IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF TEXAS

SHERMAN DIVISION

VERITAS VINCIT, LLC, WILLIAM

BERRY DEAN III,

Plaintiffs,

v. 

FRED ALAN BROWN, CHARLES 

WILLIAM DURHAM, II, BIRNAM

WOOD CAPITAL, LLC, RETICULUM 

MANAGEMENT, LLC

Defendants.

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CIVIL ACTION NO. 4:24-CV-00079-JRG

MEMORANDUM OPINION AND ORDER

Before the Court is the Motion to Dismiss Due to the Absence of a Justiciable Case or 

Controversy Under Article III of the Constitution (the “Motion to Dismiss”) (Dkt. No. 111) and 

the Motion for Leave to File the Motion to Dismiss (the “Motion for Leave”) (Dkt. No. 110) filed 

by Defendants Charles William Durham, II (“Durham”) and Birnam Wood Capital, LLC (“Birnam 

Wood”) (collectively, “Durham Defendants”).

1

I. BACKGROUND

What started as a simple business deal in the amount of $400,000 has resulted in no fewer 

than ten lawsuits, bankruptcies (on both sides), criminal indictments, bar grievances, and a 

seemingly complete breakdown of civility. Plaintiffs and Defendants in this case have spun a small 

but seemingly genuine disagreement into nearly a decade of discord and financial ruin. While 

1 Also before the Court is Defendant Brown’s Adoption of Durham and Birnam Wood’s Motion for Leave to File 

Motion to Dismiss Due to the Absence of a Justiciable Case or Controversy Under Article III of the Constitution (the 

“Adoption”). (Dkt. No. 113). In the Adoption, Defendant Brown “adopts [the Motion to Dismiss] as the argument and 

authorities are identical as to each defendant.” (Id.).

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many other courts have walked through the background of these parties’ disputes2

, another 

recitation of those facts is necessary to resolve the present Motion to Dismiss.

3

 

A. The Inciting Event

In the summer of 2015 Plaintiff William Berry Dean, III (“Dean”) was the part-time CFO 

of an entity named Total Operating, a company in the pipeline construction and maintenance 

industry. (Dkt. No. 63 at 5). Total Operating was in need of additional financing (roughly 

$500,000) to support its work for a company called Jetta Resources. (Id.). In an effort to secure 

this funding, Total Operating’s CEO, non-party Jacob Watters (“Watters”), reached out to 

Defendant Charles William Durham, II (“Durham”) about potential sources of capital. (Id.). 

Durham suggested that Watters speak with Defendant Fred Brown (“Brown”) who, at that time, 

was a client of Durham’s. (Id.). 

Ultimately, Defendant Brown agreed to fund $400,000 through various related entities and 

Russel Watters (Jacob Watter’s father) supplied the remaining $100,000 to Total Operating. (Id.). 

Plaintiffs contend that Defendant Durham: (1) acted as Brown’s financial advisor in connection 

with the transaction, (2) received a commission in connection with the deal, and (3) agreed to allow 

the parties to use one of his entities, Defendant Reticulum Management, LLC (“Reticulum”), to 

facilitate the transaction. (Id.).

The specific terms of the transaction between Reticulum and Total Operating give rise to 

the issues that have followed since. Due to issues with Total Operating’s senior secured lender 

(Capital One) being unwilling to agree to a second lien on Total Operating’s assets, the transaction 

was not done as a loan, but rather in the form of a Sale and Buyback Agreement. Under the Sale 

2 See, e.g., In re Dean, 620 B.R. 271, 274–76 (Bankr. N.D. Tex. 2020); In re Watters, No. 20-30553, 2021 WL 3744408, 

at *2–6 (Bankr. N.D. Tex. Aug. 24, 2021). 3 For purposes of establishing the necessary context for resolving the Motion to Dismiss, the Court relies upon the 

parties’ summary judgment briefing filed in this case and the exhibits attached thereto.

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and Buyback Agreement, Reticulum purchased Total Operating’s profits from its Jetta project, with 

Total Operating having the option to buy back the profits by October 30, 2015. (Id. at 6). Defendant 

Brown claimed to believe that the transaction was highly collateralized, however he never 

reviewed the Sale and Buyback Agreement, relying instead on his financial advisor (Durham) to 

review the agreement. (Id.). Plaintiff Dean signed the Sale and Buyback Agreement as Total 

Operating’s CFO, but he insists that he never had any discussions with Defendants about a bridge 

loan or the Sale and Buyback Agreement prior to its execution. (Id.). Plaintiffs contend that this is

supported by Watters who testified that he (Watters) was the only person who met and spoke with 

Durham and Brown regarding the Sale and Buyback Agreement. (Id.). 

Not long after the parties entered into the Sale and Buyback Agreement, Total Operating 

was unable to repay the amounts it owed in connection with the agreement. (Id.). It is at this point 

where the Court notes that the train appears to have come off the track. According to Plaintiffs, 

“Durham schemed to have Watters sign a security agreement because Durham knew that he 

(Durham) had entered an agreement on behalf of his client (Brown) that provided for no security 

when his client, Brown, (mistakenly) though the deal was ‘highly collateralized.’” (Id.). Watters 

ultimately executed a Security Agreement related to the Sale and Buyback transaction in late May 

2016 which purported to be effective as of October 30, 2015 (seven months prior to its signing). 

(Id.). Plaintiffs contend that “documentary evidence shows that the Security Agreement was 

executed in May 2016 to (improperly) attempt to give Reticulum preferential treatment in Total 

Operating’s forthcoming bankruptcy.” (Id.). In a June 28, 2016 email from Watters to Durham, 

Watters admits that the Security Agreement was “executed [as] a post haste security agreement not 

in or around October, but in May/June period.” (Id. at 9). Watters noted, that “[w]e all know this,” 

and that “[t]his was all at the expense of other creditors.” (Id. (quoting Dkt. No. 63-5 at 4)). Durham 

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has since admitted that there was no promissory note and that the Security Agreement was not 

executed on or about October 30, 2015. (Id. (citing Dkt. No. 63-3 at 255:10–245:19)). 

After Total Operating filed for bankruptcy and Reticulum’s status as a secured creditor was 

disputed by Dean—at which time Defendants determined that there would be “nothing left for 

us”—Defendants concluded that “[t]he only way we can get any recovery is if [Dean] and [Mr. 

Watters] are found to have committed a felony and we can get a personal judgment against both”:

(Id. at 10 (quoting Dkt. No. 63-15 at 2 (excerpted above, highlighting by Plaintiffs))).

Subsequently, Durham and Brown alleged that Dean was involved in the events leading up 

to the execution of the agreement and, in Plaintiffs’ view, falsely claimed that Dean made 

misrepresentations that induced Reticulum to sign the agreement. (Id.). 

B. The Lawsuits Against Dean4

As detailed in Plaintiffs’ Response to the Durham Defendants’ motions for summary 

judgment, over the course of five years, “Reticulum (with the assistance of Brown, Durham, and 

Birnam Wood) caused at least eleven civil and criminal proceedings to be initiated related to the 

Sale and Buyback Agreement, including at least seven proceedings against Dean, his family 

members, friends and affiliated businesses.” (Id. at 11). These proceedings are shown in the table 

below:

# Case

1 Reticulum Management, LLC v. Total Operating, LLC, Cause No. DC-16-07521, filed 

in the 14th Judicial District Court of Dallas County, Texas

4 Defendants dispute that many of these lawsuits are fairly attributable to them.

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2 In re Reticulum Management, LLC, Cause No. DC-17-06211, filed in the 193rd Judicial 

District Court of Dallas County, Texas (Reticulum’s Verified Petition to Take 

Depositions of and Request Documents From Jacob F. Watters and Barrett Dean to 

Investigate Potential Claims)

3 Reticulum Management, LLC v. Barrett Dean and Jacob F. Watters, AAA Case No. 01-

17-0006-8709, filed with the American Arbitration Association

4 Reticulum Management, LLC v. Russell Watters, Cause No. DC-18-08897, filed in the 

14th Judicial District of Dallas County, Texas

5 Reticulum Management, LLC v. Knapp Chevrolet, Inc., Cause No. 201869900, filed in 

the 151st Judicial District Court of Harris County, Texas

6 Reticulum Management, LLC v. Jacob F. Watters, Cause No. DC-19-05004, filed in the 

14th Judicial District Court of Dallas County, Texas

7 Reticulum Management, LLC v. William Berry Dean, III, Adv. No. 19-03242, filed in 

the United States Bankruptcy Court for the Northern District of Texas, Dallas Division

8 Scott M. Seidel, as Chapter 7 Trustee of the Estate of William Berry Dean, III v. William 

Berry Dean, III, William Berry Dean, II and Stephanie Knapp Dean, Adversary 

Proceeding No. 20-03141-sgj, filed in the United States Bankruptcy Court for the 

Northern District of Texas, Dallas Division

9 Scott M. Seidel, as Chapter 7 Trustee of the Estate of William Berry Dean, III v. William 

Berry Dean, III, Craftsman Capital Partners, LLC, William Berry Dean, II and Amy 

Arquilla Dean, as Trustees of the William B. Dean III Irrevocable Trust and the William 

B. Dean III Irrevocable Trust, Adversary Proceeding No. 20-03140-sgj, filed in the 

United States Bankruptcy Court for the Northern District of Texas, Dallas Division

10 Criminal Complaint filed by Fred Alan Brown of Reticulum Management, LLC against 

William Barrett Dean, III, Dallas County, Texas, with Affidavit signed January 31, 2018, 

F-2000230 & F-2000231

11 Criminal Complaint filed by Fred Alan Brown of Reticulum Management, LLC against 

Jacob F. Watters, Dallas County, Texas, with Affidavit signed January 31, 2018, F2000228 & F-2000229

See (Dkt. No. 63-2 (Dean Decl.), ¶ 25). Plaintiffs’ listing of proceedings include seven civil actions 

initiated directly by Defendant Reticulum (#1–#7 above), two civil actions initiated by the Trustee 

of Mr. Dean’s estate in bankruptcy who engaged in a litigation funding agreement with Reticulum 

(#8 and #9 above), and two criminal complaints filed by Defendants Brown and Reticulum that 

resulted in criminal indictments of Plaintiff Dean that were ultimately dismissed (#10 and #11 

above). (Id.). 

In the Arbitration (Proceeding #3) filed by Reticulum against Dean and Watters, Reticulum 

alleged “that they had committed fraud, fraud by nondisclosure, fraudulent inducement, and 

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negligent misrepresentation by making misrepresentations to induce Reticulum into loaning 

$500,000 to Total Operating and signing the Sale and Buyback Agreement.” (Id. (citing Dkt. No. 

63-2, ¶ 26)). During the Arbitration, “Watters and Dean testified that Dean never had any relevant 

communications regarding the transaction prior to the execution of the Sale and Buyback 

Agreement,” however “both Durham and Brown . . . testified in the Arbitration that the opposite 

was true.” (Id. at 12). After the hearing in the Arbitration, the Panel entered an Interim Award 

against Dean and Watters, finding that they were liable to Reticulum for negligent 

misrepresentation” but “den[ying] Reticulum’s claims against Dean and Watters for fraud, fraud 

by non-disclosure, and fraudulent inducement.” (Id.). On January 9, 2019, subsequent to the entry 

of the Interim Award, Dean filed for relief under Chapter 7 of the Bankruptcy Code. (Id. (citing 

Dkt. No. 63-2, ¶ 30)). 

C. The Present Case

Fast-forwarding to the present day, Plaintiffs Veritas Vincit, LLC5 (“Veritas Vincit”) and 

William Berry Dean, III (“Dean”) (collectively, “Plaintiffs”) assert three causes of action in this 

case: (1) malicious criminal prosecution against Defendants Reticulum and Brown; (2) malicious 

civil prosecution against Defendant Reticulum; and (3) conspiracy against all of the defendants.

(Dkt. No. 105 at 2–3).

During discovery in this case, Plaintiffs served requests for production on the Durham 

Defendants. (Dkt. No. 93 at 1). In response to those requests, the Durham Defendants served a 

privilege log identifying 2,274 documents (the “Withheld Documents”) withheld from production

on the basis of privilege claims by Defendant Reticulum, a company then owned by Defendant 

5 Plaintiff Veritas Vincit was formed on October 23, 2020 and as of April 2022 was 99% owned by the William B. 

Dean, III Irrevocable Trust (an irrevocable trust set up for Plaintiff Dean’s benefit) and 1% by William B. Dean, Jr. 

(Plaintiff Dean’s father). (Dkt. No. 114 at 3–4). In April 2022, “VV Funding LLC purchased 1% of the William B. 

Dean, III Irrevocable Trust’s interest in Veritas Vincit.” (Id. at 4).

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Fred Alan Brown. (Id.). On April 1, 2024, Reticulum was sold at an auction held by the trustee of 

Defendant Brown’s bankruptcy estate to non-party Fiduciario, LLC (“Fiduciario”). (Dkt. No. 93 

at 1–2). Fiduciario is an entity owned 50% by Plaintiff Veritas Vincit and 50% by non-party 

4222014, LLC, which is itself 100% owned and managed by Jacob Watters. (Dkt. No. 114 at 3).

Fiduciario was formed on March 30, 2024 (two days before it was used to purchase Reticulum). 

(Id.).

On April 3, 2024, two days after Fiduciario purchased Defendant Reticulum at auction, 

Plaintiffs requested that the Durham Defendants promptly produce the Withheld Documents. (Id.). 

Attached to this request was a letter from Reticulum that directed the Durham Defendants to 

produce the Withheld Documents and waived Reticulum’s privilege claims over the same:

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(Dkt. No. 93-1 at 3 (highlighting added by Plaintiffs)). This letter from Reticulum was signed by 

Plaintiff Dean “on behalf of” Plaintiff Veritas Vincit, as well as by Watters on behalf of 4222014, 

LLC. (Id.). Upon motion by the Plaintiffs, the Court ordered the Durham Defendants to produce

the Withheld Documents as no valid privilege claim remained. (Dkt. No. 101). The Durham 

Defendants now contend that Plaintiffs effectively control Defendant Reticulum in this action and, 

as a result, no genuine “case or controversy” remains to be decided by this Court, necessitating

dismissal. (Dkt. No. 111).

II. MOTION FOR LEAVE

In the Motion for Leave, the Durham Defendants argue that “[g]ood cause exists [for leave 

to file the Motion to Dismiss] because the lack of genuine adversity between the parties cannot be 

waived, cannot be cured, and requires the Court to dismiss.” (Dkt. No. 110 at 1). The Durham 

Defendants further state that “[t]here is no prejudice to the parties because parties cannot waive 

such a defect in the Court’s authority to hear a suit, and the court can raise the issue sua sponte at 

any time in the proceeding either at trial or on appeal.” (Id. at 2).

In response, Plaintiffs argue that that leave to file the Motion to Dismiss should be denied 

because the Durham Defendants “knew, at least as early as April 3, 2024 (when Reticulum waived 

privilege), that Reticulum’s new owner was Fiduciario, and that Plaintiff Veritas Vincit was a 

member of Fiduciario and Plaintiff Dean acted on behalf of Veritas Vincit.” (Dkt. No. 114 at 17).

Plaintiffs argue that “[w]hile lack of subject-matter jurisdiction may generally be raised at any time 

(including on appeal), and the Court may sua sponte address its own subject-matter jurisdiction, 

that does not justify the Durham Defendants’ failure to comply with the Court’s Docket Control 

Order [to file motions that may require a hearing by April 30, 2024].” (Id.).

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The Court finds that given the recent nature of the precipitating events giving rise to the 

Motion to Dismiss—namely, Fiduciario’s acquisition of Defendant Reticulum in April of this year, 

the parties’ briefing on the motion to compel, and the issuance of the Court’s Order on the same 

on July 11, 2024 (Dkt. No. 101)—the Durham Defendants have not been dilatory in bringing the 

Motion to Dismiss. Moreover, “it is the duty of a court to make such inquiry, in order that it may 

not be imposed on by an apparent controversy to which there are really no adverse parties.” 

Hatfield v. King, 184 U.S. 162, 165 (1902). As such, the Court finds good cause exists for granting 

the Durham Defendants leave to file the Motion to Dismiss.

Having considered the Motion for Leave, and having found that good cause supports 

granting the Durham Defendants leave to file the Motion to Dismiss, the Court finds that the 

Motion for Leave should be and hereby is GRANTED.

III. MOTION TO DISMISS

Having determined that Plaintiffs’ Motion to Dismiss (Dkt. No. 111) is properly before it, 

the Court next addresses the merits.

A. Whether the Court Has Jurisdiction to Hear the Claims Against Reticulum

In the Motion to Dismiss, the Durham Defendants argue that “[b]ecause Plaintiffs Veritas 

and Dean now own and control Reticulum, which is the primary defendant, this litigation has 

ceased to be between genuinely adverse parties and, therefore, the Court lacks authority under 

Article III of the Constitution to render any judgment and should dismiss the suit.” (Dkt. No. 111 

at 1). The Durham Defendants contend that “Plaintiffs have already puppeted Defendant 

Reticulum in this case to waive privilege over withheld documents, and already enlisted the Court 

to issue rulings against the Durham Defendants by manipulating parties on both sides of this nowpretend dispute between non-adverse parties.” (Id. at 1–2). The Durham Defendants argue that 

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“[t]he Supreme Court has been clear that where, such as here, a party controls both the plaintiff 

and defendant to a lawsuit, there is no Constitutional ‘case’ or ‘controversy’ for a court to 

adjudicate,” requiring dismissal. (Id. (citing South Spring Hill Gold Min Co. v. Amador Medean 

Gold Min Co., 145 U.S. 300, 301 (1892) (“We cannot ... consent to determine a controversy in 

which the plaintiff has become the dominus litis on both sides.”))).

With respect to its allegation that Plaintiffs control Reticulum, the Durham Defendants note 

that “Plaintiffs have [] submitted records to the Court reflecting that Fiduciario owns Reticulum, 

that Plaintiff Veritas is a member of Fiduciario, that Plaintiff Dean is a member of Plaintiff Veritas, 

and that Plaintiff Dean has authority to sign a letter on behalf of Reticulum.” (Id. at 4 (citing Dkt. 

No. 93-1 at 3 (April 3, 2024 letter from Fiduciario, signed by Dean and Watters representing 

members of Fiduciario, directing the production of Reticulum’s privileged documents); Dkt. No. 

47-3 (Bill of Sale and Assignment of Member Interest of Reticulum to Fiduciaro listing Dean as 

Fiduciario’s “Manager”)), 9 (citing Dkt. No. 47-4 at 3 (Report of Sale listing the purchaser of 

Reticulum as “Fiduciario, LLC, as the designee and assignee of Jacob F. Watters and William Berry 

Dean, III (the Buyers)”).6 Defendants argue that “[w]hile Plaintiffs may assert that they do not 

fully own and control Defendant Reticulum due to their creation of new entities and the obtuse 

relationships between the companies involved, it is clear that both Plaintiffs and Defendant 

Reticulum now ‘serv[e] the same masters’ in relation to this lawsuit as a result of Defendant 

Reticulum’s waiver of privilege.” (Id. at 9 (quoting Nikko Trading of Am. Corp. v. WasteMasters, 

Inc., No. 3:98-CV-0048, 2000 WL 284190, at *2 (N.D. Tex. Mar. 14, 2000))). 

6 Furthermore, the Durham Defendants contend, “the documents submitted to the Court by Plaintiffs also reflect that 

Plaintiffs’ legal counsel almost certainly also represents Reticulum, considering that Plaintiffs’ legal counsel 

transmitted the letter from Reticulum—signed by Dean—to Durham Defendants’ counsel.” (Id. (citing Dkt. No. 93-1 

at 1–2)). The Court finds such argument unconvincing on the limited evidence presented and need not reach it to 

dispose of this issue.

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In response, Plaintiffs argue that “neither Plaintiff (including via Reticulum’s owner 

Fiduciario) owns or controls Reticulum, so there remains a live case-and-controversy even as to 

Reticulum.” (Dkt. No. 114 at 1). Specifically, Plaintiffs contend that “Plaintiff Vertis Vincit is only 

a 50% owner of Reticulum’s current owner (Fiduciario, LLC (‘Fiduciario’)),” and that “[t]he other 

50% of Fiduciario is held by a non-party (4222014, LLC, which is owned by yet another nonparty, Jacob Watters).” (Id.). Plaintiffs argue that “[b]ecause Plaintiffs do not own or control 

Reticulum, nor do they own more than 50% of Reticulum’s owner (Fiduciario), the Court should 

deny the Durham Defendants’ Motion,” as “[a] 50% owner of an LLC (such as Fiduciario) cannot, 

on its own, direct the filing and prosecution of a lawsuit, as such activities are not within the 

ordinary course of an LLC’s business.” (Id. at 5–6 (internal quotations omitted)). In sum, Plaintiffs 

argue that “because neither Plaintiff owns a controlling interest in Defendant Reticulum’s owner—

Fiduciario—the Court should deny the Durham Defendants’ Motion to Dismiss.” (Id. at 12). 

The Court finds that Plaintiffs do in fact control Defendant Reticulum and that no case or 

controversy exists between Plaintiffs and Reticulum, necessitating Reticulum’s dismissal from the 

present case. As Plaintiffs note, subject matter jurisdiction and standing are assessed on a partyby-party, claim-by-claim basis. TransUnion LLC v. Ramirez, 594 U.S. 413, 431 (2021) 

(“[S]tanding is not dispensed in gross; rather, plaintiffs must demonstrate standing for each claim 

that they press and for each form of relief that they seek (for example, injunctive relief and 

damages).”). Here, Plaintiffs do not contest that if they are found to control Defendant Reticulum, 

then no genuine “case or controversy” exists as to that entity; rather, Plaintiffs only argue that they 

do not in fact own and control Defendant Reticulum. See, e.g., (Dkt. No. 114 at 1, 6, 12). On the 

record before it, the Court rejects that argument.

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As of April 1, 2024, Defendant Reticulum became wholly owned by Fiduciario. (Dkt. No. 

114 at 3). Fiduciario is 50% owned by Plaintiff Veritas Vincit, which itself is roughly 98% owned 

by the William B. Dean, III Irrevocable Trust—an irrevocable trust set up for Plaintiff Dean’s 

benefit. (Id. at 3–4). The remaining 50% of Fiduciario is owned by 4222014, LLC, which is itself 

owned 100% by Jacob Watters. (Id. at 3).

As explained in the Background section, Jacob Watters is not some disinterested third party

as Plaintiffs seem to suggest. See supra §§ I.A.–I.B. Quite to the contrary, Watters was the CEO 

of Total Operating at the time the initial dispute arose between these parties, was himself the 

subject of numerous lawsuits brought by Reticulum over the same transaction—at least three of 

which feature in Plaintiffs’ claims of malicious civil and criminal prosecution in this case—and 

was himself brought to bankruptcy by Reticulum’s suits. See id. (Proceedings #3, 6, and 11 all 

naming Jacob Watters specifically); In re Dean, No. 19-31232, 2021 WL 5762947, at *1 (Bankr. 

N.D. Tex. Dec. 3, 2021) (“Watters later himself filed a Chapter 7 case after the Final Arbitration 

Award against him.”); In re Watters, No. 20-30553, 2021 WL 3744408 (Bankr. N.D. Tex. Aug. 24, 

2021). Indeed, Plaintiffs cite testimony from Watters in support of their claims in this case. See, 

e.g., (Dkt. No. 63 at 29 (“[A]s Dean and Watters have consistently and adamantly testified . . . .”) 

(emphasis added) (citing Dkt. No. 63-66, ¶¶ 5, 112, 114)). Jacob Watters has also submitted

declarations in this case in support of Plaintiffs. See, e.g., (Dkt. No. 63-5 (Declaration of Jacob 

Watters)). To argue that Watters is some disinterested third party, as opposed to one aligned in 

interest with Plaintiffs, strains credulity; rather, Watters is a central figure in both the underlying 

dispute and many of the cases which Plaintiffs now point to in support of their claims for malicious 

prosecution. Even though they might like it to be, Watters’ 50% ownership of Fiduciario is not a 

magic wand waiving over this issue in Plaintiffs’ favor.

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The form of ownership of Reticulum being currently structured such that Plaintiffs share

full ownership of that entity with a fully aligned individual (Jacob Watters) does not allow or 

permit the Court to blind itself to the plain facts of this case. To permit such an apparent artifice of 

form over substance to rule the day would effectively destroy the Constitution’s limitation on 

federal courts’ authority to adjudicate only genuine cases or controversies. U.S. CONST. ART. 3, § 

2, cl. 1. As the Supreme Court has repeatedly explained, “no principle is more fundamental to the 

judiciary’s proper role in our system of government than the constitutional limitation of federalcourt jurisdiction to actual cases or controversies.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 

408 (2013) (quoting DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341 (2006)). The Court has 

emphasized the necessity of looking past the nominal posture of the parties to determine whether 

a genuine case or controversy actually exists. See, e.g., Lord v. Veazie, 49 U.S. 251, 255 (1850) 

(“[A]ny attempt, by a mere colorable dispute, to obtain the opinion of the court upon a question of 

law which a party desires to know for his own interest or his own purposes, when there is no real 

and substantial controversy between those who appear as adverse parties to the suit, is an abuse 

which courts of justice have always reprehened[.]”) (emphasis added). Upon inspection, it is clear 

to this Court that no genuine case or controversy exists as to these parties.

When Plaintiffs, acting through an entity who they control (Fiduciario), acquired 

Defendant Reticulum, they eliminated any genuine case or controversy between themselves and 

Reticulum. See Arizonans for Off. Eng. v. Arizona, 520 U.S. 43, 71 (1997) (“[F]ederal courts lack 

[] authority to act in friendly or feigned proceedings.”).7 Even absent concerns of collusion

(discussed in greater detail hereafter), “a federal court [can]not adjudicate an action between two 

7 It is immaterial that Fiduciario only acquired Reticulum years into this proceeding because “[t]o qualify as a case fit 

for federal-court adjudication, ‘an actual controversy must be extant at all stages of review, not merely at the time the 

complaint is filed.’” Id. at 64, 70 (quoting Preiser v. Newkirk, 422 U.S. 395, 401 (1975)).

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corporations controlled by the same person, even if one of the corporations ha[s] some minority 

shareholders.” Dasma Invs., LLC v. Realty Assocs. Fund III, L.P., 459 F. Supp. 2d 1294, 1304 (S.D. 

Fla. 2006) (dismissing claims brought by plaintiff Dasma against defendant PWC due to lack of a 

justiciable case or controversy where “[i]t is undisputed that Ms. Padron controls both Dasma and 

PWC: she is the only member and registered agent of Dasma (the plaintiff), and she is the majority 

shareholder and sole officer of PWC (one of the defendants)”); see also S. Spring Hill Gold-Min. 

Co., 145 U.S. at 301 (holding that where on appeal “the control of both the corporations, parties 

to this suit, had come into the hands of the same persons,” “the litigation has ceased to be between 

adverse parties, and the case therefore falls within the rule applied where the controversy is not a 

real one” regardless of minority shareholders in one of the corporations).

The Court is left without any reasonable doubt that Plaintiffs—with the passive consent of, 

or in active coordination with, Jacob Watters—effectively control Defendant Reticulum. As noted 

by the Durham Defendants, Plaintiffs have placed documents in the record reflecting that: (1) 

Plaintiff Dean is a Manager of Fiduciario (Dkt. No. 47-3 at 5; Dkt. No. 114 at 3); (2) Plaintiff Dean 

is authorized to sign for Plaintiff Veritas (id.); (3) Plaintiff Veritas is a member of Fiduciario (Dkt. 

No. 114 at 3); (4) interested-party Jacob Watters, through 4222014, LLC, is the only other member 

of Fiduciario (id.); (5) Fiduciario owns Defendant Reticulum (id.); and (6) Fiduciario is the 

designee and assignee of Plaintiff Dean and Jacob Watters (Dkt. No. 47-4 at 3). Moreover, 

Plaintiffs have exerted control over Reticulum in this case specifically to gain advantage over 

Defendants by intentionally waiving Reticulum’s privilege over thousands of documents held by 

the Durham Defendants. Notably, Reticulum’s waiver of privilege was signed by Plaintiff Dean 

and Mr. Watters:

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(Dkt. No. 93-1 at 3 (highlighting added by Plaintiffs)). It is also clear to the Court that Plaintiffs, 

in conjunction with Watters, purchased Defendant Reticulum from Defendant Brown’s bankruptcy 

estate for the purpose of gaining a material advantage in this lawsuit. Simply put, Plaintiffs were 

too clever by a half. In so doing, they have deprived this Court of jurisdiction over their claims 

against Reticulum. S. Spring Hill Gold-Min. Co., 145 U.S. at 301 (“We cannot . . . consent to 

determine a controversy in which the [plaintiff] has become the dominus litis on both sides.”). As 

a result, the Court has no alternative but to dismiss Plaintiffs’ claims against Defendant Reticulum,

as no genuine case or controversy exists any longer between those parties.

B. Whether the Court Has Jurisdiction to Hear the Remaining Claims

The Court next addresses the question of whether dismissal of the claims against Reticulum 

also necessitates dismissal of the claims against the Durham Defendants and Brown.

The Durham Defendants contend that “Reticulum is not only the sole defendant of 

Plaintiffs’ malicious civil prosecution claim, but also the primary defendant forming the linchpin 

of the entire conspiracy alleged in relation to each of Plaintiffs’ claims.” (Dkt. No. 111 at 4). The 

Durham Defendants argue that “[t]he Court should not allow Plaintiffs to continue to use their 

dominance over Defendant Reticulum to gain an unconstitutional advantage against the Durham 

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Defendants, whom Plaintiffs seek to hold jointly and severally liable with Defendant Reticulum 

for actions allegedly taken on behalf of Defendant Reticulum.” (Id. at 2).

In response, Plaintiffs first contend that “there is no such thing as a ‘primary defendant’

(contrary to the Durham Defendants’ argument) when it comes to a conspiracy, as all members of 

the conspiracy are jointly and severally liable for acts taken by any member of the conspiracy.” 

(Dkt. No. 114 at 9). As such, Plaintiffs argue, “the Durham Defendants are each liable for their 

own tortious acts of conspiring against Dean to maliciously prosecute him civilly and criminally.” 

(Id. at 10).

Plaintiffs next argue that the Court should “reject the Durham Defendants’ argument that 

somehow Plaintiffs will manipulate Defendant Reticulum to prejudice the Durham Defendants,” 

as “Reticulum has not litigated the case and has never had counsel appear in the case on its behalf” 

and “the Court entered default against Reticulum as of April 20, 2023.” (Id.). Plaintiffs explain that 

“[a]fter Fiduciario purchased Reticulum in April 2024, Reticulum did not become an active 

participant in the case,” and that “Reticulum still remains in default, still remains without counsel, 

and still has not filed any pleadings.” (Id.).

Finally, Plaintiffs argue that “even if there were no longer any live case-or-controversy with 

respect to Plaintiffs’ claims against Reticulum, Plaintiffs’ claims against Brown and the Durham 

Defendants would remain very much alive,” as “Plaintiffs assert a malicious criminal prosecution 

claim against Brown, and assert that Brown and the Durham Defendants conspired to commit 

malicious criminal prosecution and malicious civil prosecution.” (Id. at 13). In sum, Plaintiffs 

argue that “[b]ecause Plaintiffs did not to have to sue Reticulum in this case for Plaintiffs to assert 

claims against Brown and the Durham Defendants, there is no reason why any dismissal of 

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Reticulum years into the lawsuit should also work a dismissal of Plaintiffs’ claims against Brown 

and the Durham Defendants.” (Id. at 16).

As an initial matter, the Court agrees with Plaintiffs that the dismissal of Reticulum 

provides no basis to dismiss Plaintiffs’ claim for malicious criminal prosecution in its entirety. The 

same is true as to Plaintiffs’ conspiracy claim which alleges that the Durham Defendants and 

Brown (independent of Reticulum) conspired to commit malicious criminal prosecution.8

However, that does not mean that Plaintiffs can continue to make their claim for conspiracy to 

commit malicious civil prosecution, in which Reticulum was the only entity alleged to have 

committed the underlying tort. Neither can Plaintiffs rely upon the actions of Reticulum (as 

opposed to Brown and the Durham Defendants) to support their claim of conspiracy to commit 

malicious criminal prosecution. To hold otherwise would allow Plaintiffs to collude with 

Reticulum to the detriment of the other defendants in this case. While this result naturally flows

from the Court’s finding that Plaintiffs control Reticulum, the Court believes that further analysis 

of Supreme Court precedent on collusive cases is helpful to explain why such a result is not only 

necessary but just in this case.

The Supreme Court’s decision in Cleveland v. Chamberlain is instructive. In that case, the 

Supreme Court dealt with a similarly “collusive” action and found dismissal necessary. 66 U.S. 

419 (1861). In Cleveland, during the process of appeals, the appellant, Chamberlain, bought 

appellee, Cleveland, which included an assignment of Cleveland’s cause of action. Id. at 421–22. 

There, dismissal was urged by third parties who claimed they would be harmed if Chamberlain 

8 The Durham Defendants contend that “the only claim asserted against the Durham Defendants is a conspiracy claim,” 

meaning that “Plaintiffs’ allegations regarding Defendant Reticulum are the linchpin for all of their claims against the 

Durham Defendants.” (Dkt. No. 111 at 11). However, Defendants ignore that Plaintiffs have also sued Defendant 

Brown for malicious criminal prosecution (in addition to Reticulum) and have alleged that the Durham Defendants 

conspired with Defendant Brown in committing that tort. As such, there still exists a genuine case or controversy 

between Plaintiffs and the Durham Defendants for the Durham Defendants’ alleged conspiracy with Defendant Brown 

to commit malicious criminal prosecution.

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was successful in having the collusive appeal resolved successfully in his favor. Id. at 422–23. 

Upon review of the facts, the Court in Cleveland concluded in a unanimous opinion that such a 

case could not continue: 

This appeal must be dismissed. Selah Chamberlain is, in fact, both 

appellant and appellee. By the intervention of a friend he has 

purchased the debt demanded by Cleveland in his bill, and now 

carries on a pretended controversy by counsel, chosen and paid by 

himself, and on a record selected by them, for the evident purpose 

of obtaining a decision injurious to the rights and interests of third 

parties.

....

It is plain that this is no adversary proceeding, no controversy 

between the appellant and the nominal appellee. .... here, 

Chamberlain becomes the sole party in interest on both sides, makes 

up a record, and has a case made to suit himself, in order that he may 

obtain an opinion of this court, affecting the rights and interest of 

persons not parties to the pretended controversy.

Id. at 426 (emphasis added).

While the concern in Cleveland centered on the fact that appellant, through collusive action 

with appellee, may “obtain[] a decision injurious to the rights and interests of third parties,” such 

concern is equally applicable where, as here, Plaintiffs seek to hold Reticulum’s co-defendants 

jointly and severally liable with Reticulum. As the Court cautioned a decade before Cleveland, 

courts should be wary where “the plaintiff and defendant have the same interest, and that interest 

[is] adverse and in conflict with the interest of third persons, whose rights would be seriously 

affected if the question of law was decided in the manner that both of the parties to th[e] suit desire 

it to be.” Lord, 49 U.S. at 255. This Court is no less wary simply because those “third persons” are 

Reticulum’s co-defendants. See also United States v. Johnson, 319 U.S. 302, 305 (1943) (noting 

that “the honest and actual antagonistic assertion of rights to be adjudicated [is] a safeguard 

essential to the integrity of the judicial process”) (internal quotation omitted). If Plaintiffs are 

allowed to collude with Reticulum to hold the remaining defendants jointly and severally liable 

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for the resulting damages, Reticulum’s co-defendants will be injured by “the pretended 

controversy.” Cleveland, 66 U.S. at 426.

Another Supreme Court decision further illustrates this point. In American Wood-Paper 

Company v. Heft, the Court dismissed a patent infringement case on appeal where appellant had 

acquired the patents of appellee (upon which a defense to infringement was made in the lower 

court) and had granted appellee considerable stock in appellant as compensation. 75 U.S. 333, 335 

(1869). The Court explained the necessity of dismissal as follows: 

If anything further was necessary to show that the litigation is no 

longer a real one, even if the suit should proceed, and the question 

of damages be reached, there would be the same interest on both 

sides, Dixon, one of the defendants, since the sale of his patents, 

having a large interest on the side of the complainants, and, as 

defendant, would be subject to his payment of part, or the whole 

amount, of the damages recovered. Indeed, the weight of the proofs 

is, that he has bound himself to keep his co-defendants harmless.

Id. at 336–37 (emphasis added). So too here, by acquiring and controlling Reticulum with respect 

to this action, Plaintiffs cannot now seek to hold Reticulum’s co-defendants liable for Reticulum’s 

actions in any conspiracy. Instead, as in American Wood-Paper Company, Plaintiffs have “bound 

[themselves] to keep [Reticulum’s] co-defendants harmless.” Id. at 337.

While Plaintiffs note that “[a]fter Fiduciario purchased Reticulum in April 2024, Reticulum 

did not become an active participant in the case” (Dkt. No. 114 at 10), Plaintiffs fail to appreciate 

that Reticulum’s inaction, in of itself, illustrates the issue. Plaintiffs, through their purchase and 

control of Reticulum, have effectively bought and guaranteed its silence. That Reticulum “still 

remains in default, still remains without counsel, and still has not filed any pleadings” is precisely 

the issue. Plaintiffs affirmative conduct has ensured that Reticulum will mount no defense to their 

accusations—accusations which implicate Reticulum’s co-defendants. While perhaps not as 

blatantly corrupt as puppeting a strawman defendant at trial, it no less implicates the concerns 

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regarding collusive suits espoused by the Supreme Court. Moreover, as discussed above, Plaintiffs 

have controlled Reticulum to take affirmative action with respect to this case by waiving privilege 

over, and directing the production of, the Withheld Documents held by the Durham Defendants. 

Having acted once, it can easily act again and as needed to protect and benefit its true masters. For 

the reasons described herein, the Court finds and makes clear that the only parties that remain in 

this case are Plaintiffs, Defendant Brown, and the Durham Defendants, and no acts or omissions

of Reticulum, now owned and controlled by Plaintiffs (in conjunction with Watters), may be used 

to prove or support Plaintiffs’ claims against Brown and the Durham Defendants.

C. Conclusion

Having considered the Motion to Dismiss, the Court finds that it should be GRANTEDIN-PART. Accordingly, Plaintiffs’ claims of malicious civil prosecution, malicious criminal 

prosecution, and conspiracy against Defendant Reticulum are DISMISSED WITHOUT 

PREJUDICE for lack of subject matter jurisdiction. It is further ORDERED that Plaintiffs may 

not rely upon any actions or conduct of Reticulum to prove or support Plaintiffs’ claim of malicious 

criminal prosecution against Brown or Plaintiffs’ claim of conspiracy against Brown and the 

Durham Defendants. As a result of the Court’s order, the Court reiterates that the only claims that 

remain live and actionable in this suit are Plaintiffs’ claims that: (1) Brown committed malicious 

criminal prosecution; and (2) the Durham Defendants and Brown conspired to commit such 

malicious criminal prosecution. It is so ORDERED.

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____________________________________

RODNEY GILSTRAP

UNITED STATES DISTRICT JUDGE So ORDERED and SIGNED this 25th day of July, 2024.

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