,

2005, no pet.) (internal citations omitted). Consequently, Kahn’s Chapter 7

bankruptcy petition vested exclusive standing in the Chapter 7 bankruptcy trustee

to pursue this appeal. Id.

Such was the finding in a recent case of first impression by the Fifth Circuit

in In re Croft.14 Similar to this case, In re Croft arose out of a Bexar County

district court’s sanctions order against a defendant, Bradley L. Croft. Like Kahn,

Croft appealed the order to the Fourth Court of Appeals, and then filed for

14 Copies of the In re Croft opinions are attached as Appendix 10 and 11.

13

bankruptcy in the United States Bankruptcy Court for the Western District of

Texas.15 Id.

In affirming the Hon. Xavier Rodriguez’ opinion from the United States

District Court for the Western District of Texas, the Fifth Circuit held in In re

Croft held that a party’s rights to appeal from an adverse state court judgment, or

his “defensive appellate rights,” are considered a valuable property right under

Texas law. In re Croft, 737 F.3d at 376-77; Lowry v. Croft (In re Croft), 2012 BL

321154 (W.D. Tex. Dec. 10, 2012). By filing for bankruptcy, those “defensive

appellate rights” become part of the debtor’s bankruptcy estate, precluding the

debtor, here Kahn, from appealing the adverse state court judgment. Instead, the

exclusive right to pursue an appeal is vested in the bankruptcy trustee. Id. at 378.

The Fifth Circuit rejected the debtor Croft’s argument that such a finding

took away his right to object to the trustee’s prospective sale of his defensive

appellate rights, noting that the bankruptcy court would hear the trustee’s motion

and would permit the debtor to express his objection. Id. The Fifth Circuit also

rejected Croft’s claim that his right to object was “farcical” because the only party

interested in his defensive appellate rights would be the judgment holder who

would then extinguish the appeal. Id. The Fifth Circuit noted that, while that “may

be true, the trustee remains bound by its duty to maximize the value of the estate, 15 Mr. Croft actually appealed two separate sanctions orders to the Fourth Court of Appeals, both arising out of litigation in Bexar County district courts.

14

11 U.S.C. § 704(a)(1), and will sell only if the price offered exceeds the expected

value of litigating the appeal.” Id. A second safeguard recognized by the Fifth

Circuit was approval of the sale by the bankruptcy court. Id. Both of these

safeguards were followed in this case in the bankruptcy action.16

The trustee in Kahn’s bankruptcy proceedings chose not to pursue the instant

appeal because the estate lacked money for litigating it.17 On October 17, 2014,

with court approval, the trustee sold Kahn’s defensive appellate rights to Helvetia

along with all of Kahn’s other non-exempt assets, claims, and causes of action.18

Both the bankruptcy court and the trustee acknowledged that the sale would

preclude Kahn from further pursuing his litigation.19 Consequently, with the sale,

Kahn lost his rights and standing to pursue this appeal. Therefore this Court lacks

jurisdiction, and the appeal should be dismissed.

Even if Kahn’s pending appeal of the sale order is successful, and the sale is

reversed, standing is not restored in Kahn. Exclusive standing is once again placed

16 See Appendix 12, transcript excerpts from the October 15, 2014 hearing before the Hon. Craig Gargotta on the Trustee’s Motion to Sell All Non-Exempt Assets, Claims and Causes of Action, in Case No. 14-50980-cag, In re: Burton M. Kahn, Debtor, United States Bankruptcy Court for the Western District of Texas, San Antonio Division. 17 See Appendix 12, pp. 17, 22.

18 See Appendix 3.

19 See Appendix 12, p. 20

15

with the bankruptcy trustee, who, as referenced above, has already affirmed to the

bankruptcy court that the estate will not pursue the appeal.20

II. Standard of Review.

Should the Court decline to dismiss the appeal on jurisdictional grounds, it

should still affirm the trial court’s judgment. Construing his brief liberally, Kahn

argues in all of his issues that the trial court abused its discretion as follows:

(1) misapplied the doctrine of collateral estoppel, (2) improperly denied his motion

for JNOV, (3) improperly excluded witness testimony; (4) improperly struck his

amended counterclaim, and (5) disallowed presentation of financial data.

A trial court abuses its discretion only when its action is arbitrary and

unreasonable, without reference to guiding rules or principles. Downer v.

Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985); Walker v.

Gutierrez, 111 S.W.3d 56, 62 (Tex. 2003); Bay Area Healthcare Grp., Ltd. v.

McShane, 239 S.W.3d 231, 234 (Tex. 2007) (per curiam) (trial court’s decision to

admit or exclude evidence is reviewed for abuse of discretion). An abuse of

discretion occurs if the trial court clearly failed to analyze and determine the law

correctly or applied the law incorrectly to the facts. Walker v. Packer, 827 S.W.2d

833, 840 (Tex.1992).

20 See transcript excerpt from October 17, 2014 bankruptcy hearing, Appendix 12, pp. 17, 22.

16

Kahn’s issues are subject to other standards of review. For example Kahn

contends the trial court denied his motion for JNOV. (Br. p.15.) A trial court’s

decision to grant or deny a motion for JNOV is reviewed under a legal sufficiency

standard of review. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005).

Kahn complains the trial court erred in granting Helvetia’s motion to

exclude evidence or alternatively that it granted Helvetia’s motion in limine. Br.

pp. 9, 10, 28, 29. A ruling on a motion in limine is not a ruling on the admissibility

of evidence and does not preserve error. State v. Wood Oil Distrib., Inc., 751

S.W.2d 588, 594 (Tex. 1986); Greenberg Traurig of N.Y., P.C. v. Moody, 161

S.W.3d 56, 91 (Tex. App.—Houston [14th Dist.] 2004, no pet.); Huckaby v. A.G.

Perry & Son, Inc., 20 S.W.3d 194, 203 (Tex. App.—Texarkana 2000, pet. denied).

To the extent that Kahn complains otherwise of the trial court’s rulings on

admissibility of evidence, Kahn has failed to preserve any error.

Finally, “[p]ublic policy favors the validity of judgments.” Vickery v.

Comm’n for Lawyer Discipline, 5 S.W.3d 241, 251 (Tex. App.—Houston [14th

Dist.] 1999, pet. denied) (citing Crawford v. McDonald, 88 Tex. 626, 33 S.W. 325,

328 (1895)). “Thus, there is a general presumption of validity extending to the

judgments of courts of general jurisdiction. Without such a presumption, a court’s

judgment would have very little import and ‘there would be no end to troublesome

litigation.’” Id. (citing Williams v. Tooke, 116 S.W.2d 1114, 1120 (Tex. Civ.

17

App.—Texarkana 1938, writ dism’d)). The Court should accordingly indulge

every reasonable presumption in favor of the findings and judgment of the trial

court, and no presumption should be indulged against the validity of the judgment.

III. The Court did not err in applying collateral estoppel.

In his first issue, Kahn contends the trial court abused its discretion by

invoking collateral estoppel as grounds for disallowing the parties from relitigating

the issue of who owned Helvetia’s stock, and he further appears to argue that the

trial court disallowed admission of evidence based on collateral estoppel. Br. pp.

9, 10. His arguments are unavailing.

A. Kahn failed to provide a concise argument or supporting citations to the record or legal authority and so has waived his claim.

Kahn’s collateral estoppel argument is disjointed and ambiguous. The legal

authority he cites does not shed additional insight and in fact demonstrates a

fundamental misunderstanding of collateral estoppel. Kahn does not accompany

his lengthy quotes from inapposite case law with any explanation or analysis. His

record citations references are similarly deficient. He makes a bare reference to

Helvetia’s limine motion and to the Sanctions Judgment that he is separately

appealing, but nothing more. Moreover, he has repeated his same groundless and

18

confusing arguments relating to Judge Pozza and Judge Tanner from his other

appeal without proper record citations.21 (Br. pp. 6, 9, 10, 13, 14.)

It is well-settled that issues within an appellate brief may be waived absent

clear and concise arguments, with appropriate citations to legal authorities and to

the record. See TEX. R. APP. P. 38.1; Lott v. First Bank, No. 04-13-00531-CV,

2014 WL 4922896 (Tex. App.—San Antonio Oct. 1, 2014, no pet.) (mem. op.)

(appellant waived appellate complaint “by failing to comply with the briefing rules

set out in Rule 38.1 of the Texas Rules of Appellate Procedure”) (citing Keyes

Helium Co. v. Regency Gas Servs., L.P., 393 S.W.3d 858, 861-62 (Tex. App.—

Dallas 2012, no pet.) (holding failure to cite to relevant portions of record waives

appellate review); Niera v. Frost Nat’l Bank, No. 04-09-00224-CV, 2010 WL

816191, at *3 (Tex. App.—San Antonio Mar. 10, 2010, pet. denied) (mem. op.)

(holding failure to provide appropriate records citations or substantive analysis

waived appellate issue); WorldPeace v. Comm’n for Lawyer Discipline, 183

S.W.3d 451, 460 (Tex. App.—Houston [14th Dist.] 2005, pet. denied) (providing

that failure to offer argument, citations to record, or authority waives appellate

review). Because Kahn failed to support his claim with any cogent or organized

21 Helvetia addressed these issues in its Appellee’s Brief in In re a Purported Lien or Claim Against Helvetia Asset Recovery, Inc., No. 04-14-00357-CV, filed November 3, 2014, on pp. 34- 36, pages attached hereto as Appendix 13.

19

argument, analysis, record citations, or pertinent legal authority, he has waived this

issue.

B. Kahn failed to make any offer of proof for evidence he claimed should have been admitted and so has failed to preserve error.

To the extent Kahn did not waive his first issue by violating appellate

briefing rules, he has waived it by failing to preserve error for appellate review. To

preserve error concerning the exclusion of evidence, the complaining party must

actually offer the evidence or a summary of the evidence and secure an adverse

ruling from the court. Sink v. Sink, 364 S.W.3d 340, 347 (Tex. App.—Dallas 2012,

no pet.) (citing Fletcher v. Minn. Mining & Mfg. Co., 57 S.W.3d 602, 607 (Tex.

App.—Houston [1st Dist.] 2001, pet. denied)); see also, TEX. R. EVID. 103(a)(2);

TEX. R. APP. P. 33.1(a)(1). Without an offer of proof, the reviewing court cannot

determine whether exclusion of the evidence was harmful. Id.

If a party fails to make an offer of proof, it must introduce the excluded

testimony into the record by a formal bill of exception. See Southwest Country

Enters., Inc. v. Lucky Lady Oil Co., 991 S.W.2d 490, 494-95 (Tex. App.—Fort

Worth 1999, pet. denied). Failure to demonstrate the substance of the excluded

evidence through an offer of proof or bill of exception results in waiver of any

error in its exclusion. See id. at 494; Bobbora v. Unitrin Ins. Servs., 255 S.W.3d

331, 335 (Tex. App.—Dallas 2008, no pet.).

20

Kahn failed to make any offer of proof or bill of exception with regard to the

ownership of Helvetia’s shares or of any exclusion of evidence. He also cited no

order signed by the trial court. (Br. pp. 9, 10.) The complaining party must show

that the trial court ruled on the request, objection, or motion “either expressly or

impliedly.” TEX. R. APP. P. 33.1(a)(2)(A). Because of these deficiencies Kahn has

waived error. See TEX. R. APP. P. 33.1(a) (preservation of error a prerequisite to

presenting complaint for appellate review); In re M.S., 115 S.W.3d 534, 547 (Tex.

2003) (error preservation is threshold to appellate review); Basic Energy Serv., Inc.

v. D-S-B Props., Inc., 367 S.W.3d 254, 264 (Tex. App.—Tyler 2011, no pet.); Wal-

Mart Stores, Inc. v. McKenzie, 997 S.W.2d 278, 280 (Tex. 1999); TEX. R. APP. P.

33.1(a)(1)(A)-(B).

Kahn also failed to show that any error by the trial court probably caused the

rendition of an improper judgment. E-Z Mart Stores, Inc. v. Ronald Holland’s A-

Plus Transmission & Auto., Inc., 358 S.W.3d 665, 674-75 (Tex. App.—San

Antonio 2011, pet. denied) (quoting State v. Cent. Expressway Sign Assocs., 302

S.W.3d 866, 870 (Tex. 2009)). Absent this showing, Kahn’s claim is unavailing.

C. Kahn misconstrues the doctrine of collateral estoppel.

If Kahn preserved error, he still failed to show the trial court abused its

discretion in applying the doctrine of collateral estoppel to bar the parties’

relitigating the issue of who owned Helvetia’s stock. (Br. pp. 9-14).

21

Collateral estoppel prevents a party from relitigating an issue that it

previously litigated and lost. Quinney Elec., Inc. v. Kondos Entm’t, Inc., 988

S.W.2d 212, 213 (Tex. 1999); Barr v. Resolution Trust Corp., 837 S.W.2d 627,

628 (Tex. 1992); see Mid-Continent Cas. Co. v. Safe Tire Disposal Corp., 2

S.W.3d 393, 396 (Tex. App.—San Antonio 1999, no pet.) The doctrine applies

when an issue decided in the first action is actually litigated, is essential to the

prior judgment, and is identical to an issue in a pending action. Texas Dep’t of

Pub. Safety v. Petta, 44 S.W.3d 575, 579 (Tex. 2001); John G. & Marie Stella

Kenedy Mem’l Found. v. Dewhurst, 90 S.W.3d 268, 288 (Tex. 2002). Collateral

estoppel is designed to promote judicial efficiency and to prevent inconsistent

judgments by preventing relitigation of an ultimate issue of fact. Petta, 44 S.W.3d

at 579.

Specifically, a party is collaterally estopped from raising an issue under

Texas law when: (1) the facts sought to be litigated in the second case were fully

and fairly litigated in the first; (2) those facts were essential to the prior judgment;

and (3) the parties were cast as adversaries in the first case. Bonniwell v. Beech

Aircraft Corp., 663 S.W.2d 816, 818 (Tex. 1984)); Texas Dept. of Pub. Safety, 44

S.W.3d at 579. “Once an actually litigated and essential issue is determined, that

issue is conclusive in a subsequent action between the same parties.” Van Dyke v.

Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985); SWEPI,

22

L.P. v. Camden Resources, Inc., 139 S.W.3d 332, 339 (Tex. App.—San Antonio

2004, pet. denied) (collateral estoppel applies to issues expressly determined in a

prior action.)

Here, Helvetia has met all of the elements of collateral estoppel. The

ownership of Helvetia’s stock was fully litigated in the Lien Suit. Helvetia’s

January 15, 2014 sanctions motion placed directly into issue Kahn’s wrongful

claim to own Helvetia:

Kahn did not own any lots in Key Largo, so he filed his fictitious pleading in the name of Helvetia…whose stock he claimed to have purchased shortly before for $1,000….Kahn and [his attorney] hired Baggett, the discredited handwriting expert and convicted felon, to opine that Puerto Verde’s stock certificate in…Helvetia was a forgery.

Kahn improperly attached lengthy and substantive affidavits signed by him and by Baggett claiming that Puerto Verde did not own Helvetia because it had not paid for its stock in 2007, and asserting the stock certificate naming Puerto Verde as shareholder was “forged.”

Kahn’s allegations and affidavits argued that he had the authority to act on behalf of Helvetia, and could properly challenge Ripley’s authority to execute conveyance documents on behalf of Helvetia. But Kahn knew that the Court had already rejected his attempt to act on behalf of Helvetia, findings that were later echoed by Judges Sakai and Pozza when they each entered orders enjoining such conduct.

Kahn and George should also be sanctioned under 10.001(d) because they intentionally violated § 51.903…by seeking impermissible findings, namely that Puerto Verde did not own the stock of Helvetia, and that corporate documents were “forged.” [B]y claiming Kahn was a property owner [of Helvetia’s lots], and thus had standing to bring an action under § 51.903, Kahn and George’s actions made factual contentions that lacked any evidentiary support.

23

(9RR291, 293-94, 296-97, 301.)

Helvetia sought $760,000 in sanctions based on the fees and costs it incurred

relating to the Lien Suit, and to serve as a deterrent for future bad acts. (9RR308.)

Accordingly, Kahn was aware Helvetia was seeking a substantial monetary

sanction. Kahn had six weeks’ notice and time to prepare for the evidentiary

hearing on Helvetia’s, and he actively participated in the hearing. (9RR261;

2RR58-59.) Like in this case, Kahn and Helvetia were cast as adversaries in the

Lien Suit.

In entering the Sanctions Judgment the trial court necessarily had to

determine that Puerto Verde owned Helvetia’s stock, and that Kahn did not own

the stock, because the essential issue underlying Helvetia’s motion was Kahn’s

filing a fictitious lawsuit under Helvetia’s name, his false claim to buy Helvetia’s

stock, his fake stock certificate, and making an adverse claim of ownership for the

purpose of damaging Helvetia’s real estate sales. The Sanctions Judgment entered

by Judge Tanner reflected a full and fair litigation, and expressly stated both that

(1) Kahn did not own Helvetia’s stock, and (2) Puerto Verde acquired Helvetia’s

stock when it capitalized the company in 2007, and otherwise as follows:

 Puerto Verde owned Helvetia, and paid for its stock. (9RR263-64, 268, 271.)

 There was no evidence Kahn owned Helvetia’s stock. His legal arguments were groundless and his claim of ownership constituted a

24

fraud on the court and on Helvetia. (9RR262, 266-70, 272, 274, 280, 282, 287.)

 The court gave no weight to Kahn’s persistence that forged or fraudulent documents allowed him to buy Helvetia’s stock. (9RR268- 70.)

 Puerto Verde contributed approximately $1.2 million in cash in 2007 to capitalize Helvetia and to acquire all 1,000 shares of its stock. The investment was not a “loan.” (9RR263-68, 271.)

 After Helvetia terminated Kahn’s employment, Kahn emptied Helvetia’s bank accounts, transferring approximately $300,000 to other bank accounts he controlled. (9RR264.)

These facts relating to ownership of Helvetia’s stock were essential to the

Sanctions Judgment and for sanctioning Kahn. Because all elements of collateral

estoppel were met, the trial court in this case did not abuse its discretion in barring

relitigation of Puerto Verde’s ownership of Helvetia’s stock or any other ancillary

issues that Kahn may complain of.

D. Despite Kahn’s appeal of the Sanctions Judgment, it is final for purposes of collateral estoppel.

Kahn disputes the Sanctions Judgment is final for purposes of collateral

estoppel. (Br. pp. 9-10.) The Texas Supreme Court held that “a judgment is final

for the purposes of issue and claim preclusion ‘despite the taking of an appeal

unless what is called an appeal actually consists of a trial de novo.’” Scurlock Oil

Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex. 1986) (quoting RESTATEMENT (SECOND)

OF JUDGMENTS § 13 (1982)); see also, J.J. Gregory Gourmet Servs., Inc. v.

25

Antone’s Import Co., 927 S.W.2d 31, 33 (Tex. App.—Houston [1st Dist.] 1995, no

writ). In contesting finality Kahn fatally confuses the terms “de novo review” and

“trial de novo.”

A trial de novo is a trial, and is available to appeal cases which were

originally heard in courts which are not courts “of record.” For example, justice

courts and most municipal courts are not “courts of record.” Appeals from those

courts are by trial de novo in the county-level courts and, in some instances in the

district court. See, e.g., TEX. CONST. ART. V., TEX. CIV. PRAC. & REM. CODE

§ 51.001; Lone Star Gas Co. v. State, 137 Tex. 279, 153 S.W.2d 681, 682 (1941);

Sw. Bell Tel. Co. v. Public Util. Comm’n, 571 S.W.2d 503, 509 (Tex. 1978).

In contrast, a de novo review is of course a standard of review recognized by

Texas courts. When conducting a de novo review, a reviewing court exercises its

own judgment and re-determines each issue of fact and law. See Schade v. Tex.

Workers’ Comp. Comm’n, 150 S.W.3d 542, 549 (Tex. App.—Austin 2004, pet.

denied) (citing Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998)); BMC

Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Because

this Court’s review of the Sanctions Judgment in the separately pending appeal No.

04-14-00357-CV is based on the record from the proceedings in the Bexar County

district court, a court “of record,” the Court is not conducting a new trial or a “trial

de novo.” Consequently the Scurlock exception does not apply, and the Sanctions

26

Judgment is final for purposes of invoking collateral estoppel to bar relitigation of

ownership of Helvetia’s stock.

Kahn’s bare reference to an “offensive” use of collateral estoppel is

unavailing. (Br. pp. 12-13.) Offensive collateral would apply only if a party other

than Kahn litigated and lost the issue in the separate suit. Yarbrough’s Dirt Pit,

Inc. v. Turner, 65 S.W.3d 210, 216 (Tex. App.—Beaumont 2001, no pet.). Because

Kahn and Helvetia were cast as adversaries in both the Lien Suit and the suit

underlying this appeal, the trial court did not invoke “offensive” collateral

estoppel.

E. Kahn’s conclusory allegations about the merits of the Sanction Judgment are waived.

Kahn obliquely complains in his Brief about the merits of the Sanctions

Judgment (there are “several issues that by law require a review…”) (Br. p. 10.)

Kahn’s only grounds for his allegations are: (1) a citation to an opinion about

sanctions under Chapter 10 of the Texas Civil Practice & Remedies Code, (2) a

reference to Judge Pozza’s December 2013 injunction order, and (3) a reference to

his lawyer as a “representative party.” (Br. pp, 10, 11, 13.) Kahn fails to explain

these facially ambiguous references.

Similarly, Kahn offered no analysis or pertinent legal authority to support

his conclusory statements that (1) the trial court “acted unreasonable and without

reference to guiding rules of principles when it did not consider the subject matter

27

jurisdiction is a question of law that is reviewed de novo;” and (2) the trial court’s

“allowance of collateral estopped without fully litigated on the issue of ownership

of the shares of Helvetia was arbitrary and unreasonable without reference to

guiding rules or principles.” (Br. p.14.) Absent any cogent analysis, Kahn has

waived this issue, and has otherwise failed to demonstrate any abuse of discretion

with regard to the merits of the Sanction Judgment or to show it is insufficient to

bar the parties’ relitigation of the same issues. See TEX. R. APP. P. 38.1.

IV. The trial court properly denied Kahn’s motion for JNOV.22

In his second issue, Kahn contends the trial court erred in denying his

motion for JNOV, complaining generally the “jury’s answers [were] not based on

the evidence presented.” (Br. p.15.) A motion for JNOV should be granted when

(1) the evidence is conclusive and one party is entitled to recover as a matter of

law, or (2) a legal principle precludes recovery. Mancorp, Inc. v. Culpepper, 802

S.W.2d 226, 227 (Tex. 1990). When an appellant challenges the legal sufficiency

of an adverse finding on which he did not have the burden of proof at trial, he must

demonstrate that there is no evidence to support the adverse finding. Croucher v.

Croucher, 660 S.W.2d 55, 58 (Tex. 1983).

22 Although Kahn refers to a “motion for new trial” as part of this issue, Helvetia has interpreted his complaint as the trial court abused its discretion in denying Kahn’s JNOV motion. See Br., pp. 15, 23, 24.

28

In reviewing the record, this Court determines whether any evidence

supports the challenged findings; anything more than a scintilla of evidence is

legally sufficient to support a finding. Formosa Plastics Corp. USA v. Presidio

Eng’rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998); King Ranch, Inc. v.

Chapman, 118 S.W.3d 742, 751 (Tex. 2003). The Court considers and weighs all

of the evidence and will set aside the verdict only if the evidence that supports the

finding is so weak as to be clearly wrong and manifestly unjust. Cain v. Bain, 709

S.W.2d 175, 176 (Tex. 1986); Bay, Inc. v. Ramos, 139 S.W.3d 322, 329 (Tex.

App.—San Antonio 2004, pet. denied). In making this review, the Court is not a

fact finder, and will not pass upon the credibility of the witnesses or substitute its

judgment for that of the trier of fact, even if a different answer could be reached.

Bright v. Addison, 171 S.W.3d 588, 595-96 (Tex. App.—Dallas 2005, pet. dism’d).

The amount of evidence necessary to affirm a judgment is far less than necessary

to reverse. Id. “We credit evidence favoring the jury verdict if reasonable jurors

could and disregard contrary evidence unless reasonable jurors could not.” Tanner

v. Nationwide Mut. Fire Ins. Co., 289 S.W.3d 828, 830 (Tex. 2009); see also City

of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005) (“The final test for legal

sufficiency must always be whether the evidence at trial would enable reasonable

and fair-minded people to reach the verdict under review.”) Under these standards,

Kahn has failed to show any error or abuse of discretion by the trial court.

29

With regard to the measure of damages, as a general rule, the jury has broad

discretion to award damages within the range of evidence presented at trial, as long

as there is a rational basis for the jury’s calculation. Gulf States Utils. Co. v. Low,

79 S.W.3d 561, 566 (Tex. 2002); Mayberry v. Tex. Dep’t of Agric., 948 S.W.2d

312, 317 (Tex. App.—Austin 1997, writ denied). If there is a rational basis for the

jury’s calculation, its damages award will not be disregarded and set aside, even if

it is unclear in the record exactly how the jury calculated the award. First State

Bank v. Keilman, 851 S.W.2d 914, 930 (Tex. App.—Austin 1993, writ denied);

Vela v. Wagner & Brown, Ltd., 203 S.W.3d 37, 49 (Tex. App.—San Antonio 2006,

no pet.); Potter v. GMP, L.L.C., 141 S.W.3d 698, 703 (Tex. App.—San Antonio

2004, pet. dism’d). When the trial evidence supports a range of damages, an award

within that range is an appropriate exercise of the jury’s discretion, and a

reviewing court is not permitted to speculate on how the jury actually arrived at its

award. Id. at 704; see also Vela, 203 S.W.3d at 49.

A. Jury Question No. 2 – Misappropriation and Lost Profit damages caused by Breach of Fiduciary Duty and “Money Had and Received.”

Kahn’s challenge of misappropriation and lost profit damages is nebulous at

best (“There were questions on the amount that was in the registry of the Court and

it appeared confusing.”) (Br. p. 16.) His repeated contention that “there is no

evidence” is not supported with either proper record citations or cogent analysis,

30

and he associates legal presumptions to his bare conclusions that are both

unfounded and illogical.23

1. Uncontroverted evidence shows Kahn misappropriated at least $721,166.

The jury properly found Kahn’s breach of fiduciary duty and his removal of

Helvetia’s cash (“money had and received”) caused Helvetia to incur

misappropriation damages of $721,166.24 (3CR193-97.) Uncontroverted bank

records and Kahn’s own testimony demonstrate he misappropriated at least

$772,368.87 in just the years 2012 and 2013. That evidence shows Kahn withdrew

$392,202.87 or more of Helvetia’s cash from its bank account in the six weeks

before and after his employment was terminated in August 2013. Helvetia’s tax

return, prepared under Kahn’s oversight, shows he took $380,166 from Helvetia in

2012.

a. Kahn misappropriated at least $392,202.87 from Helvetia in 2013.

Kahn admitted at trial that he took $340,000 from Helvetia in 2013. 4RR 64-

67, 71-73; 9 RR 34, 70-73. In his first amended motion for JNOV, Kahn conceded

he actually took $342,202.87 in funds from Helvetia that year, just in the days after

23 Helvetia could not locate any of Kahn’s citations to the reporter’s record.

24 As the Texas Supreme Court has instructed, it is not necessary to distinguish between different theories of recovery when particular damages were recoverable under two different theories, here breach of fiduciary duty and slander of title. ERI Consulting Eng’rs, Inc. v. Swinnea, 318 S.W.3d 867, 876 n.3 (Tex. 2010).

31

his employment was terminated. (3CR81-84.) Kahn provided bank records and

other documents showing how he removed those funds, and those same records

were admitted into evidence at trial. Id., (9RR34, 70-73; 4RR33-50, 48-58, 62-81,

92-99, 104-10.) As his testimony revealed, Kahn transferred the funds to various

bank accounts he controlled, including Ideal Travel of San Antonio (“Ideal”), Trail

Construction, and Paradiv. Id. Helvetia bank records show Kahn misappropriated

an additional $50,000 from Helvetia shortly before he was fired, on August 6,

2013, by transferring the funds to another company he controlled, Contour

Construction Land Corp. (9RR71; 3CR84.) Consequently, uncontroverted

evidence establishes Kahn misappropriated at least $392,202.87 from Helvetia in

2013.

Kahn appears to claim, without supporting legal authority, he should be

absolved from liability for the funds he took from Helvetia after he was fired and

that he involuntarily deposited into the registry of the court by court order. (Br. p.

17.) (“funds …not in the possession of Kahn…cannot be construed as

misappropriated.” )25 Kahn omits that in the Final Judgment the trial court

properly accounted for those registry funds distributed to Helvetia in May 2014 as

a credit against the total amount of damages Kahn was adjudicated to owe:

25 Kahn’s conclusory statement that “The reality is that the funds were distributed as per 3 CR 41, 82” does not comply with TEX. R. APP. P. 38.1. (Br., p. 17.) The respective pages in Volume 3 of the clerk’s record are not reflective of funds or distribution, and thus do not support his conclusion.

32

It is further ORDERED that Defendants [Kahn] receive a credit for sums Plaintiff [Helvetia] received from the registry of the Court in the amount of $291,453.61, said credit to be applied against the actual damages and accrued interest as of the date the Judgment is signed.

(3CR186.) Because the distributed funds were credited against the total amount of

damages assessed against Kahn, his arguments that “nothing was stolen” or other

illogical and unexplained contentions about the registry funds are groundless.

b. Kahn misappropriated $380,166 in 2012.

Helvetia’s 2012 tax return, prepared and filed under Kahn’s watch, provided

uncontroverted evidence to the jury that Kahn misappropriated at least $380,166

from Helvetia in 2012. (9RR60; 9RR54-69.) Kahn’s after-the-fact attacks on the

tax preparer, who he failed to call as a witness to testify at trial, does not diminish

that the tax return by itself is far more than a scintilla of evidence proving Kahn

misappropriated that amount in 2012.

Kahn admitted that while still employed as president of Helvetia he retained

a tax preparer to prepare Helvetia’s 2012 income tax return. (4RR83-88.) He

admitted providing the financial information to the tax accountant that was

required to prepare the tax return. (4RR89.) The tax return showed Kahn took at

least $380,166 from Helvetia in 2012, accounting for it on the tax return as a “loan

to shareholder.” (9RR54-69.)

In Schedule G of the tax return, Kahn identified himself as Helvetia’s sole

shareholder. (4RR86-90; 9RR66.) He signed the tax return under oath. (4RR83-

33

88; 9RR60.) In Schedule L, where a corporation records its balance sheet accounts

per its books and records, Kahn agreed that at the first of the year Helvetia had no

loans to shareholders – it is blank. (9RR60.) Kahn agreed that at the end of 2012,

the tax return reported Helvetia “loaned” the sum of $380,166 to its “shareholder,”

meaning that sum had been removed by Kahn in that one year alone. (4RR89-90;

9RR60.)

This sum was calculated by the tax preparer retained by Kahn, and with the

financial documents Kahn provided to him. (4RR85-90.) Kahn admitted that he

was “responsible for the numbers” and he swore to the accuracy of the tax return.

Id. This evidence represents far more than a scintilla to support this component of

the jury’s damages award, and even Kahn admits the sum of $380,166 was part of

the $721,166 the jury found Kahn had misappropriated from Helvetia.26

Kahn did not fool the jury with his contention that a lack of “loan

documents” was evidence he did not misappropriate the money. Kahn

purposefully did not create loan documents, or other appropriate indicia used by a

corporation to record and account for a loan to an employee, both to conceal he

was taking money from Helvetia, and also to evade paying personal income taxes

on those funds as salary.

26 Kahn’s contention that Helvetia was “hiding something” by “preventing” Kahn’s tax preparer Chris Kohn from testifying, is factually false and not supported by the record. (Br., pp. 18-19.)

34

2. The evidence supports the jury’s finding that Kahn caused Helvetia to incur $133,000 in lost profits.

Kahn’s flat assessment there were “no lost sales and no lost profits” is

conclusory and contrary to the evidence. (Br. p.19.) Lost profits are recoverable

for a breach of fiduciary duty when it is shown that the loss is the natural and

probable consequence of the complained of act. Texas Instruments, Inc. v.

Teletron Energy Mgmt., Inc., 877 S.W.2d 276, 279 (Tex. 1994). In reviewing the

legal sufficiency of a lost profits award, the Court determines whether the amount

awarded was established with reasonable certainty through competent evidence.

Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d

41, 50 n.3 (Tex. 1998); Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84

(Tex. 1992) (citations omitted).

Kahn knew his claim to own Helvetia would, as a natural consequence, chill

Helvetia’s property sales, and in particular would make homebuilders, lenders and

title companies reluctant to close on sales if they thought Kahn would record

adverse ownership claims to the property. (9RR281-82.) Kahn admitted he filed

the Lien Suit specifically to shut down Helvetia’s property sales, and the trial court

in the Sanctions Judgment expressly found that Kahn’s actions made it difficult or

impossible for Helvetia to continue its sales of lots. (9RR281, 284.) Kahn

intentionally prolonged the time Helvetia could not sell lots by reneging on a

promise to remove his fraudulent lien. (9RR283.)

35

Amanda Tidmore, an escrow officer with title company First American

Title, confirmed that Kahn’s actions caused sales to fail. Ms. Tidmore handled

title insurance matters for Helvetia’s property sales in the Key Largo subdivision at

the time the dispute arose. As would be expected, Ms. Tidmore knew of Kahn’s

ownership claims in Helvetia and its property in November 2013, when the Lien

Suit and this suit were filed. Ms. Tidmore testified that the dispute halted property

closings in Key Largo. Five pending property sales transactions never closed

because of the dispute, and Helvetia lost those sales. (4RR208, 211-15, 222-24.)

Ms. Tidmore explained that multiple ownership claims to a parcel of

property clouded title to that property. In other words, Kahn’s ownership claim and

fraudulent warranty deeds prevented Helvetia from conveying lots to prospective

buyers with a clear title and prevented issuance of a clear title policy. Because title

companies like her employer First American Title could not issue a clear title

policy, mortgagors or lenders would not lend funds to the prospective homebuilder

or homebuyer to buy the property and construct the home, and consequently the

sale failed. (4RR187-92, 203.) Because of the conflicting ownership claims First

American Title declined to distribute to Helvetia sales proceeds of $90,000 and

$100,000 generated from four previous lot sales. (Id.; 4RR209.)

Homebuilder Adam Smith and a second homebuilder each held options to

buy 100 of Helvetia’s lots in Key Largo. (4RR223, 5RR169-70.) Mr. Smith

36

testified two prospective homeowners backed out of buying and building a home

on Helvetia’s lots as a result of Kahn’s false ownership claims. (4RR222-25.) Had

those sales closed, Smith would have paid Helvetia between $23,000 and $25,000

each, or a total of $46,000 to $50,000. (4RR214-15.) This is consistent with

Kahn’s 2013 letter to the Bexar Appraisal District where he represented Helvetia

earned an average of $23,453.86 for each lot sale, with no associated expense.

(SCR70-71.)

Counting just two of the five lost sales, substantial and competent evidence

demonstrated that Helvetia lost profits in the range of $136,000 to $150,000.27 The

amount of $133,000 in actual damages found by the jury was actually less than the

range established by the evidence. See Gulf States Utils. Co. v. Low, 79 S.W.3d

561, 566 (Tex. 2002) (jury has broad discretion to award damages within range of

trial evidence). “Recovery for lost profits does not require that the loss be

susceptible of exact calculation.” ERI Consulting Eng’rs, Inc. v. Swinnea, 318

S.W.3d 867, 876 (Tex. 2010) (quoting Holt Atherton Indus., Inc. v. Heine, 835

S.W.2d 80, 84 (Tex. 1992)). Because ample objective and uncontroverted factual

and legal evidence support the jury’s award of lost profits of $133,000, Kahn’s

argument must fail.

27 Ms. Tidmore: $90,000 to $100,000, plus Mr. Smith: $46,000 to $50,000, equals range of $136,000 to $150,000.

37

3. The evidence supports the jury’s award of punitive damages and attorneys’ fees.

Kahn’s sole argument challenging the jury’s findings of punitive damages

and attorney’s fees is his contention Helvetia established no actual damages were

caused by his various torts and other wrongful conduct. (Br. pp. 22,23.) His claim

fails because he made no appropriate appellate argument, he did not appeal the

liability findings, and the evidence conclusively established Kahn’s actions caused

Helvetia to incur substantial actual damages, much more than the scintilla of

evidence required. His issue should be overruled.

V. Kahn failed to preserve any error about witnesses he claimed were not allowed to testify.

In his third issue, Kahn claims the trial court abused its discretion “by not

allowing [Kahn] time to respond to [Helvetia’s] claim of no knowledge which was

another LIE.” (Br. p.24.) Kahn’s complaint that Helvetia “lied,” “ambushed,” and

“sandbagged” Kahn about disclosures of trial witnesses is unsupported and

demonstrably false.

If a trial court excludes the testimony of a witness, to challenge that ruling

on appeal the party must show that the excluded testimony was preserved by an

offer of proof or a formal bill of exception. See TEX. R. EVID. 103(a)(2). Error

cannot be predicated on the exclusion of evidence unless the substance of the

evidence was made known to the court by an offer of proof. Ludlow v. DeBerry,

38

959 S.W.2d 265, 269-70 (Tex. App.—Houston [14th Dist.] 1997, no writ). When

making an offer of proof, the attorney should make a concise statement of what

testimony would be elicited from each witness. See In re N.R.C., 94 S.W.3d 799,

806 (Tex. App.—Houston [14th Dist.] 2002, pet. denied). Error is preserved by the

trial court’s explicit ruling that the evidence in the offer of proof is not admissible

during trial. See, e.g., Greenstein, Logan & Co. v. Burgess Mktg., Inc., 744

S.W.2d 170, 181 (Tex. App.—Waco 1987, writ denied) (error was not preserved

because reporter’s record did not show what evidence was refused).

Kahn failed to preserve any error about any witness he may be complaining

was excluded from testifying. The trial court did not preclude either Tracy

Plummer or Jeff Jenson. (Br. pp. 24-25.) Ms. Plummer, Judge Pozza’s court

reporter, testified until it became apparent Kahn intended to elicit testimony from

her that was not relevant or that was barred by collateral estoppel. (Br. pp. 24-25.)

5RR73-79. Kahn did not attempt to offer any testimony from Ms. Plummer outside

of the presence of the jury that related to “original documents,” “wiring

instructions,” or ink-dating, as he addresses in his brief. (Br. pp. 24-25.) Kahn

never called the second witness, FBI agent Jeff Jenson, to testify.

Because Kahn offered no “concise statement of what testimony would be

elicited” from either Ms. Plummer or Mr. Jenson, or in fact any witness he claims

was improperly precluded from testifying, he has failed to make any appropriate

39

offer of proof, and thus has failed to preserve any error. N.R.C., id.; McInnes v.

Yamaha Motor Corp., 673 S.W.2d 185, 187 (Tex. 1984). See TEX. R. EVID.

103(a)(2).

VI. The Court did not abuse its discretion in striking Kahn’s untimely-filed Amended Counterclaim.

In his fourth issue, Kahn contends the trial court abused its discretion by

striking Defendants’ First Amended Original Answer to Plaintiff’s First Amended

Original Petition and Application for Permanent Injunction Relief, Affirmative

Defenses, Verified Denials, Third Party Claims, and Motion to Show Authority

(the “Amended Counterclaim”). (Br. p. 26-28.)

Kahn served his Amended Counterclaim at 12:45 a.m. on May 12, 2014, the

day of trial. (2CR350-60.) The Amended Counterclaim contained six new pages

of factual allegations, including vague references to “schemes” using “several

sham corporations,” “money trails,” and “secret numbered accounts,” virtually all

related to Kahn’s continued claim he owned Helvetia, despite the preclusive

findings otherwise in the April 2014 Summary Judgment. (2CR352-55.) Kahn

also added new claims, including fraud, and also added a new party, Robert Ripley,

that the trial court had previously severed into a different cause number. (1CR245.)

Kahn did not seek leave of court to file the Amended Counterclaim. Helvetia filed

a motion to strike it on the grounds of untimeliness and surprise, and the motion

was granted. (Id.)

40

A trial court’s decision to grant or strike a pleading amendment is reviewed

for an abuse of discretion. See Greenhalgh v. Service Lloyds Ins. Co., 787 S.W.2d

938, 939-40 (Tex. 1990). A trial court has discretion to refuse an amended

pleading when the amendment asserts a new cause of action or defense. Halmos v.

Bombardier Aerospace Corp., 314 S.W.3d 606, 622 (Tex. App.—Dallas 2010, no

pet.). Rule 63 provides that parties may amend their pleadings “as they may desire

. . . at such time as not to operate as a surprise to the opposite party; provided, that .

. . within seven days of the date of trial or thereafter” any pleading amendments

may be filed only with prior leave of court, “which leave shall be granted” unless

the opposing party makes a showing of surprise. See TEX. R. CIV. P. 63.

Because Kahn’s Amended Counterclaim was filed less than seven days

before trial, leave of court was necessary under Rule 63. See Houtex Ready Mix

Concrete & Materials v. Eagle Constr. & Envt’l Servs. L.P., 226 S.W.3d 514, 520

(Tex. App.—Houston [1st Dist.] 2006, no pet.). And, because Kahn added new

claims and parties, and failed to obtain leave of court, the trial court did not abuse

its discretion in refusing to consider his Amended Counterclaim. See TEX. R. CIV.

P. 63; Mensa-Wilmot v. Smith Int’l, 312 S.W.3d 771, 778-79 (Tex. App.—Houston

[1st Dist.] 2009, no pet); Halmos, 314 S.W.3d at 622.

41

VII. Kahn’s vague “catch-all” issue fails to specify any alleged error by the trial court.

Kahn’s final issue is unreasonably vague and ambiguous. To the extent he is

using this issue as a basis to request that the Court review and consider perhaps

1,000 pages of check copies, information not properly in the record, his issue

should be denied. Kahn’s “compilation of financial data” is inadmissible hearsay,

and is an attempt to inject self-serving but facially false “accounting” information

into the record. (Br. p. 29.)

“[An] [a]ppellant’s citations to his appendix are not sufficient. He must cite

to the appellate record.” Aguilera v. Aguilera, No. 04-13-00034-CV, 2014 WL

769445 (Tex. App.—San Antonio May 6, 2013, orig. proceeding) (mem. op.)

(citing TEX. R. APP. P. 38.1(d), (g), (i)). “The ‘record’ to which these rules refer is

the official court record.” Lucky Merk, LLC v. Greenville Landmark Venture, Ltd.,

No. 05-12-00848-CV, 2014 WL 4261204 (Tex. App.—Dallas Aug. 28, 2014, no

pet.) (mem. op.); In re Bishop, No. 07-12-00455-CV, 2013 WL 6529304 (Tex.

App.—Amarillo Dec. 4, 2013, no pet.) (evidentiary material omitted from the

record cannot be considered in determining whether the trial court erred, “[a]nd, it

matters not whether the litigants attached the information to their briefs or in an

appendix accompanying their briefs”) (citing In re Guardianship of Winn, 372

S.W.3d 291, 297 (Tex. App.—Dallas 2012, no pet.).)

42

To the extent Kahn’s fifth issue seeks additional relief, it should be denied.

Kahn provided no record citations, citations to legal authority, analysis or

argument for this last issue. For these reasons, and because Kahn articulated this

issue as a mere conclusion, he has waived the issue. See TEX. R. APP. P. 33.1,

38.1(e), 38.1(h), 38.1(i) (requiring brief to contain a clear and concise argument for

the contentions made with appropriate citations to authorities); Fredonia State

Bank v. American Life Ins., 881 S.W.2d 279, 284 (Tex. 1994) (discussing “long-

standing rule” that issue may be waived due to inadequate briefing).

VIII. Because Kahn’s Brief overall violates appellate rules and law, he has waived appellate review.

While the Court is to construe the Texas Rules of Appellate Procedure

reasonably yet liberally, even the broadest review of Kahn’s Brief demonstrates he

has failed to comply with Rule 38.1 of the Texas Rules of Appellate Procedure.

See TEX. R. APP. P. 38.1. Kahn’s Brief is confusing and ambiguous, and is

premised on inaccurate and unsupported assertions that are not part of the appellate

record.

Kahn’s attempt to insert unsupported allegations into the appellate record is

particularly inappropriate because the trial court struck his untimely Amended

Counterclaim that included these same statements. (2CR352-54.) The trial court’s

exclusion of such matters by striking the Amended Counterclaim is even one of

Kahn’s appeal issues, No. 4 discussed in ¶ VI above.

43

Kahn has twice been apprised in the last year by this Court that an appellate

brief lacking appropriate record references to the appellate record in the statement

of facts constitutes a formal defect. On March 26, 2014, the Court ordered Kahn to

file an amended appellant’s brief in an interlocutory appeal arising out of this same

underlying lawsuit, No. 04-14-00012-CV, after finding Kahn’s record citations

constituted flagrant violations of Rule 38. Similarly, on July 3, 2014, in appeal

No. 04-14-00357-CV, the Court entered the same order after finding Kahn’s

appellant’s brief in that matter constituted a flagrant violation of Rule 38.

Underscoring the breadth of these violations is Kahn’s record reference

legend, which by itself is a confusing array of information that has completely

prevented Helvetia from understanding the sources of Kahn’s citations. See Br. p.

xv. Helvetia has spent countless hours attempting unsuccessfully to find in the

record the information Kahn has cited. Kahn appears to be citing records in

separate lawsuits and separate appeals, but the particular appeal and record remain

indecipherable. (Br. p. xv.)

Further, speaking overall about the Brief, the pervasive grammatical,

typographical and punctuation errors have complicated Helvetia’s attempts to

understand Kahn’s complaints. If the Court finds his Brief compliant, and if

Helvetia has misinterpreted Kahn’s issues or has failed to address an issue it did

44

not correctly interpret, Helvetia respectfully requests that it be permitted an

opportunity to supplement its briefing.

It is well-settled that issues within an appellate brief may be waived absent

clear and concise arguments, with appropriate citations to legal authorities and to

the record. Lott v. First Bank, No. 04-13-00531-CV, 2014 WL 4922896 (Tex.

App.—San Antonio Oct. 1, 2014, no pet.) (mem. op.) (appellant waived appellate

complaint “by failing to comply with the briefing rules set out in Rule 38.1 of the

Texas Rules of Appellate Procedure”) (citing Keyes Helium Co. v. Regency Gas

Servs., L.P., 393 S.W.3d 858, 861-62 (Tex. App.—Dallas 2012, no pet.) (holding

failure to cite to relevant portions of record waives appellate review); Niera v.

Frost Nat’l Bank, No. 04-09-00224-CV, 2010 WL 816191, at *3 (Tex. App.—San

Antonio Mar. 10, 2010, pet. denied) (mem. op.) (holding failure to provide

appropriate records citations or substantive analysis waived appellate issue);

WorldPeace v. Comm’n for Lawyer Discipline, 183 S.W.3d 451, 460 (Tex. App.—

Houston [14th Dist.] 2005, pet. denied) (providing that failure to offer argument,

citations to record, or authority waives appellate review); Citizens Nat’l Bank v.

Allen Rae Invs., Inc., 142 S.W.3d 459, 489 (Tex. App.—Fort Worth 2004, no pet.)

Pro se litigants like Kahn are held to these same standards, and they must

therefore comply with all applicable rules of procedure. See Mansfield State Bank

v. Cohn, 573 S.W.2d 181, 184-85 (Tex. 1978); Washington v. Bank of New York,

45

362 S.W.3d 583, 584 (Tex. App.—Dallas 2012, no pet.); Valadez v. Avitia, 238

S.W.3d 843, 845 (Tex. App.—El Paso 2007, no pet.); King v. Deutsche Bank Nat’l

Trust Co., No. 04-12-00605-CV, 2013 WL 3871067 (Tex. App.—San Antonio

July 24, 2013, no pet.) citing Shull v. United Parcel Serv., 4 S.W.3d 46, 52-53

(Tex. App.—San Antonio 1999, pet. denied).

In addition to the record deficiencies described above, Kahn’s Brief fails to

direct the Court’s attention, with clear and concise argument, to the errors he

asserts. An appellant must state concisely the complaint he may have, provide

understandable, succinct, and clear argument for why his complaint has merit in

fact and in law, and cite and apply law that is applicable to the complaint being

made along with record references that are appropriate. TEX. R. APP. P. 38.1;

Bolling v. Farmers Branch Indep. Sch. Dist., 315 S.W.3d 893, 895 (Tex. App.—

Dallas 2010, no pet.) (applying TEX. R. APP. P 38.1(f), (h), and (i)). To comply

with the rules of appellate procedure, the brief must “guide [the Court] through the

appellant’s argument with clear and understandable statements of the contentions

being made.” Bolling, 315 S.W.3d at 896.

An appellant’s brief must also contain a “succinct, clear, and accurate

statement of the argument made in the body of the brief.” TEX. R. APP. P. 38.1(g).

“[U]ttering brief conclusory statements” unsupported by citations to the record or

legal authority does not satisfy the rules. TEX. R. APP. P. 38.1(i); Valadez, 238

46

S.W.3d at 845; Sweed v. City of El Paso, 195 S.W.3d 784, 786 (Tex. App.—El

Paso 2006, no pet.); Tesoro Petroleum Corp. v. Nabors Drilling USA, Inc., 106

S.W.3d 118, 128 (Tex. App.—Houston [1st Dist.] 2002, pet. denied); Witherspoon

v. Johnson, No. 04-06-00403-CV, 2007 WL 3171304 (Tex. App.—San Antonio,

Oct. 31, 2007, pet. denied) (mem. op.). If the Court must speculate or guess about

what contentions are being made, then the brief fails. Id. The Court is not

responsible for identifying possible trial court error. Canton-Carter v. Baylor Coll.

of Medicine, 271 S.W.3d 928, 931 (Tex. App.—Houston [14th Dist.] 2008, no

pet.). The Court is also not responsible for searching the record for facts that may

be favorable to a party’s position. Fredonia State Bank, 881 S.W.2d at 283-84; see

also, Alaniz v. State, No. 04-13-00118-CR, 2014 WL 954545 (Tex. App.—San

Antonio July 18, 2013, no pet.) (Court struck amended brief after it still failed to

acquaint the court with the issues or to present argument that would enable the

court to decide the case).

Kahn provides no cogent argument in the body of his Brief that sufficiently

augments his objectively inarticulate issues. The document is a series of brief

conclusory utterings, disjointed and cryptic factual assertions and legal arguments

far afield from the trial court’s discretion in making the various rulings Kahn

complains of. Even his summary of the argument lacks sufficient clarity to

identify Kahn’s contentions of error:

47

The trial court abused its discretion by allowing collateral estoppel from a sanction order that was being appealed de novo and prevented Appellant to present a defense and having a fair trial. The judgment for Appellee without any evidence from Appellee. Thus the trial should be reversed and remanded for a new trial.

(Br. p. 9.)

Kahn provides no meaningful analysis or explanation to demonstrate the

trial court abused its discretion in any of its rulings. While Kahn contended the

standard of review for all of his issues was “abuse of discretion,” he cited no

supporting authority or argument tailored to his specific issues showing how the

trial court abused its discretion, or any analysis applying the appropriate legal

authority to the facts of his case. The Brief relies heavily on alleged facts outside

the record, improper legal presumption, and simply false statements, and in general

seeks to have this Court make determinations outside the scope of its review on

issues not properly before the Court.

A brief must explain how the law that is cited is applicable to the facts of the

case. Hernandez v. Hernandez, 318 S.W.3d 464, 466 (Tex. App.—El Paso 2010,

no pet.); Plummer v. Reeves, 93 S.W.3d 930, 931 (Tex. App.—Amarillo 2003, pet.

denied); Nguyen v. Kosnoski, 93 S.W.3d 186, 188 (Tex. App.—Houston [14th

Dist.] 2002, no pet.). A party who fails to support his contentions with authority or

citations to the record when appropriate waives the issue due to inadequate

briefing. TEX. R. APP. P. 38.1(i); see Morrill v. Cisek, 226 S.W.3d 545, 548-49

48

(Tex. App.—Houston [1st Dist.] 2006, no pet.) (holding party waived issues by

failing to cite to record and authority); Lueg v. Lueg, 976 S.W.2d 308, 310 (Tex.

App.—Corpus Christi 1998, pet. denied) (same). Although appellate courts must

interpret this requirement liberally, an issue not supported by authority is waived.

Republic Underwriters Ins. Co. v. Mex.-Tex., Inc., 150 S.W.3d 423, 427 (Tex.

2004); Nguyen, 93 S.W.3d at 188; see also In re C.Z.B., 151 S.W.3d 627, 635

(Tex. App.—San Antonio 2004, no pet.); Daniel v. Falcon Interest Realty Corp.,

190 S.W.3d 177, 189 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (“Issues on

appeal are waived if an appellant fails to support his contention by citations to

appropriate authority or cites only to a single non-controlling case”). Kahn’s spare

citations to legal authority in his Brief do not support any credible or concisely

articulated argument.

Because Kahn’s Brief fails to comply with the requirements of Texas Rule

of Appellate Procedure 38 by presenting such attenuated, unsupported argument,

Kahn has waived his issues on appeal. TEX. R. APP. P. 38.1 (f), (g); Valadez, 238

S.W.3d at 845; see also, Saenz v. Saenz, No. 04-14-00033-CV, 2014 WL 6687284

(Tex. App.—San Antonio Aug. 14, 2014, no pet.) (denying appellant’s motion to

file supplemental brief, and citing Canton-Carter, 271 S.W.3d at 931 (brief

“provides a plethora of factual assertions and complaints with numerous citations

49

to various documents [but] fails to provide ‘a clear and concise argument for the

contentions made, with appropriate citations to authorities’.”)

CONCLUSION

Helvetia respectfully requests that the Court dismiss the appeal because it

lacks jurisdiction as set forth herein, or because Kahn has waived appellate review.

In addition, or alternatively, Helvetia requests that the Court affirm the trial court’s

Final Judgment in all respects. Helvetia further respectfully requests that the Court

award it all such other and further relief to which it may be entitled.

Respectfully submitted,

HAYNES AND BOONE, LLP

/s/ Lisa S. Barkley Werner A. Powers State Bar No. 16218800 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Telephone: (214) 651-5000 Facsimile: (214) 651-5940 Werner.Powers@haynesboone.com

Lisa S. Barkley State Bar No. 17851450 112 E. Pecan, Suite 1200 San Antonio, Texas 78205 Telephone: (210) 978-7427 Facsimile: (210) 554-0427 Lisa.Barkley@haynesboone.com

ATTORNEYS FOR APPELLEE HELVETIA ASSET RECOVERY, INC.

50

CERTIFICATE OF COMPLIANCE WITH RULE 9.4 This brief complies with the type-volume limitation of Texas Rule of Appellate Procedure 9.4(i) because, according to the Microsoft Word 2010 word count function, it contains 11,491 words, excluding the parts of the brief exempted by Texas Rule of Appellate Procedure 9.4(i)(2)(B).

This brief complies with the typeface requirements of Texas Rule of Appellate Procedure 9.4(e) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2010 software in Times New Roman 14 point font in text and Times New Roman 12 point font in footnotes.

/s/ Lisa S. Barkley Lisa S. Barkley

51

CERTIFICATE OF SERVICE In accordance with the Texas Rules of Appellate Procedure, the undersigned certifies that a copy of the attached instrument was served on Appellant via email and at the following address on this 17th day of March, 2015:

Burton Kahn, pro se 1706 Alpine Circle San Antonio, Texas 78248 glentrail@yahoo.com

/s/ Lisa S. Barkley Lisa S. Barkley

APPENDIX Tab 01: October 17, 2014 Bankruptcy Order approving the sale of assets to Helvetia

Tab 02 Chapter 7 Trustee’s Bill of Sale and Quit Claim Deed, effective October 17, 2014

Tab 03 Kahn’s October 31, 2014 Notice of Appeal to United States District Court for the Western District of Texas, appealing Bankruptcy Court’s October 17, 2014 order approving sale of assets to Helvetia

Tab 04 Helvetia’s February 24, 2015 Appellee’s Brief (without exhibits)

Tab 05 Judicial Finding of Fact and Conclusion of Law Regarding a Document or Instrument Purporting to Create a Lien or Claim, entered October 23, 2013

Tab 06 Plaintiff’s Verified Original Petition and Application for Temporary and Permanent Injunctive Relief, entered November 4, 2013.

Tab 07 Order Denying Kahn’s Motion for Reconsideration, entered April 11, 2014.

Tab 08 Order Granting Helvetia Asset Recovery, Inc.’s Motion to Lift or Modify the Automatic Stay, entered April 28, 2014.

Tab 09 Trustee’s Motion to Sell All Non-Exempt Assets, Claims and Causes of Action, entered August 29, 2014.

Tab 10 In re Croft, 737 F.3d 372 (5th Cir. 2013)

Tab 11 Lowry v. Croft (In re Croft), 2012 BL 321154 (W.D. Tex. Dec. 10, 2013)

Tab 12 Transcript excerpts from hearing before the Hon. Craig Gargotta on the Trustee’s Motion to Sell All Non-Exempt Assets, Claims and Causes of Action, October 15, 2014

Tab 13 Appellee’s Brief in In re a Purported Lien or Claim Against Helvetia Asset Recovery, Inc., No. 04-14-00357-CV, filed November 3, 2014, pp. 34-36

Tab 01

October 17, 2014 Bankruptcy Order approving the sale of assets to Helvetia1

1 Case No. 14-50980-cag, In re: Burton M. Kahn, Debtor, United States Bankruptcy Court for the Western District of Texas, San Antonio Division 14-50980-cag Doc#70 Filed 10/17/14 Entered 10/17/14 15:19:55 Main Document Pg 1 of 4

IT IS HEREBY ADJUDGED and DECREED that the below described is SO ORDERED.

Dated: October 17, 2014.

__________________________________

CRAIG A. GARGOTTA UNITED STATES BANKRUPTCY JUDGE

__________________________________________________________________

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

IN RE: )

)

BURTON M. KAHN, ) Bankruptcy Case No. 14-50980cag )

Debtor. )

) Chapter 7

ORDER AUTHORIZING SALE OF ALL NON-EXEMPT ASSETS, CLAIMS AND CAUSES OF ACTION

On this date came on to be considered the Motion for Authority to Sell all non-exempt

assets, claims and causes of action, filed by Johnny W. Thomas, Trustee. Due notice having been

given and one objection having been overruled, the Court is of the opinion and so finds that the

Movant’s sale of all non-exempt assets, claims and causes of action attached herein, is in the best

interest of the estate based on the reasons stated on the record which are incorporated by

reference herein. As more fully explained on the record, the Court finds the debtor has shown no

value or equity in the assets to be sold and therefore the Court further finds the debtor has no

standing to object to this sale. The Court has determined there is no value to exceed the debts in

i:\jwt trustee cases\order authorizing sale of personal property3.docx 14-50980-cag Doc#70 Filed 10/17/14 Entered 10/17/14 15:19:55 Main Document Pg 2 of 4

this bankruptcy, and the debtor has no pecuniary interest or value in the estate assets, with the

result he has no standing to object to this sale. It is accordingly,

ORDERED that movant, Johnny W. Thomas, Trustee, be and is hereby authorized and

directed to sell all property owned or claimed to be owned by the Debtor to include all the

Debtor’s non-exempt assets, claims and causes of action now existing or hereafter arising, all

rights, titles and interests in any business or business enterprise that currently exist or has ever

existed to Helvetia Asset Recovery, Inc. or its assigns, for $10,000.00. This property includes,

but is not limited to, the following:

 All stock and any other interest in Joabert Development Company.

 All stock and any other interest in Helvetia Asset Recovery, Inc.

 All stock and any other interest in Terob, Inc.

 All stock and any other interest in any and all of the following businesses: (1)

Contour Construction and Land Corporation; (2) Trail Construction Co.; (3)

Paradiv Corporation; (4) Ideal Concepts of San Antonio; (5) Burton Kahn, P.E.;

(6) Puerto Verde, Ltd.; (7) Key Largo Association, Inc. (8) Key Largo Home

Owners Association; (9) Royal Crest Home Owners Association; (10) Maple

Bush Ltd.; (11) Maple Bush Holding Ltd.

 All stock and any other interest in any and all businesses held by or through the

debtor.

 All claims or causes of action held by or for the debtor, including but not limited

to the following:

o Burton Kahn v. Joabert Development Co., et al., Cause No. 2013-CI-

17012, Bexar County, Texas.

i:\jwt trustee cases\order authorizing sale of personal property3.docx 14-50980-cag Doc#70 Filed 10/17/14 Entered 10/17/14 15:19:55 Main Document Pg 3 of 4

o In re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc.,

Cause No. 2013-CI-17516, Bexar County, Texas.

o Paradiv Corporation, et al. v. ASCBLDR, et al., Cause No. 2013-CI-

17889, Bexar County, Texas.

o Helvetia Asset Recovery, Inc. v. Burton Kahn and Paradiv Corporation,

Cause No. 2013-CI-18355, Bexar County, Texas.

o In re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc.,

Cause No. 2013-CI-18394, Bexar County, Texas.

o Burton Kahn v. John Ripley, et al., Cause No. 2014-CI00345, Bexar

County, Texas.

o Burton Kahn v. Helvetia Asset Recovery, Inc., 04-14-00012-CV, Fourth

Court of Appeals, San Antonio, Texas.

o In re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc.,

No. 04-14-00258-CV, Fourth Court of Appeals, San Antonio, Texas.

o Burton Kahn v. Helvetia Asset Recovery, Inc., No. 04-14-00319-CV,

Fourth Court of Appeals, San Antonio, Texas.

o In re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc.,

04-14-00357-CV, Fourth Court of Appeals, San Antonio, Texas.

o Burton Kahn v. Helvetia Asset Recovery, Inc., No. 04-14-00569-CV,

Fourth Court of Appeals, San Antonio, Texas.

o Burton Kahn v. Helvetial Asset Recovery, Inc. and Puerto Verde Ltd.

(Bahamian) (sic), No. 14-821, Texas Supreme Court.

o City of San Antonio v. Burton Kahn, Bexar County, Texas.

14-50980-cag Doc#70 Filed 10/17/14 Entered 10/17/14 15:19:55 Main Document Pg 4 of 4

It is further ORDERED that the sale shall be free and clear of any and all liens, claims,

security interests and encumbrances, except ad valorem tax liens if any should be due, with all

liens, claims, security interests and encumbrances to attach to the sales proceeds.

This Order shall be immediately effective and enforceable upon its entry, and the

effectiveness of this Order shall not be stayed pursuant to Bankruptcy Rule 6004(h) or otherwise.

# # #

_________________/S/____________________ Johnny W. Thomas SBN 19856500 Trustee 1153 E. Commerce St. San Antonio, Texas 78205 Telephone 210 226 5888 Fax 210 226 6085

Tab 02

Chapter 7 Trustee’s Bill of Sale and Quit Claim Deed, effective October 17, 20142

2 Case No. 14-50980-cag, In re: Burton M. Kahn, Debtor, United States Bankruptcy Court for the Western District of Texas, San Antonio Division

BILL OF SALE AND QUIT CLAIM DEED

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.

STATE OF TEXAS § § KNOW ALL PERSONS BY THESE PRESENTS:

COUNTY OF BEXAR §

Effective October 17, 2014, the undersigned Chapter 7 Trustee for the Debtor, Burton

Kahn, in the matter of In re: Burton M Kahn, Case No. 14-509800, United States Bankruptcy

Court for the Western District of Texas, San Antonio Division, for valuable consideration in

hand paid, does hereby sell and quit claim to Helvetia Asset Recovery, Inc. all of the Debtor's

right title and interest in all of his non-exempt assets as and to the extent authorized by the

attached Order Authorizing Sale of All Non-Exempt Assets, Claims and Causes of action, which

is incorporated herein by reference for all purposes.

EXECUTED on the 2~ day of October, 2014.

STATE OF TEXAS § § COUNTY OF BEXAR §

BEFORE ME, the undersigned Notary Public, on this day personally appeared Johnny

W. Thomas, personally known to me (or proven to me on the basis of satisfactory evidence) to

be the person whose name is subscribed to the within instrument, and acknowledged to me that

he executed the same in his authorized capacity as Chapter 7 Trustee for the Debtor, Burton

Kahn, in the matter of In re: Burton M Kahn, Case No. 14-509800, United States Bankruptcy

Court for the Western District of Texas, San Antonio Division, and that by his signature on the

instrument the person executed the instrument.

SUBSCRIBED AND SWORN TO BEFORE ME this 21-f h day of October, 2014

to certify which witness my hand and seal of office.

Notary Public in and for the State of Texas

V LIRIHX:tl

Tab 03 Kahn’s October 31, 2014 Notice of Appeal to United States District Court for the Western District of Texas, appealing Bankruptcy Court’s October 17, 2014 order approving sale of assets to Helvetia3

3 Case No. 14-50980-cag, In re: Burton M. Kahn, Debtor, United States Bankruptcy Court for the Western District of Texas, San Antonio Division 14-50980-cag Doc#73 Filed 10/31/14 Entered 10/31/14 16:41:29 Main Document Pg 1 of 3 14-50980-cag Doc#73 Filed 10/31/14 Entered 10/31/14 16:41:29 Main Document Pg 2 of 3 14-50980-cag Doc#73 Filed 10/31/14 Entered 10/31/14 16:41:29 Main Document Pg 3 of 3 14-50980-cag Doc#73-1 Filed 10/31/14 Entered 10/31/14 16:41:29 Exhibit A Pg 1 of 5 14-50980-cag Doc#73-1 Filed 10/31/14 Entered 10/31/14 16:41:29 Exhibit A Pg 2 of 5 14-50980-cag Doc#73-1 Filed 10/31/14 Entered 10/31/14 16:41:29 Exhibit A Pg 3 of 5 14-50980-cag Doc#73-1 Filed 10/31/14 Entered 10/31/14 16:41:29 Exhibit A Pg 4 of 5 14-50980-cag Doc#73-1 Filed 10/31/14 Entered 10/31/14 16:41:29 Exhibit A Pg 5 of 5 14-50980-cag Doc#73-2 Filed 10/31/14 Entered 10/31/14 16:41:29 Ltr/NtcApl int ptys Pg 1 of 1 UNITED STATES BANKRUPTCY COURT Western District of Texas Hipolito F. Garcia Federal Bldg and U.S. Courthouse 615 E. Houston Street, Suite 597 San Antonio, Texas 78205 YVETTE M. TAYLOR (210) 472−6720 CLERK OF COURT

DATE: October 31, 2014

RE: Notice of Appeal (or Cross Appeal)

Bankruptcy Case No.: 14−50980−cag Case Style: Burton M. Kahn Dear Mr. Kahn:

Rule 8006 of the Federal Rules of Bankruptcy Procedure states in pertinent part:

Any party filing a designation of the items to be included in the record shall provide to the Clerk, a copy of the items designated or, if the party fails to provide the copy, the Clerk shall prepare the copy at the expense of the party.

District Court Local Rule CV−5 requires that all copies of the record be submitted in duplicate.

If you will be providing copies of the record, they should be submitted to our office within 15 days. If you want the Clerk's office to make copies at your expense, notify the Clerk's office at the time of filing your designated items. The cost of copies, when supplied by the Clerk's Office is $.50 per page and there is an additional $30.00 search fee charge for each paper document when obtained from the court's manual case file.

Yvette M. Taylor Clerk, U. S. Bankruptcy Court

BY: Emilio Luna

cc: Interested parties per Notice of Appeal

903 San Jacinto, Suite 322 511 E. San Antonio Avenue, Suite 444 U.S. Post Office Annex 800 Franklin Avenue, Suite 140 Austin, Texas 78701 El Paso, Texas 79901 100 E. Wall Street, Room P−163 Waco, Texas 76701 (512) 916−5237 (915) 779−7362 Midland, Texas 79701 (254) 750−1513 (432) 683−1650

[Notice of Appeal Letter] [Ltrnaplap]

Tab 04 Helvetia’s February 24, 2015 Appellee’s Brief (without exhibits)4

4 Cause No. 5:14-cv-01109-HLH; Kahn v. Helvetia Asset Recovery, Inc.; U.S District Court, Western District of Texas

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 1 of 28

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION In re: § § Bankruptcy Case No.

BURTON M. KAHN § 14-50980-CAG § Appellant, § BURTON M. KAHN § § HELVETA ASSET § RECOVERY, INC § § Civil Action No.

v. § 5:14-CV-1109- HLH § BURTON M. KAHN. §

APPELLEE’S BRIEF

Werner A. Powers Lisa S. Barkley State Bar No. 16218800 State Bar No. 17851450 HAYNES AND BOONE LLP HAYNES AND BOONE LLP 2323 Victory Avenue, Suite 700 112 E. Pecan, Suite 1200 Dallas, Texas 75219 San Antonio, Texas 78205 Telephone: (214) 651-5000 Telephone: (210) 978-7427 Facsimile: (2 14) 651-5940 Facsimile: (210) 554-0427 werner.powers@haynesboone.com lisa.barkley@haynesboone.com

COUNSEL FOR APPELLEE HELVETIA ASSET RECOVERY, INC.

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 2 of 28

CORPORATE DISCLOSURE STATEMENT

Pursuant to Fed. R. App. P. 26.1, Appellee Helvetia Asset Recovery, Inc.

(“Helvetia”) is a Texas corporation. Puerto Verde, Ltd. (“Puerto Verde”) owns

100% of Helvetia’s stock. Puerto Verde is a corporation organized under the laws

of The Bahamas. Robert Ripley owns 100% of Puerto Verde’s stock.

INTERESTED PERSONS

The following persons may have an interest in the outcome of this matter:

1. Burton M. Kahn, Appellant, is a resident of San Antonio, Texas, and

is the Chapter 7 Debtor in Case No. 14-50980-CAG. He represents himself pro se.

2. Helvetia Asset Recovery, Inc., Appellee, is a Texas corporation since

its incorporation in 2007, with its principal place of business in San Antonio,

Texas. Helvetia is a creditor.

3. Joabert Development Company, Inc. is a Texas corporation with its

principal place of business in San Antonio, Texas. As a result of the asset sale that

is the subject of this appeal, Helvetia acquired a one-third interest in Joabert.

4. Werner A. Powers, 2323 Victory Avenue, Suite 700, Dallas, Texas

75219, Lisa S. Barkley, 112 E. Pecan Street, Suite 1200, San Antonio, Texas,

78205, attorneys with the law firm of Haynes and Boone, LLP, are counsel for

Helvetia.

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Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 3 of 28

5. Johnny W. Thomas serves as the Chapter 7 Trustee for the bankruptcy

proceeding. His address is 1153 E. Commerce Street, St. Paul Square, San

Antonio, Texas 78205.

6. The Honorable Craig A. Gargotta, Bankruptcy Judge, United States

District Court for the Western District of Texas, entered the orders underlying the

appeal.

- ii -

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 4 of 28

RECORD AND PARTY REFERENCES

The following record and party references are used in Appellee’s Brief:

1. Appellant Burton M. Kahn is referred to as either “Kahn” or the

“Debtor.”

2. Appellee Helvetia Asset Recovery, Inc. is referred to as “Helvetia.”

3. References to Kahn’s Opening Brief are cited as “Br., p. .”

4. The Federal Rules of Bankruptcy Procedure are referred to as FED. R.

BANKR. P. “__”

5. Filings in the Chapter 7 bankruptcy case are cited as “Dkt. .”

6. Filings in this appellate proceeding are cited as “DC Dkt. .”

7. Filing in the Adversary Proceeding are cited “Adv. Dkt. ___.”

8. Testimony in the October 15, 2014 transcript of the hearing on the

Trustee’s Motion to Sale is cited as “TR.___” followed by page and line

references.

- iii -

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 5 of 28

TABLE OF CONTENTS

CORPORATE DISCLOSURE STATEMENT ..........................................................i

INTERESTED PERSONS ..........................................................................................i

RECORD AND PARTY REFERENCES ............................................................... iii

TABLE OF CONTENTS ..........................................................................................iv

TABLE OF AUTHORITIES ....................................................................................vi

I. STATEMENT OF APPELlATE JURISDICTION ......................................... 1

II. STATEMENT OF THE ISSUES .................................................................... 1

III. STANDARD OF APPELLATE REVIEW ..................................................... 2

IV. STATEMENT OF THE FACTS ..................................................................... 2

V. SUMMARY OF THE ARGUMENT .............................................................. 5

VI. ARGUMENT AND AUTHORITIES ............................................................. 6

I. THE BANKRUPTCY COURT PROPERLY APPROVED THE SALE ............................................................................................................... 6

A. Because Kahn held no value in the assets to be sold, and because the debt exceeded the value of the assets, Kahn lacked standing to object to the Trustee’s proposed sale ...................... 6

1. The Bankruptcy Court did not err in approving the asset sale .................................................................................... 10

II. KAHN LACKS STANDING TO PURSUE THIS APPEAL ....................... 11

III. KAHN WAIVED HIS ISSUES ON APPEAL.............................................. 12

IV. KAHN’S STATE COURT ISSUES WERE NOT BEFORE THE COURT .......................................................................................................... 13

A. Helvetia’s state court judgments are final and in the estate ................ 13

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Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 6 of 28

1. This Court lacks jurisdiction over the interlocutory orders relating to Puerto Verde and, in any event, the Bankruptcy Court did not err in entering the interlocutory orders regarding Puerto Verde ............................ 15

V. THE APPEAL IS MOOT BECAUSE THE SALE WAS NOT STAYED........................................................................................................ 16

CONCLUSION AND PRAYER ............................................................................. 17

CERTIFICATE OF SERVICE ................................................................................ 19

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Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 7 of 28

TABLE OF AUTHORITIES

CASES In re Andreuccetti, 975 F.2d 413 (7th Cir. 1992) .............................................................................. 12

In re Camp Arrowhead, Ltd., 429 B.R. 546 (W.D. Tex. 2010) ......................................................................... 17

In re Coho Energy Inc., 395 F.3d 198 (5th Cir. 2004) ........................................................................11, 12

In re Croft, 737 F.3d 372 (5th Cir. 2013) ..........................................................................7, 10

In re Cult Awareness Network, Inc., 151 F.3d 605 (7th Cir. 1998) ................................................................................ 6

In re Curry, 409 B.R. 831 (Bankr. N.D. Tex. 2009)................................................................. 6

Diaz v. Stone, No. 5-10-74, 2011 WL 1882790 (S.D. Tex. May 17, 2011) .............................. 12

In re Duncan, 562 F.3d 688 (5th Cir. 2009) ................................................................................ 2

In re El San Juan Hotel, 809 F.2d 151 (1st Cir. 1987) ............................................................................... 12

In re Gilchrist, 891 F.2d 559 (5th Cir. 1990) .............................................................................. 17

Gregg Grain Co. v. Walker Grain Co., 285 F. 156 (5th Cir. 1922) .................................................................................... 6

Guion v. Sims (In re Sims), 479 B.R. 415 (S.D. Tex. 2012) ........................................................................... 14

In re Hardage, 837 F.2d 1319 (5th Cir. 1988) ............................................................................ 17

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Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 8 of 28

In re Laughlin, 602 F.3d 417 (5th Cir. 2010) ................................................................................ 2

Mahanna v. Bynum, 465 B.R. 436 (W.D. Tex. 2011) ........................................................................... 2

In re McClendon, 765 F.3d 501 (5th Cir. 2014) .............................................................................. 13

In re MeCombs, 659 F.3d 503 (5th Cir. 2011) .............................................................................. 12

In re Moore, 608 F.3d 253 (5th Cir. 2010) ................................................................................ 7

In re O’Connor, 258 F.3d 392 (5th Cir. 2001) ..........................................................................1, 15

In re Renaissance Hosp. Grand Prairie Inc., 713 F.3d 285 (5th Cir.2013) ................................................................................. 9

In re Richman, 104 F.3d 654 (4th Cir. 1997) .............................................................................. 12

Rohm & Hass Texas, Inc. v. Ortiz Bros. Insulation, Inc., 32 F.3d 205 (5th Cir. 1994) ................................................................................ 12

Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1 (Tex. 1986)................................................................................... 14

Spenlinhauer v. O’Donnell, 261 F.3d 113 (1st Cir. 2001) ................................................................................. 6

In re The Watch Ltd., 257 F. App’x 748 (5th Cir. 2007) (per curiam) (unpublished) ........................... 11

Williams v. State, 406 S.W.3d 273 (Tex. App.—San Antonio 2013, pet. denied) ............................ 9

STATUTES AND RULES 11 U.S.C. § 363 .......................................................................................................... 4

11 U.S.C. § 704 .......................................................................................................... 4

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Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 9 of 28

11 U.S.C. § 363(b)(1)............................................................................................... 10

11 U.S.C. § 363(m) ............................................................................................16, 17

11 U.S.C. § 523 .......................................................................................................... 4

11 U.S.C. § 523(a)(4) ............................................................................................... 13

11 U.S.C. § 523(a)(6) ............................................................................................... 13

11 U.S.C. § 541(a)(1) ................................................................................................. 7

11 U.S.C. § 704(a)(1) ............................................................................................... 11

28 U.S.C. § 158(a)(1) ................................................................................................. 1

28 U.S.C. § 158((a)(3) .........................................................................................1, 15

FED. R. BANKR. P. 6004 ............................................................................................. 4

FED. R. BANKR. P. 8001(b) ...................................................................................1, 15

FED. R. BANKR. P. 8003(c) ...................................................................................1, 15

FED. R. BANKR. P. 8006 .......................................................................................5, 12

FED. R. BANKR. P. 8013 ............................................................................................. 9

FED. R. CIV. P. 16(b) ................................................................................................ 16

TEX. R. APP. P. 56.1(b) ............................................................................................. 16

SECONDARY SOURCES Judge Bonnie Sudderth, August 28, 2011, “When can I get a trial de novo?”........ 14

- viii -

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 10 of 28

I.

STATEMENT OF APPELlATE JURISDICTION

This Court has jurisdiction over the Bankruptcy Court’s October 17, 2014

order, pursuant to 28 U.S.C. § 158(a)(1), because it is a final order. It does not

have jurisdiction over two interlocutory orders entered on April 29, 2014 relating

to Puerto Verde, Ltd.; the orders were not part of Kahn’s notice of appeal and he

did not seek leave to appeal the orders. 28 U.S.C. § 158((a)(3); FED. R. BANKR. P.

8001(b), 8003(c); In re O’Connor, 258 F.3d 392, 397-98 (5th Cir. 2001). See Dkt.

73.

II.

STATEMENT OF THE ISSUES

1. Whether Kahn had standing to object to the asset sale when the value

of the assets to be sold was less than the debt in the estate.

2. Whether Kahn has standing to appeal to this Court.

3. Whether the Bankruptcy Court erred in approving the Trustee’s sale

of assets.

4. Whether Kahn waived his appellate issues by failing to designate

them.

5. Whether Puerto Verde, Ltd. may “maintain a lawsuit in Texas” or

have access to the Bankruptcy Court.

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 11 of 28

6. Whether Helvetia’s state court judgments are not final, and therefore

not part of the estate, because of error by state court trial judges in applying the

doctrine of collateral estoppel or otherwise.

III.

STANDARD OF APPELLATE REVIEW

A district court reviews “the bankruptcy court's findings of fact for clear

error and conclusions of law de novo.” In re Laughlin, 602 F.3d 417, 421 (5th Cir.

2010) (quoting In re Duncan, 562 F.3d 688, 694 (5th Cir. 2009). “A finding of

fact is clearly erroneous only if on the entire evidence, the court is left with the

definite and firm conviction that a mistake has been committed.” In re Duncan,

562 F.3d at 694. The standard of review for both conclusions of law and mixed

questions of law and fact is de novo. See Mahanna v. Bynum, 465 B.R. 436, 439

(W.D. Tex. 2011) (citing In re Nat’l Gypsum Co., 208 F.3d 498, 504 (5th Cir.

2000)).

IV.

STATEMENT OF THE FACTS

Before filing bankruptcy, Kahn (under Helvetia’s name) filed suit against

Helvetia in Bexar County district court styled In re: A Purported Lien or Claim

against Helvetia Asset Recovery, Inc., Cause No. 2013-CI-18394. Helvetia filed a

motion for sanctions. On April 1, 2014, after a multi-day evidentiary hearing, the

Bexar County district court entered a Final Judgment and Order of Sanctions

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 12 of 28

against Kahn and his then-lawyer for $253,416.1 The judgment included findings

that Kahn did not own Helvetia’s stock. (Ex. 1.) Kahn appealed the judgment to

the Fourth Court of Appeals in San Antonio.

Helvetia sued Kahn in Bexar County district court in Helvetia Asset

Recovery, Inc. v. Burton Kahn and Paradiv Corp., Cause No. 2013-CI-18355. A

unanimous jury found Kahn breached his fiduciary duty, misapplied Helvetia’s

assets, and slandered its title. Those findings were incorporated into the state

court’s June 11, 2014 Final Judgment. (Ex. 2.) Actual damages exceeded

$800,000 and exemplary damages were $900,000. Kahn has also appealed this

judgment.

Kahn filed a pro se voluntary Chapter 7 petition on April 14, 2014. (Dkt. 2.)

The bankruptcy court partially lifted the automatic stay on April 28, 2014 to allow

the two state court suits to proceed to judgment and appeal.2 (Dkt. 39.) After the

judgments were final, Helvetia filed a notice of claim in the bankruptcy case for

$1,996,128. Helvetia believes it represents about 97% of the total dollar amount of

creditor claims. (TR.24-27, 33, 76.) All of the debt is unsecured. (TR.24-27, 33,

76.) Kahn’s two state court appeals remain pending.

1 Kahn’s lawyer in that suit, L. Terry George, died in June 2014.

2 On April 29, 2014, the Bankruptcy Court entered two interlocutory orders that Kahn appeals in his first issue. (Br., pp. 2-4; Dkt. 28, 30, 45, 47.)

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 13 of 28

Helvetia filed an adversary proceeding on July 9, 2014. (Adv. Dkt. 1.) Its

October 23, 2014 motion for summary judgment is pending, where it contends the

state court judgments are nondischargeable under 11 U.S.C. § 523, and collateral

estoppel bars relitigation of the issues. (Adv. Dkt. 16.)

On August 29, 2014, the Chapter 7 Trustee moved for court authorization to

sell Kahn’s non-exempt assets, claims and causes of action to Helvetia for $10,000,

pursuant to 11 U.S.C. §§ 363 and 704, FED. R. BANKR. P. 6004, and Local Rule

6004. (Dkt. 59, p.2.) Kahn objected to the sale claiming the bid was insufficient

because the assets were worth $6,216,349. (Dkt. 61, p.3.) Helvetia made the bid

to buy peace from protracted litigation with Kahn. (TR.20:1-3; 30:9-31:2.)

After notice and a hearing the Bankruptcy Court entered an order on

October 17, 2014 authorizing the sale as in the best interest of the estate,

incorporating its findings from the hearing. It found Kahn lacked standing to

object because he (1) had no value or equity in the assets to be sold and (2) had no

pecuniary interest in the assets because their value did not exceed the debts in the

estate (the “Order”). (Dkt. 70, p. 2; Ex. 3.) On October 28, the Trustee recorded a

bill of sale and quit claim deed reflecting sale of the assets to Helvetia effective

October 17, 2014. (Ex. 4.)

Kahn filed a notice of appeal on October 31, 2014. (Dkt. 73.) His motions

to reconsider the Order and to stay proceedings pending appeal were denied on

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 14 of 28

November 5. (Dkt. 72, 74, 77, 78.) On November 17 and December 12 Kahn filed

and supplemented his designation of items for the appellate record. (Exs. 5, 6.)

Helvetia did likewise. (Exs. 7, 8.) Kahn did not file a statement of the issues

required by Fed. R. Bankr. P. 8006. (Exs. 5, 6.) He filed his appellant’s brief on

February 10, 2015, requesting relief that the Order approving the sale be stricken.

(Br., pp. 8, 10.)

V.

SUMMARY OF THE ARGUMENT

The Bankruptcy Court did not err by overruling Kahn’s objection and

approving the Trustee’s sale of the assets. Kahn lacked standing to object because

he held no value in the assets and the value of the assets to be sold did not exceed

the debt. Even if he had standing, Kahn waived his appellate issues by failing to

designate his statement of the issues under Fed. R. Bankr. P. 8006. The state court

issues relating to Puerto Verde, Ltd. and collateral estoppel were not before the

Bankruptcy Court in connection with the asset sale and, in any event, have no

merit. This Court lacks jurisdiction over the interlocutory orders regarding Puerto

Verde. The appeal overall is moot because Kahn failed to obtain a stay of the

Order authorizing the sale of the assets. The Bankruptcy Court’s Order should be

affirmed, and the appeal dismissed.

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 15 of 28

VI.

ARGUMENT AND AUTHORITIES

I. THE BANKRUPTCY COURT PROPERLY APPROVED THE SALE.

A. Because Kahn held no value in the assets to be sold, and because the debt exceeded the value of the assets, Kahn lacked standing to object to the Trustee’s proposed sale.

A person must have a “pecuniary interest” in the outcome of a bankruptcy

proceeding in order to have standing to object to a trustee’s actions. In order to

establish a pecuniary interest, a debtor must demonstrate a reasonable possibility of

a surplus distribution after all creditors’ claims are satisfied. See Spenlinhauer v.

O’Donnell, 261 F.3d 113 (1st Cir. 2001); In re Cult Awareness Network, Inc., 151

F.3d 605 (7th Cir. 1998); Gregg Grain Co. v. Walker Grain Co., 285 F. 156 (5th

Cir. 1922); see In re Curry, 409 B.R. 831, 838 (Bankr. N.D. Tex. 2009) (debtor has

pecuniary interest where the estate potentially has surplus of assets that will result

in distribution back to debtor).

The Bankruptcy Court raised standing sua sponte, and undertook a

“standing” inquiry citing In re 60 East 80th Street Equities, Inc., 218 F.3d 109

(2nd Cir. 2000). See, e.g., 20:18-21:20, 81:25-82:19. It properly concluded both

that Kahn (1) had no value or equity in the assets to be sold and (2) had no

pecuniary interest in the assets because their value did not exceed the debts in the

estate.

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 16 of 28

The Bankruptcy Court found the estate had three categories of assets:

(1) interests in small businesses; (2) Kahn’s litigation, including (a) two state court

suits filed by Kahn that were pending but “dormant,” and (b) defensive appellate

rights in Helvetia’s two state court judgments; and (3) Kahn’s disputed ownership

of 100 shares in Joabert Development Company (“Joabert”). The Bankruptcy

Court heard from Kahn, Kahn’s appraiser, the Trustee, and counsel for Helvetia.

Kahn agreed the first category, the small businesses, had no value.

(TR.15:25-17:6, 36:7, 44:25-47:5.) For the second category, Kahn described his

two “dormant” suits as “dead.” (TR.47:15-48:23.) The Trustee had declined to

pursue Kahn’s defensive appellate rights in the two appeals because the estate

lacked money and prosecution had not been taken over by anyone on its behalf.

(TR.15:6-17:23, 43:22-52:10 22:20, 23:10, 70:20-71:16, 75:16.) Consequently, the

Bankruptcy Court properly found that none of the litigation had any value.

(TR.51:13, 52:10, 93:14.)

Property of the estate includes “rights of action as bestowed by either federal

or state law.” 11 U.S.C. § 541(a)(1); In re Moore, 608 F.3d 253, 257-58 (5th Cir.

2010) (quoting In re S.I. Acquisition, Inc., 817 F.2d 1142, 1149 (5th Cir. 1987).

This extends to a debtor’s defensive appellate rights, even if the judgment holder

purchases the rights from the trustee in order to extinguish the appeal. See In re

Croft, 737 F.3d 372, 376-77 (5th Cir. 2013).

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 17 of 28

For the third category, Kahn argued the sale price was less than what he

valued his claimed ownership of 1/3 of Joabert’s stock: $3,103,736. (TR.17:21-22;

29:13-24; 45:3-55:22; 70:8-72:21; 92:8-19.) Kahn did not offer evidence of the

stock’s value. Instead, he focused on the value of real property held by Joabert.

Kahn represented Joabert bought raw land outright and estimated that its debt, if

any, was about $250,000. (TR.65:4-8; 77:15-21.) But in a 2013 lawsuit Kahn

filed against Joabert he plead the real property was encumbered with $3,377,000 in

debt.3 (TR.64:14-65:13, 70:8-72:21.) No debt was listed on Kahn’s bankruptcy

schedules. (TR.76:10-12.)

The Bankruptcy Court reasonably concluded Kahn’s interest in Joabert was

unproven, and thus attributed its value as zero for purposes of the sale. (TR.91:5-

9; 93:9-16.) It found Kahn’s real estate appraiser could not render an opinion on

the value of Joabert’s real property as of the day of the hearing, October 15, 2014.

At Kahn’s direction, the appraisal was performed in April 2014 and dated

prospectively as of September 2014, with assumptions that during the interim the

raw land would be improved with infrastructure sufficient to permit Joabert to

begin selling platted lots to homebuilders. (TR.83:8-89:9.) Even on October 15,

the date of the hearing, the improvements contemplated by the appraisal were

incomplete. (TR.73:14.) The appraiser agreed with the Bankruptcy Court the 3 This is one of Kahn’s dormant suits, Cause No. 2013-CI-17012. (TR.17:4; 45:19-55:21; 75:13- 18; 92:16-19.)

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 18 of 28

Uniform Standards of Professional Practice did not allow him to opine on the value

of Joabert’s real property effective of the date of the hearing because he had not

appraised the property as of that day. (TR.89:18-90:21.) “[A]n appraisal opinion

is at best something of a speculation, and the question of market value is peculiarly

one for the fact finding body.” Williams v. State, 406 S.W.3d 273, 284 (Tex.

App.—San Antonio 2013, pet. denied).

The Bankruptcy Court properly disallowed Kahn’s personal offer of

testimony about Joabert’s real property, finding Kahn was not credible based on

his earlier representations that suggested his opinion would likely reflect an

inflated value. (TR.92:10-15.) “Findings of fact, whether based on oral or

documentary evidence, shall not be set aside unless clearly erroneous, and due

regard shall be given to the opportunity of the Bankruptcy Court to judge the

credibility of the witnesses.” FED. R. BANKR. P. 8013. Factual findings “based on

determinations regarding the credibility of witnesses” demand “even greater

deference” because “only the trial judge can be aware of the variations in

demeanor and tone of voice that bear so heavily on the listener's understanding of

and belief in what is said.” In re Renaissance Hosp. Grand Prairie Inc., 713 F.3d

285, 293 (5th Cir.2013) (citing Anderson v. Bessemer City, N.C., 470 U.S. 564,

575 (1985). Lacking any evidence of Joabert’s value, the Bankruptcy Court did

not err in finding it had no value. (TR.93:7.)

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 19 of 28

Even if Kahn owned Helvetia’s stock, contrary to the state court judgments,

combining the value he attributed it of $685,000 with the value of other assets in

the estate would not exceed the amount of debt. (TR.93:23.) Consequently, no

surplus would be available to Kahn after the sale under any circumstances.

(TR.21:20.)

Any contention that Kahn could obtain additional equity in the future from

his claims and assets was not reasonable. (TR.21:20.) Under In re Croft, all rights

related to litigation belonged to the estate, not Kahn. Because Kahn showed no

value or equity or pecuniary interest in the assets that were to be sold, he lacked

standing to object to the Trustee’s motion to sell the assets, and his objection to the

sale was properly overruled. (TR.91:16; Dkt, 70, pp. 1-2.)

1. The Bankruptcy Court did not err in approving the asset sale.

Kahn’s contention in his third issue that the Bankruptcy Court was “unfair

and unjust” in approving the Trustee’s asset sale is contrary to the evidence and

law. Incorporating the arguments above, the Bankruptcy Court did not err in

approving the sale of assets. A trustee is permitted to sell “property of the estate,”

other than in the ordinary course of business, after notice and a hearing. 11 U.S.C.

§ 363(b)(1). Moreover, like in In re Croft, where the judgment creditor sought to

purchase the debtor’s defensive appellate rights, the Bankruptcy Court and the

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Trustee carefully observed here the necessary safeguards for proposing and

approving a sale that would be in the best interests of the estate.

The Trustee followed his duty to maximize the value of the estate pursuant

to 11 U.S.C. § 704(a)(1). Before receiving Helvetia’s bid, the Trustee planned to

file a no-asset report in the next year where creditors would receive nothing.

(TR.22:6.) After receiving a bid from Helvetia for $5,000, he negotiated the

amount to $10,000, which he estimated could provide a 3% distribution to

unsecured creditors. (TR.21:5-9.) The Trustee assessed other options and the

actual value of the assets that Kahn scheduled. (TR.22:6-23:13.) He sought

review and approval of the proposed sale by the Bankruptcy Court. Notice was

provided of the October 15, 2014 hearing, and the Bankruptcy Court questioned

and heard witnesses, reviewed demonstrative evidence, and carefully considered

the terms of the sale, including the value of the assets and amount of debt, before

ordering it approved. Id. (TR.93:2-94:4.) Under these facts, and because Kahn

identified no error by the Bankruptcy Court in approving the Trustee’s proposed

sale, the Order should be affirmed.

II. KAHN LACKS STANDING TO PURSUE THIS APPEAL.

Kahn lacks standing to pursue this appeal. Courts use the “person

aggrieved” test to determine whether a party has standing in bankruptcy court. In

re Coho Energy Inc., 395 F.3d 198, 202 (5th Cir. 2004); see In re The Watch Ltd.,

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 21 of 28

257 F. App’x 748, 749 (5th Cir. 2007) (per curiam) (unpublished); Diaz v. Stone,

No. 5-10-74, 2011 WL 1882790, at *2 (S.D. Tex. May 17, 2011). This “is an even

more exacting standard than traditional constitutional standing.” In re Coho

Energy Inc., 395 F.3d at 202. It requires that the party “show that he was directly

and adversely affected pecuniarily by the order of the bankruptcy court.” Id. at

203. “[T]he putative appellant shoulders the burden of alleging facts sufficient to

demonstrate that it is a proper party to appeal.” Rohm & Hass Texas, Inc. v. Ortiz

Bros. Insulation, Inc., 32 F.3d 205, 208 (5th Cir. 1994). For the same reasons

Kahn lacked standing to object to the Order, discussed above, he lacks standing to

pursue this appeal. See In re Richman, 104 F.3d 654 (4th Cir. 1997); In re

Andreuccetti, 975 F.2d 413 (7th Cir. 1992); In re El San Juan Hotel, 809 F.2d 151

(1st Cir. 1987).

III. KAHN WAIVED HIS ISSUES ON APPEAL.

Kahn failed to designate a statement of issues for appeal contrary to Fed. R.

Bankr. P. 8006. (Exs. 5, 6.) In the Fifth Circuit, an appellant waives issues by not

raising them in the Rule 8006 statement of issues. In re MeCombs, 659 F.3d 503,

510 (5th Cir. 2011). “[E]ven if an issue is argued in the bankruptcy court and ruled

on by that court, it is not preserved for appeal under Bankruptcy Rule 8006 unless

the appellant includes the issue in its statement of issues on appeal.” Id., (quoting

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 22 of 28

In re GGM, P.C., 165 F.3d 1026, 1032 (5th Cir.1999)); see also, In re McClendon,

765 F.3d 501, 506 (5th Cir. 2014). Consequently, Kahn waived his appeal issues.

IV. KAHN’S STATE COURT ISSUES WERE NOT BEFORE THE COURT.

Kahn’s first and second issues relate solely to the state court proceedings,

and were not properly before the Bankruptcy Court. Both issues also lack merit.

A. Helvetia’s state court judgments are final and in the estate.

Kahn’s obtuse “collateral estoppel” issue does not relate to the asset sale

and, as a state court matter, is not properly before the Court. Kahn has conflated

collateral estoppel arguments presently pending in Helvetia’s summary judgment

motion in the adversary action, with a previous state court application of the

doctrine in connection with Helvetia’s state court judgments against Kahn that are

part of the estate.

Helvetia’s sole issue in the adversary action is its state court judgments

against Kahn are nondischargeable. (Adv. Dkt. 1.) In its summary judgment

motion Helvetia asserts collateral estoppel bars the parties from relitigating

dischargeability of the judgment debt because findings in the state court judgments

meet the standards of nondischargeability under 11 U.S.C. § 523(a)(4) and (a)(6),

including Kahn’s defalcation while acting in a fiduciary capacity and his willful,

malicious injury to Helvetia. (Adv. Dkt. 16.)

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Completely separate from that issue, Kahn contends that because the state

court judgments are undergoing a de novo review by the Fourth Court of Appeals,

including his complaint that the state court in Cause No. 2013-CI-18355

improperly applied collateral estoppel in making pre-trial limine rulings for the

May 2014 jury trial, the judgments are not final and therefore are not part of the

estate. His argument fails because he misconstrues de novo and trial de novo

reviews.

“[F]or purposes of collateral estoppel, a judgment may be final even though

an appeal is pending…” Guion v. Sims (In re Sims), 479 B.R. 415, 421-22 (S.D.

Tex. 2012) (citing Prager v. El Paso Nat’l Bank, 417 F.2d 1111, 1112 (5th Cir.

1969) (final judgment on the merits retains all of its res judicata consequences

pending a decision on appeal except in the unusual situation in which the appeal

involves a full trial de novo), and Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6

(Tex. 1986) (same, with regard to collateral estoppel)). 4 A trial de novo differs

from a de novo review, and “is available to appeal cases which were originally

heard in courts which are not courts ‘of record,’…”5 Examples are Texas justice of

the peace and municipal courts. Id.

4 Kahn misinterprets Scurlock Oil. The policy and law adopted by the Texas Supreme Court in that opinion show that both of Helvetia’s state court judgments are final. 5 Judge Bonnie Sudderth, August 28, 2011, “When can I get a trial de novo?” see Exh. 9; available at, https://bonniesudderth.wordpress.com/2011/08/28/when-can-i-get-a-trial-de-novo (last visited Feb. 24, 2015).

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 24 of 28

Here, both of Kahn’s appeals arose from Bexar County district courts, and

records from those proceedings were submitted to the Fourth Court of Appeals for

its review. Accordingly even if the Fourth Court of Appeal is performing a “de

novo” review, both state court judgments are final for purposes of collateral

estoppel and are part of the estate.

1. This Court lacks jurisdiction over the interlocutory orders relating to Puerto Verde and, in any event, the Bankruptcy Court did not err in entering the interlocutory orders regarding Puerto Verde.

Kahn complains the Bankruptcy Court erred in finding “good cause” to deny

Kahn’s motions to “disqualify” Puerto Verde, Ltd.6 from “maintaining a lawsuit in

Texas,” and from having “access to the bankruptcy court” on April 29, 2014. (Br.

p. 4.) This Court lacks jurisdiction over Kahn’s attempt to appeal these two

interlocutory orders. The orders were not part of Kahn’s notice of appeal and he

did not seek leave to appeal the orders. 28 U.S.C. § 158((a)(3); FED. R. BANKR. P.

8001(b), 8003(c); In re O’Connor, 258 F.3d 392, 397-98 (5th Cir. 2001). See Dkt.

73.

Moreover, even if the Court had jurisdiction, Kahn’s argument lacks merit

The orders expressly stated the Bankruptcy Court found “good cause” to deny

Kahn’s motions based on evidence and arguments presented at the April 24, 2014

hearing. (Dkt. 45, 47.) Kahn did not attach the transcript and offers no other 6 Kahn does not dispute that Puerto Verde, Ltd. is a corporation formed in the Bahamas.

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 25 of 28

factual support. Consequently, Kahn’s contention the court found good cause

“without having any evidence or reasons” to support its ruling is unavailing. (Br.,

p. 4.) The cases cited by Kahn do not support his argument because they pertain to

Fed. R. Civ. P. 16(b), a moving party’s burden to show “good cause” for why it

was not able to reasonably meet scheduling deadlines, and other inapposite

deadline issues.

Kahn’s suggestion the Texas Supreme Court had accepted “this issue” for

review is demonstrably incorrect. (Br., p. 10.) Indeed Kahn’s December 10, 2014

petition seeking review by the Texas Supreme Court contained some of the same

arguments he has presented here, with the same references to “terrorist activities,”

“money laundering,” and other unsupported and prejudicial allegations. (Ex. 10.)

None, however, related to the Fourth Court of Appeals’ dismissal of his appeal in

that Court from which Kahn attempted to seek review by the Supreme Court.

(Ex. 10.)

On February 13, 2015, the Texas Supreme Court denied Kahn’s petition for

review, without requesting responsive briefing by Helvetia. Ex. 11 See TEX. R.

APP. P. 56.1(b).

V. THE APPEAL IS MOOT BECAUSE THE SALE WAS NOT STAYED.

Kahn’s appeal that either the Trustee’s motion for authorization of the asset

sale, or the Order approving the sale, be “stricken,” is moot under 11 U.S.C.

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 26 of 28

§ 363(m) because Kahn did not obtain a stay of the Order. (Br., pp. 8, 10.) In re

Camp Arrowhead, Ltd., 429 B.R. 546, 549 (W.D. Tex. 2010); In re Gilchrist, 891

F.2d 559, 560 (5th Cir. 1990); see also In re Hardage, 837 F.2d 1319, 1323 n.3

(5th Cir. 1988) (Section 363(m) provides finality).

CONCLUSION AND PRAYER

WHEREFORE, PREMISES CONSIDERED, Appellee Helvetia Asset

Recovery, Inc. respectfully requests that the Court affirm the Bankruptcy Court’s

Order, or, alternatively, that it dismiss Kahn’s appeal for lack of standing or for

lack of jurisdiction, that it deny all other relief requested by the Appellant, and

further respectfully requests all other relief to which Appellee may be entitled, at

law or in equity.

Respectfully submitted,

HAYNES AND BOONE LLP

/s/ Lisa S. Barkley Werner A. Powers State Bar No. 16218800 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Telephone: (214) 651-5000 Facsimile: (2 14) 651-5940 werner.powers@haynesboone.com

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 27 of 28

Lisa S. Barkley State Bar No. 17851450 112 E. Pecan, Suite 1200 San Antonio, Texas 78205 Telephone: (210) 978-7427 Facsimile: (210) 554-0427 lisa.barkley@haynesboone.com

COUNSEL FOR APPELLEE HELVETIA ASSET RECOVERY, INC.

Case 5:14-cv-01109-HLH Document 14 Filed 02/24/15 Page 28 of 28

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on February 24, 2015 a true and

correct copy of the foregoing document was served in the manner indicated upon

the parties listed below and upon the parties that receive electronic notice in this

case via the Court’s ECF filing system:

Burton M. Kahn 1706 Alpine Circle San Antonio, Texas 78248 (via email)

/s/ Lisa S. Barkley Lisa S. Barkley

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IT IS HEREBY ADJUDGED and DECREED that the below described is SO ORDERED.

Dated: October 17, 2014.

__________________________________

CRAIG A. GARGOTTA UNITED STATES BANKRUPTCY JUDGE

__________________________________________________________________

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

IN RE: )

)

BURTON M. KAHN, ) Bankruptcy Case No. 14-50980cag )

Debtor. )

) Chapter 7

ORDER AUTHORIZING SALE OF ALL NON-EXEMPT ASSETS, CLAIMS AND CAUSES OF ACTION

On this date came on to be considered the Motion for Authority to Sell all non-exempt

assets, claims and causes of action, filed by Johnny W. Thomas, Trustee. Due notice having been

given and one objection having been overruled, the Court is of the opinion and so finds that the

0RYDQW¶VVDOHRIDOOQRQ-exempt assets, claims and causes of action attached herein, is in the best

interest of the estate based on the reasons stated on the record which are incorporated by

reference herein. As more fully explained on the record, the Court finds the debtor has shown no

value or equity in the assets to be sold and therefore the Court further finds the debtor has no

standing to object to this sale. The Court has determined there is no value to exceed the debts in

i:\jwt trustee cases\order authorizing sale of personal property3.docx EXHIBIT 3 14-50980-cag Case 5:14-cv-01109-HLH Doc#71 Filed 10/19/14 Document Entered 14-3 10/19/14 Filed23:54:09 02/24/15 Imaged Page 2Certificate of 5 of Notice Pg 2 of 5

this bankruptcy, and the debtor has no pecuniary interest or value in the estate assets, with the

result he has no standing to object to this sale. It is accordingly,

ORDERED that movant, Johnny W. Thomas, Trustee, be and is hereby authorized and

directed to sell all property owned or claimed to be owned by the Debtor to include all the

'HEWRU¶V QRQ-exempt assets, claims and causes of action now existing or hereafter arising, all

rights, titles and interests in any business or business enterprise that currently exist or has ever

existed to Helvetia Asset Recovery, Inc. or its assigns, for $10,000.00. This property includes,

but is not limited to, the following:

x All stock and any other interest in Joabert Development Company.

x All stock and any other interest in Helvetia Asset Recovery, Inc.

x All stock and any other interest in Terob, Inc.

x All stock and any other interest in any and all of the following businesses: (1)

Contour Construction and Land Corporation; (2) Trail Construction Co.; (3)

Paradiv Corporation; (4) Ideal Concepts of San Antonio; (5) Burton Kahn, P.E.;

(6) Puerto Verde, Ltd.; (7) Key Largo Association, Inc. (8) Key Largo Home

Owners Association; (9) Royal Crest Home Owners Association; (10) Maple

Bush Ltd.; (11) Maple Bush Holding Ltd.

x All stock and any other interest in any and all businesses held by or through the

debtor.

x All claims or causes of action held by or for the debtor, including but not limited

to the following:

o Burton Kahn v. Joabert Development Co., et al., Cause No. 2013-CI-

17012, Bexar County, Texas.

i:\jwt trustee cases\order authorizing sale of personal property3.docx 14-50980-cag Case 5:14-cv-01109-HLH Doc#71 Filed 10/19/14 Document Entered 14-3 10/19/14 Filed23:54:09 02/24/15 Imaged Page 3Certificate of 5 of Notice Pg 3 of 5

o In re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc.,

Cause No. 2013-CI-17516, Bexar County, Texas.

o Paradiv Corporation, et al. v. ASCBLDR, et al., Cause No. 2013-CI-

17889, Bexar County, Texas.

o Helvetia Asset Recovery, Inc. v. Burton Kahn and Paradiv Corporation,

Cause No. 2013-CI-18355, Bexar County, Texas.

o In re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc.,

Cause No. 2013-CI-18394, Bexar County, Texas.

o Burton Kahn v. John Ripley, et al., Cause No. 2014-CI00345, Bexar

County, Texas.

o Burton Kahn v. Helvetia Asset Recovery, Inc., 04-14-00012-CV, Fourth

Court of Appeals, San Antonio, Texas.

o In re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc.,

No. 04-14-00258-CV, Fourth Court of Appeals, San Antonio, Texas.

o Burton Kahn v. Helvetia Asset Recovery, Inc., No. 04-14-00319-CV,

Fourth Court of Appeals, San Antonio, Texas.

o In re: A Purported Lien or Claim against Helvetia Asset Recovery, Inc.,

04-14-00357-CV, Fourth Court of Appeals, San Antonio, Texas.

o Burton Kahn v. Helvetia Asset Recovery, Inc., No. 04-14-00569-CV,

Fourth Court of Appeals, San Antonio, Texas.

o Burton Kahn v. Helvetial Asset Recovery, Inc. and Puerto Verde Ltd.

(Bahamian) (sic), No. 14-821, Texas Supreme Court.

o City of San Antonio v. Burton Kahn, Bexar County, Texas.

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It is further ORDERED that the sale shall be free and clear of any and all liens, claims,

security interests and encumbrances, except ad valorem tax liens if any should be due, with all

liens, claims, security interests and encumbrances to attach to the sales proceeds.

This Order shall be immediately effective and enforceable upon its entry, and the

effectiveness of this Order shall not be stayed pursuant to Bankruptcy Rule 6004(h) or otherwise.

# # #

_________________/S/____________________ Johnny W. Thomas SBN 19856500 Trustee 1153 E. Commerce St. San Antonio, Texas 78205 Telephone 210 226 5888 Fax 210 226 6085 14-50980-cag Case 5:14-cv-01109-HLH Doc#71 Filed 10/19/14 Document Entered 14-3 10/19/14 Filed23:54:09 02/24/15 Imaged Page 5Certificate of 5 of Notice Pg 5 of 5 United States Bankruptcy Court Western District of Texas In re: Case No. 14-50980-cag Burton M. Kahn Chapter 7 Debtor CERTIFICATE OF NOTICE District/off: 0542-5 User: sanchezc Page 1 of 1 Date Rcvd: Oct 17, 2014 Form ID: pdfintp Total Noticed: 2

Notice by first class mail was sent to the following persons/entities by the Bankruptcy Noticing Center on Oct 19, 2014. db +Burton M. Kahn, 1706 Alpine Circle, San Antonio, TX 78248-2104 aty +W. Abigail Ottmers, Haynes and Boone, LLP, 112 E Pecan St, Suite 1200, San Antonio, TX 78205-1540

Notice by electronic transmission was sent to the following persons/entities by the Bankruptcy Noticing Center. NONE. TOTAL: 0

***** BYPASSED RECIPIENTS ***** NONE. TOTAL: 0

Addresses marked ’+’ were corrected by inserting the ZIP or replacing an incorrect ZIP. USPS regulations require that automation-compatible mail display the correct ZIP.

I, Joseph Speetjens, declare under the penalty of perjury that I have sent the attached document to the above listed entities in the manner shown, and prepared the Certificate of Notice and that it is true and correct to the best of my information and belief. Meeting of Creditor Notices only (Official Form 9): Pursuant to Fed. R. Bank. P. 2002(a)(1), a notice containing the complete Social Security Number (SSN) of the debtor(s) was furnished to all parties listed. This official court copy contains the redacted SSN as required by the bankruptcy rules and the Judiciary’s privacy policies. Date: Oct 19, 2014 Signature: /s/Joseph Speetjens

_

CM/ECF NOTICE OF ELECTRONIC FILING

The following persons/entities were sent notice through the court’s CM/ECF electronic mail (Email) system on October 17, 2014 at the address(es) listed below:

Johnny W Thomas on behalf of Trustee Johnny W Thomas 1thomas@prodigy.net, peggyjmorris@prodigy.net;jt@trustesolutions.net Johnny W Thomas 1thomas@prodigy.net, peggyjmorris@prodigy.net;jt@trustesolutions.net Scott W. Everett on behalf of Plaintiff Helvetia Asset Recovery, Inc. scott.everett@haynesboone.com, kim.morzak@haynesboone.com Scott W. Everett on behalf of Creditor Helvetia Asset Recovery, Inc. scott.everett@haynesboone.com, kim.morzak@haynesboone.com United States Trustee - SA12 USTPRegion07.SN.ECF@usdoj.gov TOTAL: 5

Case 5:14-cv-01109-HLH Document 14-4 Filed 02/24/15 Page 1 of 2

BILL OF SALE AND QUIT CLAIM DEED

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.

STATE OF TEXAS § § KNOW ALL PERSONS BY THESE PRESENTS:

COUNTY OF BEXAR §

Effective October 17, 2014, the undersigned Chapter 7 Trustee for the Debtor, Burton

Kahn, in the matter of In re: Burton M Kahn, Case No. 14-509800, United States Bankruptcy

Court for the Western District of Texas, San Antonio Division, for valuable consideration in

hand paid, does hereby sell and quit claim to Helvetia Asset Recovery, Inc. all of the Debtor's

right title and interest in all of his non-exempt assets as and to the extent authorized by the

attached Order Authorizing Sale of All Non-Exempt Assets, Claims and Causes of action, which

is incorporated herein by reference for all purposes.

EXECUTED on the 2~ day of October, 2014.

/

EXHIBIT 4

Case 5:14-cv-01109-HLH Document 14-4 Filed 02/24/15 Page 2 of 2

STATE OF TEXAS § § COUNTY OF BEXAR §

BEFORE ME, the undersigned Notary Public, on this day personally appeared Johnny

W. Thomas, personally known to me (or proven to me on the basis of satisfactory evidence) to

be the person whose name is subscribed to the within instrument, and acknowledged to me that

he executed the same in his authorized capacity as Chapter 7 Trustee for the Debtor, Burton

Kahn, in the matter of In re: Burton M Kahn, Case No. 14-50980G, United States Bankruptcy

Court for the Western District of Texas, San Antonio Division, and that by his signature on the

instrument the person executed the instrument.

SUBSCRIBED AND SWORN TO BEFORE ME this 21-1 h day of October, 2014

to certify which witness my hand and seal of office.

U~(hC(L~i- Notary Public in and for the State of Texas (P~~~~.s&t~""""",~ 14-50980-cag CaseDoc#81 5:14-cv-01109-HLH Filed 11/17/14Document Entered 11/18/14 14-5 Filed 13:23:43 02/24/15 MainPage Document 1 of 2 Pg 1 of 2

EXHIBIT 5

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EXHIBIT 6

CaseDoc#82 14-50980-cag 5:14-cv-01109-HLH Filed 12/02/14Document 14-7 Filed Entered 12/02/14 02/24/15 18:13:44 MainPage 1 of 3 Pg 1 of 3 Document

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

IN RE: § Chapter 7 § BURTON M. KAHN § Case No. 14-50980-cag § Debtor. §

APPELLEE’S DESIGNATION OF ADDITIONAL ITEMS TO BE INCLUDED IN THE RECORD ON APPEAL PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 8006

Comes now Helvetia Asset Recovery, Inc. (“Helvetia” or “Appellee”) and files this

Designation of Additional Items to be Included in the Record on Appeal Pursuant to Federal

Rule of Bankruptcy Procedure 8006.

On October 31, 2014, Debtor and Appellant Burton M. Kahn filed a Notice of Appeal

[Docket No. 73] from the Bankruptcy Court’s Order Authorizing Sale of All Non-Exempt

Assets, Claims and Causes of Action [Docket No. 70]. On November 17, 2014, Appellant filed

his Designation of Clerk’s Record and Issues on Appeal [Docket No. 81]. Helvetia designates

the following additional items to be included in the record on appeal.

No. Filing Docket Title of Document Date No.

1 4/14/2014 2 Debtor Burton Kahn’s Voluntary Petition under Chapter 7

2 4/15/2014 6 Amended List of Creditors and Amended Schedules and Without Summary with D, E, or F filed by Debtor Burton M. Kahn. (Modified on 4/16/2014. Modified on 4/23/2014.)

3 4/17/2014 9 Motion To Lift or Modify The Automatic Stay filed by Creditor Helvetia Asset Recovery, Inc. (Modified on 4/21/2014).

4 4/17/2014 10 Motion to Expedite Hearing filed by Creditor Helvetia Asset Recovery, Inc.

EXHIBIT 7 APPELLEE’S DESIGNATION OF ADDITIONAL ITEMS TO BE INCLUDED IN THE RECORD Page 1 of 3 14-50980-cag CaseDoc#82 5:14-cv-01109-HLH Filed 12/02/14Document Entered 12/02/14 14-7 Filed 18:13:44 02/24/15 MainPage Document 2 of 3 Pg 2 of 3

5 4/23/2014 27 Response Filed by Debtor Burton M. Kahn to Motion To Lift or Modify The Automatic Stay.

6 4/23/2014 32 Amended Schedules and Summary: Amended Schedule(s): B,F, I and J.

7 4/28/2014 39 Order Regarding Motion To Lift or Modify The Automatic Stay

8 7/9/2014 56 Adversary case 14-05052. Complaint to Determine Dischargeability of Debt Pursuant to 11 U.S.C. § 523(a) filed by Helvetia Asset Recovery, Inc.

9 7/11/2014 57 Amended Schedules and Summary: (Amended Schedule(s): “B").

10 10/31/2014 74 Emergency Motion for Stay of Proceedings Pending Appeal Pursuant to Bankruptcy Rule 8005 filed by Debtor Burton M. Kahn

11 11/5/2014 77 Order Regarding Motion to Reconsider Order Authorizing Sale of All Non-Exempt Assets, Claims and Causes of Action filed by Debtor Burton M. Kahn

12 11/5/2014 78 Order Regarding Emergency Motion for Stay of Proceedings Pending Appeal Pursuant to Bankruptcy Rule 8005 filed by Debtor Burton M. Kahn

13 10/15/2014 Transcript of hearing on Trustee’s Motion to Sell Non-Exempt Assets.

Additionally, Helvetia designates the following items from the related Adversary

Proceeding No. 14-05052-cag, Helvetia Asset Recovery, Inc. v. Burton M. Kahn, in the U.S.

Bankruptcy Court for the Western District of Texas, San Antonio Division:

No. Filing Docket Title of Document Date No.

14 07/09/2014 1 Plaintiff’s Complaint to Determine Dischargeability of Debt Pursuant to 11 U.S. C. § 523(a)

15 10/23/2014 16 Plaintiff’s Motion for Summary Judgment – Plaintiff’s Claims Against Burton M. Kahn are Not Dischargeable

APPELLEE’S DESIGNATION OF ADDITIONAL ITEMS TO BE INCLUDED IN THE RECORD Page 2 of 3 14-50980-cag CaseDoc#82 5:14-cv-01109-HLH Filed 12/02/14Document Entered 12/02/14 14-7 Filed 18:13:44 02/24/15 MainPage Document 3 of 3 Pg 3 of 3

Dated: December 2, 2014 HAYNES AND BOONE, LLP

/s/ Lisa S. Barkley Scott W. Everett, TBN 00796522 Werner A. Powers, TBN 16218800 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Telephone: 214.651.5000 Facsimile: 214.651.5940

Lisa S. Barkley, TBN 17851450 HAYNES AND BOONE, L.L.P. 112 E. Pecan, Suite 1200 San Antonio, Texas 78205 Telephone: 210.978-7427 Facsimile: 210-554-0427

scott.everett@haynesboone.com werner.powers@haynesboone.com lisa.barkley@haynesboone.com ATTORNEYS FOR PLAINTIFF HELVETIA ASSET RECOVERY, INC.

CERTIFICATE OF SERVICE

This certifies that on December 2, 2014, a true and correct copy of the foregoing instrument was served via e-mail on the parties who receive electronic notice in this case pursuant to the Court’s ECF filing system, and upon the parties identified below in the manner indicated, in accordance with the Federal Rules of Bankruptcy Procedure.

Burton M. Kahn Via email: glentrail@yahoo.com 1706 Alpine Circle San Antonio, Texas 78248 Debtor

Johnny Thomas Via email: 1thomas@prodigy.net St. Paul Square 1153 E. Commerce San Antonio, Texas 78205 Chapter 7 Trustee /s/ Lisa S. Barkley Lisa S. Barkley

APPELLEE’S DESIGNATION OF ADDITIONAL ITEMS TO BE INCLUDED IN THE RECORD Page 3 of 3

Case 5:14-cv-01109-HLH Document 14-8 Filed 02/24/15 Page 1 of 1

EXHIBIT 8

14-50980-cag CaseDoc#86 5:14-cv-01109-HLH Filed 12/15/14Document Entered 12/15/14 14-9 Filed 15:23:07 02/24/15 MainPage Document 1 of 3 Pg 1 of 3

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

IN RE: § Chapter 7 § BURTON M. KAHN § Case No. 14-50980-cag § Debtor. §

APPELLEE’S SUPPLEMENTAL DESIGNATION OF ADDITIONAL ITEMS TO BE INCLUDED IN THE RECORD ON APPEAL PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 8006

Comes now Helvetia Asset Recovery, Inc. (“Helvetia” or “Appellee”) and files this

Supplemental Designation of Additional Items to be Included in the Record on Appeal Pursuant

to Federal Rule of Bankruptcy Procedure 8006.

On December 2, 2014, Appellee filed its Designation of Additional items to be Included

in the Record on Appeal Pursuant to Federal Rule of Bankruptcy Procedure 8006 [Docket No.

82], which is incorporated by reference herein.

Appellee now files its Supplemental Designation of Additional items to be Included in

the Record on Appeal Pursuant to Federal Rule of Bankruptcy Procedure 8006 to include one

additional item, Docket No. 47, Order regarding Motion to Disqualify Puerto Verde Ltd. to

Maintain a Lawsuit in Texas, filed on April 29, 2014. On December 12, 2013 Debtor Burton

Kahn supplemented his designation of items for his appeal by designating the corresponding

Motion, but his designation omitted the Order.

In addition, docket entry number 84 has now been added the October 15, 2014 transcript

of the hearing on the Trustee’s Motion to Sell Non-Exempt Assets, a document which Appellee

previously designated.

EXHIBIT 9 APPELLEE’S DESIGNATION OF ADDITIONAL ITEMS TO BE INCLUDED IN THE RECORD Page 1 of 3 14-50980-cag CaseDoc#86 5:14-cv-01109-HLH Filed 12/15/14Document Entered 12/15/14 14-9 Filed 15:23:07 02/24/15 MainPage Document 2 of 3 Pg 2 of 3

No. Filing Docket Title of Document Date No.

16 4/29/2014 47 Order Regarding Motion to Disqualify Puerto Verde Ltd. to Maintain a Lawsuit in Texas

14 10/15/2014 84 Transcript of hearing on Trustee’s Motion to Sell Non-Exempt Assets.

Dated: December 15, 2014 HAYNES AND BOONE, LLP

/s/ Lisa S. Barkley Scott W. Everett, TBN 00796522 Werner A. Powers, TBN 16218800 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Telephone: 214.651.5000 Facsimile: 214.651.5940

Lisa S. Barkley, TBN 17851450 HAYNES AND BOONE, L.L.P. 112 E. Pecan, Suite 1200 San Antonio, Texas 78205 Telephone: 210.978-7427 Facsimile: 210-554-0427

scott.everett@haynesboone.com werner.powers@haynesboone.com lisa.barkley@haynesboone.com ATTORNEYS FOR APPELLEE HELVETIA ASSET RECOVERY, INC.

APPELLEE’S DESIGNATION OF ADDITIONAL ITEMS TO BE INCLUDED IN THE RECORD Page 2 of 3 14-50980-cag CaseDoc#86 5:14-cv-01109-HLH Filed 12/15/14Document Entered 12/15/14 14-9 Filed 15:23:07 02/24/15 MainPage Document 3 of 3 Pg 3 of 3

CERTIFICATE OF SERVICE

This certifies that on December 15, 2014, a true and correct copy of the foregoing instrument was served via e-mail on the parties who receive electronic notice in this case pursuant to the Court’s ECF filing system, and upon the parties identified below in the manner indicated, in accordance with the Federal Rules of Bankruptcy Procedure.

Burton M. Kahn Via email: glentrail@yahoo.com 1706 Alpine Circle San Antonio, Texas 78248 Debtor

Johnny Thomas Via email: 1thomas@prodigy.net St. Paul Square 1153 E. Commerce San Antonio, Texas 78205 Chapter 7 Trustee /s/ Lisa S. Barkley Lisa S. Barkley

APPELLEE’S DESIGNATION OF ADDITIONAL ITEMS TO BE INCLUDED IN THE RECORD Page 3 of 3

FILED Case 5:14-cv-01109-HLH Document 14-10 Filed 02/24/15 Page 1 of 42 14-0821 12/10/2014 5:29:41 PM tex-3448609 SUPREME COURT OF TEXAS BLAKE A. HAWTHORNE, CLERK

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Case 5:14-cv-01109-HLH Document 14-11 Filed 02/24/15 Page 1 of 4

FILE COPY

RE: Case No. 14-0821 DATE: 2/13/2015 COA #: 04-14-00012-CV TC#: 2013-CI-18355 STYLE: BURTON KAHN v. HELVETIA ASSET RECOVERY, INC.

Today the Supreme Court of Texas denied the petition for review in the above-referenced case.

MS. LISA S. BARKLEY HAYNES AND BOONE, L.L.P. 112 EAST PECAN STREET, SUITE 1200 SAN ANTONIO, TX 78205

EXHIBIT 11

Case 5:14-cv-01109-HLH Document 14-11 Filed 02/24/15 Page 2 of 4

FILE COPY

RE: Case No. 14-0821 DATE: 2/13/2015 COA #: 04-14-00012-CV TC#: 2013-CI-18355 STYLE: BURTON KAHN v. HELVETIA ASSET RECOVERY, INC.

Today the Supreme Court of Texas denied the petition for review in the above-referenced case.

MR. KEITH E. HOTTLE CLERK, FOURTH COURT OF APPEALS BEXAR COUNTY JUSTICE CENTER 300 DOLOROSA, STE. 3200 SAN ANTONIO, TX 78205

Case 5:14-cv-01109-HLH Document 14-11 Filed 02/24/15 Page 3 of 4

FILE COPY

RE: Case No. 14-0821 DATE: 2/13/2015 COA #: 04-14-00012-CV TC#: 2013-CI-18355 STYLE: BURTON KAHN v. HELVETIA ASSET RECOVERY, INC.

Today the Supreme Court of Texas denied the petition for review in the above-referenced case.

MS. DONNA KAY MCKINNEY BEXAR COUNTY DISTRICT CLERK PAUL ELIZONDO TOWER 101 W. NUEVA, SUITE 217 SAN ANTONIO, TX 78205-3411

Case 5:14-cv-01109-HLH Document 14-11 Filed 02/24/15 Page 4 of 4

FILE COPY

RE: Case No. 14-0821 DATE: 2/13/2015 COA #: 04-14-00012-CV TC#: 2013-CI-18355 STYLE: BURTON KAHN v. HELVETIA ASSET RECOVERY, INC.

Today the Supreme Court of Texas denied the petition for review in the above-referenced case.

BURTON KAHN 1706 ALPINE CIR. SAN ANTONIO, TX 78248

Tab 05 Judicial Finding of Fact and Conclusion of Law Regarding a Document or Instrument Purporting to Create a Lien or Claim5, entered October 23, 2013

5 Cause No. 2013-CI-17516; In Re: A Purported Lien or Claim Against Helvetia Asset Recovery, Inc.; In the 438th Judicial District Court, Bexar County, Texas

I,, I -·· ·-- - -·.

• ,.-

.• Il llll Illlllllllllllllllllllll I lllllll Ill PI2-20130221775-12 'lllf ,~.~~,•-11·111 . ''-- _2~I 2 751_6___::Q_4~!!_ __ _ _ )

MISC. DOCKET NO. 2013-CJ-17516 0 w IN RE: A PURPORTED LIEN § :z OR CLAIM AGAINST HELVETIA § z ASSET RECOVERY, INC.

() § § en Property Owner § BEXAR COUNTY, §

JUDICIAL FINDING OF FACT AND CONCLUSION OF LAW REGARDING A DOCUMENT OR INSTRUMENT PURPORTING TO CREA TE A LIEN OR CLAIM

On the ~ay of ()c.Jab..t,;v , 2013, in the above entitled and numbered

cause, this Court reviewed a motion, verified by affidavit, of Robert Ripley and the

documentation attached thereto. Additionally, the Court reviewed the "Warranty Deed" and

"Correction Warranty Deed" attached hereto. No testimony was taken from any party, nor was

there any notice of the Court's review, the Court having made the determination that a decision

could be made solely on review of the documentation under the authority vested in the Court

under Subchapter J, Chapter 51 of the Texas Government Code.

The Court finds as follows: the Warranty Deed, attached hereto as Exhibit 1; the Revised ~ ,.1·

·'.:; Warranty Deed, attached hereto as Exhibit 2~ and the Correction Warranty Deed, attached hereto r.~

'.t as Exhibit 3 (collectively, the "Warranty Deeds"), are NOT created by implied or express ~? i~)

consent or agreement of the obligor, debtor, or the owner of the real property or by implied or l ,;

express consent or agreement of an agent, fiduciary, or other representative of that person. The v 0 Warranty Deeds, attached hereto as Exhibits 1-3, do not grant Paradiv Corporation any interest in L 4 '

the property described therein.

1 I

I

2 f The Court makes no finding as to any underlying claims of the parties involved, and 4 '

p expressly limits its finding of fact and conclusion or' law to the review of a ministerial act. The G

~ . 9_ JlJ.Q!c;;k\J,.J':J~DING OF FACT AND CONCLl,!.SION OF I AW R\:;QAR.p.J]'JQ .,.,ase NumberA~~f OR INSTRUMENT PURPQRitflQ~~1lit~eJN~le~I{~gl.rmP OF A FACT AND CONCLUSl~eqF LAW REGARD!

Page I of 12 Book 16403 Page 313 12pgs

' ' I

county clerk shall file this finding of fact and conclusion of law in the same class of records as

clerk to index it using the same names that were used in indexing the subject

instrument.

..(;( Signed on this the U day of Oc.:fb JaM-, U I 3 '

DISTRICT JUDGE fa38 JHaieiel Distri'* 'lf>"--

Bexar County, Texas

m ~ /

0 ! e 4 ~4

~ 2 % a JlJ.Ql~!<\!r..f.JNPING OF FACT AND CONCL1,l.SION OF 1..A W R~MBP..INQ §ase NumberA~~M~t OR INSTRUMENT PURPOR~'ffl~R!Y.i1EteiA'~~jq\t;)'f{lt'ii:;>A~ OF A FACT AND CONCLUSl~JiJ¥ LAW REGARD!

Page 2of12

'\ .'

..--------------··- - --

NOTICE or CXWFIDEm'IALITY RIGHTS: IF YOO ARE A NM'URAL PERSCN, YOO M1\Y RDIOVE OR STRIKE Nl'f or THE E'OLLalOO INFOl\MJ\TIOO FRCM TIUS INSTIUJtENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YWR SOCIAL SECURITY NUMBER OR YOUR DRIVERS LICENSE NUMBER.

WARRANTY DEED scAtlNe.o Grantor: HELVETIA ASSET RECOVERY, INC.

BEXAR COUNTY TEXAS

GRANTEE: PARADIV CORPORATION BEXAR COUNTY. TEXAS

Consideration: TEN AND NO/J 00 DOLLARS and other good and valuable consideration Property (including any improvements} BLOCK 3 LOTl , BLOCK 3 LOT 2 •.BLOCK 3 LOT 3 •BLOCK 3 LOT 4 , BLOCK 3 LOT 5 . BLOCK 3 LOT 6, BLOCK 3 LOT 7, BLOCK 3 LOT 8 • BLOCK 3 LOT 9, BLOCK 3 LOT l O, BLOCK 3 LOT l J, BLOCK 3 LOT 12, BLOCK 3LOT13, BLOCK 3 LOT 16, BLOCK 3LOT17, BLOCK 3 LOT 18 , BLOCK 3 LOT 19

, BLOCK 4 LOT 1 , BLOCK 4 LOT 6 , BLOCK 4 LOT 7, BLOCK 4 LOT 8 • BLOCK 4 LOT 9 , BLOCK 4 LOT 10, BLOCK 4 LOT I l , BLOCK 4LOT12, BLOCK 4 LOT 13. BLOCK 4LOT14, BLOCK 4 LOT JS• BLOCK4 LOT 16. BLOCK 4LOT17, BLOCK 4LOT18, BLOCK 4 LOT 19, BLOCK 4 LOT 20 , BLOCK 4 LOT 21 , BLOCK 4 LOT 22 , BLOCK 4 LOT 23 • BLOCK 4 LOT 24 , BLOCK 4 LOT 25 • BLOCK 4 LOT 26 , BLOCK 4 LOT 27 , BLOCK 4 LOT 28

, BLOCK S LOT 1 , BLOCK S LOT 2 , BLOCK 5 LOT 3 , BLOCK 5 LOT 4 , BLOCKS LOTS , BLOCK S LOT 6 , BLOCK S LOT 7, BLOCK S LOT 8 • BLOCK 5 LOT 9 , BLOCK S LOT 10 , BLOCK 5 LOT 11 • BLOCKS LOT 12, BLOCK 5 LOT 13. BLOCK 5 LOT 14, BLOCKS LOT 15, BLOCK .5 LOT 16 • BLOCK 5 LOT 17 • BLOCK 5 LOT 18 BLOCK 5 LOT 19 , BLOCK 5 LOT 20 , BLOCKS LOT 21 , BLOCK 5 LOT 22 , BLOCKS LOT 23 , BLOCK S LOT 24 , BLOCK S LOT 25 , BLOCKS LOT 26 , BLOCK 5 LOT 27. BLOCKS LOT 28 , BLOCKS LOT 29, BLOCK 5 LOT 30 , BLOCK S LOT 31 , BLOCK S LOT 32 •

BLOCK 6 LOT 1 , BLOCK 6 LOT 2 , BLOCK 6 LOT 3 , BLOCK 6 LOT 4 . BLOCK 6 LOT S , BWCK 6 LOT 6, BLOCK 6 LOT 7 , BLOCK 6 LOT 8 , BLOCK 6 LOT 9 , BLOCK 6 LOT 10 , BLOCK 6 LOT 11 • BLOCK 6 LOT 12 , BLOCK 6 LOT 13 , BLOCK 6 LOT 14 , BLOCK 6 LOT 15 , BLOCK 6 LOT 16, BLOCK 6 LOT 17, BLOCK 6 LOT 18, BLOCK 6 LOT 19, BLOCK 6 LOT 20, BLOCK 6 LOT 21 , BLOCK 6 LOT 22 • BLOCK 6 LOT 23 , BLOCK 6 LOT 24 • BLOCK 6 LOT 25 , BLOCK 6 LOT 26. BLOCK 6 LOT 27. BLOCK 6 LOT 28 , BLOCK 6 LOT 29, BLOCK 6 LOT 30 , BLOCK 6 LOT 31 , BLOCK 6 LOT 32 •

BLOCK 7 LOT l , BLOCK 7 LOT 2 , BLOCK 7 LOT 3 , BLOCK 7 LOT 4, BLOCK 7 LOTS , BLOCK 1LOT6. BLOCK 1LOT7, BLOCK 1 LOT 8 , BLOCK 7 LOT 9 , BLOCK 7 LOT 10 , e BLOCK 7 LOT 1t, BLOCK 7LOT 12. BLOCK 7LOT13. BLOCK 7LOT 14 BLOCK 7LOT JS I

, BLOCK 7 LOT 16, BLOCK 7 LOT 17 , BLOCK 7 LOT J8 • BLOCK 7 LOT 19 , BLOCK 7 LOT 20 , 4 BLOCK 7 LOT 21 , BLOCK 7 LOT 22 , BLOCK 7 LOT 23 , BLOCK 7 LOT 24 , BLOCK 7 LOT 25 , BLOCK 7 LOT 26, BLOCK 7 LOT 27 , BLOCK 7 LOT 28 , BLOCK 7 LOT 42 • BLOCK 7 LOT 43 , ~ t Book 1&367 Page 870 Jpgs

! EXHIBIT 1 ]=-- tse Number: 2013Cl17516 Document Type: JUDICIAL FINDING OF A FACT AND CONCLUSION OF LAW REGARDI Page 3of12

' .

BLOCK 7 LOT 44 , BLOCK 7 LOT 45 , BLOCK 7 LOT 46, BLOCK 7 LOT 47, BLOCK 7 LOT 48 , BLOCK 7 LOT 49, BLOCK 7 LOT 50, BLOCK 7LOTS1 , BLOCK 7 LOT 52 • BLOCK 7 LOT 53 , BLOCK 7 LOT S4 • BLOCK 7 LOT SS • BLOCK 7 LOT S6 • BLOCK 7 LOT 57 • BLOCK 7 LOT 58, BLOCK 7 LOT S9 • BLOCK 7 LOT 60, BLOCK 7 LOT 61 , BLOCK 7 LOT 62 , BLOCK 7 LOT 63 ~ BLOCK 7 LOT 64 • BLOCK 7 LOT 65 , BLOCK 7 LOT 66 , BLOCK 8 LOT 1 ,

BLOCK 8 LOT 2 , BLOCK 8 LOT 3 , BLOCK 8 LOT 4 , BLOCK 8 LOT S , BLQC.J:V..D,,_.v BLOCK 8 LOT 18 , BLOCK. I LOT 19 , BLOCK 8 LOT 20 , BLOCK 8 LOT 21 • B.LA.1'4~ .........::x--~-... . BLOCK 8 LOT 23 , BLOCK 8 LOT 24 , BLOCK 8 LOT 25 , BLOCK 8 LOT 26 , BL BLOCK 8 LOT 28, BLOCK 8, LOT 29 , BLOCK 8, LOT 30, BLOCK 8, LOT 31 , B 32 , BLOCK 8, LOT 33 , BLOCK 8, LOT 34 ,

BLOCK 9 LOT 1 , BLOCK 9 LOT 2 • BLOCK 9 LOT 3 , BLOCK 9 LOT 4 , BLOCK 9 LOT i,z~i::::£P...r·· BLOCK 9 LOT 6 , BLOCK 9 LOT 7 , BLOCK 9 LOT 8, BLOCK 9 LOT 9 , BLOCK 9 LOT l O, BLOCK 9 LOT t I, BLOCK 9LOT12, BLOCK 9 LOT l3, BLOCK9LOT14, BLOCK 9 LOT 15 , BLOCK 9 LOT 16 , BLOCK 9 LOT 17 , BLOCK 9 LOT 18, , BLOCK 9 LOT 19 , BLOCK 9 LOT 20, BLOCK 9 LOT 21 , BLOCK 9 LOT 22, BLOCK 9 LOT 23 , BLOCK 9 LOT 24, BLOCK 9 LOT 25 , BLOCK 9 LOT 26 , BLOCK 9 LOT 27, BLOCK 9 LOT 28, BLOCK 9 LOT 29 , BLOCK 9 LOT 30, BLOCK 9 LOT 31 , BLOCK 9 LOT 32 , BLOCK 9 LOT 33 , BLOCK 9 LOT 34, KEY LARGO SUBDIVISION CB 05065 IN BEXAR COUNTY, TEXAS AS PLAT RECORDED IN VOLUME 9573 PAGE 13 Property Records, Bexar.Co\Dlty~ Texas.

. .

RESER VATION From and Exceptions to Conveylnoo and Warranty:

Easements, rights-of-way, and prescriptive rights, whether of record or not; all presendy recorded instruments, other than liens and conveyances, that affect the property; taxes for the cWTent year, the payment of which Grantee assumes.

Grantor, for the consideration, receipt of which is acknowledged. and subject to the reservations from and exceptions to conveyance and warranty, grants, sells and conveys to Grantee the property, together with all and singular the rights and appurtenances thereto in any wise belonging to have and bold it to Grantee, Grantee's heirs. executor, administrators, successors or assigns forever. Gtantor binds Grantor and Grantor's heirs, executors, administrators and successors to warrant and forever defend all and singular the properly to Grantee and Grantee's heirs, executors~ administrators, successors and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof, except as to the reservations from and exceptions to conveyance and warranty.

This instrument was acknowledged before me on September)tJ. 2013 by Burton Kahn, President, Helvetia Asset Recovery, Inc.

p G

Document Type: JUDICIAL FINDING OF A FACT AND CONCLUSION OF LAW REGARDI Page 4of12 ..

SEP 3 0 2013

Ooetl 28130295231 Fees: $24.ee lllJfl/2913 3:21Pn # Pages 3 Filed &Rec:orded in the O'f ici•I Public Reco~ds of BEXAR COUNTY CIRAAD C. RICkHOF~ COUHTV Q.ERIC

e 4 ~ tJ,

t a_ ~,

fse Number: 2013Cl17516 Document Type: JUDICIAL FINDING OF A FACT AND CONCLUSION OF LAW REGARD!

Page 5of12

..

tcl'ICE OF ca;FICENTIALITY RIGHTS: IF YOU ME A NATURAL ~. YOO Ml\Y RfM)VE OR STRIKE ANY OF THE rnIJom«; INroRMA.TION FRCM nns INSTlO!ENI' BEroRE IT IS FILED roR RECORD IN THE PUBLIC RECORDS: YOOR SOCIAL SECURITY NUMBER OR YOOR DRIVERS LICENSE NUMBER.

e,_[:\J/5.f/)WARRANTY DEED Granter: HELVETIA ASSET RECOVERY, INC.

BEXAR COUNlY TEXAS

GRANTEE: PARADIV CORPORATION BEXAR COUN'IY, TEXAS

Consideration: TEN AND N0/100 DOLLARS and other good and valuabJe consideration

Property (including any improvements) BLOCK 3 LOTl , BLOCK 3 LOT 2 , BLOCK. 3 LOT 3 , BLOCK 3 LOT 4 , BLOCK 3 LOT 5 . BLOCK 3 LOT 6, BLOCK 3 LOT 7, BLOCK 3 LOT 8, BLOCK 3 LOT 9 , BLOCK 3 LOT 10, BLOCK 3LOT11, BLOCK 3LOT12, BLOCK 3 LOT 13, BLOCK 3LOT16, BLOCK 3LOT17, BLOCK 3 LOT 18 , BLOCK. 3 LOT 19

, BLOCK 4 LOT 1 , BLOCK 4 LOT 6, BLOCK 4 LOT 1 , BLOCK 4 LOT 8 , BLOCK 4 LOT 9 , BLOCK 4 LOT 10, BLOCK 4LOT11, BLOCK 4 LOT 12, BLOCK 4LOT13, BLOCK 4 LOT 14, BLOCK 4 LOT IS, BLOCK4 LOT I 6, BLOCK 4 LOT 17, BLOCK 4 LOT 18, BLOCK 4 LOT 19, BLOCK 4 WT 20, BLOCK 4 LOT 21 , BLOCK 4 LOT 22, BLOCK 4 LOT 23 , BLOCK 4 LOT 24, BLOCK 4 LOT 2S , BLOCK 4 LOT 26, BLOCK 4 LOT 27, BLOCK 4 LOT 28

, BLOCK. 5 LOT 1 , BLOCKS LOT 2 , BLOCKS LOT 3 , BLOCKS LOT 4 , BLOCK. 5 WT 5 , BLOCKS LOT 6, BLOCKS LOT 7, BLOCK 5 LOT 8 , BLOCK 5 LOT 9, BLOCK SLOT 10, BLOCK 5 LOt 11 , BLOCKS LOT 12, BLOCKS LOT 13, BLOCKS LOT 14, BLOCKS LOT 15, BLOCKS LOT 16 , BLOCKS LOT 17, BLOCK 5 LOT 18 BLOCK 5 LOT 19 , BLOCK S LOT 20 , BLOCKS WT 21 , BLOCKS LOT 22, BLOCKS LOT 23 , BLOCK 5 LOT 24, BLOCK 5 LOT 25, BLOCKS LOT 26, BLOCKS LOT 27, BLOCK 5 LOT 28 , BLOCK S LOT 29, BLOCK 5 LOT 30 , BLOCK S LOT 31 , BLOCK S LOT 32 , 1 BLOCK 6 LOT I , BLOCK 6 LOT 2, BLOCK 6 LOT 3 , BLOCK 6 LOT 4, BLOCK 6 LOTS, 0 BLOCK 6 LOT 6 , BLOCK 6 LOT 7 , BLOCK 6 LOT 8 , BLOCK 6 LOT 9 , BLOCK 6 LOT 10 , I ·2 BLOCK6LOT11, BLOCK6LOT 12,BLOCK6LOT 13,BLOCK6LOT14,BLOCK6LOT 15 4I , BLOCK 6 LOT 16, BLOCK 6 LOT 17, BLOCK 6 LOT 18 ·,BLOCK 6 LOT 19, BLOCK 6 LOT 20.

BLOCK. 6 LOT 21 , BLOCK 6 LOT 22 , BLOCK 6 LOT 23 , BLOCK 6 LOT 24 , BLOCK 6 LOT 2S , 2 BLOCK 6 LOT 26, BLOCK 6 LOT 27, BLOCK 6 LOT 28 , BLOCK 6 LOT 29, BLOCK 6 LOT 30 , 8 BLOCK 6 LOT 31 , BLOCK 6 LOT 32 , ~.

BLOCK 7 LOT 1 , BLOCK 7 LOT 2 , BLOCK 7 LOT 3 , BLOCK 7 LOT 4, BLOCK 7 LOT 5 , v BLOCK 7 LOT 6, BLOCK 7 LOT 7 , BLOCK 7 LOT 8 , BLOCK 7 LOT 9 , BLOCK 7 LOT I0 ,

e BLOCK 7 LOT 11 , BLOCK 7 LOT 12 , BLOCK 7 LOT 13 , BLOCK 7 LOT 14 , BLOCK 7 LOT 15 , BLOCK 7 LOT 16, BLOCK 7 LOT 17, BLOCK 7 LOT 18 , BLOCK 7 LOT 19, BLOCK 7 LOT 20, BLOCK 7 LOT 21 , BLOCK 7 LOT 22 , BLOCK 7 LOT 23 , BLOCK 7 LOT 24, BLOCK. 7 LOT 2S , 4 BLOCK 7 LOT 26, BLOCK 7 LOT 27, BLOCK 7 LOT 21, BLOCK 7 LOT 42, BLOCK 7 LOT 43 , ...~ 4 .Boott 16371 , ... 11!157 3pg5 p G

a--··· ..... ---··-·· .-· . ~se Number: 2013Cl17516 · - - __ , EXHIBIT 2 I·· Document Type: JUDICIAL FINDING OF A FACT AND CONCLUSION OF LAW REGARDI Page 6of12

' ..

BLOCK 7 LOT 44, BLOCK 7 LOT 45 , BLOCK 7 LOT 46, BLOCK 7 LOT 47 , BLOCK 7 WT 41, BLOCK 7° LOT 49, BLOCK 7 LOT 50, BLOCK 7 LOT 51 • BLOCK 7 LOT 52. BLOCK 7 LOT 53, BLOCK 7 LOT S4, BLOCK 7 LOT 55 , BLOCK 7 LOT 56, BLOCK 7 LOT 57, BLOCK 7 LOT 58 , BLOCK 7 LOT 59, BLOCK 7 LOT 60, BLOCK 7 LOT 61 , BLOCK 7 LOT 62, BLOCK 7 LOT~rs~I:',-. BLOCK 7 LOT 64, BLOCK 7 LOT 65 , BLOCK 7 LOT 66 , BLOCK 8 LOT 1 , OF Bf..t . " ~" " ." ~"

BLOCK 8 LOT 2 , BLOCK 8 LOT 3 , BLOCK 8 LOT 4 , BLOCK 8 LOT 5 , BLOC ~'t0T6, \ BLOCK 8 WT 18 , BLOCK 8 LOT 19 , BLOCK I LOT 20 , BLOCK 8 LOT 21 , B fe8 ;f!. ~~;:;;y~. BLOCIC. 8 LOT 23 , BLOCK 8 LOT 24 , BLOCK I LOT 25 , BLOCK 8 LOT 26 , BL SL ~' ,,·-·~/ / '

BLOCK I LOT 28 , BLOCK 8, LOT 29, BLOCK 8, LOT 30 , BLOCK 8, LOT 31 , . ~.~.. ·· 32 , BLOCK 8, LOT 33 , BLOCK 8, LOT 34 ,

BLOCK 9 LOT l , BLOCK 9 LOT 2 , BLOCK 9 LOT 3 , BLOCK 9 LOT 4 , BLOCK 9 LO BLOCK 9 LOT 6 , BLOCK 9 LOT 7, BLOCK 9 LOT 8, BLOCK 9 LOT 9 , BLOCK 9 LOT l 0 , BLOCK 9 LOT I 1 , BLOCK 9 LOT 12, BLOCK 9 LOT 13 , BLOCK 9 LOT 14 , BLOCK 9 LOT 1S • BLOCK 9 LOT 16, BLOCK 9LOT17, BLOCK 9 LOT 18,, BLOCK 9 LOT 19, BLOCK 9 LOT 20, BLOCK 9 LOT 21 , BLOCK 9 LOT 22 , BLOCK 9 LOT 23 , BLOCK 9 LOT 24 , BLOCK 9 LOT 25 , BLOCK 9 LOT 26, BLOCK 9 LOT 27 , BLOCK 9 LOT 28, BLOCK 9 LOT 29 • BLOCK 9 LOT 30, BLOCK 9 LOT 31 , BLOCK 9 LOT 32 , BLOCK 9 LOT 33 , BLOCK 9 LOT 34 , KEY LARGO SUBDIVISION CB 05065 IN BEXAR COUN1Y, TEXAS AS PLAT RECORDED IN VOLUME 9573 PAGE 13 Property Records, Bexar County, Texas.

RESERVATION From and Exceptions to Conveyance and Wananty:

F.asements, rights-of-way, and prescriptive rights, whether of record or not; all presently nx:ordcd ~ other than liens and conveyances, that affect the property; taxes for the cummt year, the payment of which Grantee assumes.

Orantor, for the consideration, receipt of which is acknowledged, and subject to the reservations from and exceptions to conveyance and warranty, grants, sells and conveys to Grantee the property, together with all and singular the rights and appu&nanccs thereto in any wise belonging to have and bold it to Grantee, Grantee's heirs, executor, administrators, successon or assigns forever. Gnmtor binds Grantor and Grantor's heirs, executors, administrators and successors to warrant and forever defend all and singular the properly to Grantee and Grantee's heirs, executors; administrators, suc:cessors and assigns apin.• every pe1'S01l whomsoever lawfully claiming or to claim the same or any ~/ pert thereof, except as to the reservations from and exceptions to conveyance and warranty.

2 uires, singular nouns and pronouns include the plural. 4 I

6 iii~~~~~~RECOVERY, INC. ! TON KAHN, PRESIDENT ACKNOWLEDGMENT v e This instrument was acknowledged before me on October 4, 2013 by Burton Kahn, President. Helvetia Asset Recovery, Inc.

4

~. p G 2 .a. ' ___ ____ ,,,

~ase Number: 2013Cl17516 Document Type: JUDICIAL FINDING OF A FACT AND CONCLUSION OF LAW REGARDI Page 7of12

OCT ·: ~ 2013

A/~~ ~COUNTY CLERK BEXAR COUNTY, TEXAS

0/ • a! i v e i h a· iase Number: 2013Cl17516 Document Type: JUDICIAL FINDING OF A FACT AND CONCLUSION OF LAW REGARD!

Page 8of12

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WOfX S IDr 16 .auxz., BI.Oat 5tor11. 8LOCX S IDl 12,BLOCK.SIDT13,. BtOat.5Im14,.BLOaCSLOT15,.

IDl' l1,.Bl.OCX51Dr ll:m.<XX 5Lal'It,&CXX51Dr20,.

m.oc&: 5 U7t21, mAXX 5 L0r22 ,lllOCS. 5 IDf 23. 81.0CX S LOl'M, 81.CXXS I.Or 25,. JIUX%SID1"26 ,BLQ(XS WT "ZI .BLOCX51Dr21,BUXX5 wra ,.BUX% 5 IDT 30. BtOC&: 5 LOT 31 • BLOCX 5 LOT 32 • I BLOClt 6 tar I, BLOClt 6 U1l2 ,JRDCX 6LOr 3 ,..BLOCX 6tor4,BL<XX61.(11' S.

a ma%6IDl'6.BUXZ6tar7, BUXX' I.Or I,. BLOC% 6 UH t. BLOCS 6 LOI" JO, BLOC% 41 LOI' 11 .• BUXS 6U11" 12 .BLOCX61Dr l3. BUXX 6IDr14.,·BLOCI.'. 6IDI'15 i / ,BLOCX•UR 16,aocz:61Dl' 17 .m.DCS'LOI' tl.JR.OCX6 LOr :If •.BLO<X6LOJ'3J, m:.o<X6 tar21,m.ocg6J.Dl'2ZtBD<Z6UJl2J ,llUX&61DlJI I BLOat6LOr2S I BLOCK6IDF26.• moat61Dr'Z1 ,Kncx6 LOr21,mt>CK.6UJr29 .BLOCIC 6 LOT 30.

i . BtOCZ d tor 31 • BLOC1C 4li LOT 32.

BLOC&: 'I tor I • BLOC% 11.01'2.BLOCX1101' 3, BLOaC 1Im4 .BLOCK. 7 LOT 5 .. BL<XZ 7U1f 6.•0CZ 7U:R 7. BLOCS 7 LOI" I. BLOCK 7 U1r 9 •BLOCK: 7 LOT 10. BU:X% 7 LOT 11 , :mDm: 7ID'I' 12.aocs:.7IDr l3 .JR.Oar 71.0r 14, BLCXX 7Im 15 •moat 71.0l' J6,BLOCX 7lDI' n ,max 71Dl' 11.:mox 7 IDr Jt .111.0X1 iar20 ..

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CERTIFIED COPY CERTIFICATE STATE OF TEXAS I, DONNA KAY M"l<INNEY, BEXAR COUNTY DISTRICT CLERK, CERTIFY THAT THE FOREGOING IS A TRUE AND CORRECT COPY OF THE ORIGINAL RECORD AS INDICATED BY THE VOLUME, PAGE AND COURT ON SAID DOCUMENT. WITNESSED MY OFFICIAL HAND AND SEAL OF OFFICE ON THIS:

October 24, 2013 DONNA KAY M£KINNEY BEXAR COUNTY, TEXAS

By:_.._a&K___..__~-~-·- ·- - -

ALEX LEWICKE, Deputy District Clerk (NOT V.4UD WJrHOUT THE OERKS'S ORIGINAL SIGNATURE.)

Ooctt 20130221775 Fees: $60.0~2 10/24/20R13 3d:~2 ~~ ~h~a81~icial Filed & ecor e EXAR COUNTY Public RCecoRrldCsKHg~F ~OUNTY CLERK GERARD ·

OCT 2 4 2013

~~ <~COUNTY CLERK BEX;\R COUNTY, TEXAS

Case Number: 2013Cl17516 Document Type: JUDICIAL FINDING OF A FACT AND CONCLUSION OF LAW REGARD!

Page 12 of 12

Tab 06 Plaintiff’s Verified Original Petition and Application for Temporary and Permanent Injunctive Relief6, entered November 4, 2013.

6 Cause No. 2013-CI-18355; Helvetia Asset Recovery, Inc. v. Burton Kahn and Paradiv Corporation; In the 37th District Court, Bexar County, Texas

Filed 13 November 4 P5:49 Donna Kay McKinney District Clerk Bexar District CAUSE NO. - - - - - - - Accepted by:

Annabelle Kung HELVETIA ASSET RECOVERY, INC. § IN THE DISTRICT COURT § Plaintiff. § § V, § BEXAR COUNTY, TEXAS § BURTON KAHN and § PARADIV CORPORATION, § § Defendants. § JUDICIAL DISTRICT

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF

Plaintiff Helvetia Asset Recovery, Inc. ("Helvetia") files its Verified Original Petition

and Application for Temporary and Permanent Injunctive Relief and respectfully shows the

Court as follows:

I.

INTRODUCTION

Robert Ripley C'Ripley") formed Helvetia in order to acquire and develop certain

property in San Antonio. Puerto Verde, Ltd. ("Puerto Verde"), a company owned by Ripley,

acquired 100% of the common stock of Helvetia for valuable consideration. As owner of Puerto

Verde, Ripley later elected Burton Kahn ("Kahn") as president and sole director of Helvetia.

Unbeknownst to Ripley and while still on officer and director of Helvetia, Kahn formed another

corporation, Paradiv Corporation ("Paradiv"), as part of a plan and scheme to divert assets from

Helvetia. After Ripley removed Kahn as an officer of Helvetia, he learned Kahn had drained

over $400,000.00 from Helvetia's accounts. Additionally, Kahn purported to transfer Helvetia's

lots-including those previously sold years before to third parties-to Paradiv. Kahn persists in

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF PAGE I his attempts to sell these lots as Paradiv property. As a result of Kahn's flagrant breaches of his

fiduciary duties to Helvetia, Helvetia has suffered substantial losses and continues to suffer

losses every day it is unable to develop and sell its Jots. In conjunction with its Original Petition,

Helvetia applies to the Court for temporary and permanent injunction to protect against further

loss of its assets, properties and further injury to its goodwill.

II.

DISCOVERY

1. Plaintiff intends to conduct discovery under Level 2 described in Texas Rule of

Civil Procedure 190.3.

III.

PARTIES

2. Plaintiff Helvetia Asset Recovery, Inc. is a Texas corporation with its principal

place of business at 13123 Feather Point Drive, San Antonio, Texas 78233.

3. Defendant Burton Kahn is an individual and former officer and director of

Plaintiff. Kahn may be served at his residence at 1706 Alpine Circle, San Antonio Texas 78248,

or where found.

4. Defendant Paradiv Corporation is a Texas corporation with its principal place of

business at 1706 Alpine Circle, San Antonio, Texas 78248 and may be served by serving its

officer and registered agent, Kahn.

IV.

JURISDICTION AND VENUE

5. This Court has subject matter jurisdiction over Plaintiffs claims against

Defendants under Texas common law and various equity principles. The claims raised in this

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF PAGE2

Petition involve an amount in controversy that exceeds the minimum jurisdictional limits of this

Court.

6. In accordance with Texas Rule of Civil Procedure 47, Plaintiff seeks monetary

relief over $1,000,000 and all other relief requested below and to which Plaintiff is justly

entitled.

7. Venue is proper in this Court based on Sections 15.002(a)(l), 15.002(a)(2), and

15.002(a)(3) of the Texas Civil Practice & Remedies Code.

v.

FACTUAL BACKGROUND

8. Since its inception in 2007, Helvetia has been owned by a single shareholder-

Puerto Verde. Ripley has been the sole shareholder of Puerto Verde since its incorporation in

2006.

9. In or around the summer of 2007, Helvetia acquired the property at issue in this

lawsuit, lots in a subdivision known as "Key Largo," in San Antonio, Texas.

10. On or about October 23, 2009, Ripley, as owner of Puerto Verde, elected Burton

Kahn as president, secretary, and sole director of Helvetia.

11. As an officer and director of Helvetia, Kahn had a fiduciary relationship with

Helvetia and owed Helvetia a duty of utmost good faith, loyalty, fairness, and honesty. Kahn, as

a signatory to Helvetia's bank accounts, was also a trustee for funds deposited there.

12. Helvetia kept the funds from the Key Largo lot sales in accounts at Randolph

Brooks Federal Credit Union ("RBFCU") (the "Trust Funds"). The Trust funds were intended

to be kept separate from other funds or accounts owned by Burton Kahn and were earmarked to

be used to develop a subdivision known as "Royal Crest" in San Antonio, Texas.

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF PAGE3 13. By mid-2013, Kahn's relationship with Ripley had deteriorated. Kahn was no

longer perfonning as expected, and Ripley desired to replace Kahn at Helvetia.

14. On or about September 3, 2013, Kahn fanned Paradiv.

15. On or about September 8, 2013, Kahn was advised that Puerto Verde would be

holding an extraordinary shareholder meeting to elect a new president, secretary, and director of

Helvetia.

16. On or about September 16, 2013, Ripley, as sole owner and director of Puerto

Verde, elected Helvetia's new officers as follows: Robert Ripley as president and director, Fred

Seehusen as vice president, and John Ripley as secretary.

17. On or about that same day, Ripley, as the sole owner and director of Puerto

Verde, resolved to remove Kahn as a signatory on all Helvetia's bank accounts, including its

accounts held at RBFCU.

18. On or about September 17, 2013, Kahn established "Puerto Verde Ltd.," a Texas

company with the same name as Helvetia's owner, Puerto Verde.

19. On or about September 20, 2013, Ripley notified Kahn that he was not to act in

any capacity on behalf of Helvetia and must immediately tum over all business records, payroll

records, IRS fllings and returns, bank accounts, and any contracts or other materials related to

Helvetia, and must provide a complete account for all receipts and disbursements to date.

20. Despite this notice, Kahn continued to act purportedly as "president of Helvetia,"

notwithstanding Helvetia's direct order not to act as such.

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY AND PERMANENT JNJUNCTIYE RELIEF PAGE4 21. As the purported "president of Helvetia," Kahn attempted to transfer the Key

Largo Jots Helvetia owned-including Jots previously sold to developers and homeowners-to

1

Paradiv.

22. Kahn's deliberate actions with respect to the Key Largo Jots were done without

reasonable cause and have impaired Helvetia's ability to sell the lots, resulting in a loss of

specific sales of property.

23. Additionally, between July and September 2013, Kahn drained more than

$400,000.00 out of Helvetia's savings account at RBFCU without Helvetia's consent.

24. Kahn has continued to interfere with Helvetia's business affairs and unless

enjoined, will cause irreparable damage to Helvetia's business reputation and good will.

25. As a result of Kahn's acting in violation of his fiduciary duties and with

knowledge and malice, Helvetia has suffered a disruption of its business, loss of business

opportunity, Joss of goodwill and its competitive position in the marketplace.

VI.

CAUSES OF ACTION

COUNT ONE - BREACH OF FIDUCJAR\' OUT\'

26. Plaintiff incorporates the preceding paragraphs in the Petition.

27. As described in this Petition, Kahn was Helvetia's fiduciary.

28. Kahn breached his fiduciary duties to Helvetia.

1 See Ex. I ("Warranty Deed," purportedly transferring a block of approximately 216 Jots from Helvetia 10 Paradiv Corporation on September 30, 2013); Ex. 2 ("Revised Warranty Deed," purportedly transferring the same block of lots from Helvetia to Paradiv Corporation on October 4, 2013); Ex. 3 ("Correction Warranty Deed," purportedly transferring the same block of lots again from Helvetia to Paradiv Corporation on October 11, 2013) (collectively, the "Deed Transfers").

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF PAGE 5 29. Plaintiff seeks to recover all damages caused by this breach and the imposition of

a constructive trust on the stock of Paradiv and on all real and personal property acquired with

embezzled funds or through the breach of fiduciary duties.

COUNT Two - CONVERSION

30. Plaintiff incorporates the preceding paragraphs in the Petition.

31. Helvetia owned, possessed or had the right to immediate possession of personal

property.

32. Kahn wrongfully exercised dominion or control over the property.

33. Kahn's actions were committed with malice.

34. Plaintiff has incurred and continues to incur financial damages resulting from

Defendants' wrongful control over the property.

COUNT THREE - MONEY HAD AND RECEIVED

35. Plaintiff incorporates the preceding paragraphs in the Petition.

36. Helvetia owned, possessed, or had a right to possess personal property, namely

$400,000 held in a savings account at RBFCU.

37. Defendants wrongfully removed the $400,000.00 from Helvetia's bank account

without authorization.

38. In equity and good conscience, the money in Defendants' possession, including

all real and personal property acquired with such funds, belongs to Helvetia.

COUNT FOUR- SLANDER OF TITLE

39. Plaintiff incorporates the preceding paragraphs in the Petition.

40. Helvetia owned, possessed, or had a right to possess real property.

PLAINTlFF'S VERIFIED ORIGINAL PETlTION AND APPLICATION FOR TEMPOBARY AND PERMANENT INJUNCTIVE RELIEF PAGE 6 41. Defendants uttered and/or published a false and disparaging statement about title

to Helvetia's property.

42. Defendants acted with legal malice.

43. Defendants caused plaintiff special damages, the loss of sales of property.

VII.

EXEMPLARY DAMAGES

44. Plaintiff incorporates the preceding paragraphs in the Petition.

45. Defendants' conduct was fraudulent, willful, and malicious. The conduct violates

Texas Penal Code Sections 32.21, 32.42, and 31.03. Helvetia is entitled to exemplary damages

as a result of Defendants' tortious conduct, as alleged in this Petition.

VIII.

APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF

46. Plaintiff incorporates the preceding paragraphs in the Petition.

47. There is a substantial likelihood that Helvetia will prevail on the merits of its

claims against Defendants.

48. Unless enjoined, Defendants' wrongful interference with Helvetia's business

operations and theft of and control over Helvetia's Trust Funds and properties will cause

Helvetia irreparable harm which there is no adequate remedy at law, including, without

limitation, loss of unique real property, disruption of business, loss of business opportunity, loss

of goodwill, and loss of its competitive position in the marketplace.

49. This action for injunctive relief is Helvetia's only means of securing relief. The

resulting damage, injury, interruption and harm to Helvetia exceeds any remedy that could be

afforded by a monetary award, even if Defendants were able to respond in payment of money

damages.

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF PAGE 7 50. The hann to Helvetia is imminent. Without the Court's immediate intervention,

Helvetia's Trust Funds will likely become co-mingled with other funds, and Helvetia could Jose

its ability to impose a trust on and collect the Trust Funds.

51. Helvetia respectfully requests that the Court issue an order temporarily:

(a) enjoining Kahn and his respective agents, servants, employees and

representatives, from taking any action on behalf of Helvetia or Paradiv;

(b) enjoining Defendants and their respective agents, servants, employees,

members and representatives from transferring, encumbering or disposing

of the proceeds from their sale of lots in Key Largo;

(c) enjoining Defendants and their respective agents, servants, employees,

members and representatives from transferring, encumbering or disposing

of any real or personal property in which the proceeds from the sale of lots

in Key Largo have been invested;

(d) enjoining Defendants and their respective agents, servants, employees,

members and representatives from transferring, encumbering or disposing

of the Trust Funds, and to the extent the Trust Funds have been invested

into real or personal property, freezing that in which it has been invested.

(e) imposing a constructive trust over the Trust Funds to prevent dissipation

of ill-gotten gains.

IX.

PRAYER

WHEREFORE, Plaintiff Helvetia Asset Recovery, Inc. respectfully requests that this

Court:

(i) award Plaintiff its actual damages in an amount to be determined at trial;

PLAINTIFF'S VERIFIED ORIGINAL PETJTJON AND APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF PAGES

(ii) award Plaintiff exemplary damages in an amount to be determined at trial;

(iii) impose a constructive trust in favor of Plaintiff on the stock of Paradiv and on all proceeds, funds, or real and personal property improperly obtained by Defendants;

(iv) convert the preliminary injunction into a permanent injunction enjoining Kahn from acting on behalf of Helvetia;

(v) permanently enjoin Defendants from migrating assets belonging to Plaintiff;

(vi) award Plaintiff its attorneys' fees, expenses, and court costs in connection with this action, as well as conditional awards in the event of post-verdict proceedings and appeals;

(vii) award Plaintiff pre- and post-judgment interest at the maximum amounts permitted by law; and

(viii) grant Plaintiff all other relief, both special and general, at law or in equity, to which it may show itself justly entitled.

~----------------

--~<--~~~~~~~~~~~ - ----.....__ ......

~---......., er A. Powers StateBarNo.16218800 Natalie DuBose State Bar No. 24077481

HA YNES AND BOONE, LLP 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Telephone: (214) 651-5000 Telecopier: (214) 651-5940

ATTORNEYS FOR PLAINTIFF HELVETIA ASSET RECOVERY, INC.

D-2211145_3

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOR TEMPORARY AND PERMANENT INJUNCTIVE RELIEF PAGE9

VERIFICATION

STATE OF TEXAS § § COUNTY OF BEXAR §

BEFORE ME, the undersigned authority, on this day personally appeared, Robert Ripley,

who, being by me duly sworn, on his oath deposed and said that he is duly qualified in all

respects to make this verification, that he has read the allegations in the above and foregoing

Verified Original Petition, Application for Temporary and Pennanent Injunction, and that the

statements of fact contained herein are true and correct.

SUBSCRIBED AND SWORN TO BEFORE ME, the undersigned authority, on this _ day of November, 2013, to certify which witness my hand and official seal.

e CYH'OIA KHUHTEft INKENllWIDT Notary Public STATE OF TEXAS My Comm. Exp. 11-02·14 Notary Public Signature

(PERSONALIZED SEAL)

PLAINTIFF'S VERIFIED ORIGINAL PETITION AND APPLICATION FOB IEMPOBARYAND PEBMANENT INJUNCTIVE REUEF PAGE 11

Tab 07 Order Denying Kahn’s Motion for Reconsideration7, entered April 11, 2014.

7 Cause No. 2013-CI-18394; In Re: A Purported Lien or Claim Against Helvetia Asset Recovery, Inc.; In the 224th District Court, Bexar County, Texas

Tab 08 Order Granting Helvetia Asset Recovery, Inc.’s Motion to Lift or Modify the Automatic Stay8, entered April 28, 2014.

8 Case No. 14-50980-cag, In re: Burton M. Kahn, Debtor, United States Bankruptcy Court for the Western District of Texas, San Antonio Division 14-50980-cag Doc#39 Filed 04/28/14 Entered 04/28/14 12:24:52 Main Document Pg 1 of 4

IT IS HEREBY ADJUDGED and DECREED that the below described is SO ORDERED.

Dated: April 28, 2014.

__________________________________

CRAIG A. GARGOTTA UNITED STATES BANKRUPTCY JUDGE

__________________________________________________________________

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

IN RE: § Chapter 7 § BURTON M. KAHN § Case No. 14-50980-cag § Debtor. §

ORDER GRANTING HELVETIA ASSET RECOVERY, INC.’S MOTION TO LIFT OR MODIFY THE AUTOMATIC STAY

Came on for hearing on April 24, 2014, the Motion to Lift or Modify the Automatic

Stay (the “Motion”) filed by Helvetia Asset Recovery, Inc. (“Helvetia”), 1 the Chapter 7

trustee’s response to the Motion, the Debtor’s response to the Motion and additional motions

by the Debtor challenging the Motion. 2 The Court heard evidence and considered the

arguments of counsel for Helvetia, the Chapter 7 trustee, and the Debtor, who appeared pro

se. The Court announced on the record that the Motion was granted, overruling the

1 Capitalized terms not defined herein shall have the meaning ascribed to them in the Motion.

2 In addition to his response, the Debtor filed and urged the following opposing motions: (1) Motion to Disqualify Puerto Verde Ltd. to Maintain a Lawsuit in Texas; (2) Motion to Disqualify Puerto Verde Ltd. to Have Direct Access to this Court; and (3) Motion to Disqualify Motion to Modify the Automatic Stay Because Filing was not a Correct Style.

S-227205_5 14-50980-cag Doc#39 Filed 04/28/14 Entered 04/28/14 12:24:52 Main Document Pg 2 of 4

responses and motions in opposition by the Chapter 7 trustee and the Debtor. The findings

of fact and conclusions of law announced on the record at the hearing are incorporated

herein by reference for all purposes. The Court finds that good cause exists to grant the

Motion; accordingly, it is hereby

ORDERED that the Motion is GRANTED as set forth herein; it is further

ORDERED that the stay of 11 U.S.C. § 362 is modified immediately to allow the

parties to proceed with litigation in the case numbered and styled Cause No. 2013-CI-18394,

In re: A Purported Lien or Claim Against Helvetia Asset Recovery, Inc., pending in the 224th

Judicial District Court, in Bexar County, Texas (the “18394 Action”), 3 including any

appellate proceedings related to the 18394 Action; it is further

ORDERED that the automatic stay is modified immediately to permit Helvetia to

take all steps necessary to liquidate its claim against the Debtor in the 18394 Action and

Helvetia may likewise take all steps necessary to prosecute its claims against the Debtor and

any non-debtor defendants in the 18394 Action; it is further

ORDERED that the modification of the automatic stay in the 18394 Action,

however, does not permit Helvetia to collect any judgment against the Debtor as a result of

the 18394 Action; it is further

ORDERED that the stay of 11 U.S.C. § 362 is modified immediately to allow the

Bexar County district court to enter any order regarding the Plaintiff’s Motion for Release of

Funds in the Registry of the Court, or any subsequent motion or relief requested seeking

release of funds held in the registry of the Bexar County district court, as filed in case

numbered and styled Cause No. 2013-CI-18355, Helvetia Asset Recovery, Inc. v. Burton

3 Referred to in the Motion and at the hearing as the Barratry Action.

S-227205_5 14-50980-cag Doc#39 Filed 04/28/14 Entered 04/28/14 12:24:52 Main Document Pg 3 of 4

Kahn and Paradiv Corporation, pending in the 407th Judicial District, Bexar County Texas

(the “18355 Action”);4 it is further

ORDERED that the Debtor has not identified the funds held in the registry of the

Court as assets of the Debtor’s estate and the Debtor at the hearing on the Motion did not

provide a colorable claim of ownership to the funds in the registry of the Court; it is further

ORDERED that nothing herein precludes Helvetia from enforcing any order from

the Bexar County district court, or some appellate court thereof, finding that the monies in

the registry of the court belong to Helvetia; it is further

ORDERED that the stay of 11 U.S.C. § 362 is modified immediately to allow the

parties to proceed with litigation in the 18355 Action, including any appellate proceedings

related to the 18355 Action; it is further

ORDERED that the automatic stay is modified to permit Helvetia to take all steps

necessary to liquidate its claim against the Debtor in the 18355 Action, including but not

limited to trying the lawsuit on its present trial setting of May 12, 2014, and Helvetia may

likewise take all steps necessary to prosecute its claims against the Debtor and any non-

debtor defendants in the 18355 Action; it is further

ORDERED that the modification of the automatic stay in the 18355 Action,

however, does not permit Helvetia to collect any judgment against the Debtor as a result of

the 18355 Action; it is further

ORDERED that this Order is effective immediately and this order shall not be

subject to the 14-day stay imposed by FED. R. BANKR. P. 4001(a)(3); it is further

4 Referred to in the Motion and at the hearing as the Embezzlement Action.

S-227205_5 14-50980-cag Doc#39 Filed 04/28/14 Entered 04/28/14 12:24:52 Main Document Pg 4 of 4

ORDERED that this Court shall retain jurisdiction to hear any matter or dispute

relating to the interpretation or implementation of the terms and provisions of this Order.

# # #

Submitted by: HAYNES AND BOONE, LLP Werner Powers Texas State Bar No. 16218800 Lisa Barkley Texas State Bar No. 17851450 Abigail Ottmers Texas State Bar No. 24037225 112 East Pecan Street, Suite 1200 San Antonio, Texas 78205 Telephone: (210) 978-7000 Facsimile: (210) 978-7450 werner.powers@haynesboone.com lisa.barkley@haynesboone.com abigail.ottmers@haynesboone.com

S-227205_5

Tab 09 Trustee’s Motion to Sell All Non-Exempt Assets, Claims and Causes of Action9, entered August 29, 2014.

9 Case No. 14-50980-cag, In re: Burton M. Kahn, Debtor, United States Bankruptcy Court for the Western District of Texas, San Antonio Division 14-50980-cag Doc#59 Filed 08/29/14 Entered 08/29/14 10:42:17 Main Document Pg 1 of 3

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

IN RE: } } BURTON M. KAHN } CASE NO. 14-50980G } DEBTOR(S) } CHAPTER 7

TRUSTEE’S MOTION TO SELL ALL NON-EXEMPT ASSETS, CLAIMS AND CAUSES OF ACTION

THIS PLEADING REQUESTS RELIEF THAT MAY BE ADVERSE TO YOUR INTERESTS.

IF NO TIMELY RESPONSE IS FILED WITHIN TWENTY ONE (21) DAYS FROM THE DATE OF SERVICE, THE RELIEF REQUESTED HEREIN MAY BE GRANTED WITHOUT A HEARING BEING HELD.

A TIMELY FILED RESPONSE IS NECESSARY FOR A HEARING TO BE HELD.

TO THE DEBTOR, THEIR CREDITORS, AND ALL OTHER PARTIES IN INTEREST:

Johnny W. Thomas, Trustee makes and files this Motion, and in support thereof

respectfully represents to the Court as follows:

I.

On April 14, 2014, this case was filed as a Chapter 7 proceeding. Johnny W.

Thomas was appointed as the Chapter 7 Trustee. This Motion is filed pursuant to the

provisions of Sec. 363 and 704 of the Bankruptcy Code, Federal Rule of Bankruptcy

Procedure 6004 and Local Rule 6004.

II.

I:\JWT TRUSTEE CASES\motion to sell personal property Burton Kahn.doc 1 14-50980-cag Doc#59 Filed 08/29/14 Entered 08/29/14 10:42:17 Main Document Pg 2 of 3

Among the assets of the bankruptcy estate are: All the debtor’s non-exempt assets,

to include all claims and causes of action now existing or hereafter arising, all rights, titles

and interests in any business or business enterprise that currently exists or has ever existed.

III.

The Trustee requests authority from the Court to sell all the assets and receivables,

free and clear of any and all liens, claims, security interests and encumbrances, but as is,

where is, with all faults, without recourse on the Trustee or the bankruptcy estate and

without any warranties.

IV.

The Trustee does not believe that the tax liability will exceed $500.00. If there are

liens on the property, then creditors are herein properly notified to file claims against the

proceeds.

V.

The Trustee requests that the stay provided by Federal Rule of Bankruptcy

Procedure 6004(g) be waived immediately so that this sale can be completed after entry of

an Order on the docket.

VI.

The Trustee proposes to sell the assets and receivables to Helvetia Asset Recovery,

Inc. or it’s assigns, c/o Haynes and Boone, LLP, 112 East Pecan Street, Suite 1200, San

Antonio, Texas 78205 for $10,000.00.

WHEREFORE, PREMISES CONSIDERED, the Trustee prays that he be

authorized to sell the aforesaid property, and for such other and further relief, as is just.

Respectfully submitted this 29th day of August, 2014.

I:\JWT TRUSTEE CASES\motion to sell personal property Burton Kahn.doc 2 14-50980-cag Doc#59 Filed 08/29/14 Entered 08/29/14 10:42:17 Main Document Pg 3 of 3

Johnny W. Thomas Chapter 7 Trustee 1153 E. Commerce Street St. Paul Square San Antonio, TX 78205 (210) 226-5888 Fax: (210) 226-6085

By: ____/S/_______________ JOHNNY W. THOMAS SBN 19856500

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the above and foregoing Motion for

Authority to Sell all assets and receivables has been mailed to the Debtor, all parties in

interest and all creditors as indicated on the attached creditors matrix, by first-class mail,

postage prepaid, on this the 29th day of August, 2014.

Debtors: Debtor Attorney: Burton M. Kahn Pro Se 1706 Alpine Circle San Antonio, Texas 78248

United States Trustee John Ripley P. O. Box 1539 c/o Haynes and Boone, LLP San Antonio, Texas 78295-1539 112 East Pecan Street, Ste. 1200 San Antonio, Texas 78205

________/S/__________________ JOHNNY W. THOMAS

I:\JWT TRUSTEE CASES\motion to sell personal property Burton Kahn.doc 3 14-50980-cag Label Matrix for local noticing Doc#59-1 Filed U.S.08/29/14 Entered 08/29/14 10:42:17 Atlas BANKRUPTCY COURT Exhibit MatrixLLCPg 1 of Acquisitions 0542-5 1 615 E. HOUSTON STREET, ROOM 597 294 Union St.

Case 14-50980-cag SAN ANTONIO, TX 78205-2055 Hackensack, NJ 07601-4303 Western District of Texas San Antonio Fri Aug 29 10:33:04 CDT 2014 DARYL WATSON HELVETIA ASSET RECOVERY, INC. NCO PORTFOLIO MGT 16607 BLANCO RD. 13123 FEATHERPOINT 140 CORPORATE BLVD. SAN ANTONIO, TX 78232-1913 SAN ANTONIO, TX 78233-4561 NORFOLK, VA 23502-4952

R. WACHSMUTH RICHARD SOMMERS United States Trustee - SA12 9311 SAN PEDRO, #707 8610 N. NEW BRAUNFELS US Trustee’s Office SAN ANTONIO, TX 78216-4468 SAN ANTONIO, TX 78217-6370 615 E Houston, Suite 533 PO Box 1539 San Antonio, TX 78295-1539

Burton M. Kahn Johnny W Thomas End of Label Matrix 1706 Alpine Circle johnnywthomas.trusteblogs.com Mailable recipients 10 San Antonio, TX 78248-2104 St Paul Square Bypassed recipients 0 1153 E Commerce Total 10 San Antonio, TX 78205-3305 14-50980-cag Doc#59-2 Filed 08/29/14 Entered 08/29/14 10:42:17 Proposed Order Pg 1 of 2

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION

IN RE: )

)

BURTON M. KAHN ) Case No. 14-50980G ) )

Debtor(s) ) Chapter 7

ORDER AUTHORIZING SALE OF PERSONAL PROPERTY ALL NON-EXEMPT ASSETS, CLAIMS AND CAUSES OF ACTION

On this date came on to be considered the Motion for Authority to Sell all

non-exempt assets, claims and causes of action, filed by Johnny W. Thomas,

Trustee. Due notice having been given and no objections having been filed, the

Court is of the opinion and so finds that the Movant’s sale of all non-exempt assets,

claims and causes of action attached herein, is in the best interest of the estate. It

is accordingly,

I/JWT TRUSTEE/Order to Sell Personal Property – Burton Kahn 1 14-50980-cag Doc#59-2 Filed 08/29/14 Entered 08/29/14 10:42:17 Proposed Order Pg 2 of 2

ORDERED that movant, Johnny W. Thomas, Trustee, be and is hereby

authorized and directed to sell all property owned by the Debtor to include all the

Debtor’s non-exempt assets, claims and causes of action now existing or hereafter

arising, all rights, titles and interests in any business or business enterprise that

currently exist or has ever existed to Helvetia Asset Recovery, Inc. or it’s assigns,

for $10,000.00.

It is further ORDERED that the sale shall be free and clear of any and all

liens, claims, security interests and encumbrances, except ad valorem tax liens,

with all liens, claims, security interests and encumbrances to attach to the sales

proceeds.

# # #

I/JWT TRUSTEE/Order to Sell Personal Property – Burton Kahn 2

Tab 10 In re Croft, 737 F.3d 372 (5th Cir. 2013)

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Tab 12 Transcript excerpts from hearing before the Hon. Craig Gargotta on the Trustee’s Motion to Sell All Non-Exempt Assets, Claims and Causes of Action10, October 15, 2014

10 Case No. 14-50980-cag, In re: Burton M. Kahn, Debtor, United States Bankruptcy Court for the Western District of Texas, San Antonio Division

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Tab 13 Appellee’s Brief in In re a Purported Lien or Claim Against Helvetia Asset Recovery, Inc., No. 04-14-00357-CV, filed November 3, 2014, pp. 34-36

ACCEPTED 04-14-00357-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 11/4/2014 11:53:12 AM KEITH HOTTLE CLERK

NO. 04-14-00357-CV

__________________________________________________________________

IN THE COURT OF APPEALS FOR THE FOURTH DISTRICT OF TEXAS

__________________________________________________________________

IN RE:

A PURPORTED LIEN OR CLAIM AGAINST HELVETIA ASSET RECOVERY, INC.

__________________________________________________________________

ON APPEAL FROM THE 224TH JUDICIAL DISTRICT COURT BEXAR COUNTY, TEXAS CAUSE NO. 2013-CI-18394

__________________________________________________________________

BRIEF OF APPELLEE HELVETIA ASSET RECOVERY, INC.

IN RESPONSE TO APPELLANT’S AMENDED BRIEF

HAYNES AND BOONE LLP HAYNES AND BOONE LLP

Werner A. Powers Lisa S. Barkley State Bar No. 16218800 State Bar No. 17851450 2323 Victory Avenue, Suite 700 112 E. Pecan, Suite 1200 Dallas, Texas 75219 San Antonio, Texas 78205 Telephone: (214) 651-5000 Telephone: (210) 978-7427 Facsimile: (214) 651-5940 Facsimile: (210) 554-0427 werner.powers@haynesboone.com lisa.barkley@haynesboone.com

COUNSEL FOR APPELLEE

Second, the record establishes the trial court imposed sanctions because

Kahn acted in bad faith by filing a fictitious and groundless lawsuit on November

5, 2013 that was intended to harm Helvetia’s business. 3CR 248-249. Kahn’s

subsequent act of reneging on his Rule 11 Agreement to release the cloud on

Helvetia’s title caused by his fictitious suit was further evidence of his intent to

harm Helvetia. 3CR 250-251. Kahn’s own counsel recommended he release the

lien right away by performing under the Rule 11 Agreement, and Kahn fired him.

5SRR 149; 3RR 30, 102-104. As the trial court noted, Kahn knew how to chill

sales with fraudulent liens. 3CR 232, 3CR 255; 3RR 59-60. By disavowing the

Rule 11 Agreement, Kahn succeeded in keeping the fraudulent lien intact until it

was finally set aside after a lengthy evidentiary hearing, multiple other hearings

and the entry of two TROs against him. 2CR1, 5, 8, 42 11; 1CR 161; 5SRR 162. It

was but one act by Kahn “in a pattern of tactical gamesmanship to delay the

inevitable dismissal” of his claim. See Bennett v. Reynolds, No. 03-12-00568-CV,

2014 WL 4179452 (Tex App.—Austin Aug. 22, 2014m no pet. h.). Had Kahn

performed under the Rule 11 Agreement and promptly released the lien, substantial

sums of attorneys’ fees would have been avoided.

C. A sanctions motion predicated on a party filing a fictitious lawsuit necessarily required the trial court to determine ownership issues.

In Kahn’s second issue, he appears to complain the trial court’s sanction was

based on its finding Kahn did not own Helvetia, an issue Kahn contends was not

35

before the trial court. Am. Br. p. 11. Kahn argues ownership was neither set for

hearing nor a matter within the trial court’s subject matter jurisdiction. Id. These

arguments are unavailing.

The trial court did not abuse its discretion by finding Kahn held no

ownership interest in Helvetia. Helvetia’s motion for sanctions expressly argued

Kahn did not own Helvetia when he filed the underlying lawsuit, making it a

fictitious lawsuit and conduct sanctionable under the various grounds sought. 2CR

121, 123, 126, 130, 132, 133, 137. Based on the motions, Kahn knew the trial

court would necessarily adjudicate ownership of Helvetia as it evaluated whether

sanctions were warranted. 3CR 230, 235-242.

Further, Kahn’s conclusion that the trial court “declared” that “the

ownership of stock was not in her subject matter jurisdiction,” is contrary to the

record. Am. Br., pp. 11-15. In the soliloquy cited by Kahn, the context shows

Judge Tanner explaining to Kahn the trial court could not comply with Kahn’s

request that it “make” Helvetia’s counsel Werner Powers “prove who he is” absent

Kahn setting before the court a motion under Rule 12 of the Texas Rules of Civil

Procedure challenging Powers’ authority to prosecute a lawsuit on behalf of

Helvetia:

Mr. Kahn: …And another thing is this: The issue in this particular case is who owns the stock, who owns the company. And there’s no – he [Mr. Powers] just all of a sudden says I’m Helvetia, I’m this. So we need to

have – when he presents his case, he needs to prove – I’m requesting that he needs to prove who he is before [he] can even ask any questions. (emphasis added – see above)

The Court: Well, that’s a subject of a different type of motion than is before me right now. But you’re certainly welcome to urge that to some court when you file a proper motion.

3RR 20-21. See TEX. R. CIV. P. 12 (“A party to a suit or proceeding pending in a

court of this state may, by sworn written motion stating he believes the suit or

proceeding is being prosecuted or defended without authority, cause the attorney to

be cited to appear before the court and show his authority to act”); In re

Guardianship of Benavides, 403 S.W.3d 370, 376 (Tex. App.—San Antonio 2013,

pet. denied) (a trial court considers and weighs the evidence presented at the

hearing on a Rule 12 motion to show authority). App. 16. Nothing in the trial

court’s comments could reasonably be construed as a comment on jurisdiction.

D. Kahn was not sanctioned under § 10.001(2). In Kahn’s third issue he argues the trial court erred in assessing monetary

sanctions against him because TEX. CIV. PRAC. & REM. CODE § 10.004(d) prohibits

sanctioning a party under § 10.001(2) if he is represented by counsel. Am. Br. p.

15. As Kahn correctly argues, a represented party cannot be sanctioned for

asserting a claim or legal contention that is not warranted by existing law or by a

Respectfully submitted,

HAYNES AND BOONE, LLP

/s/ Lisa S. Barkley Werner A. Powers State Bar No. 16218800 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Telephone: (214) 651-5000 Facsimile: (2 14) 651-5940 Werner.Powers@haynesboone.com

Lisa S. Barkley State Bar No. 17851450 112 E. Pecan, Suite 1200 San Antonio, Texas 78205 Telephone: (210) 978-7427 Facsimile: (210) 554-0427 Lisa.Barkley@haynesboone.com

ATTORNEYS FOR APPELLEE HELVETIA ASSET RECOVERY, INC.

CERTIFICATE OF SERVICE In accordance with the Texas Rules of Appellate Procedure, the undersigned certifies that a copy of the attached instrument was served on Appellant via email and at the following address on this 3rd day of November, 2014:

Burton Kahn, pro se 1706 Alpine Circle San Antonio, Texas 78248 glentrail@yahoo.com

/s/ Lisa S. Barkley Lisa S. Barkley

CERTIFICATE OF COMPLIANCE WITH RULE 9.4(e), (i)

This brief complies with the type-volume limitation of Texas Rule of Appellate Procedure 9.4(i) because, according to the Microsoft Word 2010 word count function, it contains 9,079 words on pages 1–40, excluding the parts of the brief exempted by Texas Rule of Appellate Procedure 9.4(e)(i)(1).

This brief complies with the typeface requirements of Texas Rule of Appellate Procedure 9.4(e) because it has been prepared in a proportionally spaced typeface using Microsoft Word 2010 software in Times New Roman 14 point font in text and Times New Roman 12 point font in footnotes.

/s/ Lisa S. Barkley Lisa S. Barkley