in Re 8650 Frisco, LLC D/B/A Estilo Gaucho Brazilian Steakhouse, Mandona, LLC, Galovelho, LLC, Bahtche, LLC, Claudio Nunes and David Jeiel Rodrigues

Opinion

ACCEPTED

01-15-00423-CV

FIRST COURT OF APPEALS

HOUSTON, TEXAS

5/7/2015 11:44:52 AM

CHRISTOPHER PRINE

CLERK

No. 01-15-00423-CV st FILED IN

1 COURT OF APPEALS

HOUSTON, TX

IN THE MAY 7, 2015 CHRISTOPHER A. PRINE,

CLERK

FIRST JUDICIAL DISTRICT COURT OF APPEALS

at HOUSTON, TEXAS

IN RE 8650 FRISCO, LLC d/b/a ESTILO GAUCHO BRAZILIAN STEAKHOUSE, MANDONA, LLC, GALOVELHO, LLC, BAHTCHE, LLC, CLAUDIO NUNES, and DAVID JEIEL RODRIGUES, Relators

ORIGINAL PROCEEDING FROM THE 133rd JUDICIAL DISTRICT COURT OF

HARRIS COUNTY, TEXAS

EMERGENCY RELIEF REQUESTED

MOTION FOR EMERGENCY TEMPORARY RELIEF TO STAY ACTION BY THE TRIAL COURT

TO THE HONORABLE FIRST COURT OF APPEALS:

Relators, 8650 Frisco LLC, Mandona, LLC, Galovelho, LLC, Bahtche, LLC, Claudio Nunes, and David Jeiel Rodrigues (hereinafter “Relators”) file this, the Relators’ Motion for Temporary Relief and would respectfully show the Court as follows:

INTRODUCTION

1. Relators are 8650 Frisco LLC, Mandona, LLC, Galovelho, LLC,

RELATORS’ MOTION FOR TEMPORARY RELIEF PAGE 1 OF 8

Bahtche, LLC, Claudio Nunes, and David Jeiel Rodrigues.

2. The Real Parties In Interest are Los Cucos Mexican Café VIII, Inc., Los Cucos Mexican Café IV, Inc., Manuel Cabrera, and Sergio Cabrera 3. Respondent is the Honorable Jaclanel McFarland, Judge Presiding of the 133rd Judicial District Court, located in Harris County.

4. Relators filed their Petition for Writ of Mandamus on May 6, 2015, in the above captioned case.

5. Relators attach a certificate of compliance certifying that on May 7, 2015, they notified respondent and real parties in interest by expedited means that a motion for temporary relief has been filed. Tex. R. App. P.

52.10(a).

6. The original proceeding in which a petition for writ of mandamus was filed complains of two orders issued by the Respondent compelling discovery responses and imposing sanctions on the Relators for failure to comply with previous discovery orders.

7. Respondent’s April 1, 2015 order compelled discovery of documents which have no relevance to the live pleading on file with the trial court.

8. Additionally, Respondent’s April 27, 2015 Order included sanctions barring Relators from further discovery until the documents are

RELATORS’ MOTION FOR TEMPORARY RELIEF PAGE 2 OF 8 produced, taxing costs incurred in securing production of the documents to the Relators, and conclusively establishing an unpleaded issue in favor of the Real Parties in Interest.

9. Finally the order demanded compliance by hand delivery of responsive documents to the office of Counsel for the Real Parties in Interest forty-

eight hours after the Respondent signed the order. Said office is in Houston, and is 260 miles from the Office of Counsel for Relators. The documents for which discovery was compelled had been served pursuant to TEX. R. CIV. P. 21 and 21a twice previously.

10. Respondent signed this order in the presence of Counsel for Real Parties in Interest but outside the presence of Relators’ attorney.

11. On May 3, 2015, Counsel for Real Parties in Interest served the April 27, 2015 order on Relators’ attorney requiring compliance by April 29, 2015. Counsel then demanded compliance by noon on May 4, 2015.

This letter is attached to the motion as “Exhibit A” and is incorporated in haec verba.

12. On May 4, 2015, Counsel for Real Parties in Interest filed with the Respondent and served on Relators’ attorneys its Fourth Motion to Enforce the Court’s Order in which the Real Parties in Interest

RELATORS’ MOTION FOR TEMPORARY RELIEF PAGE 3 OF 8 demanded that the Respondent strike the Relators’ pleadings for failure to comply. The Fourth Motion to Enforce the Court’s Order is attached to this motion as “Exhibit B” and is incorporated in haec verba. The Real Parties in Interest set this matter for hearing on May 18, 2015.

ARGUMENT & AUTHORITIES

13. The Court may grant temporary relief pending its determination of an original proceeding. Tex. R. App. P. 52.10(b).

14. This emergency stay is necessary to maintain the status quo of the parties and to preserve the Court’s jurisdiction to consider the merits of the original proceeding. In re Reed, 901 S.W.2d 604, 609 (Tex.

App.—San Antonio 1995, orig. proceeding). Relators filed their Petition in the above captioned case on May 6, 2015, seeking relief from both the April 1, 2015 order and the April 27, 2015 order, both of which the Real Parties In Interest seek to enforce in their Fourth Motion to Enforce the Court’s Order.

15. The issues at the heart of Relators’ Petition for Writ of Mandamus are the same issues on which the Real Parties’ in Interest Motion to Enforce are based. See Exhibit B. Granting the Petition for Writ of Mandamus would dispose the issues in the Petition and in the Fourth Motion to

RELATORS’ MOTION FOR TEMPORARY RELIEF PAGE 4 OF 8

Enforce the Court’s Order simultaneously. A stay maintains the state of affairs between the parties, and prevents irreparable harm from accruing to either side, pending the court’s decision on the Relator’s Petition for Writ of Mandamus.

16. Relator attaches an unsworn declaration to establish facts that are not included in the appellate record, are not known to the Court in its official capacity, and are not within the personal knowledge of the attorney signing this motion. Tex. R. App. P. 10.2.

CONCLUSION

9. Because the issues raised by the Relators in above-captioned original proceeding address all of the issues raised by the Real Parties in Interest in their Fourth Motion to Compel, a stay would operate to prevent needless expense to both parties and the trial court and would resolve the ongoing discovery dispute.

PRAYER

WHEREFORE, PREMISES CONSIDERED, the Relators ask the Court for an emergency stay of the Respondent’s consideration of Real Parties’ in Interest Fourth Motion to Enforce until such time as this Court has had an opportunity to review the merits of Relators’ above-captioned Petition for Writ of

RELATORS’ MOTION FOR TEMPORARY RELIEF PAGE 5 OF 8

Mandamus. This stay will maintain the status quo of the parties and preserve the Court’s jurisdiction to consider the merits of relator’s original proceeding.

RESPECTFULLY SUBMITTED, MOSSER LAW PLLC

/s/ James C. Mosser James C. Mosser Texas Bar No. 00789784 Nicholas D. Mosser Texas Bar No. 24075405 Paul J. Downey Texas Bar No. 24080659 2805 Dallas Parkway, Suite 220 Plano, Texas 75093 Tel. (972) 733-3223 Fax (469) 626-1073 courtdocuments@mosserlaw.com LAWYERS FOR RELATORS

CERTIFICATE OF COMPLIANCE 1

In accordance with Tex. R. App. P. 52.10, the relators have notified all parties by expedited means that a motion for temporary relief has been or would be filed in this court. The following parties were notified:

Respondent Honorable Jaclanel McFarland Judge Presiding 133rd Judicial District Court Harris County Civil Courthouse 201 Caroline, 11th Floor Houston, Texas 77002 Tel. 713-368-6200

RELATORS’ MOTION FOR TEMPORARY RELIEF PAGE 6 OF 8

Real Parties In Interest Los Cucos Mexican Café VIII, Inc.; Los Cucos Mexican Café IV, Inc.; Manuel Cabrera; and Sergio Cabrera, represented by

Stephens & Domnitz, PLLC Kelly Stephens Texas Bar No. 19158300 P.O Box 79734 Houston, Texas 77279-9734 Tel. 281-394-3287 Fax 832-476-5460 kstephens@stephensdomnitz.com

/s/ Paul J. Downey Paul J. Downey CERTIFICATE OF COMPLIANCE 2

I certify that this Motion for Leave to File Appellee’s Sur-Reply complies with the word limit of Tex. R. App. P. 9.4 because it contains 867 words, excluding the parts of the motion exempted by Tex. R. App. P. 9.4. I relied on the word count feature of Corel WordPerfectX6 to reach this number

/s/Paul J. Downey Paul J. Downey

CERTIFICATE OF CONFERENCE

I certify that on May 7, 2015, I attempted to confer with Kelly Stephens, the attorney-in-charge for the Real Parties’ In Interest litigation efforts in accordance with TEX. R. APP. P. 10.1(a)(5). He failed to respond to the request prior to the filing of this motion.

/s/ Nicholas D. Mosser Nicholas D. Mosser

RELATORS’ MOTION FOR TEMPORARY RELIEF PAGE 7 OF 8

CERTIFICATE OF SERVICE

In accordance with TEX. R. APP. P. 9.5, I certify that on May 7, 2015, I served a copy of this Motion for Temporary Relief on the following parties:

Respondent Honorable Jaclanel McFarland Judge Presiding 133rd Judicial District Court Harris County Civil Courthouse 201 Caroline, 11th Floor Houston, Texas 77002 Tel. 713-368-6200

Real Parties In Interest Los Cucos Mexican Café VIII, Inc.; Los Cucos Mexican Café IV, Inc.; Manuel Cabrera; and Sergio Cabrera, represented by

Stephens & Domnitz, PLLC Kelly Stephens Texas Bar No. 19158300 P.O Box 79734 Houston, Texas 77279-9734 Tel. 281-394-3287 Fax 832-476-5460 kstephens@stephensdomnitz.com

/s/ Paul J. Downey Paul J. Downey

RELATORS’ MOTION FOR TEMPORARY RELIEF PAGE 8 OF 8

CAUSE NO. 2014-10896

LOS CUCOS MEXICAN CAFE VIII, § IN THE DISTRICT COURT INC., LOS CUCOS MEXICAN § CAFE IV, INC., MANUEL § CABRERA, and SERGIO § CABRERA § PLAINTIFFS, § §

V. § 133rd JUDICIAL DISTRICT §

8650 FRISCO LLC, MANDONA § LLC, GALOVELHO LLC, § BAHTCHE LLC, CLAUDIO § NUNES, AND DAVID JEIEL § RODRIGUES § DEFENDANT. § OF HARRIS COUNTY, TEXAS

UNSWORN DECLARATION OF PAUL J. DOWNEY 1. My name is Paul J . Downey. I am of sound mind, capable of making this unsworn declaration, and personally acquainted with the facts herein stated .

2. I am a lawyer at Mosser Law, PLLC. 3. I am one of the custod ians of the records at Mosser Law, PLLC. 4. Attached hereto are the following 50 pages of records from Mosser Law, PLLC. These records are kept by Mosser Law, PLLC in the regular course of business, and it was in the regular course of business of Mosser Law, PLLC, that an employee or representative of Mosser Law PLLC, with knowledge of the act or event recorded , made the records.

5. The records were made at or near the time of the event, or reasonably soon thereafter.

6. The records attached hereto are exact duplicates of the originals and contain:

a. Exhibit A- Letter from Real Parties in Interest Dated May 3, 2015;

b. Exhibit B - Real Parties' in Interest Fourth Motion to Enforce the Court's Order, filed May 4, 2015 My name is Paul James Downey, my date of birth is January 19, 1984, and my address is C/0 Mosser Law, PLLC, 2805 Dallas Parkway, Suite 222, Plano, Texas 75093, United States of America . I declare under penalty of perjury that the foregoing is true and correct. Executed in Collin County, State of Texas on the 5th Day of May, 2015.

P/(2z_ Z ~ PauiJ. Er~ ~

HAWASH MEADE HAWASH MEADE GASTON NEESE & CJCACK LLP Samuel B. Haren

sharen@hmgnc.com

713-658-9001 (phone)

713-658-9011 (fax)

May 3, 2015

Via Facsimile: (469) 626-1073 Mr. James C. Mosser Mr. Nicholas D. Mosser Mosser Law PLLC 17110 Dallas Parkway, Suite 290 Dallas, Texas 75248

Re: Cause No. 2014-10896, Los Cucos Mexican Cafe VIIL Inc. et al. v. 8650 Frisco, LLC et al. in the 133rd Judicial District Comt ofHanis County, Texas

Dear Mr. Mosser:

The Comt' s order is attached. As you are aware, it was readily available to anyone from the Court's clerk and to any licensed attomey from the District Clerk's website. As stated in my previous letter, if you have not complied with the Court's order by noon on Monday, May 4, 2015, we will file a fomth motion to enforce the Comt's order.

_;'_ff

~-H-a-re_n_ __

2118 Smith Street I Houston, Texas 77002 Main Phone: (713) 658-9001 I Main Facsimile: (713) 658-9011 www. hmg II p.com

Exhibit A Page 1

CAUSE NO 2014-10896

LOS CUCOS MEXICAN CAFE Vill, INC , LOS CUCOS MEXICAN §

§

IN THE DISTRICT COURT OF f,Z -

CAFE IV, INC , MANUEL § cf Mr£u=x

*

CABRERA, and SERGIO § CABRERA, § Plamtiffs § /tTFE)( § ~ v § (} § HARRIS CO~, TEXAS ""'

8650 FRISCO, LLC D/B/A ESTILO § 0~ ~ 9 GAUCHO BRAZILIAN § ~ CP STEAKHOUSE, MANDONA, LLC, § 0~ GALOVELHO, LLC, BAHTCHE, § «:::}~ LLC, CLAUDIO NUNES, and § ~ 0 DAVID JEIEL RODRIGUES, § 0~ ~ Defendants § Ul~ JUDICIAL DISTRICT& ftj(9}

Order Grantm

Third MotiOn To En~ he Court's Order

On thrs day the Court came to con~Wlamtrffs' Thrrd Matron to Enforce the Court's cg

Order (the "Motion") After consrdenn~e facts, law, and argument of counsel, the Court has

decrded to GRANT the Matron nt~nts Will produce all documents responsive to Requests for Production 1, 2, 3, 4, 5, 7~Q8 contamed m Exhrbrt 1 to the Mohon (the "Documents")

~0.

Thrs productron must be ~hrough hand delivery dunng normal busmess hours to Andrew

Meade or Samuel H~ Gat HAWASH MEADE GASTON NEESE & CICACK LLP, 2118 Smrth, o~j

Houston, Texas 7f!;Qj. ·'

The ~Q fiuther finds that Defendants VIOlated three of the Court's pnor orders by

farlmg to ~uce responsrve documents Thrs misconduct Is part of a larger pattern of Improper objectwns, mentless motions, frrvolous arguments, fergned rgnotance of baste factual and legal

Issues, and drshonest gamesmanship m vrolatwn of Texas Rule of Crvll Procedure 13 Pt evrous warnmgs from the Court have been meffectrve m forcmg Defendants to comply wrth the Court's

Exhibit A Page 2 orders or with Texas law, and another warnmg IS unlikely to achieve better results Moreover, another warnmg would only encourage Defendants to contmue their egregwus behaviOr m the future Accordmgly, the Court ltnposes the followrng sanctiOns

•

*

Defendants may not conduct additional discovery m this matter u~~representattve of 8650 Fnsco, LLC stgns a sworn affidavit of compliance wtth ~~rder,

• Defendants shall pay $ iV()V, f30 to Plamtlffs fot; ~ costs mcurred m secunng productiOn of the. ocuments, and ~

• the Issue of whether Plamtrffs face Irreparable harm ~~e lack of the note/secunty requrred by the parties' contract IS conclusively es~Yed m Plarntiffs' favor 0~

Should Defendants fall to comply w1th this order w~ forty~eight hours of the stgnature

hereof, Defendants and their attorneys of record WJ

wtl~ asked to personally appear and show cause as to why they should not be held m cont~~th1s Court ~ru

Signed on the _Jj_ day of 4f:rt?J<f!2 ,2015

a~ ~c-k9J ug~~

o~ry;

(~

~0

~

~

2

Exhibit A Page 3

5/4/2015 2:00:20 PM

Chris Daniel - District Clerk Harris County Envelope No. 5138641

By: JIMMY RODRIGUEZ

Filed: 5/4/2015 2:00:20 PM

Cause No. 2014-10896

Los Cucos Mexican Cafe VIII, Inc.; In the District Court of Los Cucos Mexican Cafe IV, Inc.; Manuel Cabrera; and Sergio Cabrera, Plaintiffs

v.

Harris County, Texas

8650 Frisco, LLC d/b/a Estilo Gaucho Brazilian Steakhouse; Mandona, LLC; Galovelho, LLC; Bahtche, LLC; Claudio Nunes; and David Jeiel Rodrigues, Defendant 133rd Judicial District

Plaintiffs’ Fourth Motion to Enforce the Court’s Order and for Sanctions The Court has ordered Plaintiffs to produce certain financial documents on four separate occasions. Defendants have refused to do so. Plaintiffs request that the Court obviate the need for further document production by striking Defendants’ pleadings.

Background

At a June 23, 2014 hearing, the Court orally ordered Defendants to produce certain financial documents. Exhibit 1, Transcript of Motion to Compel Hearing at 23:2–9. Defendants pretended that, they “ha[d] never been served with an order from the court to produce documents,” they were not required to do so. Exhibit 2 Letter from Mosser to Stephens. On July 28, 2014, the Court again ordered Defendants to produce all responsive documents “by August 1, 2014.” Exhibit 3, Order on Plaintiffs’ Third Motion to Compel. Defendants improperly served an inadequate production. On March 30, 2015, the Court ordered Defendants a third time to produce all responsive documents “by 5:00 p.m. on Wednesday, April 1, 2015.” Exhibit 4, Order on Plaintiffs’ Second Motion to Enforce the Court’s Order. Defendants again violated the Court’s order by making a woefully incomplete production.

Exhibit B Page 4

On the morning of Monday, April 27, the Court ordered Defendants to (1) produce all responsive documents and (2) pay a $1,000 sanction. Exhibit 5, Order Granting Plaintiffs’ Third Motion to Enforce the Court’s Order. The Court further ordered that, “[s]hould Defendants fail to comply with this order within forty-eight hours of the signature hereof, Defendants and their attorneys of record will be asked to personally appear and show cause as to why they should be held in contempt of this Court.” Id. Once again, Defendants ignored this order.

On Thursday, April 30, Plaintiffs informed Defendants of their failure to comply with the Court’s order and demanded production of the documents and payment of the sanction before noon on Monday, May 4. Exhibit 6, Letter from Haren to Mosser. At 4:50 p.m. on Friday, May 1, Defendants sent the following response:

Exhibit 7, Letter from Mosser to Stephens. Even though the order was available from the Court’s office and through the District Clerk’s website, Plaintiffs forwarded a copy of the order to Defendants on Sunday, May 3. Exhibit 8, Letter from Haren to Mosser.

Background

The Court has ordered Defendants to produce certain documents on four separate occasions. Defendants have refused or failed to comply all four times. Defendants’ most recent is excuse is that they were not “served” a copy of the Court’s order. See Exhibit 7, Letter from Mosser to Stephens As the Court may recall, this was the same explanation Defendants offered

2

Exhibit B Page 5 for their failure to comply with the original order compelling production. See Exhibit 2, Letter from Mosser to Stephens. This excuse was invalid both times it was made. Regardless of whether Defendants “served” a copy of the Court’s order, “[t]he law charges all parties and their lawyers with notice of all orders and judgments that the court renders in the case.” Welborn Mortg. Corp. v. Knowles, 854 S.W.2d 328, 331 (Tex. App.—Dallas 1993, writ denied). For this reason alone, Defendants are deemed to have known the contents of the Court’s order.

Moreover, “[t]he law charges one who has knowledge of facts that would cause a prudent man to inquire further with notice of the facts that, by use of ordinary intelligence, he would have learned.” Id. Defendants appeared at the April 27 hearing telephonically, so they were aware that the Court ordered them to produce documents and pay a sanction. Defendants were further aware that copies of the order could have been easily obtained by calling the Court’s clerk or by visiting the District Clerk’s website. A reasonably prudent attorney who was ordered to pay a sanction and produce documents would make an effort to obtain such orders rather than remaining deliberately ignorant.

Further, Defendants received actual notice at 1:57 p.m. on April 30 that the Court had signed an order requiring Defendants produce documents and pay a sanction within 48 hours. See Exhibit 6, Letter from Haren to Mosser. Thus, Defendants had at least 94 hours between receipt of actual notice of the terms of the Court’s order and the filing of this motion.

As a sanction for Defendants’ fourth failure to comply with the Court’s order, Plaintiffs ask the Court to order that:

 Defendants’ attorneys pay Plaintiffs a sanction for all attorneys’ fees incurred in attempting to obtain the requested documents;

 Defendants and their attorneys appear and show cause as to why they should not be held in contempt; and

 Defendants be disallowed from conducting any discovery in this case.

3

Exhibit B Page 6

Plaintiffs are hopeful that such a sanction will be sufficient to ensure future compliance with the Court’s orders and Defendants’ obligations under the Texas Rules of Civil Procedure.

Conclusion

Defendants continue to ignore the Court’s orders. Plaintiffs pray that the Court further sanction Defendants and order Defendants and their attorneys to show cause as to why they should not be held in contempt. Plaintiffs further pray for all other relief to which they are entitled.

Respectfully submitted,

Hawash Meade Gaston

Neese & Cicack LLP

/s/ Samuel B. Haren

Andrew K. Meade

State Bar No. 24032854

Jeremy M. Masten

State Bar No. 24083454

Samuel B. Haren

State Bar No. 24059899

2118 Smith Street

Houston, Texas 77002

713-658-9001 (phone)

713-658-9011 (fax)

ameade@hmgnc.com

jmasten@hmgnc.com

sharen@hmgnc.com

Stephens & Domnitz, PLLC

Kelly D. Stephens

State Bar No. 19158300

P.O. Box 79734

Houston, Texas 77279-9734 281-394-3287 (phone)

832-476-5460 (fax)

kstephens@stephensdomnitz.com

4

Exhibit B Page 7

Cox Smith Matthews Incorporated

David Kinder

State Bar No. 11432550

112 East Pecan Street, Suite 1800 San Antonio, Texas 78205

210-554-5500 (phone)

210-226-8395 (fax)

Attorneys for Plaintiffs

Certificate of Conference I sent two letters to opposing counsel in an effort to obtain the documents and payment without further judicial intervention. I further tripled the time for compliance from the two days allowed by the Court to six. Despite this, Defendants still have not complied with the Court’s order.

/s/ Samuel B. Haren

Samuel B. Haren

Certificate of Service

A true and correct copy of the foregoing has been served on all counsel of record via electronic service on May 4, 2015.

James C. Mosser Nicholas D. Mosser Mosser Law PLLC 17110 Dallas Pky, Suite 290 Dallas, Texas 75248

/s/ Samuel B. Haren

Samuel B. Haren

5

Exhibit B Page 8

MOTION TO COMPEL

1

1 REPORTER'S RECORD VOLUME 1 OF 1 VOLUME

2 TRIAL COURT CAUSE NO. 2014-10896

3

4 LOS CUCOS MEXICAN CAFE VIII( IN THE DISTRICT COURT OF INC.;LOS CUCOS MEXICAN ( 5 CAFE IV,INC.; MANUEL ( CABRERA;AND SERGIO CABRERA ( 6 ( VS. ( HARRIS COUNTY, TEXAS 7 ( 8650 FRISCO,LLC D/B/A ESTILO 8 GAUCHO BRAZILIAN ( STEAKHOUSE; MANDONA,LLC; ( 9 GALOVELHO,LLC;BAHTCHE, ( LLC; CLAUDIO NUNES; AND ( 10 DAVID JEIEL RODRIGUES ( 133rd JUDICIAL DISTRICT

11 _______________________________________________________

12 MOTION TO TRANSFER

13 _______________________________________________________

14 15 On the 23rd day of June, 2014, the following 16 proceedings came on to be held in the above-titled and 17 numbered cause before the Honorable JACLANEL McFARLAND, 18 Judge Presiding, held in Houston, Harris County, Texas. 19 Proceedings reported by computerized stenotype 20 machine. 21 22

23 DARLENE STEIN OFFICIAL COURT REPORTER

24 133RD DISTRICT COURT HARRIS COUNTY, TEXAS

25

DARLENE STEIN

Exhibit B Exhibit 1 Page 9

MOTION TO COMPEL

2

1 APPEARANCES

2 Mr. Andrew K. Meade SBN 24032854 3 Mr. Samuel B. Haren SBN 24059899 4 2118 Smith Street Houston, Texas 77002 5 Telephone: (713)658-9001 Telephone: (713)658-9011 (Fax)

6 Attorney for Plaintiffs

7 Mr. Nicholas D. Mosser 8 SBN 24075405 Mr. James Mosser 9 SBN 00789784 17110 Dallas Parkway, Suite 290 10 Dallas, Texas97 75248 Telephone:) (972)733-3223 11 Telephone: (972)267-5072 Attorney for Defendants 12

13 14 15 16 17 18 19 20 21 22 23 24 25 DARLENE STEIN

MOTION TO COMPEL

3

1 CHRONOLOGICAL INDEX 2 June 23, 2014 3 PAGE 4 Proceedings............................... 4 5 Argument by Mr. Meade..................... 6 6 Argument by Mr. Mosser.................... 11 7 Proceedings concluded..................... 25 8 Reporter's Certificate.................... 26 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 DARLENE STEIN

MOTION TO COMPEL

4

1 (P R O C E E D I N G S) 2 June 23, 2014 3 4 THE COURT: This is Cause No. 2014-10896. 5 And if everyone would announce who they are and who they 6 represent, please. 7 MR. MEADE: Andrew Meade and Sam Haran for 8 the Plaintiffs. 9 THE COURT: Mr. Mosser, if you'll announce 10 who you are and who you represent, please. 11 MR. MOSSER: I'm sorry? 12 THE COURT: Announce who you are and who 13 you represent. 14 MR. MOSSER: Yes, ma'am. This is James 15 Mosser, Mosser Law Firm, PLLC, appearing telephonically 16 on behalf of all Defendants. 17 THE COURT: Okay. I will tell you that I 18 don't have the motions in front of me. My law clerks 19 have gone to get them. For some reason, even though you 20 are on the docket, they thought it had been pulled. So, 21 anyway, but I'm going to let y'all go ahead and start. I 22 think it's Plaintiff's motions. So, I'm going to let 23 them go ahead and start while the law clerks are bringing 24 in the actual written motions. 25 MR. MEADE: All right. Your Honor, if DARLENE STEIN

MOTION TO COMPEL

5

1 you'll recall, this is a -- my client supplied about 2 $950,000 in some equipment for a restaurant -- 3 MR. MOSSER: Your Honor, if he could get 4 closer to the microphone or speak up louder, it would be 5 easier to hear. 6 THE COURT: Yeah. Well, I'll put the 7 phone a little closer. But, you know, have you got a 8 storm in Dallas? Is that the problem or what? You know, 9 when you don't show up, it's -- we can only do the best 10 we can do. 11 You know, that's why when I practiced law, 12 I didn't depend on Southwest. Now, going to committee 13 meetings, I depended on Southwest a lot. I was on a lot 14 of Baptist boards that met over on North Washington, the 15 Baptist building. But when I had a case, I usually drove 16 down the night before or drove up or drove west or east or 17 wherever I was going. 18 MR. MEADE: And -- and for convenience, 19 Your Honor, we will try to set hearings in the case on 20 Fridays and Mondays to make that more convenient. 21 THE COURT: Well, we don't have hearings 22 on Fridays. So, they have to be on Mondays. 23 MR. MEADE: Mondays. 24 And so, the situation that we've got 25 here -- Your Honor will recall that we had previously DARLENE STEIN

MOTION TO COMPEL

6

1 noticed depositions for early May of the Defendants, that 2 those depositions had been quashed. So, we set a Motion 3 to Compel. The Court ordered the depositions to occur in 4 June. We agreed on dates that were put into the Court's 5 order, which was June 9th and 10th for six depositions to 6 occur. 7 On the Sunday before -- June 9th was a 8 Monday. 10th was a Tuesday. On the Sunday before, 9 Mr. Mosser left a message on Mr. Stephen's phone, saying 10 that he wouldn't be attending the depositions nor would 11 his clients because -- and they subsequently filed a 12 motion. Mr. Mosser apparently has a nervous system injury 13 of some sort that he came down with the day before the 14 depositions. And there is nobody else within his 15 four-person law firm who's qualified to sit in a chair and 16 defend a deposition. 17 He then went and set his Motion to Transfer 18 Venue, offered us some dates in late July that -- or -- 19 that conflict with a trial that I have in Judge 20 Englehart's court. And then when I rejected those dates, 21 offered dates in August. 22 And we have run into a problem now, which 23 is that I leave the country on Saturday for two and a half 24 weeks. I get back and have five days to prepare for a 25 week-long trial in Judge Englehart's court. And then at DARLENE STEIN

MOTION TO COMPEL

7

1 the end of the week that I'm in trial with Judge Englehart 2 is their Motion to Transfer Venue. We have taken the 3 position, which is correct under the rules, that discovery 4 should not be and cannot be, in fact, abated while a 5 Motion to Transfer Venue is pending. 6 They have taken the position and even set 7 for today and then withdrew a Motion to Stay all 8 proceedings while they have the opportunity to have that 9 Motion to Transfer Venue heard. 10 We're going to have to take these 11 depositions before the Motion to Transfer Venue hearing. 12 We need them ordered and compelled, and we need the Motion 13 to Transfer Venue hearing pushed back till that can 14 happen. 15 But we also need Mr. Mosser or his clients 16 to pay the costs of the depositions that were ordered -- I 17 took Certificates of Nonappearance on all six 18 depositions -- and that they ought to have to bear the 19 cost on each of those. 20 The next issue that we have is as you'll 21 recall, we have an accountant that worked for the company 22 in New Braunfels and then a new accountant in Dallas. We 23 had the -- the letter and correspondence where they said, 24 you know, turn over all records and destroy all in your 25 possession. And -- and we had to move to compel the DARLENE STEIN

MOTION TO COMPEL

8

1 accountant to produce the records from New Braunfels, and 2 he did produce the records to us. 3 But we have also asked for certain 4 financial records, including tax records and other 5 financial documents from the Defendants themselves; and 6 soon we will -- and, also, their new accountant, who will 7 soon have to come down on a Motion to Compel, as well, 8 although that's not part of today. 9 The -- the other issue that is part of 10 today is their responses and objections to our requests 11 for production, which deal with the financial and tax 12 records. 13 Starting with the tax records, there are 14 numerous reasons why as members of the company and -- 15 that -- that we're entitled to the tax records of an LLC. 16 First of all, the statute allows it. 17 Second, we need to prepare our own tax 18 returns. 19 Third, how they chose to characterize our 20 capital contributions, the proportion of what is 21 characterized as a loan and capital contribution and all 22 of that is going to be relevant to the parties' agreement 23 or disagreement about our membership status and -- and how 24 much money is owed in terms of -- our position is that 25 part of the money was loaned and part of it was a capital DARLENE STEIN

MOTION TO COMPEL

9

1 contribution, and -- and they may or may not disagree, 2 although they haven't disclosed their theory of the case 3 to us at all in any way. That will be relevant, those tax 4 records. 5 The other financial records, which include 6 bank account statements, we're -- we're entitled to the 7 books and records, again, of the company; but, also, these 8 bank account statements are going to be relevant to 9 whether distributions -- because under the -- under the 10 limited liability company act, under the partners' oral 11 agreement, and under the written agreements that were 12 exchanged, we would be entitled to distributions of 13 distributable cash. 14 None have been made to us. We believe some 15 have been made to the Defendants, substantial 16 distributions, and that there is distributable cash. We 17 believe that, but we don't have the records to show it, 18 and the bank statements will go a long ways towards that. 19 What we've met with to date is an objection 20 every step of the way and resistance even to Court-ordered 21 depositions. And -- and the objection that was made, for 22 example, to the accountant's records was that objection of 23 privilege that the Texas courts don't recognize. Well, it 24 was made again in response to requests for production 25 after the Court had already ruled on the objection in DARLENE STEIN

MOTION TO COMPEL

10

1 relation to the accountant. 2 They made other objections; for example, 3 objecting that the Texas Finance Code provides the 4 exclusive means to get bank account statements, even bank 5 account statements of a party. I -- I assure you that I 6 will go to the bank, under the Texas Finance Code, and get 7 the bank statements separately. But that doesn't 8 alleviate the obligation of a party to produce those bank 9 statements. 10 So, a recommendation in -- in one of my 11 motions is really -- it's really -- we're asking for the 12 relief but sort of recommending a path for the Court, 13 would be to appoint a discovery master in the case. I 14 don't mind coming down here once a week, and I suspect we 15 will be back here again in a week. And I'll tell you why. 16 You know, we had these grills. I -- I 17 don't know if you remember the -- the unique grills. 18 Well, we have reason to believe that the grills have been 19 destroyed. And I've asked for an inspection of the 20 collateral, of -- of the property. They haven't responded 21 to it. I'm going to be asking the Court for it and 22 probably having to move it to compel. 23 When these depositions do occur, I suspect 24 I'm going to meet with a series of objections and probably 25 instructions to the witness not to answer and that sort of DARLENE STEIN

MOTION TO COMPEL

11

1 thing. And I -- and we can have the depositions in your 2 chambers. I leave it to the Court's discretion of how we 3 deal with these issues; but I would rather, if we can 4 avoid it -- and I -- I know that judges, including 5 yourself, don't like us coming down here all the time on 6 Motions to Compel. I would like to avoid them, if 7 possible. And so, the appointment of a discovery master 8 is one suggestion to do that. 9 And I'll let Mr. Mosser respond. 10 THE COURT: Mr. Mosser? 11 MR. MOSSER: Yes, ma'am. 12 THE COURT: You may respond. 13 Hello? 14 MR. MOSSER: Yes, ma'am. I'm right here. 15 THE COURT: Where -- you want to respond? 16 MR. MOSSER: Oh, yes, ma'am. I surely 17 will. Thank you. 18 May it please the Court? Let me go 19 backwards a little bit here. Let's start with the grills 20 are being destroyed, which is a false statement made by 21 counsel. It has become custom in this case. The problem 22 is we sent notice to counsel that he should come and pick 23 up the grills, and counsel told us they weren't going to 24 pick up the grills. 25 So, we told them if they leave the grills DARLENE STEIN

MOTION TO COMPEL

12

1 that they claim they loaned to my clients, we told them, 2 If you don't pick them up, we'll just put them in storage; 3 and you can pay the storage bill when you get here. 4 Nobody said they were going to destroy them, and it's just 5 outrageous that he would say those kinds of things. 6 As for bank accounts, the Finance Code does 7 provide the method by which he can obtain the bank 8 accounts. But let's assume he doesn't want to do that and 9 I'm required to deliver bank accounts. If the Court will 10 recall, he mentioned that he held a deposition on written 11 questions for Mr. -- I can't remember the accountant's 12 name -- Hal Holtman, I think -- to produce all the records 13 he had related to anything with my clients. 14 Now, if you will recall from the -- the 15 Temporary Injunction hearing, Mr. Holtman went and 16 testified on everything we told him he shouldn't be 17 testifying on; and then he subsequently, based on comment 18 from counsel this morning, delivered all the documents he 19 had to the Plaintiff's lawyers in this case. That 20 includes the tax returns, all bank statements, all the 21 income statements, all the financial statements, 22 everything related to the business until Mr. Holtman was 23 fired. 24 Now, the Court ordered that. Mr. Holtman 25 turned them over, over our objection. So, I don't think DARLENE STEIN

MOTION TO COMPEL

13

1 that we're required to produce records in a duplicitous 2 manner that have already been produced by the accountant 3 in this case. 4 And, secondly, those documents were 5 produced to opposing counsel who has yet to this day 6 served them on us. When he gets discovery from whatever 7 source it's from, he's required to serve everybody in the 8 lawsuit, all parties, a copy of that discovery. He has 9 not done so. So, I don't have any. 10 Going back to the top of the complaint from 11 opposing counsel, I'm 69 years old; and I can't help it if 12 my sacral iliac joint gets sprained, inflamed, bruised, 13 and strained. I can't do anything about that. We 14 immediately notified, upon determination that I was 15 immobile, that this deposition had to be reset or 16 postponed. 17 I think it's outrageous that I can't even 18 pick up the phone and call a counsel for a medical problem 19 that he won't reset depositions for or even respond to the 20 telephone calls. I think it's outrageous that they file 21 motions claiming that they've had a conference with 22 opposing counsel, which is plainly false. They didn't 23 have any conference with us. In fact, they filed these 24 motions and then claimed that they had a conference after 25 they filed the motion.

DARLENE STEIN

MOTION TO COMPEL

14

1 As for offering dates, we offer to set a 2 date in July; and understanding trial schedules, as I do, 3 I was required to file a Motion to Continuance on -- let's 4 see -- that date that he wanted to do these, the 16th, 5 17th, somewhere in there because I had a special setting. 6 I had to go into that court and request the Court reset 7 the special setting in that case because of my sacral 8 iliac sprain. 9 I don't under -- I suppose five years ago 10 when I had my quadruple bypass surgery, opposing counsel 11 would complain because that was just an excuse. These are 12 not excuses. These are real-live things. We've offered a 13 second set of dates. Counsel didn't even respond to them. 14 Now, counsel also says that we don't -- we 15 should take depositions to get proof for the Motion to 16 Transfer Venue. I don't think the Motion to Transfer 17 Venue is set for today, but he puts it in his -- in his 18 response or his Third Amended Motion to Compel, and I 19 don't understand. He believes that the testimony given in 20 open court on the record and sworn to by his clients can't 21 be used in Motion to Transfer Venue. At some point in 22 time, the Court will have to rule on that motion; and I 23 will be happy to defend that issue. 24 As for costs, counsel fails to properly 25 prepare any cost statements, hasn't made any cost DARLENE STEIN

MOTION TO COMPEL

15

1 statements, hasn't suffered from any problems other than 2 my sacral iliac joint sprain; and I don't think he would 3 like me sitting in his conference room, taking the 4 narcotics that I was taking and the side effects that go 5 with it. 6 So, he has all of the financial records we 7 believe that exist, delivered by Holtman over our 8 objection. He did not properly serve the accountant -- 9 the new accountant in Texas, which is more than 150 miles 10 and -- away, and he doesn't have a right to get anything 11 from him. 12 And as for tax records from the LLC, 13 they're not members. They never have been members. 14 They're not members. They rejected the opportunity to 15 become a member, and that's clear testimony in the 16 Temporary Injunction hearing. 17 So, I think I've covered the waterfront. 18 But as far as tax returns, the State of Texas has made 19 very clear by the Supreme Court and the Court of Appeals 20 in Houston -- I think every Court of Appeals has said it 21 is an abuse of discretion requiring the disclosure of 22 Federal income tax returns if other documents can provide 23 the information necessary. 24 But in order to even search out and get 25 that information, opposing counsel is required to provide DARLENE STEIN

MOTION TO COMPEL

16

1 the relevancy and materiality that's necessary as to his 2 claims. He has none. He hasn't presented any. He hasn't 3 asked for any. He hasn't said a single word that shows 4 that a tax return, a financial statement, or any of these 5 other intrusive and burdensome matters are necessary for 6 his claims. And the Court should deny his motions in 7 total. 8 Thank you. 9 THE COURT: When do you want to take the 10 depositions? 11 MR. MEADE: Well -- 12 MR. MOSSER: I'm sorry, Judge? 13 THE COURT: I'm -- I'm asking your 14 opposing counsel when he wants to take the depositions. 15 MR. MEADE: I knew you were going to ask 16 that, and I think the simplest answer to that is before 17 the Motion to Transfer Venue is heard. 18 THE COURT: Okay. 19 MR. MEADE: The more complex answer is 20 after the week of the 21st of July because I have a trial 21 that entire week. But we are set number one. So, we 22 will go; and I will be done that week because it's a 23 breach of contract case. 24 So, following that week, I only have one 25 day that I have a -- I have a deposition currently set DARLENE STEIN

MOTION TO COMPEL

17

1 that I'm defending on the 28th of July. Otherwise, I am 2 wide open to -- to take these depositions. 3 THE COURT: Okay. Counsel, you heard 4 that, I assume. So, pick a date after his trial in Judge 5 Englehart's court and not on July -- what? 6 MR. MEADE: 28th. 7 THE COURT: -- 28th that you can produce 8 your people for depositions. 9 MR. MOSSER: I'm looking at the calendar 10 now, Judge. 11 THE COURT: Okay. 12 MR. MOSSER: I would recommend August 4th 13 and 5th, and I -- I would like to also add, Judge, that 14 four of the depositions that were set, two of them -- on 15 two separate days, two of them were set at exactly the 16 same time. And then the next day, two more were set at 17 exactly the same time, which I would discourage that 18 concept as appropriate. 19 MR. MEADE: And -- and here would be my 20 response. If Mr. Mosser would cooperate with me -- 21 MR. MOSSER: But the 4th and the 5th are 22 good with me, Judge. 23 MR. MEADE: If Mr. Mosser would cooperate 24 with me a little bit and let me know -- these are an 25 individual -- two individuals and four corporate DARLENE STEIN

MOTION TO COMPEL

18

1 representatives who may be, and I suspect will be, those 2 same individuals -- could all be taken possibly at the 3 same time or concurrently with each other. But 4 Mr. Mosser hasn't identified who are -- who's going to be 5 the corporate representative. So, I don't know how else 6 to do it. 7 If he will identify who will be the 8 corporate representatives for those entities, I will 9 notice the -- the depositions so that they don't conflict 10 timewise with one other another. 11 MR. MOSSER: As you previously noticed, 12 the doc -- the areas of inquiry, Mr. Rodriguez will be 13 the deponent. 14 MR. MEADE: On all, Mr. Mosser? 15 MR. MOSSER: Yes. 16 MR. MEADE: Okay. Then I will -- I will 17 set it up so that they don't conflict with one another. 18 MR. MOSSER: Thank you. 19 THE COURT: Okay. So, pick, the 4th of 20 the 5th of August? 21 MR. MEADE: It will be both, Your Honor. 22 THE COURT: Oh, both. 23 MR. MEADE: Yeah. 24 THE COURT: Okay. All right. The 25 depositions are set for the 4th and the 5th. And DARLENE STEIN

MOTION TO COMPEL

19

1 Plaintiff's counsel will send notice, but they are now 2 set. He'll send notice as to time and place, I assume, 3 which I assume you've already -- where -- where are they 4 going to be? 5 MR. MEADE: Well, as Mr. Mosser doesn't 6 have an office here in Houston -- 7 THE COURT: Okay. 8 MR. MEADE: -- I'm just going to do them 9 at my offices here in Houston, Your Honor. 10 THE COURT: Right. And I presume that's 11 okay with you, Mr. Mosser? 12 MR. MOSSER: Oh, yes, ma'am, that's fine 13 with me. 14 THE COURT: Okay. Now, as to fees of the 15 nonappearance, I'm not going to order anything at this 16 time. I will consider it later as the case progresses, 17 depending on how discovery goes. So, I will just hold 18 that under advisement. 19 What else was there? 20 MR. MEADE: The objections, which I think 21 lie in the Third Motion to Compel, which are Motions to 22 Compel the responses to discovery that ask for a 23 variety -- it's -- it's a variety of financial 24 information, including bank statements and -- and tax 25 returns.

DARLENE STEIN

MOTION TO COMPEL

20

1 THE COURT: Mr. Mosser, have -- does your 2 client have the bank statements? 3 MR. MOSSER: I'm sorry, Judge? 4 THE COURT: Does your client have the bank 5 statements? 6 MR. MOSSER: I think Mr. Holtman has them, 7 and opposing counsel has collected everything Holtman 8 has. And I would like the Court to order opposing 9 counsel to deliver those documents that he got from the 10 third-party witness Holtman to us. 11 THE COURT: Well, let me ask -- that -- 12 that wasn't my question. 13 MR. MOSSER: I understand. 14 THE COURT: My question is: Does your 15 client have them? 16 MR. MOSSER: No. I think -- I think 17 Holtman has them all. 18 THE COURT: So, your client didn't keep a 19 copy? 20 MR. MOSSER: Nobody sends out copies of 21 bank statements any more, Judge. 22 THE COURT: Sure they do. I get them 23 every month. 24 MR. MOSSER: I appreciate that, Your 25 Honor. Let me put it a different way. Many businesses DARLENE STEIN

MOTION TO COMPEL

21

1 do not get bank statement in paper form. 2 THE COURT: Well, do they get them 3 electronically where they can print them out? 4 MR. MOSSER: My understanding, Your Honor, 5 is that Holtman has all the bank statements. 6 THE COURT: So, your client doesn't get 7 the e-mail saying, Your bank statement is ready to be 8 printed out; or they can't go in and print it out? 9 MR. MOSSER: I haven't made that 10 particular inquiry. 11 THE COURT: Yeah. 12 MR. MOSSER: Because they're with the bank 13 and the accountant. 14 THE COURT: Well, my guess is your client 15 has access to them by -- if they -- if they're not like 16 me and they don't pay to get a paper statement or get a 17 paper statement, they get an e-mail saying, Your bank 18 statement is online. And you just log in, and you can 19 print it out. 20 MR. MOSSER: I understand what the Court 21 is saying, but my suggestion is that they already have 22 all of that stuff. They got it from Holtman. 23 MR. MEADE: Your Honor, if I -- if I could 24 add one -- as Your Honor may recall, they -- the 25 Defendants fired Mr. Holtman, who is the CPA, from the DARLENE STEIN

MOTION TO COMPEL

22

1 company in March, terminated my client's access and his 2 access to all of the bank accounts. Then -- then hired a 3 new accountant located up in Dallas and identified him as 4 the new CPA, to which Holtman was supposed to and did 5 send all of the information. 6 As far as account statements, the -- it's 7 an ongoing duty, in fact, and they -- they have the 8 duty -- even if, in fact, we had gotten all of the 9 information and -- and Mr. Mosser has just said he doesn't 10 actually know what we've gotten. Even if had gotten all 11 of the information, it wouldn't alleviate their 12 responsibility to produce it, too, because, for example, 13 we might be missing a page of a bank statement. We might 14 want to use a 173, you know, authentication means for the 15 documents. 16 But there are certainly post termination of 17 Mr. Holtman, zero financial records that we have access to 18 but that the Defendants have access, custody, and control 19 over those documents exclusively; and that's what we're 20 asking for. 21 THE COURT: Okay. So -- 22 MR. MEADE: Their current accountant has 23 all of it, and they have all of it. 24 THE COURT: All right. 25 MR. MOSSER: Well, we don't really know DARLENE STEIN

MOTION TO COMPEL

23

1 that. 2 THE COURT: Well, I'm going to overrule 3 your objections and tell you to produce it if it's 4 available to you. 5 MR. MOSSER: From the time that Holtman 6 was terminated? Because they already have everything 7 else. 8 THE COURT: No. Just from what they've 9 requested. 10 MR. MOSSER: And will you order them to 11 deliver us what Holtman has? 12 MR. MEADE: I don't need to be ordered to, 13 Your Honor. I will -- I haven't had him even ask me. If 14 you send me a letter asking for it -- 15 THE COURT: Well, he's asking now. Send 16 it to him. 17 MR. MEADE: I'll send it to him, Your 18 Honor. 19 THE COURT: Yeah. I'm not going to order 20 him, but he -- he said on the record now he's going to 21 send you copies of it. 22 MR. MEADE: Well, in fact, if it's 23 easiest, I will upload it onto FPT link; and you can 24 download it from your computer today. 25 THE COURT: You want to do that, Counsel?

DARLENE STEIN

MOTION TO COMPEL

24

1 MR. MOSSER: Which kind of link? 2 THE COURT: I don't know. It's over my 3 head. 4 MR. MEADE: I will suggest a couple of 5 means by which I can deliver the documents to you, 6 Mr. Mosser. 7 THE COURT: He will -- he will get them to 8 you. 9 MR. MEADE: You can choose the most 10 convenient means to you. 11 THE COURT: Okay. On the -- I've looked 12 at the interrogatories, your objections are overruled. 13 What else have we got? 14 MR. MEADE: The requests for production 15 objections that were -- 16 THE COURT: Yeah, and they're overruled, 17 also. 18 Anything else? 19 MR. MEADE: And -- nothing else unless 20 Your Honor -- and I -- and from what Your Honor said 21 earlier, I think you're not inclined to appoint a master 22 at this -- 23 THE COURT: I'm not. 24 MR. MEADE: -- point in the discovery. 25 So, I won't --

DARLENE STEIN

Motion to Compel

25

1 THE COURT: And we will reset -- 2 MR. MEADE: -- belabor the point. 3 THE COURT: -- the motion for change of 4 venue until after the deposition. 5 MR. MEADE: Thank you, Your Honor. 6 Nothing else today. 7 THE COURT: Anything else? 8 MR. MOSSER: No, Your Honor. 9 THE COURT: Counsel, I hope you feel 10 better. I know -- 11 MR. MOSSER: Thank you very much, Judge. 12 THE COURT: I know how it feels to get 13 older, but... 14 MR. MOSSER: I appreciate it, Judge. 15 THE COURT: Okay. Thank you. 16 MR. MOSSER: Yes, ma'am. 17 MR. MEADE: Thank you. Have a good week, 18 Your Honor. 19 THE COURT: Thank you. 20 (Proceedings concluded.) 21 22 23 24 25 DARLENE STEIN

Motion to Compel

26

1 STATE OF TEXAS 2 COUNTY OF HARRIS 3 I, DARLENE STEIN, Official Court Reporter in and 4 for the 133rd District Court of Harris, State of 5 Texas, do hereby certify that the above and foregoing 6 contains a true and correct transcription of all 7 portions of evidence and other proceedings requested 8 in writing by counsel for the parties to be included 9 in this volume of the Reporter's Record in the 10 above-styled and numbered cause, all of which 11 occurred in open court or in chambers and were 12 reported by me. 13 I further certify that this Reporter's Record of 14 the proceedings truly and correctly reflects the 15 exhibits, if any, offered by the respective parties. 16 I further certify that the total cost for the 17 preparation of this Reporter's Record is $312.00 and 18 was paid by Mr. Andrew Meade.

19 /s/Darlene Stein_________ 20 DARLENE STEIN, CSR Texas CSR 2557

21 Official Court Reporter 133rd District Court

22 Harris County, Texas 201 Caroline, 11th Floor

23 Houston, Texas 77002 Telephone: (713) 368-6402 24 Expiration: 12/31/2014

25 DARLENE STEIN

From:MOSSER HILL PLLC 8172 267 5072 07/12/2014 10:39 1235 P.001/001

1 '11 n DALLAS PARKWAY, SLTTfE 29() • D:\LLAS, TEXA.S :.)2.'18 • 9':::-- 33-3223 • FAX ~P2-26"7 -)(Y-;2 1\IOSSERLAW.COM

July 12, 2014

Via Facsimlile: 832-476-5460 Kelly Stephens P.O. Box 79734 Houston, Texas 77279

RE: Los Cucos VIII, Inc. Et al., v. B650 Frisco LLC, et al.

Dear Mr. Stephens:

Apparently my prior letter was too subtle, I will try to be more blunt.

There is no "currently scheduled August 1, 2014 inspection" because you have failed to serve a proper request pursuant to the rules.

We have never been served with an order from the court to produce documents. To the extent our objections were overruled, you are in possession of the responsive documents

I will not withdraw my objection to your improper subpoena. To the extent Mr. Verucchi has documents, you have those documents in your possession.

Respectfully, MoSSER LA.W PLLC~

/s/ Nicholas D. Mosser Nicholas D. Mosser

Exhibit B Exhibit 2 Page 35

611112014 2:07:32 PM

Chris Daniel -District Clerk Harris County

Envelope No: 1510270

By: ARRIAGA, AMANDA R

Cause No. 2014-10896

LOS CUCOS MEXICAN CAFE VIII, fNC.; LOS CUCOS MEXICAN CAFE IV, § § IN THE DISTRICT COURT OF f2 fNC.; MANUEL CABRERA; AND SERGIO CABRERA, §

§

1 (lfA.D)(

STP~)'

§

Plaintiffs, § §

v. § §

8650 FRISCO, LLC D/B/A ESTILO § GAUCHO BRAZILIAN STEAKHOUSE; § MANDONA, LLC; GALOVELHO, LLC; § BAHTCHE, LLC; CLAUDIO NUNES; and § DAVID JEIEL RODRIGUES, § §

Defendants. § 133rd JUDICIAL DISTRICT

ORDER ON DEFENDANTS' MOTd~TO STAY ALL MATTERS ~~

PLAINTIFFS' THII~>TION TO COMPEL

0

The Court, having considered !®fendants' Motion to Stay All Matters and Plaintiffs'

oQ

Third Motion to Compel and th~tive responses, arguments of counsel, and evidence, has determined that Defendants' ~on should be and is hereby DENIED and that Plaintiffs' motion

should be and is hereby G~ED. Specifically:

The Court DE~gefendants' request to stay all matters.

. The Cou!J ~~y OVERRULES Defendants' objections to Plaintiffs' Requests for

Production No,2, 3, 4, 5, 7, and 8. IT IS ORDERED that Defendants shall produce all ~

document~onsive to Requests for Production Nos. 1, 2, 3, 4, 5, 7, and 8 within 24 hours of

the entry of this order.

Th~om t Fllq!JS that Defeudams' co,msernasahused the discovery_pr~'Sis_fiil:g­ l'(oM:;it;A-';-enr-:ln~ermmea that the followillg sanctions are appropriate~ satisfy the legitimate-

Exhibit B Exhibit 3 Page 36 ~I 1 A purposes of discovery sanctions, and are nenher more 1101 less stringent than nece:.:.ary to-. 11\j-/ '-- aceef!!plishjtT7}Se purpes&.-

AcsorQ_ingly, IT IS ORDERED that all---eXpenses of dtscovery assocmtecrwith th~ ooderlying motiotnl1101fie deposition of each of the Defenda"""fitrin aecordance with this oreer an:~

e MOSSER l.AW fiRM shall pay to~~ $ within I 0 days of the sig11iflg ei.th.iuJrder.~ (J ·rr- IS FURTHER ORDERED that the fullo"i"g fucts a~ABL!SHBD fi5r1rtl---...

I'm poses in thiS hbgatwn: that Defendants havo <on"oted to ven;~arris Coun~s. -

IT IS FURTHER ORDERED that failure to compl;~Q this Order may result in the further imposition of sanctions or a holding of contempt, ~hable by fin~ or imprisonment or -

both. ;{J__o_ c\~ ~ &~MJ!~r:J1/r o.* t;:cop.JU . ~ v---1'

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DATED: 1-- J- <(- d!J)J/ ~

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Exhibit B Page 37

3/30/2015 4 07 31 PM

Chr1s Damel - D1stnct Clerk Hams County

Envelope No 4698208

By GENTRY, EUNIECY M

Fsled 3/30/2015 4 07 31 PM CAUSE NO 2014-10896

LOS CUCOS MEXICAN CAFE VIII, § IN THE DIS1 RICT COURT OF INC , LOS CUCOS MEXICAN §

~ jj)x

CAFE IV, INC , MANUEL § CABRERA, and SERGIO § CABRERA, Plflmtiffs

§

~

~

* aPtPK

v § § ~=~r#i HARRIS COUN 1 ~XAS

8650 FRISCO, LLC D/B/A ESTILO ~ GAUCHO BRAZILIAN § ~ STEAKHOUSE, MANDONA, LLC, GALOVELHO, LLC, BAH1 CIIE, LLC, CLAUDIO NUNES, and §

§

§

#

Q~

DAVJD JEIEL RODRIGUES, § DefendalltY § 133r~DICIAL DISTRICT OROER GRANTING IN J>ART A INGINPART PLAINTIFFS' MOTION TO ENFOR 0~

On thts dav the Court came to constder pJ.il~~ffs Sec.ond Mohon to Enforce the Court'& - ~~ Order and for Sandton~ (lhe "Mot.Ion") ~Y cons1denng lhe facts, law, and argument of

<..ounscl, the Court has dec1ded to grant ~~otlontn part and deny the Mohon m pmt

Defendant!:. are ordered to ~e all documents tdenttfied m the CoUtt's July 28, 2014 Order on Detendant~ MottonJRGay All Mattml> and Plamhffs' Il11rd Matton to Compel lhts

p10dm.tton must be made~lo p m on Wednesday, Apttl 1, 2015 to both Sam Haten and

Kelly Stephen::, ~U oW

Plmnt1f~~Dcfendants' request; ~or sancuons dlC dcmed

s:~J~ilieL-day or~ ~~

Exhibit B Exhibit 4 Page 38

CAUSE NO 2014-10896

LOS CUCOS MEXICAN CAFE Vill, INC , LOS CUCOS MEXICAN §

§

IN THE DISTRICT COURT OF f,Z -

CAFE IV, INC , MANUEL § cf Mr£u=x

*

CABRERA, and SERGIO § CABRERA, § Plamtiffs § /tTFE)( § ~ v § (} § HARRIS CO~, TEXAS ""'

8650 FRISCO, LLC D/B/A ESTILO § 0~ ~ 9 GAUCHO BRAZILIAN § ~ CP STEAKHOUSE, MANDONA, LLC, § 0~ GALOVELHO, LLC, BAHTCHE, § «:::}~ LLC, CLAUDIO NUNES, and § ~ 0 DAVID JEIEL RODRIGUES, § 0~ ~ Defendants § Ul~ JUDICIAL DISTRICT& ftj(9}

Order Grantm

Third MotiOn To En~ he Court's Order

On thrs day the Court came to con~Wlamtrffs' Thrrd Matron to Enforce the Court's cg

Order (the "Motion") After consrdenn~e facts, law, and argument of counsel, the Court has

decrded to GRANT the Matron nt~nts Will produce all documents responsive to Requests for Production 1, 2, 3, 4, 5, 7~Q8 contamed m Exhrbrt 1 to the Mohon (the "Documents")

~0.

Thrs productron must be ~hrough hand delivery dunng normal busmess hours to Andrew

Meade or Samuel H~ Gat HAWASH MEADE GASTON NEESE & CICACK LLP, 2118 Smrth, o~j

Houston, Texas 7f!;Qj. ·'

The ~Q fiuther finds that Defendants VIOlated three of the Court's pnor orders by

farlmg to ~uce responsrve documents Thrs misconduct Is part of a larger pattern of Improper objectwns, mentless motions, frrvolous arguments, fergned rgnotance of baste factual and legal

Issues, and drshonest gamesmanship m vrolatwn of Texas Rule of Crvll Procedure 13 Pt evrous warnmgs from the Court have been meffectrve m forcmg Defendants to comply wrth the Court's

Exhibit B Exhibit 5 Page 39 orders or with Texas law, and another warnmg IS unlikely to achieve better results Moreover, another warnmg would only encourage Defendants to contmue their egregwus behaviOr m the future Accordmgly, the Court ltnposes the followrng sanctiOns

•

*

Defendants may not conduct additional discovery m this matter u~~representattve of 8650 Fnsco, LLC stgns a sworn affidavit of compliance wtth ~~rder,

• Defendants shall pay $ iV()V, f30 to Plamtlffs fot; ~ costs mcurred m secunng productiOn of the. ocuments, and ~

• the Issue of whether Plamtrffs face Irreparable harm ~~e lack of the note/secunty requrred by the parties' contract IS conclusively es~Yed m Plarntiffs' favor 0~

Should Defendants fall to comply w1th this order w~ forty~eight hours of the stgnature

hereof, Defendants and their attorneys of record WJ

wtl~ asked to personally appear and show cause as to why they should not be held m cont~~th1s Court ~ru

Signed on the _Jj_ day of 4f:rt?J<f!2 ,2015

a~ ~c-k9J ug~~

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2

Exhibit B Page 40

HAWASHM EA DE HAW ASH MEADE GASTON NEESE & CICACK LLP Samuel B. Haren

sharen@hmgnc.com

713-658-9001 (phone)

713-658-9011 (fax)

April30, 2015

Via Facsimile : (469) 626-1073 Mr. James C. Mosser Mr. Nicholas D. Mosser Mosser Law PLLC 17110 Dallas Parkway, Suite 290 Dallas, Texas 75248

Re: Cause No. 2014-10896, Los Cucos Mexican Cafe VIII, Inc. et al. v. 8650 Frisco, LLC et al. in the 133rd Judicial District Court of Ranis County, Texas

Dear Mr. Mosser:

As you aware, the Comt granted Plaintiffs' Third Motion to Enforce the Court's Order and For Sanctions on April 27, 2015. In so doing, the Comt ordered you and your client to (1) hand-deliver the requested documents to the offices ofHawash Meade Gaston Neese & Cicack LLP and (2) pay a $1,000 sanction to Plaintiffs. The Comt fmther ordered that, "should Defendants fail to comply with this order within forty-eight hours of the signature hereof, Defendants and their attorneys of record will be asked to personally appear and show cause as to why they should not be held in contempt ofthis Court."

As of the transmission hereof, neither the document production nor the monetary sanction have been received. If we have not received the documents and payment by noon on Monday, May 4, 2015, we will be forced to file a fomth motion to enforce the Court's order and seek additional sanctions.

Yours truly,

2118 Smith Street 1 Houston, Texas 77002 Main Phone: (713) 658-9001 I Main Facsimile: (713) 658-9011 Exhibit B Exhibit 6

www. hmgll p . com Page 41

MOSSER LAW PLLC 2805 DALLAS PARKWAY, SUITE 222 • PLANO, TEXAS 75093 • 972-733-3223 • FAX: 469-626-1073 MOSSER LAW .COM

May 1, 2015

Via eFile Kelly Stephens P.O. Box 79734 Houston, Texas 77279 Telephone: 1-281-394-3287 Facsimile: 1-832-476-5460 kstephens@stephensdominitz.com

RE: Los Cucos VIII, Inc. Et al., v. 8650 Frisco LLC, et al. Dear Mr. Stephens:

We are in receipt of Mr. Haren’s letter dated April 30, 2015. W e have been served no signed orders of any court requiring date certain compliance or any other required action.

Respectfully, MOSSER LAW PLLC

/s/ Nicholas D. Mosser Nicholas D. Mosser

Exhibit B Exhibit 7 Page 42

HAWASH MEADE HAWASH MEADE GASTON NEESE & CJCACK LLP Samuel B. Haren

sharen@hmgnc.com

713-658-9001 (phone)

713-658-9011 (fax)

May 3, 2015

Via Facsimile: (469) 626-1073 Mr. James C. Mosser Mr. Nicholas D. Mosser Mosser Law PLLC 17110 Dallas Parkway, Suite 290 Dallas, Texas 75248

Re: Cause No. 2014-10896, Los Cucos Mexican Cafe VIIL Inc. et al. v. 8650 Frisco, LLC et al. in the 133rd Judicial District Comt ofHanis County, Texas

Dear Mr. Mosser:

The Comt' s order is attached. As you are aware, it was readily available to anyone from the Court's clerk and to any licensed attomey from the District Clerk's website. As stated in my previous letter, if you have not complied with the Court's order by noon on Monday, May 4, 2015, we will file a fomth motion to enforce the Comt's order.

_;'_ff

~-H-a-re_n_ __

2118 Smith Street I Houston, Texas 77002 Main Phone: (713) 658-9001 I Main Facsimile: (713) 658-9011 www. hmg II p.com

Exhibit B Exhibit 8 Page 43

CAUSE NO 2014-10896

LOS CUCOS MEXICAN CAFE Vill, INC , LOS CUCOS MEXICAN §

§

IN THE DISTRICT COURT OF f,Z -

CAFE IV, INC , MANUEL § cf Mr£u=x

*

CABRERA, and SERGIO § CABRERA, § Plamtiffs § /tTFE)( § ~ v § (} § HARRIS CO~, TEXAS ""'

8650 FRISCO, LLC D/B/A ESTILO § 0~ ~ 9 GAUCHO BRAZILIAN § ~ CP STEAKHOUSE, MANDONA, LLC, § 0~ GALOVELHO, LLC, BAHTCHE, § «:::}~ LLC, CLAUDIO NUNES, and § ~ 0 DAVID JEIEL RODRIGUES, § 0~ ~ Defendants § Ul~ JUDICIAL DISTRICT& ftj(9}

Order Grantm

Third MotiOn To En~ he Court's Order

On thrs day the Court came to con~Wlamtrffs' Thrrd Matron to Enforce the Court's cg

Order (the "Motion") After consrdenn~e facts, law, and argument of counsel, the Court has

decrded to GRANT the Matron nt~nts Will produce all documents responsive to Requests for Production 1, 2, 3, 4, 5, 7~Q8 contamed m Exhrbrt 1 to the Mohon (the "Documents")

~0.

Thrs productron must be ~hrough hand delivery dunng normal busmess hours to Andrew

Meade or Samuel H~ Gat HAWASH MEADE GASTON NEESE & CICACK LLP, 2118 Smrth, o~j

Houston, Texas 7f!;Qj. ·'

The ~Q fiuther finds that Defendants VIOlated three of the Court's pnor orders by

farlmg to ~uce responsrve documents Thrs misconduct Is part of a larger pattern of Improper objectwns, mentless motions, frrvolous arguments, fergned rgnotance of baste factual and legal

Issues, and drshonest gamesmanship m vrolatwn of Texas Rule of Crvll Procedure 13 Pt evrous warnmgs from the Court have been meffectrve m forcmg Defendants to comply wrth the Court's

Exhibit B Page 44 orders or with Texas law, and another warnmg IS unlikely to achieve better results Moreover, another warnmg would only encourage Defendants to contmue their egregwus behaviOr m the future Accordmgly, the Court ltnposes the followrng sanctiOns

•

*

Defendants may not conduct additional discovery m this matter u~~representattve of 8650 Fnsco, LLC stgns a sworn affidavit of compliance wtth ~~rder,

• Defendants shall pay $ iV()V, f30 to Plamtlffs fot; ~ costs mcurred m secunng productiOn of the. ocuments, and ~

• the Issue of whether Plamtrffs face Irreparable harm ~~e lack of the note/secunty requrred by the parties' contract IS conclusively es~Yed m Plarntiffs' favor 0~

Should Defendants fall to comply w1th this order w~ forty~eight hours of the stgnature

hereof, Defendants and their attorneys of record WJ

wtl~ asked to personally appear and show cause as to why they should not be held m cont~~th1s Court ~ru

Signed on the _Jj_ day of 4f:rt?J<f!2 ,2015

a~ ~c-k9J ug~~

o~ry;

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Exhibit B Page 45

Cause No. 2014-10896

Los Cucos Mexican Cafe VIII, Inc.; In the District Court of Los Cucos Mexican Cafe IV, Inc.; Manuel Cabrera; and Sergio Cabrera, Plaintiffs

v. Harris County, Texas

8650 Frisco, LLC d/b/a Estilo Gaucho Brazilian Steakhouse; Mandona, LLC; Galovelho, LLC; Bahtche, LLC; Claudio Nunes; and David Jeiel Rodrigues, 133rd Judicial District Defendant

Notice of Hearing

Please be advised that the Court will hold an oral hearing on Plaintiffs’ Fourth Motion to Enforce the Court’s Order and for Sanctions on Monday, May 18, 2015, at 3:00 p.m., in the 133rd Judicial District Court of Harris County, Texas.

Respectfully submitted,

Hawash Meade Gaston

Neese & Cicack LLP

/s/ Samuel B. Haren

Andrew K. Meade

State Bar No. 24032854

Jeremy M. Masten

State Bar No. 24083454

Samuel B. Haren

State Bar No. 24059899

2118 Smith Street

Houston, Texas 77002

713-658-9001 (phone)

713-658-9011 (fax)

ameade@hmgnc.com

jmasten@hmgnc.com

sharen@hmgnc.com

Exhibit B Page 46

Stephens & Domnitz, PLLC

Kelly D. Stephens

State Bar No. 19158300

P.O. Box 79734

Houston, Texas 77279-9734 281-394-3287 (phone)

832-476-5460 (fax)

kstephens@stephensdomnitz.com

Cox Smith Matthews Incorporated

David Kinder

State Bar No. 11432550

112 East Pecan Street, Suite 1800 San Antonio, Texas 78205

210-554-5500 (phone)

210-226-8395 (fax)

Attorneys for Plaintiffs

Certificate of Service

A true and correct copy of the foregoing has been served on all counsel of record via electronic service on May 4, 2015.

James C. Mosser Nicholas D. Mosser Mosser Law PLLC 17110 Dallas Pky, Suite 290 Dallas, Texas 75248

/s/ Samuel B. Haren

Samuel B. Haren

3

Exhibit B Page 48

Cause No. 2014-10896

Los Cucos Mexican Cafe VIII, Inc.; In the District Court of Los Cucos Mexican Cafe IV, Inc.; Manuel Cabrera; and Sergio Cabrera, Plaintiffs

v. Harris County, Texas

8650 Frisco, LLC d/b/a Estilo Gaucho Brazilian Steakhouse; Mandona, LLC; Galovelho, LLC; Bahtche, LLC; Claudio Nunes; and David Jeiel Rodrigues, 133rd Judicial District Defendant

Order Granting Plaintiffs’ Fourth Motion To Enforce The Court’s Order On this day the Court came to consider Plaintiffs’ Fourth Motion to Enforce the Court’s Order (the “Motion”). After considering the facts, law, and argument of counsel, the Court has decided to GRANT the Motion.

The Court finds that  Defendants and their counsel have wasted substantial amounts of the Court’s and Plaintiffs’ time by filing frivolous motions, making bad-faith arguments, and feigning ignorance of basic factual and legal issues;

 Defendants and their counsel have violated their discovery obligations by lodging frivolous objections, making inadequate productions, refusing to comply with the Court’s orders, and asking third parties to destroy evidence;

 Defendants’ counsel has acted unprofessionally to the Court, the Court’s staff, and Plaintiffs’ counsel throughout this litigation;

 Defendants have failed or refused to comply with four prior orders from this Court; and

Exhibit B Page 49  Defendants did not comply with this Court’s order even after sanctions were entered and a show cause order was threatened.

The Court hereby imposes the following sanctions:

 Defendants shall pay a sanction of $_________ to Plaintiffs. This sanction is based on the reasonable and necessary attorneys’ fees incurred by Plaintiffs in attempting to secure production of the documents Defendants have failed to produce. This sanction is to be paid by cashier’s check to Hawash Meade Gaston Neese & Cicack LLP’s IOLTA Account. The check shall be hand-delivered to the offices of Hawash Meade Gaston Neese & Cicack LLP during normal business hours within forty-eight hours of the entry of this order.

 James Mosser, Nicholas Mosser, Claudio Nunes, and David Jeiel Rodrigues shall appear in this Court on the ____ day of _____________________, 2015 at __:____ __.m. and show cause as to why they should not be held in contempt.

 Defendants shall not be entitled to conduct or participate in any further discovery in this case.

This order does not replace or supplant the Court’s April 27, 2015 Order Granting Plaintiffs’ Third Motion to Enforce the Court’s Order. All sanctions and required imposed therein remain in force.

Signed at __:____ __.m. on the _____ day of _______________________, 2015.

Judge Presiding

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Exhibit B Page 50