Court Opinion

ID: 4055212
Source: CourtListenerOpinion
Date Created: 2016-09-29 06:43:53.068063+00
Date Added: 2024-06-11T13:56:19.480683
License: Public Domain

ACCEPTED
                                                                                      01-15-00423-CV
                                                                           FIRST COURT OF APPEALS
                                                                                   HOUSTON, TEXAS
                                                                                 5/8/2015 10:13:28 AM
                                                                                CHRISTOPHER PRINE
                                                                                               CLERK

                           No. 01-15-00423-CV
                                                                     FILED IN
                                                              1st COURT OF APPEALS
                                                                  HOUSTON, TEXAS
                          In the Court of Appeals
                                                              5/8/2015 10:13:28 AM
                   For the First Judicial District of Texas
                                                              CHRISTOPHER A. PRINE
                               Houston, Texas                         Clerk

 In re 8650 Frisco, LLC; Estilo Gaucho Brazilian Steakhouse; Mandona, LLC;
  Galovelho, LLC; Bahtche, LLC; Claudio Nunes; and David Jeiel Rodrigues,
                                   Relators

                     The Honorable Jaclanel McFarland,
      133rd Judicial District Court of Harris County, Texas, Respondent
                    Arising out of Cause No. 2014-10896

 Real Parties in Interest’s Response to Motion for Emergency Temporary
                  Relief to Stay Action by the Trial Court

Hawash Meade Gaston      Stephens & Domnitz, Dykema Cox Smith
Neese & Cicack LLP       PLLC

Andrew K. Meade          Kelly D. Stephens            David Kinder
State Bar No. 24032854   State Bar No. 19158300       State Bar No. 11432550
Samuel B. Haren          P.O. Box 79734               112 East Pecan Street,
State Bar No. 24059899   Houston, Texas 77279         Suite 1800
2118 Smith Street        281-394-3287 (phone)         San Antonio, Texas
Houston, Texas 77002     832-476-5460 (fax)           78205
713-658-9001 (phone)     kstephens@stephensdom        210-554-5500 (phone)
713-658-9011 (fax)       nitz.com                     210-226-8395 (fax)
ameade@hmgnc.com
sharen@hmgnc.com
                                   Background

       Real Parties in Interest (“Los Cucos”) have a pending claim against Relators

(“8650 Frisco”) for breach of the parties’ settlement agreement (the “Settlement

Agreement”). See Exhibit 1, Fourth Amended Petition at ¶¶ 32–40. Under the

Settlement Agreement, 8650 Frisco is required to pay $900,000 to Los Cucos over

a period of five years. Id. at ¶ 33. Los Cucos’ suit against 8650 Frisco is premised,

in part, on 8650 Frisco’s refusal to execute a promissory note and UCC-1 form.

See id. at ¶¶ 34–36. As a result, Los Cucos has taken-on an unbargained-for credit

risk. The magnitude of this risk—and the attendant harm and damages resulting

therefrom—hinges on 8650 Frisco’s financial condition. Los Cucos seeks damages

and, in the alternative, specific performance of 8650 Frisco’s obligation to execute

the relevant documents. See id. at ¶ 42; Exhibit 2, Supplement to Fourth Amended

Petition at ¶ 3.

       Over a year ago, Los Cucos requested that 8650 Frisco produce certain

financial and accounting documents (the “Financial Documents”). The Court

ordered 8650 Frisco to produce the Financial Documents on June 13, 2014; July

28, 2014; April 1, 2015; and April 27, 2015. See Exhibit 3, Hearing Transcript at

23:2–4; Exhibit 4, Order on Third Motion to Compel; Exhibit 5, Order Granting in

Part and Denying in Part Motion to Enforce the Court’s Order; Exhibit 6, Order

Granting Plaintiffs’ Third Motion to Enforce the Court’s Order (the “April 27

                                         1
Order”). The last of these four orders included (1) a monetary sanction of $1,000

and (2) a finding conclusively establishing the irreparable harm element of Los

Cucos’ specific performance claim. See Exhibit 6, April 27 Order.

       Los Cucos believes that 8650 Frisco still has not complied with the April 27

Order. See Exhibit 7, Fourth Motion to Enforce the Court’s Order and for

Sanctions. Los Cucos has filed yet another motion to enforce the trial court’s order;

that motion is set for hearing on May 18, 2015. See Exhibit 8, Notice of Hearing.

                                       Discussion

       8650 Frisco’s Motion for Emergency Temporary Relief to Stay Action by

the Trial Court (the “Motion”) is factually incorrect and legally insufficient. As

demonstrated below, the Motion should be denied in its entirety and the trial court

should be permitted to continue working toward a resolution of this case.

I.     8650 Frisco’s Motion misstates the facts.

       8650 Frisco’s Motion contains numerous factual misstatements. First, 8650

Frisco flatly asserts that the Financial Documents “have no relevance to the live

pleading on file with the trial court.” Motion at ¶ 7. This is incorrect as 8650

Frisco’s financial condition is relevant to assessing the harm/damages caused by

8650 Frisco’s breach of the Settlement Agreement.1

1
  In fact, 8650 Frisco has a pending no-evidence motion for summary judgment on this exact
issue, and Los Cucos requires the Financial Documents in order to fully respond thereto. See
Exhibit 9, No-Evidence Motion for Summary Judgment at ¶ 13; Exhibit 10, Los Cucos’
Supplemental Response at 1–2.

                                             2
      8650 Frisco next complains that the trial court “conclusively establish[ed] an

unpleaded issue in favor of [Los Cucos].” Motion at ¶ 8. This is a reference to the

irreparable harm element of Los Cucos’ request for specific performance. Compare

Exhibit 6, April 27 Order and Exhibit 2, Supplement to Fourth Amended Petition

at ¶ 3. In both its Motion and its petition for writ of mandamus, 8650 Frisco

appears to have simply forgotten that Los Cucos has sought specific performance.

      8650 Frisco further complains that it had already produced the Financial

Documents “twice previously.” Motion at ¶ 9. If this were true, 8650 Frisco could

avoid any harm—let alone irreparable harm—by simply sending the documents to

a courier and having the courier hand deliver those documents before the May 18,

2015 hearing. In truth, however, the April 27 Order was issued precisely because

8650 Frisco’s prior attempts at production were incomplete. 8650 Frisco has not

produced the requested Financial Documents, and any future complete production

would be the first.

      8650 Frisco next complains that the trial court signed the April 27 Order “in

the presence of Counsel for [Los Cucos] but outside the presence of [8650

Frisco’s] attorney.” Motion at ¶ 10. Because 8650 Frisco’s attorney chose to

appear telephonically, the entire hearing occurred outside of his presence.

Moreover, despite the nefarious implication 8650 Frisco seeks to make, the Court

                                         3
merely signed the proposed order filed by Los Cucos with its Motion to Enforce.

Compare Exhibit 6, April 27 Order and Exhibit 11, Proposed Order.

      Finally, 8650 Frisco complains that Los Cucos’ Fourth Motion to Enforce

the Court’s Order “demanded that the [trial court] strike [8650 Frisco’s] pleadings

for failure to comply” with the April 27 Order. Motion at ¶ 12. But Exhibit B to the

Motion plainly states that the only sanctions requested are (1) a monetary sanction

for the attorneys’ fees incurred in obtaining the Financial Documents, (2) an order

to 8650 Frisco and its attorneys to show cause as to why they should not be held in

contempt, and (3) an order barring 8650 Frisco from conducting further discovery.

See Motion Exhibit B at 6, 50. While such sanctions are admittedly harsh, they are

not requests to strike 8650 Frisco’s pleadings.

II.   8650 Frisco has not shown irreparable harm.

      8650 Frisco has shown that it disagrees with the trial court’s orders. It has

not shown that it faces irreparable harm unless the trial court’s proceedings are

stayed. Should the May 18, 2015 hearing go forward, 8650 Frisco is not threatened

with the loss of any property, the expiration of any deadlines, or the striking of its

pleadings. 8650 Frisco merely complains that, absent a stay, it will be required to

appear at a hearing on a motion which 8650 Frisco believes it should win. If that

were the standard for irreparable harm, every hearing could produce a petition for

                                          4
writ of mandamus, and every petition for writ of mandamus would result in a stay

of the trial court’s proceedings.

                                    Conclusion

      8650 Frisco has not accurately characterized this case, nor has it shown that

failure to stay the trial court would cause it any harm. Los Cucos prays that the

Court deny the Motion and grant Los Cucos all other relief to which it is entitled.

                                                 Respectfully submitted,

                                                 Hawash Meade Gaston
                                                 Neese & Cicack LLP

                                                 /s/ Samuel B. Haren
                                                 Andrew K. Meade
                                                 State Bar No. 24032854
                                                 Samuel B. Haren
                                                 State Bar No. 24059899
                                                 2118 Smith Street
                                                 Houston, Texas 77002
                                                 713-658-9001 (phone)
                                                 713-658-9011 (fax)
                                                 ameade@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

                                          5
                                                  Dykema Cox Smith

                                                  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 Real Parties in
                                                  Interest

                           Certificate of Compliance

      Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), this document

contains 1,062 words, not including portions excluded under Texas Rule of

Appellate Procedure 9.4(i)(1).

                                                           /s/ Samuel B. Haren
                                                                Samuel B. Haren

                                 Certificate of Service

      I hereby certify that a true and correct copy of the foregoing was served on

the following via electronic service on May 8, 2015:

      James C. Mosser
      Nicholas D. Mosser
      Paul J. Downey
      Mosser Law PLLC
      2805 Dallas Parkway, Suite 220
      Plano, Texas 75093

                                                           /s/ Samuel B. Haren
                                                                Samuel B. Haren

                                           6
                                     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 Amended Petition

       Plaintiffs Los Cucos Mexican Cafe VIII, Inc.; Los Cucos Mexican Cafe IV, Inc.; Manuel

Cabrera; and Sergio Cabrera file this Fourth Amended Petition against defendants 8650 Frisco,

LLC d/b/a Estilo Gaucho Brazilian Steakhouse; Mandona, LLC; Galovelho, LLC; Bahtche,

LLC; Claudio Nunes a/k/a Alex Nunes; and David Jeiel Rodrigues:

                                        Discovery Level

       1.      The plaintiffs intend to conduct discovery under Level 3 of Rule 190.3 of the

Texas Rules of Civil Procedure.

       2.      The plaintiffs seek damages within the jurisdictional limits of this Court,

including monetary relief over $1,000,000.

                                             Parties

       3.      Plaintiff, Los Cucos Mexican Cafe VIII, Inc. (“Los Cucos VIII”), is a Texas

Corporation with its principal place of business in Houston, Harris County, Texas.

       4.      Plaintiff, Los Cucos Mexican Cafe IV, Inc. (“Los Cucos IV”), is a Texas

Corporation with its principal place of business in Harris County, Texas.

                                        Exhibit 1                                       A-1
          5.    Plaintiff, Manuel Cabrera, is an individual who resides in Austin County, Texas.

          6.    Plaintiff, Sergio Cabrera, is an individual who resides in Harris County, Texas.

          7.    Defendant, 8650 Frisco, LLC (“8650 Frisco”), is a Texas limited liability

company doing business as Estilo Gaucho Brazilian Steakhouse. It has been served and appeared

herein.

          8.    Defendant, Mandona, LLC (“Mandona”), is a Texas limited liability company. It

has been served and appeared herein.

          9.    Defendant, Galovelho, LLC (“Galovelho”), is a Texas limited liability company.

It has been served and appeared herein.

          10.   Defendant, Bahtche, LLC (“Bahtche”), is a Texas limited liability company. It has

been served and appeared herein.

          11.   Defendant, Claudio Nunes a/k/a Alex Nunes (“Nunes”), is an individual citizen of

Texas. He has been served and appeared herein.

          12.   Defendant, David Jeiel Rodrigues (“Rodrigues”), is an individual citizen of

Texas. He has been served and appeared herein.

                                     Jurisdiction and Venue

          13.   Venue is proper under TEX. CIV. PRAC. & REM. CODE § 15.002(a)(1) because a

substantial part of the events giving rise to this lawsuit occurred within this county. More

specifically, Plaintiffs and Defendants negotiated and entered into, on the record, an agreement

to settle the underlying complaints of Plaintiffs. The negotiations leading to this settlement took

place in the offices of Hawash, Meade Gaston Neese & Cicack, LLP, located at 2118 Smith

Street, Houston, Harris County, Texas 77002.

          14.   Jurisdiction is proper in this Court because the parties are all Texas residents and

the amount in controversy is within the jurisdictional limits of the court.

                                                  2
                                                                                             A-2
                                      Factual Background

       15.     Manuel Cabrera and Sergio Cabrera are brothers with significant experience in

creating, owning, and operating restaurants. The brothers are the owners and operators of a

number of Mexican restaurants branded and known as “Los Cucos Mexican Cafe”. Each

restaurant is a separate legal entity registered with the State of Texas. Los Cucos VIII and Los

Cucos IV are two of these entities.

       16.     Manuel Cabrera, Sergio Cabrera, David Jeiel Rodrigues, and Claudio Nunes

(collective, the “Partners”) agreed to create and operate a restaurant together. The plan and

agreement was to create a Brazilian churrascaria-style restaurant in the Dallas, Texas area.

                                      The Underlying Background

I.     The initial agreement.

       17.     After a series of negotiations, the Partners agreed that, inter alia: (1) each partner

would obtain a 25% interest in the restaurant; (2) Manuel Cabrera and Sergio Cabrera

(individually or through entities subject to their control) would contribute $600,000 for start-up

capital; (3) David Jeiel Rodrigues and Claudio Nunes would contribute “sweat equity” by

contributing personal services to the creation and operation of the restaurant; (4) Manuel Cabrera

and Sergio Cabrera (individually or through entities subject to their control) would guarantee a

lease for the restaurant; (5) all intellectual property, including trademarks would be held together

with the restaurant; and (6) the Partners would share control, profits, and losses equally, but

would receive no other salary from the restaurant.

II.    Excess contributions and attempted renegotiation.

       18.     As work progressed on the restaurant, additional capital was needed. At David

Jeiel Rodrigues’ and Claudio Nunes’ request, Manuel Cabrera and Sergio Cabrera (individually

or through entities subject to their control) increased their contributions. The Cabreras’ total

                                                 3
                                                                                               A-3
contributions eventually equaled more than $948,000. In addition, Manuel Cabrera and Sergio

Cabrera (individually or through entities subject to their control) paid for and/or loaned

equipment and furniture (including two large, expensive, and difficult-to-obtain Brazilian grills)

worth over $60,000 to the enterprise.

       19.     To account for the unanticipated and additional contributions, the Partners

attempted to negotiate a way for Manuel Cabrera and Sergio Cabrera (individually or through

entities subject to their control) to receive preferential distributions until their initial

contributions were repaid, subject to a small guaranteed distribution to David Jeiel Rodrigues

and Claudio Nunes.

III.   Creation of the corporate structure and the Restaurant operations.

       20.     While the Partners negotiated a new distribution structure, the Partners agreed to

form 8650 Frisco as the holding company for the Restaurant. Each of the four Partners was to

own 25% of 8650 Frisco. David Jeiel Rodrigues and Claudio Nunes created defendant Galovelho

to hold their 50% ownership interest in 8650 Frisco and the Restaurant. Sergio Cabrera and

Manual Cabrera designated Los Cucos VIII to hold their 50% ownership interest in 8650 Frisco

and the Restaurant.

       21.     8650 Frisco then entered into a lease agreement for restaurant space, which Sergio

Cabrera and Manuel Cabrera personally guaranteed.

       22.     David Jeiel Rodrigues and Claudio Nunes also desired to create a holding

company to manage 8650 Frisco, but the parties did not agree on this structure. Instead, David

Jeiel Rodrigues and Claudio Nunes formed Mandona to hold their collective 50% interest in the

management of 8650 Frisco. Manuel Cabrera and Sergio Cabrera did not form a holding

                                                4
                                                                                           A-4
company to hold their collective 50% control over 8650 Frisco, but continued to hold control in

their individual capacities.

       23.     The Partners then opened bank accounts for 8650 Frisco and granted all of the

Partners access to the accounts.

       24.     Despite lengthy negotiations, it now appears that the Partners were and are unable

to agree on new distribution terms to take into account the Cabreras’ (or entities under their

control) substantial excess contributions. Instead, the Partners continued to operate as general

partners or joint venturers up and until the defendants removed the plaintiffs from the enterprise

and began to deny the plaintiffs’ ownership interest in 8650 Frisco and the restaurant.

IV.    The defendants’ exclusion of the plaintiffs.

       25.     Thanks to the contributions from Manuel Cabrera and Sergio Cabrera

(individually or through entities subject to their control), 8650 Frisco opened the Estilo Gaucho

Brazilian Steakhouse (the “Restaurant”) in February of 2013.

       26.     8650 Frisco is currently operated by David Jeiel Rodrigues and Claudio Nunes,

individually, and (upon information and belief) through their entities Mandona, Galovelho, and

Bahtche. The defendants have collectively refused to recognize the plaintiffs as co-owners of

8650 Frisco and the Restaurant, and have collectively excluded the plaintiffs from the operations,

control, distributions, and profits of 8650 Frisco and the Restaurant.

       27.     On information and belief, the defendants are distributing and/or diverting

$40,000 or more per month from 8650 Frisco and the Restaurant to themselves or their

designees. This is a violation of the parties’ agreement and the defendants’ duties as partners

and/or joint venturers.

                                                 5
                                                                                           A-5
        28.    On further information and belief, the defendants registered the Restaurant’s

“Estilo Gaucho” trademark in the name of Bahtche and/or transferred the trademark to Bahtche

without the plaintiffs’ consent, in violation of the parties’ agreement, and in breach of the

defendants’ duties as partners and/or joint venturers.

        29.    The plaintiffs have not received any distributions from the Restaurant’s

operations. Instead, the defendants have attempted to steal the plaintiffs’ contributions by

denying the plaintiffs any distributions or benefits of ownership. For example, the defendants

have:

                      transferred and/or laundered 8650 Frisco’s cash from bank accounts to
                       which the plaintiffs had access to new accounts to which the plaintiffs
                       have no access;

                      denied the plaintiffs access to 8650 Frisco’s new bank accounts;

                      failed to hold and/or give notice of meetings for 8650 Frisco;

                      denied the plaintiffs access to the Restaurant’s premises;

                      fired 8650 Frisco’s long-time accountant in favor of an account who, upon
                       information and belief, is controlled by the defendants;

                      denied the plaintiffs access to 8650 Frisco’s books and records;

                      denied the plaintiffs’ interest in 8650 Frisco;

                      distributed 8650 Frisco’s cash to themselves but not to the plaintiffs;

                      used equipment loaned to 8650 Frisco for the defendants’ own benefit and
                       refusing to return such equipment after demand was made; and

                      transferring the assets of 8650 Frisco to entities owned or controlled by the
                       defendants such as Bahtche.

        30.    The plaintiffs have made written demands for return of their money and property

and for an accounting. The defendants have refused. Instead, the defendants continue to use the

                                                  6
                                                                                             A-6
plaintiffs’ property and the fruits of the plaintiffs’ contributions while simultaneously pretending

that the plaintiffs are owed nothing in the transaction.

                                The Underlying Causes of Action

       31.     The Plaintiffs sued Defendants alleging as causes of action: Breach of Contract,

Coversion, Breach of Fiduciary Duty, Fraud/Fraudulent Inducement, Civil Conspiracy, Aiding,

Abetting and Participation in Breach of Fiduciary Duty, Corporate Veil Piercing, Unjust

Enrichment, Quantum Meruit, and Money Had and Received and for an Accounting.

                               The Rule 11 Settlement Agreement

       32.     On or about August 5, 2014, while in the midst of taking the Court Ordered

depositions of the Defendants at the offices of Hawash Meade Gaston Neese & Cicack, LLP,

located at 2118 Smith Street, Houston, Harris County, Texas 77002, the parties entered into a

settlement negotiation and on August 5, 2014, entered into a Rule 11 Settlement Agreement on

the record. On August 6, 2014, the Defendants filed the Rule 11 Agreement with the Court.

       33.     The key elements of the agreement were:

               A. Defendant 8650 Frisco, LLC d/b/a Estilo Gaucho Brazilian Steakhouse was to

               pay to Cabrera Brothers II, LP, the amount of $900,000.00.            The terms of

               payment were $60,000.00 was to be paid upon completion of the paperwork

               formalizing the settlement and the remainder to be paid monthly over 5 years at

               6.7% interest. The initial payment under the note was to be due on October 1,

               2014;

               B. The Defendants further agreed to enter into “standard bank-type

               documentation” for the note to include a “note or promissory note, a deed of trust,

                                                  7
                                                                                             A-7
                appropriate UC-1s to the extent Plaintiff determine it’s necessary, an assignment

                of the lease and any assets related to the restaurant;

                C. Time would be of essence in the agreements, and there would no cure time for

                any default;

                D. In the case of default, there was to be a $10.00 paid up license fee for use of

                the name of the restaurant limited to that location; and,

                E. The individual Defendants would not be liable under the note.

                Plaintiffs ask that the Court take judicial notice of the Transcript of the Rule 11

        Settlement Statement filed in this cause by the Defendants on August 6, 2014.

        34.     In August and September of 2014, Plaintiffs prepared and forwarded documents

to the Defendants for review and suggestion. These documents included a formal settlement

agreement which included the release of the individual Defendants, a promissory note, a UCC-1

listing as collateral for the note the assets of the restaurant; an assignment of interest in the lease,

all as required by the Rule 11 Agreement.

        35.     The Defendants made a number of suggestions to change these documents, most

of which were then included in the documents. Not all of Defendants changes were accepted,

most notably Plaintiffs refused to accept a venue selection clause in the documents requiring

venue of any action based on a breach of the agreement in Collin County, Texas.

        36.     Defendants have and continue to refuse to execute the settlement agreement or the

note and security documents as required by the Rule 11 Agreement.

        37.     On or about October 1, 2014, the Defendants did make the $60,000.00 down

payment and the first monthly payment under the proposed terms of the note. And, have made

the monthly payments through the January 1, 2015 payment as of the time of this filing.

                                                   8
                                                                                                A-8
          38.   On or about October 9, 2014, Plaintiffs notified the Defendants that they were in

default of the settlement agreement absent the execution of the settlement agreement, the note,

the deed of trust and the appropriate security documents.

          39.   On or about October 10, 2014, Plaintiffs again notified the Defendants of the

default, ask for additional complaints about the documents as provided and made an offer to

change the documents to address the lone identified bone of contention (venue).

          40.   To date, Defendants have not responded to this request.

                                           Causes of Action

I.        Breach of Contract

          41.   The Defendants have breached the Rule 11 Agreement by failing to execute the

formal settlement agreement, the promissory note and the appropriate security documents as set

forth in the Rule 11 Agreement. By so doing, the Defendants are denying the Plaintiffs the

protection agreed to in case of default under payments of the amount agreed to.

                                           Relief Requested

          42.   The plaintiffs seek judgment jointly and severally against all Defendants for

actual damages in the amount of $900,000.00 as agreed to under the Rule 11 agreement with

credit to be given for the amounts paid.

          43.   The plaintiffs seek their attorney’s fees and costs incurred in prosecuting these

claims.

          44.   The plaintiffs seek pre and post judgment interest and the maximum rate allowed

by law.

          45.   The plaintiffs seek all other relief, at law or in equity, to which the plaintiffs may

be entitled.

                                                  9
                                                                                               A-9
     Respectfully Submitted,

     Stephens & Domnitz, PLLC

     /s/ Kelly D. Stephens
     Kelly D. Stephens
     State Bar No. 19158300
     P.O. Box 79734
     2118 Smith Street
     Houston, Texas 77279-9734
     281-394-3287 (phone)
     832-476-5460 (fax)
     kstephens@stephensdomnitz.com

     Hawash Meade Gaston
     Neese & Cicack LLP

     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

     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)
     dkinder@coxsmith.com

     Attorneys for Plaintiffs

10
                                A-10
                                    Certificate of Service

       A true and correct copy of the foregoing has been served on all counsel of record via ECF
on January 21, 2014.

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

                                                             /s/ Kelly D Stephens
                                                             Kelly D. Stephens

                                              11
                                                                                      A-11
                                                                                                     2/23/2015 8:37:36 PM
                                                                                Chris Daniel - District Clerk Harris County
                                                                                                    Envelope No. 4254256
                                                                                                  By: JIMMY RODRIGUEZ
                                                                                              Filed: 2/23/2015 8:37:36 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,
Defendants                                                     133rd Judicial District

                      Supplement to Plaintiffs’ Fourth Amended Petition

       1.      Plaintiffs file this Supplement to Plaintiffs’ Fourth Amended Petition (the

“Supplement”) to clarify the relief requested in Plaintiffs’ Fourth Amended Petition (the

“Petition”). The Supplement does not replace the Petition.

       2.      Plaintiffs believe that the Petition gives fair notice of Plaintiffs’ need and request

for specific performance of the Rule 11 settlement agreement. See Stafford v. S. Vanity

Magazine, Inc., 231 S.W.3d 530, 535 (Tex. App.—Dallas 2007, pet. denied).

       3.      Out of an abundance of caution, Plaintiffs hereby expressly plead that, in the

event damages are not awarded in this action, (1) Defendants’ refusal to execute a promissory

note, settlement agreement, and other security agreements would constitute an irreparable harm

by exposing Plaintiffs to a credit risk they specifically contracted to avoid and (2) Plaintiffs

respectfully request that the Court order specific performance of Defendants’ obligations under

the Rule 11 settlement agreement, including, without limitation, the execution of a promissory

note, a settlement agreement, and a dismissal of its pending claim for declaratory relief.

                                         Exhibit 2                                            A-12
    Respectfully submitted,

    Stephens & Domnitz, PLLC

    /s/ Kelly D. Stephens
    Kelly D. Stephens
    State Bar No. 19158300
    P.O. Box 79734
    2118 Smith Street
    Houston, Texas 77279-9734
    281-394-3287 (phone)
    832-476-5460 (fax)
    kstephens@stephensdomnitz.com

    Hawash Meade Gaston
    Neese & Cicack LLP

    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

    Cox Smith Matthews Incorporated

    David Kinder
    State Bar No. 11432550
    112 East Pecan Street, Suite 1800
    San Antonio, Texas 78205
    210-554-4400 (phone)
    210-226-8395 (fax)
    dkinder@coxsmith.com

    Attorneys for Plaintiffs

2
                               A-13
                                   Certificate of Service

        A true and correct copy of the foregoing has been served on all counsel of record via
electronic service on February 23, 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
                                                                                    A-14
                                     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 3                         A-15
                                       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
                                                          A-16
                                     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
                                                         A-17
                                            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
                                                                   A-18
                                           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
                                                                A-19
                                         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
                                                               A-20
                                       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
                                                               A-21
                                     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
                                                             A-22
                                      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
                                                             A-23
                                        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
                                                               A-24
                                         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
                                                                  A-25
                                      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
                                                            A-26
                                       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
                                                              A-27
                                       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
                                                               A-28
                                      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
                                                             A-29
                                            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
                                                                  A-30
                                            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
                                                                  A-31
                                           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
                                                               A-32
                                            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
                                                                A-33
                                          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
                                                                  A-34
                                           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
                                                               A-35
                                          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
                                                              A-36
                                           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
                                                                A-37
                                            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
                                                                 A-38
                                           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
                                                                A-39
                                     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
                                                             A-40
Exhibit 4   A-41
A-42
Exhibit 5   A-43
Exhibit 6   A-44
A-45
                                                                                                     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 7                                           A-46
       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
                                                                                       A-47
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
                                                                                            A-48
        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
                                                                                        A-49
                                                                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
                                                                                           A-50
                                     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 1                         A-51
                                       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
                                                          A-52
                                     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
                                                         A-53
                                            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
                                                                   A-54
                                           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
                                                                A-55
                                         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
                                                               A-56
                                       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
                                                               A-57
                                     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
                                                             A-58
                                      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
                                                             A-59
                                        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
                                                               A-60
                                         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
                                                                  A-61
                                      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
                                                            A-62
                                       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
                                                              A-63
                                       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
                                                               A-64
                                      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
                                                             A-65
                                            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
                                                                  A-66
                                            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
                                                                  A-67
                                           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
                                                               A-68
                                            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
                                                                A-69
                                          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
                                                                  A-70
                                           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
                                                               A-71
                                          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
                                                              A-72
                                           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
                                                                A-73
                                            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
                                                                 A-74
                                           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
                                                                A-75
                                     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
                                                             A-76
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