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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

NETSPHERE, INC., §

MANILA INDUSTRIES, INC., and §

MUNISH KRISHAN, §

Plaintiffs. §

§ Civil Action No. 3-09CV0988-F

v. §

JEFFREY BARON, and §

ONDOVA LIMITED COMPANY, §

Defendants. §

AMENDED RESPONSE, OBJECTION, MOTION FOR LEAVE TO FILE,

AND MOTION FOR RELIEF WITH RESPECT TO RECEIVER

ASSESSMENT OF FORMER ATTORNEY CLAIMS

TO THE HONORABLE JUDGE ROYAL FURGESON:

COMES NOW JEFF BARON, Appellant, and makes this response discussing

some of the fundamental legal issues, and offering an overview of some claims in

order of significance of amount claimed, and jointly moves this Court to grant leave

to file the included motion for relief to require the receiver to produce the documents

which have been requested and promised but not delivered, provide funding for Jeff

Baron to hire expert witnesses to offer evidence as to the reasonableness and

necessity of the claimed fees, to provide funding for the employment of trial counsel

and legal assistants to assist in investigating and responding to the claims, to provide

funding for legal research on westlaw and lexis, to allow discovery including for

disclosures, document production and depositions, and to allow sufficient time to

review the materials and respond appropriately to the number of civil attorneys

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working on the matters on behalf of Jeff Baron.

A. OVERRIDING ISSUES OF LAW

1. Receivership of a person’s property is different from receivership of a

human being.

The Thirteenth Amendment prohibits slavery or involuntary servitude as a

civil punishment. Involuntary servitude occurs when one no longer possess the

liberties and privileges of a freeman, including by legal coercion. Slaughter-House

Cases, 83 US 36, 90 (1873)(dissent); US v. Kozminski, 821 F. 2d 1186, 1192 (6th

Cir. 1987). The Supreme Court ruled in Plessy v. Ferguson, 163 U.S. 537, 555

(1896):

“The Thirteenth Amendment does not permit the withholding or the

deprivation of any right necessarily inhering in freedom. It not only

struck down the institution of slavery as previously existing in the

United States, but it prevents the imposition of any burdens or

disabilities that constitute badges of slavery or servitude. It decreed

universal civil freedom in this country.”

Your honor’s goal is not to place Jeff Baron personally into your honor’s

servitude. Rather your honor’s goal was to seize Jeff’s property. The difference is

fundamental for handling your honor’s goal of resolving the former attorney claims.

A receiver’s authority under the bounds of a court’s equity (and inherent)

power is limited to taking “into his possession every kind of property which may be

taken in execution”. Booth v. Clark, 58 U.S. 322, 331 (1855)(emphasis).

Accordingly, the Fifth Circuit has held “Where a final decree involving the

disposition of property is appropriately asked, the court, in its discretion, may

appoint a receiver to preserve and protect the property pending its final disposition”)

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Tucker v. Baker, 214 F.2d 627, 631 (5th Cir. 1954) (emphasis).

Accordingly, claims against the person Jeff Baron are not, and cannot be

included in a receivership. Claims against Jeff are not his property.

The receiver is no more authorized under the law to affect Jeff’s rights with

respect to claims against him, than the receiver is authorized to marry Jeff off, or

divorce him if he were married. If Jeff were married, he would possesses the legal

right to divorce. The receiver obviously could not exercise that right on Jeff’s

behalf.

Similarly, the receiver cannot exercise any right on Jeff’s behalf personally. A

receiver can take only Jeff’s property, and (if the receivership is lawful and

authorized under the law and within the jurisdiction of the court), can exercise all

the rights auxiliary to ownership of that property.

Thus, if the receiver has taken property that has a mortgage, or liens filed

against the property, with the Court’s approval the receiver can pay, or settle those

equitable ownership claims in the property res itself. The same is true whether the

property is real estate, or a corporation.

2. Jeff is a citizen, a human being, not a corporation.

Jeff is a person, not property. By contrast, a corporation is property. When a

corporation is seized from its owner, a receiver can be authorized to settle any and

all claims made against the corporation. That is because the claims are claims

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against a corporation which is property.

The law allows rights to be asserted by or

against the property which is a corporation. Control of the corporation therefore

involves control of the rights to be asserted by or against that corporation. Thus, for

example, a receiver could bind a corporation to a 99 year lease. By contrast, a

receiver has no power to bind Jeff, or any other human being to anything.

For this reason, there is no legal authority allowing a receiver of an

individual’s property to settle claims against that individual.

3. The authority relied upon by the receiver does not support the receiver’s

position.

The receiver errs in its interpretation of Santibanez v. Wier McMahon & Co.,

105 F.3d 234,241 (5th Cir. 1997) as holding “receivership may be an appropriate

remedy . . . to subject equitable assets to the payment of . . . claim[s]”. As a general

rule of law, an appellate court’s ruling cannot be interpreted by cutting out selected

words and phrases to create an opposite meaning to that expressed by the appellate

Notably, Novo Point and Quantec have appeared before your honor, and clearly, as a matter of

personal jurisdiction, this court has seized in receivership the companies’ local property. The

owner of those companies, SouthPac, has never made any appearance, has not been served with

process, and has not been named as a party in any pleading filed with this court. Accordingly,

your honor has not acquired personal jurisdiction over SouthPac, and as a matter of lack of

personal jurisdiction cannot take possession of SouthPac’s property. Thus, if the concept of the

requirement of personal jurisdiction is respected, while the companies’ property has been seized,

SouthPac’s property interest and ownership of those companies has not. That situation is very

different from when a corporation is itself taken as the receivership res.

With respect to the companies, if well established law is respected, is long well settled that a

District Court does not have jurisdiction over res which is not located within the district. Booth v.

Clark, 58 U.S. 322, 335 (1855); Sterrett v. Second National Bank, 248 U. S. 73,77; e.g.,

Guaranty Trust Co. of New York v. Fentress, 61 F. 2d 329, 332 (7th Cir.1932). Accordingly, the

domain name registrations in Australia fall well outside the jurisdiction of the court’s receiver.

Again, by contrast a corporation is property. Where a receiver holds a corporation as

receivership res, the receiver can exercise all rights in and to that property.

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court.

The Fifth Circuit in Santibanez held opposite to the position taken by the

receiver. The Fifth Circuit held in Santibanez:

“[R]eceivers may be appointed ‘to preserve property pending final

determination of its distribution in supplementary proceedings in aid of

execution.’ 7 Moore et al., ¶66.05]1 ] (citing Haase v. Chapman, 308

F.Supp. 399 (W.D.Mo.1969)). In addition, ‘receivership may be an

appropriate remedy for a judgment creditor who seeks to set aside

allegedly fraudulent conveyances by the judgment debtor, or who has

had execution issued and returned unsatisfied, or who proceeds through

supplementary proceedings pursuant to Rule 69, or who seeks to

subject equitable assets to the payment of his judgment, or who

otherwise is attempting to have the debtor's property preserved from

dissipation until his claim can be satisfied.’ 12 Wright & Miller,§2983

(citing Pusey & Jones Co. v. Hanssen, 261 U.S. 491, 43 S.Ct. 454, 67

L.Ed. 763 (1923))”

Santibanez, 105 F. 3d 241 (emphasis).

Obviously, the holding in Santibanez, is very different, and in fact opposite,

from the cut and paste variation erroneously relied upon by the receiver

(“receivership may be an appropriate remedy . . . to subject equitable assets to the

payment of . . . claim[s]”). The distinction between a judgment creditor and a

simple creditor is the distinction that makes all the difference. As the case relied

upon in Santibanez, Pusey & Jones, explains, an unsecured creditor may not use

receivership to collect its debt:

“[A]n unsecured simple contract creditor has, in the absence of

statute, no substantive right, legal or equitable, in or to the property

of his debtor. This is true, whatever the nature of the property; and,

although the debtor is a corporation and insolvent. The only substantive

right of a simple contract creditor is to have his debt paid in due course.

His adjective right is, ordinarily, at law. He has no right whatsoever in

equity until he has exhausted his legal remedy. After execution upon a

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judgment recovered at law has been returned unsatisfied he may proceed

in equity by a creditor's bill.”

Pusey & Jones Co. v. Hanssen, 261 U.S. at 497.

As explained in Pusey & Jones, an unsecured creditor has “no right

whatsoever in equity until he has exhausted his legal remedy”. The receiver’s string

cites following Santibanez, establish clearly that receivership is a remedy in equity.

Accordingly, the receiver has conclusively established that as a matter of long

established law receivership is an equitable remedy to which unsecured creditors

have no right whatsoever. The attorney claimants are just as clearly simple,

unsecured alleged creditors.

The receiver similarly errs in its interpretation of United States v. Arizona

Fuels Corp., 739 F.2d 455, 458-60 (9th Cir. 1984). The receiver errs first, in

omitting the context cut from center of the quote cited. The court in Arizona Fuels

held “Although precedents are few and far between, the traditional rule is that

summary proceedings are appropriate and proper to protect equity receivership

assets. A receiver may proceed summarily to recover money belonging to the

receivership by petition to the appointing court for an order to show cause against a

possessor not a party to the original action. Receivership courts have the general

power to use summary procedure in allowing, disallowing, and subordinating the

claims of creditors.” Id. at 458 (citations omitted). The actual holding of Arizona

Fuels is that “[S]ummary proceedings are appropriate to determine right to

possession, although not ultimate rights to title or ownership.” Id. at 459

(emphasis).

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The holding in Arizona Fuels is clear. The claim that can adjudicated is a

claim to an equitable ownership interest in the res of the receivership property itself.

The court in Arizona Fuels held that where “The district court's order determined the

Receiver's right to possession of the funds, based on adjudication of the right to

setoff, without determining the validity of Tenneco's claims as a creditor of

Arizona Fuels. We hold that summary proceedings were appropriate and proper for

this purpose.” Id.

The attorney’s claims are personal claims in law. The attorneys are claiming

to be simple creditors. The claims are not against the receivership res. Therefore

there is no power to adjudicate the claims within the framework of the receivership.

The attorneys are not seeking merely the right to possess funds pending

determination of their claims as creditors, the attorneys are seeking the ultimate

determination of the validity of their claims as creditors. Pursuant to the law, as

explained and held in the key case relied upon by the receiver, the attorneys’ claims

cannot be adjudicated by summary proceedings.

Notably, if the receivership is dissolved, Jeff can ask the attorneys to

participate in the State Bar fee arbitration process and sit down before the State Bar

fee committee to resolve the disputes. If the Court desires assurance that if

recovered the fees will be collectable, Jeff and the companies can post security for a

stay pending appeal, including a security interest in the domain names the receiver

would like to sell (and others if the Court desires), so that the attorneys will be

secure.

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4. The trial court has been divested of jurisdiction over the matter of the

receivership by the interlocutory appeal of the receivership order.

Jeff has appealed the order appointing the receiver [Doc #136] and

NovoPoint, LLC and Quantec, LLC have appealed from the order including the

companies into the receivership [Doc #227]. The Supreme Court has established

that the filing of a notice of appeal is an event of jurisdictional significance— it

confers jurisdiction on the court of appeals and divests the district court of its

control. Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58 (1982). The

divesture of jurisdiction of the trial court involves those aspects of the case appealed.

Id. Accordingly, the Fifth Circuit has established that “A district court does not have

the power to ‘alter the status of the case as it rests before the Court of Appeals’.”

Dayton Indep. School Dist. v. US Mineral Prods. Co., 906 F.2d 1059, 1063 (5th Cir.

1990).

The Fifth Circuit has established that the jurisdiction of the district court over

a matter appealed from, pending appeal are limited to maintaining the status quo.

Coastal Corp. v. Texas Eastern Corp., 869 F.2d 817, 820 (5th Cir. 1989). For that

reason, an approach that achieves your honor’s goals without disregarding the law

and controlling precedent should be preferred.

You honor can insure that the attorney’s claims, if valid, will be secured by

requiring from the ‘receivership parties’ security to stay the receivership pending

appeal. The companies can provide a security interest in domain names valued well

in excess of the attorney fees claims. That will achieve your honor’s goals while

following the law and respecting controlling precedent. The claims will then be

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resolved in appropriate forums, most likely the State Bar fee committee – if the

attorney claimants are willing to participate. Such a solution would also respect and

uphold the constitutional right to trial by jury. The Seventh Amendment guarantees

every American, including Jeff Baron, the right to trial by jury. E.g., Ross v. Bernhard, 396

U.S. 531, 542 (1970). That right is a sacred right that his Court should protect and

defend. Being assured of that right allows the parties not to have to resort to it—all

if both sides agree they can voluntarily sit down before the State Bar fee committee

to resolve the fee disputes.

Notably, as a matter of law, the district court lacks subject matter jurisdiction

over the non-diverse attorneys’ claims, as well as the property subject the

receivership. Even if the receiver desires to waive all complaint and agree to this

Court’s jurisdiction, the receiver has no such power. No party can grant a court

subject matter jurisdiction it does not possess under the law. Mitchell v. Maurer, 293

U.S. 237 (1934) (parties cannot confer subject matter jurisdiction upon a federal

court by agreement, waiver, or consent); and e.g., Matter of Edwards, 962 F.2d 641,

644 (7th Cir. 1992); First State Bank v. Sand Springs State Bank, 528 F.2d 350, 354

(10th Cir. 1976). Accordingly, adjudications purporting to adjudicate the non-

diverse claims risk being held void for lack of subject matter jurisdiction, especially

where the lack of subject matter jurisdiction over the claims is so clear– the

pleadings do put neither the claims’ subject-matter nor the receivership res at issue.

See Cochrane v. WF Potts Son & Co., 47 F.2d 1026, 1029 (5th Cir. 1931) (“their

proceedings are absolutely void in the strictest sense of the term”).

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B. OBJECTION TO ASSESSMENT ‘PROCEDURES’

The assessment lists only evidence of claims. The receiver took no apparent

steps to investigate or determine the substantive merit of the claims. Accordingly,

the 'assessment' that the claims should be paid is no assessment. There is a large gap

between claims being made, and the validity of the claims. The receiver took no

steps to cross that gap.

C. OBJECTION TO RECEIVER BIAS

The assessment is unreliable because the receiver is biased and did not take

reasonable steps to make the assessments. The Receiver is aggressively antagonistic

and adversarial toward Mr. Baron and has manufactured evidence that was then

falsely represented to the Court attacking the conduct and character of Jeff and his

counsel. Accordingly, the opinion and work of the receiver cannot be trusted.

(Doc#440 and 440-1 detailing the receiver’s actions are incorporated herein by

reference).

There are also other examples of the receiver’s gross bias and failure to

investigate in any reasonable meaning of the word ‘investigate’. For example, the

two million dollars provided by Jeff to Ms. Schurig to hold in trust that is now

‘gone’. The receiver explains that:

(1) Approximately $450,000.00 was distributed to Mr. Baron for his taxes.

However, Mr. Baron has no knowledge or record of such half million

dollar distribution to him. The receiver has provided no check, or wire

transfer information, and yet declares that Mr. Baron engaged in “ill

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informed and disingenuous statements” with respect to Ms. Schurig. In

2009 Schurig did not distribute $450,000.00 to Baron, by check, cash

in a briefcase, or wire transfer. Rather The Beckum Group sent to

Schurig approximately that sum (upon belief) (in addition to the $2

Million). That additional sum is also unaccounted for. Since the

amount Ms. Schurig is believed to have received was listed as a

disbursement, the discrepancy is almost one million dollars just for this

item alone.

(2) $425,106.00 was distributed to Friedman & Feiger. But as this Court

is well aware, that money was from Ondova's receivables, not from Ms.

Schurig. Here is another near half million dollars unaccounted for. Yet

the receiver demanded no documentation, performed no actual

investigation, and accepts the assertion that Friedman & Feiger were

paid an additional $425,106.00 from Jeff’s $2 Million he left with Ms.

Schurig in trust.

(3) $600,000.00 is claimed for registration fees to Ondova. But, this money

was not authorized by Jeff. If the claim is truthful (no documentation

has been provided), the registration fees were not due or owing by Jeff.

Any registration fee payments should have come from the company’s

funds, not the $2 Million Jeff placed with Schurig to hold for him in

trust. Accordingly, as trustee for Jeff's money, that $600,000.00 should

properly and promptly have been placed into receivership funds. The

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receiver has not operated as a true receiver, and took no action to do

that.

(4) $750,000.00 was claimed paid in trustee, protector, and trust attorneys’

fees. Current protector costs re $500.00 per year, and trustees fees

should not exceed $5,000.00 annually. The near million dollar 'expense'

is not legitimate. Apparently Schurig claims in a cloaked 'disclosure' to

have ‘paid’ herself this money as 'trust attorney'. Accordingly, Schurig

admits to having taken money from the trust, asserting it to be an

attorney's fee. Since she was a trustee and acting as fiduciary for the

money, a transaction with herself is clearly not arms-length and is

presumed to be invalid. Since attorneys were hired and paid substantial

fees, how Schurig justifies a near million dollar fee is unclear. In any

case, as a self-dealing transaction between a trustee and himself is

invalid as a matter of law, that money should have been taken back by

the receiver.

(5) Similarly, there is a claim that funds remaining in the hands of

Asiatrust, or in accounts owned by any of the companies owned by

Asiatrust, were turned over to either Southpac as Successor Trustee of

The Village Trust or to agents of the companies designated on Sept.

30,2010. Apparently those funds were not received. The receiver did

no investigation, no accounting of those funds was demanded nor

provided. Since all the asserted companies which claim to have

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transferred the money to SouthPac are receivership parties, the

accounting of these funds should be a simple matter. Yet the receiver

performed none.

D. DUE PROCESS OBJECTION AND REQUEST FOR RELIEF

Jeff moves the Court to require the receiver to produce the documents which

have been requested and promised but not delivered, provide funding for Jeff Baron

to hire expert witnesses to offer evidence as to the reasonableness and necessity of

the claimed fees and as to malpractice committed by the claimants, to provide

funding for the employment of trial counsel and legal assistants to assist in

investigating and responding to the claims, to provide funding for legal research on

westlaw and lexis, to allow discovery including for disclosures, document

production and depositions, and to allow sufficient time to review the materials and

respond appropriate to the number of civil attorneys working on the matters on

behalf of Jeff Baron. Without this relief there is a failure of due process, and Jeff

cannot reasonably defend or respond to the claims.

Attached and incorporated herein are specific requests made of the receiver

with respect to Jeff responding to the claims. Although the receiver promised to

provide the files requested, the receiver has failed to do so.

Jeff’s only civil attorney this Court has allowed to represent him, is the

appellate lawyer below signed. Jeff had been represented by an AV rated trial

counsel, but the Court allowed him to be fired by the receiver. Oddly, that attorney

is listed as a ‘claimant’ since the receiver seized all of Jeff’s assets and the attorney

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was therefore not paid. Because this Court has ordered that the undersigned counsel

must work without payment, for the past four months the undersigned has been

forced to work over 65 hours a week reviewing, researching and responding to a

mountain of paperwork generated by two teams of attorneys working literally 24

hours a day. The overwhelming workload without pay, has forced counsel to turn

away and defer other work, and go without material income for four months.

Obviously, counsel has had to drastically reduce office expenses and rely upon

savings for his livelihood and office expenses. Accordingly, without funding

allowed on this case, legal research on westlaw, etc., the hiring of legal assistance,

the hiring of expert witnesses, etc. is not possible. The reasonableness of attorneys

fees requires expert opinion. Without the ability to hire an expert witness to provide

such an opinion, it is impossible for Jeff to put up a defense as would be sufficient if

such experts could be retained. As an attorney the undersigned can clearly see

much of the work billed is grossly duplicative and not reasonable. Many of the

attorneys owe Jeff a refund for overpayment. However, trial counsel is not

competent as a witness, and without an expert witness Jeff cannot defend himself on

these grounds.

It is notable, the claimant attorneys have been paid by Jeff nearly two million

dollars for less work than the undersigned has provided by court order on this case—

for which this Court has paid no money. But after four months of work without any

payment for fees or expenses on a case requiring more than 65 hours a week of

response work by a single individual to large firms’ billing frenzies, counsel does not

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have the resources to be able to properly respond or defend against the 20 cases

listed as ‘claims’.

In summary, Jeff has been denied a fair, reasonable, and equitable opportunity

to investigate and object to the claims, including as follows:

1. Attorney’s fees claims are contract claims. It should be easy to take the

retainer agreement, compare it to the work and the billing, and get a fair

impression as to the claim generally. Attorneys have an ethical and fiduciary

duty to provide clear written contract terms and monthly billings and reports.

Failure to due so and to breach an attorney’s fiduciary duty to a client, pursuant

to Texas law results in fee forfeiture. Counsel for Mr. Baron asked-- in writing—

for the receiver to provide for each claim (A) the retainer contracts or

engagement letters, (B) the billing sent to the client, (C) the demand letters sent

to the client, and (D) any responses. The receiver has refused to do this and most

of the retainer contracts have been withheld. Notably, for those few produced,

the bulk of the work billed (where billing has been produced) does not match the

scope of work retained for. Notably, what 'seems' or doesn't seem to counsel is

not relevant. Expert opinion is needed to present an objection or response, and

without any funds to hire an expert, we have none to offer.

2. Jeff has been denied competent legal counsel expert in handling

attorney fee disputes. All of Jeff's assets were seized, so that he would have no

money to hire an attorney. He was also directed not to spend any money on an

attorney. The court ordered that Mr. Baron be represented by (1) a state court

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criminal defense attorney with serious medical issues and upon information and

belief under the influence of prescription psychotropic drugs, that has zero

experience in handling civil matters in the federal court; and (2) an appellate

lawyer who is a solo practitioner that associates with additional counsel on a per

case basis, but who has been overloaded with working over 65 hours a week on

the trial matters in this case. Said counsel has been forced to work without any

associated counsel, without additional staff, without expenses for west law

research, etc. Moreover, while in theory a client might be able to find an attorney

to provide work on a contingency fee basis, because of two factors, no attorney

has been willing to get near this case. First, attorneys are scared that the court

will make them unpaid attorneys for all purposes as has been done with Mr.

Schepps, and they will be trapped in a case for months or years without pay.

Secondly, it looks like there may be zero assets left because the court is playing

favorites, and picking and choosing who gets preferential treatment with Jeff's

assets. Accordingly, no attorney has been willing to accept work on this case.

Attorneys adverse to Jeff have been paid hundreds of thousands of dollars of

Jeff’s money. Attorneys representing Jeff have been allowed no money for fees

or expenses.

3. Jeff has been denied the basic information and documentation

necessary even to begin to respond and object. Very specific and simple requests

for information were made of the receiver. (Attached as Exhibit A). The receiver

agreed to provide the information, but has failed to do so. The information is

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material. Without that material, it is not possible for Jeff to reasonably object or

respond to the claims in a reasonable manner.

4. Jeff has been denied the opportunity to hire experts to investigate and

offer opinions as to the reasonableness and necessity of the fee demands.

Without this basic evidence, Jeff cannot reasonable defend or object to these

claims.

5. Jeff has been denied a reasonable opportunity to investigate and

respond. Jeff's only civil attorney is a solo practitioner. Between the demands of

the appeal and the flood of work run up by the receiver, even at working 65 hours

a week or more, counsel has not had the time, as a literal matter, to investigate

each of the claims. There are over twenty claims. Each claim involves its own

factual issues, and requires research into the fiduciary duties and violations

involved. For a single attorney to handle the cases, if only a single week was

spent researching, investigating, and preparing a defense to each claim, it would

require six months of work dedicated fully to that project.

E. JURY DEMAND

Notably, Jeff Baron object to this process, and demands a jury trial for each

and every claim against him, as his constitutional right.

F. SPECIFIC DEFENSES

Issues relating to claims over $10,000.00 are briefly addressed:

(1) Some claims such as Pronske and Patel and Bickel & Brewer

include fees for work not performed for Jeff or any receivership

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entity, such as for ‘collection’ or making motions for substantial

contribution in the bankruptcy court. Texas law does not provide

for the recovery of such fees. Additionally no showing has been

made providing for the collection of any additional fees.

(2) Many claimants appear to have no written contract, and have not

complied with Texas law that is mandatory and prerequisite for an

attorney’s entitlement to payment of fees. These appear to include

Pronske and Patel, Carrington, Coleman, Sloman & Blumenthal,

LLP , Schurig Jetel Beckett Tackett, Gary G. Lyon, Dean

Ferguson, Robert J. Garrey, David L. Pacione, Jones, Otjen &

Davis, and Mateer & Shaffer, LLP.

(3) Powers and Taylor admit being paid, and appear to owe Jeff

$7,500.00 remaining unused on an initial $10,000.00 retainer.

They are seeking fees for a contingency, but their contract is

explicit and the contingency was not reached. They lost the lawsuit

they handled, they did not win it.

(4) Some attorneys are not entitled to recover any fees through a

‘claims’ procedure, they agreed to seek any fees only via

arbitration. Those attorneys appear to include Bickel & Brewer,

and Broome.

(5) For many attorneys the work billed does not match the scope of

the retainer. Pursuant to Texas law, an attorney’s representation

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and right to payment is limited by the scope of the attorney client-

contract. Firms not entitled to fees beyond the scope of the work

agreed to be paid for include Fee, Smith, Sharp & Vitullo, West &

Associates, and Schurig Jetel Beckett Tackett.

(6) Lyon’s claim is concerning he produced a written agreement that

provides “You (Lyon) will not bill any further amounts, and I will

not pay you any amounts (except as identified in #1 and #2 above)

unless you perform work specifically instructed by me in writing

and we reach a further agreement regarding payment.” Since none

of the now claimed work was authorized in writing as required by

the contract, Lyon is not entitled to any payment. Lyon also

appears to have reached an agreement on fees, and is owed under

$4,000.00.

(7) Some attorneys are not licensed, or not licensed in Texas and are

not entitled pursuant to state law for charging for state court and

state law work in Texas. In fact, the attempt to charge such fees is

criminal. Lyon apparently is not licensed in Texas and neither is

Michael B. Nelson. Other attorneys may also not be licensed, no

budget has been allowed for an investigator.

(8) Dean Ferguson admitted under oath that he “never reached an

agreement” with Jeff to pay the $300 per hour he is now

demanding. He testified that he worked 45 days and was paid for

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22 days, leaving only 23 days of work unpaid. He sent a bill for

$20,000.00 and now demands over $70,000.00 for his 23 days of

work. The fee is unreasonable and unconscionable and the fee

demand violates his ethical duties such that Jeff is entitled to fee

forfeiture of all sums paid to Ferguson.

(9) In addition to Dean Ferguson, several attorneys appear to have

engaged in ethical violations requiring forfeiture of the fee they

are demanding as well as the fee they have already been paid.

These attorneys include Dean Ferguson, Pronske and Patel,

Garrey, Schurig, Broome, and perhaps others as well.

(10) In total, the work charged is grossly duplicative and over billed.

Expert opinion is required to provide further detain, Jeff has been

denied expenses to hire an expert.

(11) Most of the attorneys represented multiple clients but have failed

to segregate their billing. Accordingly, no prima facie case has

been established as to any client in particular.

(12) Broome’s contract was expressly limited to $10,000.00 per month.

Broome worked at most 2 months and one week. Broome admits

he was paid $18,000.00. Accordingly, the maximum possible

claim would be $4,000.00 not the $28,000.00 he claims.

Demanding excess fees from a client is an ethical violation in

Texas resulting in fee forfeiture both of the excess fee demanded,

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and the original fee paid.

(13) Sidney B. Chesnin’s fee is not and never was objected to. He was

fired by the receiver, and the receiver in bad faith has not paid

him.

(14) Jeff was not a client of Hitchcock Evert, LLP, nor West &

Associates, LLP. The Hitchcock fees appear to have been capped

by a supplemental agreement so that they are owed no money.

(15) Some of the attorneys, such as West & Associates, Fee, Smith,

Sharp & Vitullo, Broome Law Firm, Mateer & Shaffer, Hohmann,

Taube & Summers, and Pronske and Patel appear to have

committed malpractice with respect to their representations.

Establishing the existence and extent and amount of set-off for the

damages requires expert opinion. No funding has been allowed

for the retention of expert witnesses, and accordingly, it is not

possible to provide that opinion and evidence at this point. For

example the malpractice includes, but is not limited to: (A)

Drafting a settlement which was represented that the settlement

provided from the plaintiff payment in the form of 30,000-40,000

valuable domains, (estimated in value from $3 Million to $12

Million) but not actually providing for that term in the contract.

Instead of transferring the domains to the clients of the malpractice

attorneys, the plaintiff simply deleted the names and allowed them

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to vanish into cyberspace. (B) The settlement of claims with the

University of Texas for generic names and names registered in

good faith without any knowledge of any possible infringement.

These claims should not have been settled, nor was the settlement

amount reasonable. (C) Failing to disclose or warn the client that

the Ondova trustee was not actually releasing all of its claims and

causes of action and remedies as stated in the settlement

agreement, but that the clients were at risk of being placed into

receivership based on the settlement agreement. This failure to

disclose and advise represents a material breach of the attorneys’

duty of care and has caused millions of dollars in damages and

loss, far offsetting any fee that is allegedly due.

(16) Other issues are reserved for evidentiary and oral argument.

Respectfully submitted,

/s/ Gary N. Schepps

Gary N. Schepps

Texas State Bar No. 00791608

5400 LBJ Freeway, Suite 1200

Dallas, Texas 75240

(214) 210-5940 - Telephone

(214) 347-4031 - Facsimile

Email: legal@schepps.net

FOR JEFFREY BARON

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CERTIFICATE OF SERVICE

This is to certify that this filing was served this day on all parties who receive

notification through the Court’s electronic filing system.

CERTIFIED BY: /s/ Gary N. Schepps

Gary N. Schepps

COURT ORDERED TRIAL COUNSEL

FOR JEFFREY BARON

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