Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ared-4_21-cv-00618/USCOURTS-ared-4_21-cv-00618-6/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1441 Petition for Removal- Declaratory Judgement

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IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

CENTRAL DIVIVSION

WITT CARIBBEAN, LLC PLAINTIFF/

COUNTERV.

ATLYS GLOBAL, LLC

DEFENDANT

DEFENDANT/

COUNTERPLAINTIFF/rHIRDPARTY PLAINTIFF

V.

WITT GLOBAL PARTNERS, LLC;

WITT GLOBAL PARTNERS FUND I, L.P.;

WITT GLOBAL PARTNERS CAPITAL, LLC,

d/b/a WGP Capital; WITT GLOBAL PARTNERS

ASSET MANAGEMENT, LLC; WITT GLOBAL

PARTNERS GP-I, LLC; WITT CORP;

AG WITT, LLC; JOHN DOE CORPORATIONS,

Witt Affiliated Companies; JAMES LEE WITT;

ROD SWEETMAN; and WILLIAM (BILL) RILEY

ORDER

THIRD-PARTY

DEFENDANTS

1. In an earlier Order, Doc. 134, the Court denied Atlys Global's

motion for summary judgment. Here's why.

James Lee Witt served as director of the Federal Emergency

No. 4:21-cv-618-DPM

Management Agency under President Clinton. Since then, he's worked

Case 4:21-cv-00618-DPM Document 139 Filed 05/03/24 Page 1 of 5
as a consultant. In 2019, Witt and his business partners, Rod Sweetman

and Bill Riley, met with Atlys Global about launching a joint venture to

provide disaster recovery and emergency management consulting

services. Witt would provide the reputation and expertise; Atlys

Global the money. Term sheets were negotiated. A joint venture -AG

Will-was formed. Business was conducted. But things soured, and

here we are.

There are fundamental disputed material facts that make

summary judgment inappropriate. The first, for example, is whether

the parties made a contract. Atlys Global argues hard that a term sheet,

Doc. 85-1, is the parties' contract. But the term sheet says it "is

NON-BINDING and is intended only to set forth some of the principal

terms proposed for a working relationship between" Atlys Global and

the Witt parties. Doc. 85-1 at 1. Witt and Atlys Global operated under

the term sheet but never entered a later, "binding" agreement.

Doc. 109-5 at 13; Doc. 85-1 at 1. Beyond formation, the performance

facts are genuinely disputed. Atlys Global says that the Will parties

didn't give best efforts and actually funneled business to other entities.

E.g., Doc. 111 at 25. The various torts alleged spring from the Will

parties' disputed acts and omissions. The Witt parties disagree, saying

they did nothing wrong. Doc. 119 at 32 & Doc. 118 at 5. They also say

they want out of the deal because Atlys Global choked the joint venture

with minimal funding and wanted to finance AG Will's accounts

Case 4:21-cv-00618-DPM Document 139 Filed 05/03/24 Page 2 of 5
receivables at an exorbitant interest rate before covering payroll.

Doc. 109-5 at 28 & 34. Atlys Global responds that it did nothing wrong.

The facts of the record in what is essentially a business divorce action

point both ways. A jury must decide the contested contract issues and

the related claims.

2. The motions in limine fail, too. These motions largely

relitigate the matters raised in Atlys Global's motion for summary

judgment. The Court, for example, will not instruct the jury that the

6 September 2019 term sheet was a final binding contract-as requested

in the first and second motions in limine -because there are genuine

disputes of material fact on that issue. As for the third and fourth

motions, Atlys Global may cross-examine witnesses using their

deposition testimony and other exhibits. Any other evidentiary issues

can be handled as they arise during trial.

3. That leaves the motion for sanctions. Atlys Global

challenges six statements made in Witt Caribbean's complaint that it

says were knowingly false. Three of those statements-labeled as

statements three, four, and six -are contested issues in the case.

They have evidentiary support. The other three statements-one, two,

and five -are admittedly wrong. But should the Witt parties be

sanctioned under Rule 11? No. Statement five, about AG Witt not

being formed, is small potatoes. The statements related to personal

jurisdiction -two and three -are more serious. Witt Caribbean said

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Case 4:21-cv-00618-DPM Document 139 Filed 05/03/24 Page 3 of 5
that its principal place of business was in Pulaski County, Arkansas.

This was, all now agree, not true. Witt Caribbean's principal place of

business was in Puerto Rico. And this error has some significance

because Witt Caribbean also said that the Pulaski County Circuit Court*

could exercise personal jurisdiction over Atlys Global because it had

entered a joint venture with an Arkansas-based company. Doc. 4 at 1.

This error, though, is not sanctionable for two reasons.

First, the mistake is understandable. James Lee Will operated out

of Arkansas. Witt Global Partners and its affiliates had their principal

place of business in Pulaski County. Doc. 12-1 at 16-19 & Doc. 48 at 2-3.

Witt Caribbean was the exception. It was formed after a hurricane hit

Puerto Rico, but was inactive. Doc. 109-2 at 6-8. The record establishes

that the Witt parties pulled the Will Caribbean entity off the shelf when

they needed a company on short notice to plug into the joint venture.

That the Witt folks' base of operations was in Little Rock was never in

any real doubt. There's nothing indicating that the erroneous allegation

about the location of Witt Caribbean's principal place of business was

anything other than an honest mistake.

Second, there's no prejudice. When Atlys Global filed its answer,

counterclaim, and third-party complaint in September 2021, it alleged

that Witt Caribbean's principal place of business was in Puerto Rico.

*Witt Caribbean filed its complaint in state court. Atlys Global removed

the case to this Court.

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Case 4:21-cv-00618-DPM Document 139 Filed 05/03/24 Page 4 of 5
Doc. 12-TI at 16. Each of the Witt parties admitted that fact in their

answer. Doc. 24 at 1; Doc. 33 at 1; Doc. 34 at 1; & Doc. 35 at TI. Did Atlys

Global then file a motion to dismiss for lack of personal jurisdiction?

It did not.

All material things considered, no sanctions are appropriate.

Navarro-Ayala v. Hernandez-Colon, 3 F.3d 464,467 (1st Cir. 1993) (Breyer,

J., writing).

* * *

For the reasons stated, Atlys Global's motions, Doc. 124, 129, 130,

131 & 132, are denied.

So Ordered.

D.P. Marshall Jr.

United States District Judge

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Case 4:21-cv-00618-DPM Document 139 Filed 05/03/24 Page 5 of 5