Court Opinion

ID: 3208230
Source: CourtListenerOpinion
Date Created: 2016-06-01 10:08:42.840323+00
Date Added: 2024-06-11T14:29:06.469579
License: Public Domain

ACCEPTED
                                                                                03-16-00230-CV
                                                                                      10897417
                                                                     THIRD COURT OF APPEALS
                                                                                AUSTIN, TEXAS
                                                                           5/31/2016 3:31:15 PM
                                                                              JEFFREY D. KYLE
                                                                                         CLERK
                     NO. 03-16-00230-CV

                IN THE COURT OF APPEALS               FILED IN
                                               3rd COURT OF APPEALS
           FOR THE THIRD DISTRICT OF TEXAS AUSTIN, TEXAS
                        AT AUSTIN              5/31/2016 3:31:15 PM
___________________________________________________________
                                                 JEFFREY D. KYLE
                                                             Clerk
       TEXAS HALO J4T MANAGEMENT, LLC, ET AL.
                               Appellant,
                             vs.
                 DAVID STEAKLEY, ET AL
                                     Appellees.
___________________________________________________________

                       On Appeal from the
        98th Judicial District Court, Travis County, Texas
            Trial Court Cause No. D-1-GN-15-004109
___________________________________________________________

   HALO FUND MANAGER APPELLEES’ OPPOSITION TO
      APPELLANT’S “NOTICE OF INTENT TO DISMISS”
___________________________________________________________

                                   REAGAN D. PRATT
                                   State Bar No. 00788218
                                   Pratt & Flack, LLP
                                   1331 Lamar, Suite 1250
                                   Houston, Texas 77010
                                   Telephone: (713) 936-2402
                                   Facsimile: (713) 481-0231

                                   Attorneys for Appellees David Steakley,
                                   Andrew Clark, William Wheelock, and
                                   Robert Tucci
      Appellees David Steakley, Andrew Clark, William Wheelock, and Robert

Tucci (the “Halo Fund Managers”) ask the Court to not dismiss this appeal until

Appellant has had an opportunity to consider the waiver offered herein.

                                       Background Facts
      Appellant Victor Elgohary is a serial pro se litigant who happens to be an

attorney. He has filed at least 15 lawsuits on his own behalf over the last few

years. This is at least the fourth time that Elgohary has personally sued someone

for allegedly defaming him, and at least the third time that he has asserted personal

claims against a non-profit corporation while purporting to bring the suit

derivatively on behalf of the non-profit. Two of his prior defamation suits were,

just like this one, against former co-workers who allegedly questioned his

competence and professionalism. Despite sanctions and attorneys’ fees awards

issued against him in prior suits, Elgohary continues to abuse the courts with

vindictive litigation.

      This time, Elgohary purported to sue on behalf of Houston Angel Network,

Inc. (“HAN”),1 a non-profit, volunteer-run corporation; an affiliated entity, Texas

Halo Fund I, LLC (“Halo Fund”), and two of Halo Fund’s subsidiaries. He

claimed to have authority to act for those entities even though he had held no office

with HAN since it declined to renew his officer position in January 2014, and he

  1
      HAN has recently changed its name to “The Houston Texas Angel Network, Inc.”

                                                   2
was removed from any roles with the Halo Fund entities—by the unanimous vote

of all those voting—in April 2015. He filed this suit in retribution for that firing,

naming as defendants all 14 of the real directors and managers of those entities.

      The Appellants identified above as the Halo Fund Managers are the real

Halo Fund managers, who had successfully sought Elgohary’s removal from the

board of managers.

      Elgohary also purported to sue derivatively on behalf of the Halo entities,

based on the fact that he is one of 67 members of the Halo Fund.

                            The Trial Court Judgment
      The Defendants challenged Elgohary’s suit with a Rule 12 motion to show

authority, plea to the jurisdiction and motion to dismiss. After an evidentiary

hearing, the trial court granted the Defendants’ motions. The court ordered that

Elgohary could not appear as an attorney in this cause, and that his pleadings

should be stricken. The court expressly found that Elgohary lacked standing to sue

derivatively on behalf of any of the purported plaintiff entities “because he cannot

fairly and adequately represent the interests of any of those entities in a derivative

lawsuit,” and because he did not make an adequate written demand to the entities

before filing the suit. See Exhibit A.

                                          3
                     Elgohary’s “Notice of Intent to Dismiss”
      On May 13, 2016, the clerk of this court wrote to Elghoary about his failure

to pay for the clerk’s record that he had asked the district clerk to prepare. The

clerk notified Elgohary that his failure to make payment arrangements might result

in the dismissal of his appeal.

      Elgohary responded on May 18, advising the Court that he no longer wished

to pursue this appeal because “Appellants” have refiled certain claims in Harris

County District Court, and “have also made a new derivative demand upon certain

Appellees.” By “Appellants,” Elgohary apparently means himself, personally.

                   The Halo Fund Managers Waive Reliance on
                      Elgohary’s Failure to Make Demand
      Elgohary apparently believes that by dismissing this appeal he can avoid the

collateral estoppel effect of the trial court’s finding that “he cannot fairly and

adequately represent the interests of any of [the subject] entities in a derivative

lawsuit.” By making a “new derivative demand,” he apparently believes that he

can re-litigate the issue of his suitability as a derivative plaintiff, in a new venue.

      Elgohary’s understanding of the law of collateral estoppel in incorrect. To

avoid any doubt, however, the Halo Fund Managers hereby waive any argument in

this appeal that the trial court’s order as to Elghohary’s lack of standing to bring a

derivative action against them can be sustained solely on his failure to make an

adequate written demand. The Halo Fund Managers stipulate, for the purpose of

                                            4
this appeal, that the trial court’s order as to Elghohary’s lack of standing to bring

derivative claims against them should be affirmed only on the basis that Elgohary

cannot fairly and adequately represent the interests of any of the subject entities in

a derivative lawsuit.

           Request for Elgohary to Have an Opportunity to Respond
      In light of this waiver and stipulation, the Halo Fund Managers ask the court

to give Elgohary a further opportunity to decide whether he wants to continue this

appeal, or dismiss it.

                                       Respectfully Submitted,

                                       PRATT & FLACK LLP

                                       By: /s/ Reagan D. Pratt
                                         Reagan D. Pratt
                                         State Bar No. 00788218
                                         4306 Yoakum Blvd., Suite 500
                                         Houston, Texas 77006
                                         Telephone: (713) 936-2402
                                         Facsimile: (713) 481-0231
                                         Email: rpratt@prattflack.com

                                           Attorney for Appellees,
                                           David Steakley, et al.

                                          5
                         CERTIFICATE OF SERVICE
      I hereby certify that I caused a true and correct copy of the foregoing to be
served on the following counsel of record on this the 27th day of May, 2016.

Victor S. Elgohary
6406 Arcadia Bend Court
Houston. TX 77041
Telephone: 281-858-0014
Email: victor@velgohary.com

Mitchell D. Savrick
David A. Buono II
The Overlook at Gaines Ranch
4330 Gaines Ranch Loop, #150
Austin TX 78735
Email: mitchell@ssjmlaw.com
Email: david@ssjmlaw.com

Thomas A. Zabel
Zabel Freeman
1135 Heights Boulevard
Houston, TX 77008
Email: tzabel@zflaw.com

                                              /s/ Reagan D. Pratt
                                            Reagan D. Pratt

                                        6
                                                                               Filed in The District Court
                                                                                of Travis County, Texas

                                                                                    JAN 13 2016
                                CAUSE NO. D-1-GN-15-004109                   At      ~~ 'L/f AM.
                                                                           Velva L. Price, District 'clerk
TEXAS HALO J4T MANAGEMENT,                    §                    IN THE DISTRICT COURT OF
LLC, ct al.                                   §
                                              §
w.                                            §                       TRAVIS COUNTY, TEXAS
                                              §
HOUSTON ANGEL NETWORK, INC.,                  §
ctd.                                          §                           98TH JUDICIAL DISTRICT

                        ORDER ON DEFENDANTS'
         MOTIONS TO SHOW AUTHORJTY, PLEAS TO THE JURJSDICTION,
                        and MOTIONS TO DISMISS

       On this day came to be heard the Defendants' Motions to Show Authority, Pleas to the

Jurisdiction and Motions to Dismiss.

       The Court finds that Victor Elgohary has not sustained his burden of proving that he has

been authorized, by any of the entities named as plaintiffs in this cause, to file suit on behalf of

those entities. Therefore, pursuant to Rule 12 ofthe Texas Rules of Civil Procedure, it is

       ORDERED that Victor Elghohary may not appear as attorney in this cause. It is further

       ORDERED that the pleadings filed by Victor Elgohary in this cause be STRJCKEN.

       In addition and alternatively, the Comt finds that Victor Elghohary lacks standing to

bring any of the claims described in his pleadings. Among other things, Elgohary lacks standing

(either individually or derivatively) to assert claims on behalf of any of the entities for which he

purports to sue (Texas Halo J4T Management, LLC, Texas Halo J4T Affiliate Fund, LLC, Texas

Halo Fund I, LLC, and Houston Angel Network, Inc.) because he lacks authority to act on behalf

of those entities; because he has no individual standing to assert claims for damages allegedly

done to those entities; because he cannot fairly and adequately represent the interests of any of

those entities in a derivative lawsuit, due to his personal claims against the entities for damages

     Exhibit A                                    -l -

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          and attorneys' fees; because he did not make an adequate written demand to the entities before

          filing this purported derivative suit; and, with respect to two of those entities, because those

          entities never bought or sold the securities which are the subject to their purported claims.

                 Accordingly, the Defendants' Pleas to the Jurisdiction and Motions to Dismiss are

          GRANTED. It is therefore

                 ORDERED that all claims of all purported plaintiffs are DISMISSED for lack of subject

          matter jurisdiction.

                 This is a final judgment, disposing of all parties and all claims. Any and all relief sought

          in this case and not granted herein is denied.

                 Sigoohhi•       /3 .,,,r~~'· ,]._oJ~

                                                           - 2.

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