AFFIDAVIT OF GARY SCHEPPS - Page 1IN THE UNITED STATES DISTRICT COURTFOR THE NORTHERN DISTRICT OF TEXASDALLAS DIVISIONNETSPHERE, INC., )MANILA INDUSTRIES, INC., and )MUNISH KRISHAN, )Plaintiffs, ))vs. ) Civil Action No. 3-09CV0988-F)JEFFREY BARON, and )ONDOVA LIMITED COMPANY, )Defendants. )DECLARATION OF GARY SCHEPPS1. My name is Gary Schepps. I am the appellate counsel for Jeff Baronand have been ordered by Judge Furgeson to act as trial counsel as well. Iam competent to make this declaration. The facts stated in this declarationare within my personal knowledge and are true and correct. I have personalknowledge of the stated facts, which I learned as the result of beingsubjected to the facts and events stated herein.2. I formally requested that the receiver produce the material as stated inthe exhibit attached to Jeff’s Response, and Amended Response to theAssessment of Former Attorney Claims, previously filed in this cause. Avery limited amount of material was requested, including for example, allfee agreements, all correspondence between the attorneys and their clientrelating to the fee and specifically (1) a copy of the actual billing sent to theclient, and (2) the correspondence sent by each attorney making any demandfor payment, and any return correspondence. The receiver agreed to producethis material in the format requested (OCR’d tabbed PDF files) and I spokewith a copy service hired by the receiver explaining specifically whatmaterial was requested. The receiver refused to produce the material theyhad promised to produce. There were several exchanges with the receiver,including the receiver’s claim that the failure of their production was myfault because I failed to contact their copy service. I did contact their copyservice and had a detailed conversation setting out specifically what wasrequested (the exact thing which was requested in writing to the receiver). Idiscussed the request at a formal ‘meet and confer’ meeting with theCase 3:09-cv-00988-F Document 499-1 Filed 04/28/11 Page 1 of 4 PageID 18388AFFIDAVIT OF GARY SCHEPPS - Page 2receiver. Still, the receiver refused to produce what they had promised toproduce, and I was forced to make a formal motion. The withheld materialis necessary to fairly evaluate and respond to claim for unpaid attorney’sfees.3. The rules of ethics require that an attorney’s fee be limited toreasonable fees for the services rendered. An attorney is prohibited fromcharging unreasonable fees and fee forfeiture of the entire fee paid theattorney is the remedy for an attorney’s excess fee demand. As a matter oflaw, proof of the reasonable of an attorney’s fee requires expert opinion. Iformally requested from the receiver access to some of Jeff’s funds to hirean expert on the fees issue. I requested this even in a formal ‘meet andconfer’ session with the receiver. The receiver refused to provide any suchfunding. I attempted to find an expert who would work on a contingencybasis, and was unable to find any qualified expert agreeing to do so. As amatter of law, without an expert’s opinion is not possible at this time topresent evidence that any attorney’s fee is unreasonable. Accordingly, it isnot possible to offer evidence in defense of the attorney’s claims withrespect to that aspect of the claim’s defense. It is my opinion there aregrounds to assert the defense of unreasonable fees on Jeff’s behalf.4. Proof of Malpractice requires expert opinion. In order to presentevidence of malpractice an expert’s opinion is required. The facts statedabove apply to an expert on malpractice. If Jeff is prohibited from using hisown money to hire an expert, as a matter of law he is unable to presentevidence to establish a defense of malpractice. It is my opinion there aregrounds to assert the defense of malpractice, on Jeff’s behalf.5. I handle federal appeals, not federal trials. I have never on my ownhandled a federal trial, bench or jury, and have always relied upon hired trialcounsel for trials in the federal court. I am not qualified on my own toappear in federal court and defend multiple claims against multiple teams ofattorneys. I require assistance to handle the organization of the files, trackingof admission of evidence, preparation and tracking of objections, and manyother aspects of the appearance. If I was up against a single attorney whoalso had no support, I think I could manage. It is simply not possible for meto properly represent Jeff’s interests by myself. My engagement wasexpress and clear that I was not accepting employment to make anyappearance as trial counsel. An AV rated trial attorney was representing Mr.Baron at the time I was retained as appellate counsel, but he was ‘fired’ byCase 3:09-cv-00988-F Document 499-1 Filed 04/28/11 Page 2 of 4 PageID 18389AFFIDAVIT OF GARY SCHEPPS - Page 3the receiver. From the moment this Court ordered me to be trial counsel forJeff, I have been flooded by the receiver and the trustee with a mountain ofpaperwork. I have been working well over 65 hours per week on the trialcourt issues, for around four months now. As the Court is aware, I have notbeen paid because the Court has not allowed Jeff to pay me.6. Even a minimal evaluation of an attorney’s claim would take a weekof work. Some of the larger claims will take a couple weeks of work toproperly evaluate. Working on my own it will take me over 24 weeks,approximately half a year, dedicated strictly to that job, to evaluate the‘claims’ presented. If I were allowed the funds to hire sufficient attorneysand staff to assist me, the evaluation could be completed in less than amonth.7. Basic discovery is necessary to properly investigate and respond to theclaims. This includes an opportunity to conduct depositions, and obtaindisclosures from the claimants. An opportunity to serve admissions wouldalso be helpful. For example, Mr. Ponske at one time swears under oath thatthere was no engagement agreement, but at another time swears that therewas an engagement agreement. While some attorneys may be quick ontheir feet and have sufficient experience to put on a hearing with livewitnesses without the need to conduct formal discovery, I am not one ofthose attorneys. I need to question a witness in a deposition, and then spendconsiderable time figuring out how to admit the relevant evidence I desire. Iam not qualified to prove up a foundation ‘from the seat of my pants’. Myability to put on a hearing is based on hard work and preparation. Withoutthe opportunity to conduct the underlying discovery I am not qualified todefend the claims against Jeff. I am not able to ‘shoot from the hip’ andreliably hit a target. In order to put on a defense at a hearing I must beallowed to prepare for it. As discussed in this affidavit, I have not beenallowed to prepare a defense in this case.8. Because this Court has ordered that the undersigned counsel mustwork without payment, for the past four months the undersigned has beenforced to work over 65 hours a week on trial court matters reviewing,researching and responding to a mountain of paperwork generated by twoteams of attorneys billing often over 24 hours a day. The overwhelmingworkload without pay, has forced counsel to turn away and defer other work,and go without material income for four months. Frankly, I am also tired.Case 3:09-cv-00988-F Document 499-1 Filed 04/28/11 Page 3 of 4 PageID 18390AFFIDAVIT OF GARY SCHEPPS - Page 49. It is notable, that the claimant attorneys have been paid nearly twomillion dollars while by court order the undersigned has worked on this caseas court ordered trial counsel for months and has been paid no money.Instead, this court has taken Jeff’s own money, most of his liquid funds, andpaid the receiver who has engaged in a blizzard of work in fabricating claimsagainst Jeff, and against me personally as his attorney. In addition to beingunpaid, I have been subject to personal insults by the Court’s receiver andhis law partners (for example, accusing me of being “despicable”).I declare under penalty of perjury that the foregoing is true and correct.Signed this 28th day of April, 2011, in Dallas, Texas./s/ Gary N. ScheppsGary N. ScheppsCase 3:09-cv-00988-F Document 499-1 Filed 04/28/11 Page 4 of 4 PageID 18391