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. §
MOTION FOR LEAVE TO FILE: MOTION TO SUPPLEMENT RECORD
WITH NEWLY DISCOVERED EVIDENCE
TO THE HONORABLE JUDGE ROYAL FURGESON:
COMES NOW JEFF BARON, and moves this Court to grant leave to file
the following motion to supplement the record with the evidence attached as
Exhibit A and Exhibit B:
A. WHAT THIS EVIDENCE PROVES
EXHIBIT A - THE LYON EMAIL
This email:
(1) Completely discredits Mr. Lyon. Even after September 2010, Lyon is
clearly charging $40.00 per hour, not the $300.00 he is now claiming. In
this evidence Mr. Lyon, in his own words, states that his rate is $40 per
hour. He notes that allows ‘more bang for the buck’. There is no
ambiguity.
Case 3:09-cv-00988-F Document 507 Filed 05/03/11 Page 1 of 6 PageID 18536
(2) Evidences that multiple claimants have personal knowledge exonerating
Jeff with respect to the claims, but they have sat in silence. For example:
a. Mr. Broome and Mr. Cox were fully aware that Lyon's fee
was $40.00/hour– it is Broome who sent Cox the email
from Lyon. Yet, Broome and Cox have been silent,
allowing this Court to falsely believe that Jeff owed Lyon
money and failed to pay it.
b. Broome, Lyon, and Cox were all personally aware that in
this email chain, Mr. Taylor is 'proposing' a contingency fee
of $42,000.
1
This is about half of what Mark Taylor now
claims is the contingency fee. Even though each of these
attorneys knew that Taylor was doubling the amount of the
‘proposed’ contingency fee, they have all sat and kept their
silence. Not one claimant attorney has come forward to tell
the Court the truth—even though they have personal
knowledge of the facts.
1
Notably, Taylor's original ‘proposal’ is inconsistent with his billing and his contract. Taylor’s
‘proposal’, although half the amount of his ‘receivership claim’, is itself discredited by Exhibit B
to this motion. Taylor’s statements in August were that a subsequent “small bill” in September
should be the last one. It should also be noted that, per Taylor’s own ‘claim affidavit’, Taylor
held $10,000.00 in retainer from Jeff. Thus, the $2,500.00 “60 day old” invoice mentioned in
Exhibit B, was not outstanding as there was a $10,000.00 retainer balance. (Today, there is still a
$7,500.00 retainer balance due Jeff and it should be returned to Jeff).
Case 3:09-cv-00988-F Document 507 Filed 05/03/11 Page 2 of 6 PageID 18537
In other words, this email evidence establishes that multiple
‘claimant’ attorneys have personal knowledge that the ‘claims’ of other
attorneys are false and fraudulent. However, each and every ‘claimant’
attorney has kept his mouth shut as to the false claims another attorney is
making. Not a single ‘claimant’ attorney has stood up and come forward to
the Court with the facts within their personal knowledge exonerating Jeff.
EXHIBIT B - THE TAYLOR EMAIL
This email:
(1) Discredits Taylor’s claim for a right to a ‘contingency’ fee. Exhibit B
proves that after the settlement had been entered and approved (in July
2010), Taylor made no claim to any additional ‘contingency’ fee due,
and instead stated expressly “We'll probably have a very small bill
that will go out at the first of September, but that should be the last
one.”
2
Notably, Powers Taylor’s own billing ‘evidence’ supports this.
What happened between August 26, when this letter was sent, and
October ? Pronske engaged in his ‘scorched earth’ policy against
Jeff. Suddenly, multiple attorneys, all in contact with Pronske (as
2
Note that although the email asserts there is an outstanding balance, since Jeff had a $10,000.00
retainer still with Taylor, there was actually no balance due. The Powers Taylor ‘claim’ plainly
admits that there is a $7,500.00 balance due to Jeff based on the hourly fees billed and paid.
Case 3:09-cv-00988-F Document 507 Filed 05/03/11 Page 3 of 6 PageID 18538
seen from the attorneys’ own billing records), started asserting new
claims against Jeff for fees well beyond those they had agreed to,
and those they had previously billed. Pronske, Lyon, Taylor, Broome,
etc. All in communication with each other, and all with their hands out.
(2) This email evidence proves that there was no claim alleged or asserted
by Taylor for any ‘contingency’ amount due prior to Pronske’s
“scorched earth” campaign against Jeff.
B. WHY THE EVIDENCE WAS NOT RAISED EARLIER
The undersigned counsel is a solo practitioner. As a physical matter of
available time in the day, it is not possible for counsel to have reviewed all the
materials relevant to each of the multiple claims.
3
The receiver was requested to
provide key materials to make review of the ‘claims’ more efficient, but the
receiver after first promising to produce, refused to produce. Accordingly, the
undersigned counsel has not physically had the available hours to review all of the
material at hand (let alone material in the possession of the receiver and claimant
3
In addition to counsel’s duties as appellate counsel (which were undertaken by the agreement
of counsel), and counsel’s duties as trial counsel (which was placed upon counsel by this Court,
over objection, for which this Court has not paid for those services nor provided funding for
expenses or support), counsel still has pre-existing duties to other clients. If counsel had no other
work to perform, that would mean still that only approximately one work day was allowed to
investigate, review all the material and search for relevant evidence, research, and respond to
each of the ‘claims’. Since the receiver and trustee have flooded counsel with an avalanche of
paperwork, both in the trial court and in the court of appeals, the available time to review each
claim has amounted to a fractional part of a day, per claim. In such circumstance, it is simply
not possible as a matter of available time to review much of the available material for each case.
Case 3:09-cv-00988-F Document 507 Filed 05/03/11 Page 4 of 6 PageID 18539
attorneys which has been withheld), and can only raise that evidence once counsel
has, as a matter of physical time, been able to review and find the material.
C. RELIEF REQUESTED
Jeff Baron requests the Court to consider this evidence with respect to the
Court’s consideration of the receiver’s motions.
Jointly and in the alternative Jeff Baron requests this Court to reconsider its
ruling with respect to entering a stay pending appeal because such ruling was based
in material part on the Court’s belief that Mr. Baron had “abused” Mr. Lyon and
not paid him his fee. The new evidence proves that Mr. Lyon’s fee was $40 per
hour and not the $300 per hour billing rate Mr. Lyon has constructed his unpaid fee
claim upon. If this Court would have been aware that Mr. Lyon’s claim was based
on his claim for a $300 per hour fee, and that (as shown by this evidence) his fee
was actually $40 per hour and that he had been paid in full at that rate (as shown
by Mr. Lyon’s statements), the decision on relief pending appeal may have been
handled differently.
4
4
Notably, this is also true for other evidence now before the Court. For example, Mr. Broome,
whose “withdrawal” in the bankruptcy court was offered to show good cause for the
receivership, has now produced his contract. The contract proves that his fees were capped– he
was not authorized under the contract terms [page 3 term “2”] (without a written modification
authorizing such work) to work more than $10,000.00 in billing for any month. He withdrew in
November, 2010 with a maximum (per Broome’s accounting) ‘claim’ for $3,314. Accordingly his
‘claim’ for almost ten times that amount ($28,737.00) is not supported by his retainer agreement.
Similarly, with attorney after attorney producing contracts with monthly fee caps, Pronske’s
claim that he received $75,000.00 up front but Jeff actually told him to bill as much as he wanted
lacks credibility. This is true especially where Pronske had sent no bills, no engagement letter, no
receipt, no work statements, no statements of the status of any retainer, nothing to indicate that
Case 3:09-cv-00988-F Document 507 Filed 05/03/11 Page 5 of 6 PageID 18540
Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
Texas State Bar No. 00791608
Drawer 670804
Dallas, Texas 75367
(214) 210-5940 - Telephone
(214) 347-4031 - Facsimile
E-mail: legal@schepps.net
COURT ORDERED TRIAL
COUNSEL FOR JEFF BARON
CERTIFICATE OF SERVICE
This is to certify that this document 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
the $75,000.00 was anything other than an up-front flat fee payment. It is also especially true
where Pronske averred in his bankruptcy court counterclaim that when Pronske was first hired,
Jeff had stated he was not going to be paying Pronske any fee payments.
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