REPLY EXHIBIT A - The McNair Ex Parte Application in Cook
Islands 3.........................................................................................................................
REPLY EXHIBIT B - McNair Letter 5.........................................................................
REPLY EXHIBIT C - Plaintiff's Florida Suit 11..........................................................
REPLY EXHIBIT D - Baron Feb 2014 Motion in Netsphere Case 20.........................
REPLY EXHIBIT E - Simon Appearance for Baron 31...............................................
REPLY EXHIBIT F - Tayari in Eastern District 33.....................................................
REPLY EXHIBIT G - Simon Appearance for McNair 36............................................
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NOVO POINT, LLC., Et al. §
Plaintiffs, §
vs. § Civil Action No. 3:14-cv-1552-P
§
ELISA KATZ, Et al. §
Defendants §
APPENDIX OF EXHIBITS
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 1 of 49 PageID 1222
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 2 of 49 PageID 1223
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 3 of 49 PageID 1224
From: David McNair [mailto:david@mcnairpc.com]
Sent: Thursday, February 27, 2014 5:46 PM
To: Christopher A. Payne
Subject: RE: Novo Point LLC and Quantec LLC
Dear Mr. Payne
Thank you for your email and attached letter. I confirm I act for the trustee of the Village Trust, and through it, underlying
entities including Novo Point LLC and Quantec LLC. In regard to your call, I did not receive instructions to reply.
Your letter purports to impugn a number of actions taken in relation to the trust. I have sighted your filing in Netsphere v
effrey Barron filed today and advise that it contains fundamental factual errors; in particular see note 3 on page 2.
Before dealing with those matters, I must ask that you provide me with documentary authority for your assertion that you
represent Novo Point LLC and Quantec LLC.
Kind Regards
David McNair
Barrister & Solicitor
& Notary Public
From: Christopher A. Payne [mailto:cpayne@cappc.com]
Sent: Thursday, 27 February 2014 12:44 p.m.
To: David McNair
Subject: RE: Novo Point LLC and Quantec LLC
Mr. McNair,
PO Box 3104
Avarua
Rarotonga
Cook Islands
For US callers:
Office:
Cell:
Fax:
Email:
Website:
1 (949) 734-5216
+++ (682) 21514
+++ (682) 79623
+++ (682) 21517
david@mcnairpc.com
www.mcnairpc.com
This transmission contains confidential and possibly legally privileged information intended only for the recipient named above. If you
are not the named recipient you are notified that any use, disclosure, distribution or copying of the contents including any attachments is
rohibited. If you have received this transmission in error, kindly notify us on (682) 21514 and destroy this message. David McNair P.C.
is a Cook Islands limited liability corporation. Clients are accepted and advised by David McNair P.C. and not by members, partners,
employees, or consultants personally. David McNair P.C. alone is responsible for advice and services provided to its clients.
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 4 of 49 PageID 1225
Please see attached correspondence
Best regards,
Christopher A Payne
Sandler Siegel, PLLC
6600 LBJ Freeway, Suite 183
Dallas, TX 75240
Phone 972 284-0731
Direct 972 239-1270
Fax 214 453-2435
Cell 214 675-2923
chris@sandlersiegel.com
From: David McNair [mailto:david@mcnairpc.com]
Sent: Tuesday, February 25, 2014 8:09 PM
To: Christopher A. Payne
Subject: Novo Point LLC and Quantec LLC
Dear Mr. Payne
I refer to my email to you of 18 February 2014 in which I forwarded the resolutions of the above LLC’s directing you to
withdraw pleading number 1360 in the Netsphere matter and to take no further action without further notice from RPV
Limited, the sole member of both LLC’s.
My understanding is that you have not complied with these directions. It is also my understanding that you appear to be
unlawfully attempting to exercise control over Novo Point LLC and Quantec LLC for what appears to be your own benefit.
My further understanding is that this behaviour and activity is prohibited by your state’s Bar Disciplinary Rules. I advise that I
am seriously considering filing a complaint with the State Bar if you do not rectify this situation forthwith.
Kind Regards
David McNair
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 5 of 49 PageID 1226
Barrister & Solicitor
& Notary Public
PO Box 3104
Avarua
Rarotonga
Cook Islands
For US callers:
Office:
Cell:
Fax:
Email:
Website:
1 (949) 734-5216
+++ (682) 21514
+++ (682) 79623
+++ (682) 21517
david@mcnairpc.com
www.mcnairpc.com
This transmission contains confidential and possibly legally privileged information intended only for the recipient named above. If you
are not the named recipient you are notified that any use, disclosure, distribution or copying of the contents including any attachments is
rohibited. If you have received this transmission in error, kindly notify us on (682) 21514 and destroy this message. David McNair P.C.
is a Cook Islands limited liability corporation. Clients are accepted and advised by David McNair P.C. and not by members, partners,
employees, or consultants personally. David McNair P.C. alone is responsible for advice and services provided to its clients.
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 6 of 49 PageID 1227
6600 LBJ Freeway, Suite 183
Dallas, Texas 75240
Phone: 972-284-0731
Fax: 972-239-9968
February 26, 2014
Mr. David McNair
Barrister & Solicitor
& Notary Public
PO Box 3104
Avarua
Rarotonga
Cook Islands
RE: Novo Point LLC and Quantec LLC
Dear Mr. McNair,
Please accept this as my response to your e-mail from Tuesday February 25, 2014 regarding my
activities as counsel for Novo Point LLC and Quantec LLC (“the LLCs”).
First, and I mean absolutely no disrespect by this statement as you may be the finest barrister and
solicitor not only in the Cook Islands, but in the entire English legal system, but I do not know
who you are. You and I have never met or had any conversations or communications of any kind
that I am aware of until I was copied on an e-mail addressed to Lisa Katz on February 18, 2014.
The only thing that I know about you is that you are a barrister and solicitor in the Cook Islands.
The e-mail from February 18, 2014 is not addressed to me. I am merely copied on it. I received
the e-mail at 8:12PM CST. The document which is attached to the e-mail contains an apparent
signature, which I cannot read. Below what is apparently the signature is additional writing
which I also cannot read. There is no printed identification of the individual purporting to act, no
identification of the position of the person purporting to act, or any demonstrable authority of
any kind for the individual signing to bind the entity which purportedly enacted the resolution.
The resolution is undated, is not verified, is not notarized or certified and bears no other
information demonstrating the authenticity of the document. The document provided appears to
bear the name of Elissa Katz as the author. Ms. Katz did not author or authorize the document.
There are a number of other issues and concerns with the document which I will not take the
time to go through at this point. Despite all of these issues, after I received the document I
attempted to call you to speak to you about my concerns. I called you at 9:09 PM and again at
9:19 PM on February 18, 2014. I left a voice mail asking you to contact me. I have not received a
return call as of the date and time of this e-mail.
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 7 of 49 PageID 1228
6600 LBJ Freeway, Suite 183
Dallas, Texas 75240
Phone: 972-284-0731
Fax: 972-239-9968
Second, I received an e-mail from you on February 19, 2014 at 8:46 PM. Like the document
attached to the e-mail of February 18, 2014, the document attached to this e-mail has significant
concerns and issues as well. The document appears to be signed by you in your capacity as a
director of CITP, Ltd. This is yet another entity that has never before contacted me. Nothing in
this e-mail or the documents attached provide any documentation to identify who you are, the
source of CITP Ltd’s purported authority to act in any capacity which it purports to act, and other
basic information that you as a barrister & solicitor would require before you took any action on
behalf of your client, let alone an action such as withdrawing a pleading, when withdrawing that
pleading might reasonably be construed as an action against the best interest of a client and a
violation of fiduciary duties owed to that client. With respect to handling of the federal
proceedings, you should be aware that in Texas a lawyer should assume responsibility for the
means by which the client's objectives are best achieved; thus, a lawyer has very broad discretion
to determine technical and legal tactics.
Third, on Friday February 19, 2014 and again on Saturday February 20, 2014, I spoke with
Leonard Simon. I expressed my concerns that no one has provided me with the necessary
documentation to demonstrate the authority of CITP Ltd and/or RPV to act. I also advised him
that I had called you but had not received a return call. Perhaps incorrectly, I assumed he would
communicate these concerns to you as well. Mr. Simon also asked me to submit invoices to you
for my time and expenses so that arrangements could be made to get them paid.
Fourth, on Sunday February 21, 2014, Mr. Leonard sent me an e-mail suggesting “As a showing
of good faith, please file a notice of withdrawal of the Reply you filed on 2/18/2014, Document
No. 1360.” He attached the same resolutions as included in your e-mail of February 19, 2014
with the same defects, issues and concerns as those contained in your e-mail. Receiving this e-
mail from him did not cure these defects, issues and concerns. Moreover, Mr. Simon does not
purport to represent the LLCs, and has not yet been authorized to substitute in as counsel in the
federal court. I seriously doubt that you would accept such documents if they came from a
foreign country as the basis for taking any action which might be construed as against the interest
of your client without authenticated documentation and far more information than has been
provided to me. With no disrespect intended, I do not believe the entities you represent hold the
authority they are purporting to exercise. However, while it is not clear which, if any, parties you
are representing as counsel, I am happy to look at whatever documentation you may provide.
As counsel for Novo Point LLC and Quantec LLC I have a fiduciary duty to both of these
companies. I fully intend to discharge these responsibilities to the best of my abilities and am
not about to take any action which I believe might likely harm the companies. I will also not be
threatened into taking an action that I believe is in violation of my fiduciary duties to the LLCs
and/or cannot verify is genuinely requested of me by someone who is authorized and actually
understands the potential consequences of such actions.
I need, as a preliminary matter, documentation that can be authenticated and which evidences the
authority of the entities your represent to take the actions reflected in the documents you sent me.
That will allow me to determine what actions should be taken, if any, in light of the substance of
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 8 of 49 PageID 1229
6600 LBJ Freeway, Suite 183
Dallas, Texas 75240
Phone: 972-284-0731
Fax: 972-239-9968
the documents. Please provide these to me at your earliest convenience. Once I receive these I
will be happy to discuss this matter with you.
Best regards
Christopher A. Payne
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 9 of 49 PageID 1230
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
NOVO POINT, LLC, a Cook Islands limited
liability company and QUANTEC, LLC, a
Cook Islands limited liability company
Plaintiffs,
vs.
DOMAIN HOLDINGS GROUP, INC., a
Florida corporation, and DOES 1-5
Defendants.
CASE NO.
PLAINTIFFS’ COMPLAINT
/
COMPLAINT
Plaintiffs, NOVO POINT, LLC, a Cook Islands limited liability company, and QUANTEC,
LLC, a Cook Islands limited liability company, hereby sue Defendants DOMAIN HOLDINGS
GROUP, INC., a Florida corporation, and DOES 1-5, alleging as follows:
PARTIES AND PARTICIPANTS
1. Plaintiff NOVO POINT, LLC (hereinafter "NOVO"), is a Cook Islands limited liability
company, having its principal place of business in the Cook Islands. NOVO does not have a place
of business in the State of Florida. NOVO is in good standing under the laws of the Cook Islands.
2. Plaintiff QUANTEC, LLC (hereinafter "QUANTEC"), is a Cook Islands limited liability
company, having its principal place of business in the Cook Islands. QUANTEC does not have a
place of business in the State of Florida. QUANTEC is in good standing under the laws of the Cook
Islands.
1
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3. Defendant DOMAIN HOLDINGS GROUP, INC., (hereinafter "DOMAIN HOLDINGS"),
is a Florida corporation with its principal place of business in Delray Beach, Florida.
4. Defendants DOES 1 through 5 are other parties not yet fully identified who have apparently
made a claim towards monies owed to NOVO and/or QUNATEC by DOMAIN HOLDINGS as more
fully set forth below. The true names, whether corporate, individual or otherwise, of Defendants
DOES 1 through 5 are presently not fully known to NOVO and/or QUANTEC. Accordingly, NOVO
and QUANTEC file this action against DOMAIN HOLDINGS and said DOE Defendants by such
fictitious names, and will seek leave to amend this Complaint to show their true names and
capacities when same have been ascertained and adequately identified.
5. Plaintiffs are informed and believe and thereon allege that DOMAIN HOLDINGS is
withholding the funds owed to NOVO and/or QUANTEC for multiple Internet domain names
("domains") owed by NOVO and/or QUANTEC, which domains generate money for NOVO and/or
QUANTEC (such money being collected by DOMAIN HOLDINGS for the benefit of Plaintiffs as
further alleged below).
JURISDICTION AND VENUE
6. This action arises under Declaratory Judgments, Title 28 U.S.C. §2201 and 2202.
7. This Court has diversity jurisdiction over this action and declaratory judgment claim pursuant
to 28 U.S.C. §§1332(a)(2) and 1332(c)(1) because (a) the amount in controversy is greater than
$75,000, exclusive of interest and costs (28 U.S.C. §1332(a)); (b) DOMAIN HOLDINGS has a
principal place of business within the territorial jurisdiction of the Court (namely, Delray Beach, FL);
(c) NOVO is incorporated in the Cook Islands and is a citizen of a foreign state (namely, Cook
Islands) and QUANTEC is also incorporated in the Cook Islands and is a citizen of a foreign state
2
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(namely, Cook Islands)(see 28 U.S.C. §1332(c)(1)); and (d) neither NOVO or QUANTEC have a
principal places of business in the State of Florida (see 28 U.S.C. §1332(c)(1)). Therefore, this Court
has diversity jurisdiction over this dispute involving citizens of a foreign state and DOMAIN
HOLDINGS, a local company in Florida.
8. Venue is proper in the Unites States District Court for the Southern District of Florida
pursuant to 28 U.S.C. §1391, because Plaintiffs NOVO and QUANTEC have separate contractual
agreements with DOMAIN HOLDINGS for the monetization of the multiple NOVO and/or
QUANTEC domains, and whereas, DOMAIN HOLDINGS is a Florida corporation located in Delray
Beach Florida, a substantial part, if not all, of the performance by DOMAIN HOLDINGS and events
giving rise to the claims occurred in the State of Florida, Plaintiffs have suffered damages in Florida,
and DOMAIN HOLDINGS solicits business from consumers in the State of Florida.
FACTS
9. Plaintiffs NOVO and QUANTEC register, purchase, monetize, develop and/or sell domains.
NOVO and QUANTEC have been in this business since their inception, approximately June 30,
2009. NOVO and QUANTEC have collectively acquired over 200,000 domains (herein collectively
"NQ Domains").
10. Currently NOVO owns approximately 170,000 domains (herein "NP Domains") and
QUANTEC owns approximately 60,000 domains (herein "Q Domains"). Both the NP Domains and
the Q Domains are the subject of this action.
11. NOVO is the owner of all the NP Domains. QUANTEC is the owner of all Q Domains. All
the NP Domains and Q Domains are registered with two (2) Domain Registrars, namely
Fabulous.com and Name.com. The concept of domain registrars are commonly before the courts as
3
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shown in 15 U.S.C. §1125(d)(2)(A). As of the date of filing this action, both Registrars
(Fabulous.com and Name.com) have placed a temporary lock of the NP Domains and Q Domains,
in order to freeze any transfer or changes to the ownership or control thereof.
12. NOVO and QUANTEC, and each of them, entered into separate agreement(s) with DOMAIN
HOLDINGS such that, among other things, DOMAIN HOLDINGS is permitted to utilize the domain
names for the purposes of earning revenues ("monetization") and in exchange DOMAIN
HOLDINGS pays to NOVO and/or QUANTEC as the case may be, a percentage of revenues and
other consideration earned or received by DOMAIN HOLDINGS in connection with such
monetization or a fixed fee.
13. On or before March 21, 2014, NOVO and QUANTEC were informed by DOMAIN
HOLDINGS that it would not release the money owed to NOVO and/or QUANTEC relative to the
monetization of the NQ Domains because one or more third parties (named herein as DOE
defendants) have demanded that DOMAIN HOLDINGS pay all such amounts to them and not to
plaintiffs.
14. The NP Domains and the Q Domains require the payment of annual registration fees to the
registrars Fabulous and Name.com, respectively in order for NOVO and QUANTEC to continue to
hold the registration rights therein. If the Registrars (Fabulous and Name.com as the case may be)
are not paid then NOVO's and QUANTEC's respective ownership interests and registrations rights
therein will be cancelled, thereby ending Plaintiffs', and each of their, rights therein, including any
right to monetize such domains. NOVO and QUANTED are informed and believe, and based
thereon allege, that the annual registration fees for multiple NP Domains and Q Domains are coming
due and require payment. Plaintiffs are further informed and believe, and based thereon allege, that
4
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DOMAIN HOLDINGS possesses a complete list of the NP Domains and Q Domains which are at
issue in this case, the Registrar at which such domains are registered, and the expiration dates prior
to which annual registration fees are due thereon. Although requested to do so, DOMAIN
HOLDINGS has refused to tender to Plaintiffs and/or to the Registrars (Fabulous.com and/or
Name.com as the case may be) any part of the amount owed to Plaintiffs so that the domains at issue
may be renewed and not cancelled.
15. Upon information and belief DOES 1-5 have laid claim to the money held by DOMAIN
HOLDINGS for the NQ Domains. Currently, DOMAIN HOLDINGS owes NQ in excess of
$75,000.
16. In light of the large number of domains at issue, all of the renewal fees to keep the NQ
Domains properly registered to and owned by NQ are paid from the DOMAIN HOLDINGS
monetization funds. Plaintiffs are currently without funds necessary to pay the renewal fees and in
the event amounts due are not paid to Plaintiffs, the domains at issue will expire all to the damage
and detriment of Plaintiffs.
COUNT I:
DECLARATION OF OWNERSHIP FOR DOMAIN MONETIZATION FUNDS
17. Plaintiffs repeat each and every allegation set forth in the preceding paragraphs of this
Complaint as if fully set forth herein.
18. Both NOVO and QUANTEC have contractual agreements with DOMAIN HOLDINGS
relative to the monetization of the NP Domains and Q Domains respectively.
19. NOVO and QUANTEC have informed DOMAIN HOLDINGS of NOVO and QUANTEC's
respective rights and claims to the monetization funds.
5
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20. DOMAIN HOLDINGS has failed to pay the monetization funds to NOVO and/or
QUNATEC. DOMAIN HOLDINGS failure to turn over those monetization funds to NOVO and/or
QUANTEC are causing damage and harm, to PLAINITFFS.
21. DOES 1-5 have asserted claims of ownership to the monetization funds held by DOMAIN
HOLDINGS. These DOES 1-5 claims of right to these funds do not relieve DOMAIN HOLDINGS
of their contractual obligations to NOVO and/or QUANTEC. Any claims by DOES 1-5 should only
be directed to NOVO and/or QUANTEC.
22. NOVO and QUANTEC seek a Declaration of ownership as to the monetization funds for the
NP Domains and the Q Domains.
COUNT II:
PRELIMINARY INJUNCTIVE RELIEF
23. Plaintiffs repeat each and every allegation set forth in the preceding paragraphs of this
Complaint as if fully set forth herein.
24. Some NP Domains and Q Domains will be coming due for renewal within the next few
weeks and/or months.
25. NOVO and QUANTEC rely almost exclusively on the monetization funds for the continued
renewal and maintenance of ownership of the NP Domains and Q Domains. Some of the funds
generated from the DOMAIN HOLDINGS monetization money is earmarked and used towards these
renewals. PLAINTIFFS have instructed DOMAIN HOLDINGS to pay such renewal fees, and/or
release the money to Plaintiffs for payment, but DOMAIN HOLDINGS has refused to do so. The
failure of DOMAIN HOLDINGS to release these funds and effectuate the renewals will cause
substantial and irreparable harm to NOVO and QUANTEC.
6
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26. As a result, NOVO and QUANTEC seeks a preliminary injunctive order from this Court to
command DOMAIN HOLDINGS to use the necessary portion of the current monetization funds
owed to NOVO and QUANTEC in order to renew and maintain the soon-to-be expiring registrations
of the NP Domains and/or Q Domains, or in the alternative to release those funds to NOVO and/or
QUANTEC so that the renewals can be handled by NOVO and/or QUANTEC. Such expiration will
cause these domains to end up on the open market, subject to any willing buyer to have a potential
claim to ownership of said domains.
27. If NOVO and/or QUANTEC lose their ownership rights to these domains, due to DOMAIN
HOLDINGS failure to release the funds allowing NOVO and/or QUATNEC to renew same, NOVO
and/or QUANTEC will be irreparably injured and will suffer, and will continue to suffer, substantial
damage to their businesses, as well as general and special damages, in an amount to be established
at trial.
COUNT III:
PERMANENT INJUNCTIVE RELIEF
28. Plaintiffs repeat each and every allegation set forth in the preceding paragraphs of this
Complaint as if fully set forth herein.\
29. Plaintiffs seek an Order from the Court commanding DOMAIN HOLDINGS to pay over to
the respective plaintiffs their respective monetization funds as determined by the Court in the
declaratory judgments action, Count 1.
30. Plaintiffs have suffered irreparable injury by the failure of DOMAIN HOLDINGS to (a) pay
Plaintiffs their respective portions of the monetization funds and (b) pay the respective Registrars
portions of the monetization funds to renew the various NP Domains and Q Domains.
7
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31. Plaintiffs' remedies at law are not adequate to compensate Plaintiffs' injuries with respect to
their respective NP Domains and Q Domains. For example, if certain NP Domains and/or Q
Domains are not renewed and third parties purchase such non-renewed NP Domains and/or Q
Domains, Plaintiffs' may not be able to re-purchase such domains from such third party purchasers.
32. Any injury suffered by DOMAIN HOLDINGS due to the issuance of the permanent
injunction to turn over monetization funds to the respective plaintiffs is small when balanced against
the injury to Plaintiffs.
33. The issuance of a permanent injunction serves the public's interest because the public, and
various members of the public, including Plaintiffs, benefit when DOMAIN HOLDINGS adheres
to the contractual arrangements with NOVO and with QUANTEC.
RELIEF REQUESTED
WHEREFORE, Plaintiffs respectfully request judgment in their favor and against Defendants as
follows:
1. A declaration that Plaintiffs are the owners of the respective monetization funds for the NP
Domains and the Q Domains;
2. Entry of a preliminary injunctive relief instructing DOMAIN HOLDINGS to pay over to the
respective Registrars respective portions of the monetization funds for the renewal of NP Domains
and Q Domains which are subject to renewal;
3. Entry of a permanent injunctive relief instructing DOMAIN HOLDINGS to pay over to the
respective plaintiffs monetization funds for the NP Domains and the Q Domains;
4. An award of attorneys fees per the DOMAIN HOLDINGS agreements with the respective
plaintiffs;
8
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5. An award of costs and expenses for this action; and
6. Such other and further relief as the Court may deem just and proper.
Respectfully submitted,
Dated: _April 7, 2014__ By: s/Robert Kain
Robert C. Kain, Jr. (Florida Bar No. 266760)
Rkain@ComplexIP.com
Darren Spielman (10868)
Dspielman@ComplexIP.com
KAIN & ASSOCIATES, Attorneys at Law, P.A.
900 Southeast 3rd Avenue, Suite 205
Fort Lauderdale, FL 33316
T: (954) 768-9002
F: (954) 768-0158
Attorneys for Plaintiffs
9
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Stephen R. Cochell
The Cochell Law Firm, P.C.
7026 Old Katy Road, Ste. 259
Houston, Texas 77096
Telephone: (713)980-8796
Facsimile: (214) 980-1179
srcochell@cochellfirm.com
LEAD ATTORNEY FOR JEFFREY BARON
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
JEFFREY BARON,
Respondent,
vs.
ELIZABETH SCHURIG, et. al.,
Movants.
§
§
§ CIVIL ACTION NO. 3:13-cv-03461-L
§
§
§ (Bankruptcy Case No. 12-37921)
§
§
§
§
§
BARON’S OBJECTION TO VOGEL’S STATUS REPORT [DOC 1352]
TO THE HONORABLE SAM A. LINDSAY,
UNITED STATES DISTRICT JUDGE:
NOW COMES, Jeffrey Baron (“Baron”) and files this Objection to to Vogel’s Status
Report [Doc 1352, and in support thereof would respectfully show this Court as follows:
INTRODUCTION
1. On November 24, 2010, the District Court established a Receivership
(“Receivership”). Pursuant to the Order creating the Receivership, the Receiver, Peter Vogel,
took possession of the assets of Jeffrey Baron, and took control of two entities called Novo Point,
Case 3:09-cv-00988-L Document 1355 Filed 02/11/14 Page 1 of 11 PageID 65656
Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 19 of 49 PageID 1240
LLC (“Novo Point”) and Quantec, LLC (“Quantec”), two limited liability companies organized
under the laws of the Cook Islands. Novo Point and Quantec, in turn, have always been owned
by a trust called the Village Trust, also an entity organized under the laws of Cook Islands.
2. The Receivership and the appointment of the Receiver in this case for the purpose
of marshalling Mr. Baron’s personal assets has turned into an unmitigated disaster for everyone
but the Receiver and his attorneys, who have stripped all of Baron’s personal assets from him,
including all of his exempt assets – IRA accounts and 401k accounts - and the assets of Quantec
and Novo Point, and have used Baron’s assets to pay themselves at least $5,200,000 in fees and
expenses. Not one creditor of Baron has been paid in this case. Baron was deprived of the basic
right to engage counsel to defend himself against the actions taken by the Petitioning Creditors
1
and the Receiver. See true and correct copy of an email dated December 2, 2010, from the
Receiver’s attorney, Barry Golden, attached hereto and made a part here of as Exhibit “1”.
3. Two years later, and after the payment of at least $5,200,000 in fees and expenses
incurred by the Receiver and his attorneys, the Fifth Circuit found that the appointment of the
Receiver was an abuse of discretion, and that “[e]stablishing a receivership to secure a pool of
assets to pay Baron's former attorneys, who were unsecured contract creditors, was beyond the
court's authority.” Netsphere, Inc. v. Baron, 703 F.3d 296, 308 (5
th
Cir. 2012).
4. The Fifth Circuit found no basis to support the Receiver’s and Petitioning
Creditors’ contention that Baron was attempting to secret away from the jurisdiction of the Court
any assets that were subject to the settlement in the Netshpere v Baron case:
“We do not, though, find evidence that Baron was threatening to nullify the global
settlement agreement by transferring domain names outside the court's
jurisdiction. Accordingly, the receivership cannot be justified in this instance on
the basis that it was needed to take control of the property that was the subject of
1
The Petitioning Creditors are: Pronske Goolsby & Kathman, PC, f/k/a Pronske & Patel, P.C., Shurig Jetel Beckett
Tackett, Dean Ferguson, Gary G. Lyon, Robert Garrey, Powers Taylor, LLP, Jeffrey Hall, and David Pacione’s
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the litigation. Rather, the receivership was established to pay the attorneys and to
control vexatious litigation. We will now examine each of those reasons.”
Id. at 308. Nor could the Receiver or the Ondova Trustee point to one order that Baron violated
in the District Court that might have resulted in a contempt of court:
“If the district court entered a sufficiently specific order, it could have held Baron
in contempt, imposed a fine or imprisoned him for “disobedience ... to its lawful
... command.” 18 U.S.C. § 401. At oral argument in the appeal, it seemed
conceded that no clear order existed. Instead, the receiver and trustee cited only to
hearings at which the district court admonished Baron not to hire or fire any more
attorneys.”
Id. at 311. All of the “mud slinging” of the Receiver was laid bare by the Fifth Circuit, and the
Court vacated the Receivership Order. Yet in his Status Report, Vogel continues the “mud
slinging”.
5. Within two hours of the Fifth Circuit’s issuance of the Netsphere, Inc. v. Baron
opinion on December 18, 2012, instead of going to state court to liquidate their claims, as the
Fifth Circuit so admonished them, the Petitioning Creditors filed an involuntary bankruptcy
proceeding against Mr. Baron in an effort to circumvent the Fifth Circuit decision in Netsphere v
Baron and keep his assets frozen. Thus these Petitioning Creditors, unhappy with the ruling they
had just received from the Fifth Circuit, decided to take action that was intentionally designed to
circumvent, emasculate and defy the decision of the Fifth Circuit. Their mission was to keep Jeff
Baron’s personal assets frozen and to continue to deprive him of his “day in court”, where he
might have an impartial trial by a court and jury with respect to the attorney fee claims being
asserted against him. Baron believes that the Receiver and his attorneys actively participated in
the meretricious efforts of the Petitioning Creditors to keep Baron’s assets frozen.
6. Then, in attempting to prove up their involuntary bankruptcy claims as being
liquidated, and non-contingent in nature, the Petitioning Creditors again attempted to avoid a full
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blown trial on the merits by relying on the May 18, 2011 Fee Order to support a summary
judgment motion, making the outrageous unsupported argument that such order should have
preclusive effect obviating the need to liquidate their claims for purposes of satisfying the
requirements of 11 U.S.C. § 303. Again, Baron believes that ultimately he will be able to prove
that the Receiver and his attorneys actively participated in the design of the Petitioning
Creditors’ tactics, which, again, “blew up in their faces”.
7. One thing is for certain: at no time did the Receiver ever attempt to protect Baron
and the Receivership Estate’s assets from the meritorious claims of the Petitioning Creditors.
Having left Baron totally crushed financially, and barred from defending himself, even using his
exempt assets to do so, the Receiver and his attorneys frittered away $5,200,000 of Baron’s
assets.
8. “Federal courts are courts of limited jurisdiction; without jurisdiction conferred by
statute, they lack the power to adjudicate claims.” In re FEMA Trailer Formaldehyde Products
Liability Litigation, 668 F.3d 281, 286 (5
th
Cir. [La.], 2012), citing Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 377 (1994). The Fifth Circuit in Netsphere, Inc. v. Baron held that
the District Court neither had the jurisdiction to appoint the Receiver in this case,
2
nor the
authority to do so,
3
and then vacated the receivership order.
4
This Honorable Court should
adhere to the mandate of the Fifth Circuit in the Netsphere, Inc. v. Baron case, and not
countenance any further delays in winding up this Receivership and discharging this Receiver
2
In Netsphere v. Baron, 703 F.3d at 310, the Fifth Circuit stated: “A court lacks jurisdiction to impose a receivership
over property that is not the subject of an underlying claim or controversy.” Citing Cochrane v. W.F. Potts Son &
Co., 47 F.2d 1026, 1029 (5th Cir.1931).
3
“A court has undeniable authority to control its docket but not through creating a receivership over assets,
including personal assets, that were not the subject of the litigation.” Netsphere v. Baron, 703 F.3d at 311.
4
“We conclude that the receivership improperly targeted assets outside the scope of litigation to pay claims of
Baron's former attorneys and control Baron's litigation tactics. This was an improper use of the receivership remedy.
The order appointing a receiver is vacated.” Id.
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and his attorneys. This Court should not pay this Receiver and his professionals one additional
penny in fees and expenses.
5
9. As important, this Court should enforce its own mandate in the Court’s Order
dated January 6, 2014 directing the Receiver to take necessary steps to wind down and terminate
the Receivership created in this case and return all Receivership assets to the parties from which
the assets were received. ECF Document 1351.
10. Finally, this Court should keep in mind the limited nature of this Court’s
jurisdiction as enunciated by the Fifth Circuit in the Netsphere v Baron case. This Court should
not be lured into the abyss of ruling on matters over which it has no jurisdiction.
QUANTEC AND NOVO POINT
11. On April 22, 2011, Judge Furgeson entered an Order Granting the Receiver's
Motion to Appoint Damon Nelson as Permanent Manager of the LLCS and for Turnover of LLC
Materials to Damon Nelson. ECF Document 473. Said order has never been vacated.
12. Novo Point and Quantec are Cook Islands Limited Liability Companies that are
owned by the Village Trust, also organized under the laws of the Cook Islands.
13. The current trustee of the Village Trust is RPV Limited. RPV Limited replaced
Southpac Trust International Inc. as the trustee of the Village Trust on or about July 3, 2013,
approximately six months after the receivership was vacated. RPV Limited is also the sole
member of Quantec and the sole member of Novo Point. RPV Limited has appointed Tayari
Law PLLC of Dallas Texas, USA as its duly authorized legal representative in the United States.
All of these matters are established by the Assignments and Resolutions attached hereto as
Exhibits “2” & “3”,
5
Indeed, with the sweep of a pen this Court can and should, sua sponte, order the Receiver to unfreeze Jeff Baron’s
exempt property IRA and Retirement Accounts within twenty-four hours.
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14. Damon Nelson and/or the Receiver have taken possession of bank accounts in the
name of Novo Point and Quantec, and books and records of Novo Point and Quantec have been
turned over to Damon Nelson and/or the Receiver as directed by the April 22, 2011 Order.
15. For nearly three years, the Receiver and/or Damon Nelson have been engaged in
the control and operation of Novo Point and Quantec by virtue of the April 22, 2011 Order.
16. In winding up the affairs of the Receivership, the following simple tasks must be
accomplished immediately:
a. RPV Limited, as the sole manager of Quantec and Novo Point shall designate an
entity in the United States to act as the local manager for Novo Point and
Quantec, and shall provide such resolutions to its counsel in the United States,
Tayari Law PLLC.
b. Tayari Law PLLC shall provide such resolutions to the Receiver and Damon
Nelson.
c. The Court should enter an order vacating the April 22, 2011 Order, which should
(i) direct the Receiver and Damon Nelson, within two business days, to turn over
the bank accounts of Novo Point and Quantec to the entity designated by RPV
Limited to become the manager in the United States for Novo Point and Quantec;
(ii) direct the Receiver, Damon Nelson or any of their respective agents or
employees to remove themselves as the signatories on such bank accounts; (iii)
direct the Receiver, Damon Nelson or any of their respective agents or employees
to turn over to Tayari Law PLLC in an orderly fashion (boxes to be numbered and
a summary document to be prepared identifying the numbered boxes and a
description of the contents within each box) within five business days all originals
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of the books and records of Novo Point and Quantec that are in their possession or
subject to their control, including, but not limited to, any correspondence,
memoranda, emails and facsimile documents, and including all attorney-client
privileged information where such attorney-client privilege would belong to Novo
Point, Quantec or the Receiver and/or Damon Nelson or any of their agents or
employees insofar as they were acting as agents and representatives of Novo Point
and Quantec.
JEFFREY BARON’S ASSETS
17. The Court should enter an Order In Aid of Winding Down the Receivership (the
“Wind Down Order”).
18. The Wind Down Order should direct and compel the Receiver to accomplisah the
following:
a. The Receiver and all of his agents or employees, within two business days, shall
turn over to Jeffrey Baron all bank accounts containing moneys belonging to
Jeffrey Baron.
b. The Receiver any of his agents or employees shall, within two business days,
remove themselves as the signatories on such bank accounts;
c. The Receiver or any of his agents or employees shall, within five business days,
turn over to Jeffrey Baron in an orderly fashion (boxes to be numbered and a
summary document to be prepared identifying the numbered boxes and a
description of the contents within each box) all originals of the books and records
of Jeffrey Baron that are in their possession or subject to their control, including,
but not limited to, any correspondence, memoranda, emails and facsimile
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documents, and including all attorney-client privileged information where such
attorney-client privilege would belong to Jeffrey Baron or the Receiver and/or any
of his agents or employees insofar as they were handling the affairs of Jeffrey
Baron.
d. The Receiver shall, within one business day, take all steps necessary to unfreeze
any bank accounts or other assets of Jeffrey Baron in Texas or in any other
jurisdiction frozen or seized by the Receiver or any of the Receiver’s agents or
employees, including, but not limited to, all of Jeffrey Baron’s exempt IRAs and
401Ks held by any institution in any jurisdiction. Such steps to unfreeze such
assets shall include notice that such institutions shall forthwith take their
instructions regarding disposition of such accounts or assets from Jeffrey Baron.
All such steps to unfreeze such assets shall be in written form, and copies shall be
mailed and emailed to Jeffrey Baron in pdf format.
DOMAIN NAME DISPUTES AGAINST NOVO POINT LLC
AND QUANTEC LLC SHOULD BE ENJOINED FOR TWELVE MONTHS
19. Novo Point and Quantec will require a short period to find and hire competent
counsel to respond to the UDRP domain name disputes. The Receiver has wholly failed to
respond to the UDRP domain name disputes.
20. Because Vogel has failed to respond to any UDRP disputes and, pursuant to his
report, has allowed 800 disputes to accumulate over the past three years, it is estimated that a
minimum of twelve months will be required for a staff of three attorneys, working solely on
UDRP claim responses, to handle the backload of 800 claims resulting from Vogel’s refusing to
prepare responses to any of the claims over the past three years.
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RECEIVERSHIP FEES AND EXPENSES ALLOWED BY THIS COURT
PURSUANT TO INTERLOCUTORY ORDERS SHOULD BE REVIEWED AND
EXAMINED, PARTICULARLY THOSE FEES AND EXPENSES INCURRED
AFTER THE FIFTH CIRCUIT’S DECISION IN DECEMBER 2012
21. The Fifth Circuit held in the Netsphere v Baron case as follows:
“In light of our ruling that the receivership was improper, equity may well require
the fees to be discounted meaningfully from what would have been reasonable
under a proper receivership. Fees already paid were calculated on the basis that
the receivership was proper. Therefore, the amount of all fees and expenses must
be reconsidered by the district court. Any other payments made from the
receivership fund may also be reconsidered as appropriate.
“We also conclude that everything subject to the receivership other than cash
currently in the receivership, which Baron asserts in a November 26, 2012 motion
amounts to $1.6 million, should be expeditiously released to Baron under a
schedule to be determined by the district court for winding up the receivership.
The new determination by the district court of reasonable fees and expenses to be
paid to the receiver, should the amount be set at more than has already been paid,
may be paid from the $1.6 million. To the extent the cash on hand is insufficient
to satisfy fully what is determined to be the reasonable charges by the receiver
and his attorneys, those charges will go unpaid. No further sales of domain names
or other assets are authorized.”
Netsphere v. Baron, 703 F.3d at 313-14. Under any set of circumstances, the fees and expenses
of the Receiver and his attorneys from and after December 18, 2012, should be limited to the
$1,600,000 on hand as of November 26, 2012. Any additional fees and expenses should go
unpaid, as clearly articulated by the Fifth Circuit. Baron believes that more than $1,600,000 has
been distributed since December 18, 2012, and would ask that the Receiver be ordered to
account for such payments.
22. Furthermore, this Court should revisit the fees and expenses of the Receiver and
his attorneys based on the failure of the Receiver to protect the Quantec and Novo Point assets,
the damages incurred by Baron as a result of the Receiver’s conduct in this proceeding, and the
failure of the Receiver to accomplish much of anything other than the payment of his fees and
expenses and the fees and expenses of his legal counsel.
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CONCLUSION AND PRAYER
`This Honorable Court should not rely upon Vogel’s report and should not open new
proceedings. Within the timeframe outlined above the receivership assets belonging to Baron
should be returned to Baron and the receivership assets belonging to Novo Point and Quantec
should be returned to the the United States Manager for Novo Point and Quantec duly appointed
by the current Cook Island Manager for Novo Point and Quantec. There is no dispute and no
other party that can lay claim to these assets. This Honorable Court should promptly terminate
the receivership estate and discharge Vogel, without prejudice to a review and final approval of
his fees and expenses and the fees and expenses of his professionals, and without prejudice to
potential claims that Baron, Novo Point and Quantec may have against him and his agents and
attorneys, all of this being in conformity with the mandate of the Court of Appeals.
Dated: February 11, 2014
Respectfully submitted,
TAYARI LAW PLLC
By: ___________________________
Mpatanishi Tayari Garrett, Esq.
Texas Bar No. 24073090
100 Crescent Court, Ste. 700
Dallas, TX 75201
Tel. (214) 459-8266
Fax. (214) 764-7289
And
Stephen R. Cochell
The Cochell Law Firm, P.C.
7026 Old Katy Road, Ste. 259
Houston, Texas 77096
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Telephone: (713)980-8796
Facsimile: (214) 980-1179
srcochell@cochellfirm.com
Attorneys for Jeffrey Baron on Appeal
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the foregoing was served
via ECF on all parties receiving ECF Notices in the above-captioned case on February 11, 2014.
/s/ Stephen R. Cochell
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Page 1 of 2
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC.,
MANILA INDUSTRY, INC.,
AND MUNISH KRISHAN
PLAINTIFFS,
v.
JEFFREY BARON AND
ONDOVA LIMITED COMPANY,
DEFENDANTS
§
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§
§
§
§
CIVIL ACTION NO. 3:09-cv-0988-L
NOTICE OF APPEARANCE OF LEONARD H. SIMON OF THE PENDERGRAFT &
SIMON LAW FIRM AS ATTORNEY IN CHARGE FOR JEFFREY BARON
PLEASE TAKE NOTICE that on behalf of Jeffrey Baron the undersigned hereby appears
as attorney-in-charge in the captioned proceeding:
Leonard H. Simon, Esq.
TBN: 18387400; SDOT No. 8200
PENDERGRAFT & SIMON, LLP
The Riviana Building
2777 Allen Parkway, Suite 800
Houston, Texas 77019
(713) 528-8555 (Telephone)
(713) 737-8207 (Direct)
(713) 253-2810 (Mobile)
(713) 868-1267 (Main Telecopy)
(832) 202-2810 (Direct Telecopy)
Email: lsimon@pendergraftsimon.com
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Case 3:14-cv-01552-P Document 31-1 Filed 05/28/14 Page 30 of 49 PageID 1251
Page 2 of 2
Respectfully submitted this 25
th
day of February 2014.
/s/ Leonard H. Simon
Leonard H. Simon, Esq.
TBN: 18387400; SDOT: 8200
The Riviana Building
2777 Allen Parkway, Suite 800
Houston, Texas 77019
(713) 727-8207 (Direct Line)
(832) 202-2810 (Direct Telecopy)
lsimon@pendergraftsimon.com
ATTORNEY IN CHARGE FOR
JEFFREY BARON
OF COUNSEL:
PENDERGRAFT & SIMON, L.L.P.
The Riviana Building
2777 Allen Parkway, Suite 800
Houston, Texas 77019
(713) 528-8555 (Main Telephone)
(832) 202-2810 (Main Telecopy)
CERTIFICATE OF SERVICE
I hereby certify that a true and complete copy of the foregoing was served through the
ECF system on February 25, 2014.
/s/ Leonard H. Simon
Leonard H. Simon
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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
JUDGE: Richard Schell
COURT REPORTER:
Jerry Kelley
COURTROOM DEPUTY:
Bonnie Sanford
MARGETIS, ET AL
vs. CIVIL NO. 4:12cv753
FURGESON, ET AL
PRESENT: For Plaintiffs: Alan Baron (pro se), John Margetis (pro se)
For Defendants: Randi Russell, Bradley Visosky, Garin Reetz
This day, 3/21/14, came the parties and by their attorneys the following proceedings were held
before Judge Richard Schell in Plano, Texas:
Motion Hearing [de#34]
10:02 pm The court called the case, noting the appearance of the parties and their attorneys.
10:04 am Ms. Mpatanishi Tayari Garret addresses the court, stating that Mr. Margetis had
some travel issues and will be running late.
10:07 am Mr. Margetis is not present. However, the court is informed that he is en route.
10:08 am Mr. Baron presents filings to the court. The court informs Mr. Baron that they will
be accepted, but as late filings and will not be read for this court hearing.
10:20 am Mr. Margetis appears and requests a restroom break.
10:22 am The court begins addressing the plaintiff’s motions. The court addresses the motion
to continue the hearing on the motion for sanctions [de#82].
Page 1 of 3
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10:37 am Mr. Margetis addresses the court regarding the Motion for Continuance..
10:39 am Mr. Russell addresses the court, opposing the Motion for Continuance.
10:43 am The court denies the Motion for Continuance [de#82].
10:44 am Mr. Margetis calls witness Michael Briscoe. The court addresses the reasons for
calling this witness.
10:48 am Mr. Visosky addresses the court regarding any additional information to what’s
already in the record.
10:51 am The court addresses Mr. Margetis’s request for Judge Schell to recuse.
11:02 am At Mr. Margetis request, court recessed for 10 minutes.
11:16 am Court resumes. Mr. Margetis begins presentation of his argument.
11:28 am Neither party wishes to invoke the rule.
11:29 am Mr. Margetis offers Plaintiff exhibit 1. Mr. Visosky objects and makes a global
objection to all exhibits that have been presented at this hearing.
11:34 am Mr. Margetis calls himself as a witness and is sworn in.
11:48 am Mr. Visosky questions the witness, Mr. Margetis.
12:31 pm Mr. Margetis calls Mpatanishi Tayari Garrett. Ms. Garrett is sworn in.
12:52 pm The court questions Ms. Garrett.
12:58 pm Mr. Visosky questions the witness.
1:05 pm Govt (defense) exhibit 5 admitted.
1:18 pm Witness excused.
1:19 pm Court recessed until 2:20 pm.
2:19 pm Court resumes.
2:20 pm Mr. Margetis calls witness Andrea (DeeDee) Arnold. The court questions Mr.
Margetis as to what Ms Arnold will testify to.
Page 2 of 3
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2:29 pm Ms. Andrea Arnold is sworn in. The court questions Ms. Arnold.
2:33 pm The court finds this witness is not relevant to this case. Ms. Arnold is excused.
2:34 pm Court and parties discuss the case.
3:23 pm Mr. Margetis calls Donna Baron. Ms. Baron is sworn in.
3:58 pm Witness is excused.
4:00 pm Mr. Margetis addresses the court.
4:15 pm Mr. Visosky addresses the court.
4:29 pm Mr. Margetis addresses the court.
4:32 pm The court will give a ruling as soon as possible.
4:33 pm Court recessed.
Page 3 of 3
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- 1 -
Leonard H. Simon, Esq.
TBN: 18387400; SDOT: 8200
The Riviana Building
2777 Allen Parkway, Suite 800
Houston, Texas 77019
(713) 737-8207 (Direct)
(832) 202-2810 (Direct Fax)
lsimon@pendergraftsimon.com
ATTORNEYS IN CHARGE FOR
DAVID R. MCNAIR
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
DOMAIN VAULT LLC,
PLAINTIFF,
VS.
DAVID R. MCNAIR,
DEFENDANT.
§
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§
CIVIL ACTION NO. 3:14-cv-01126-L
SUPPLEMENT TO MOTION FOR EXTENSION OF TIME
TO FILE RULE 9(b)
1
AND RULE 12(b)(6) MOTION OR,
IN THE ALTERNATIVE, PRELIMINARY MOTION TO
DISMISS CASE UNDER RULE 12(b)(2), (4) & (5)
MOTION PURSUANT TO RULE 9(b) AND RULE 12(b)(6)
Defendant David R. McNair, sole defendant in the captioned proceeding, hereby
files this Supplement to Motion filed at ECF Doc 6, and for cause would show.
1
In the Motion filed at ECF Doc 6, Defendant McNair mistakenly referred to Rule 8(b), but intended to
refer to Rule 9(b).
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- 2 -
I.
MOTION FOR ADDITIONAL TIME
TO FILE RULE 9(b) AND RULE 12(b)(6) MOTION PREVIOUSLY FILED
1. Defendant McNair previously filed a Motion for Additional Time to File
Rule 9(b) and Rule 12(b)(6) Motion. ECF Doc 6. In said motion, Defendant McNair
alerted the Plaintiff that there is no “summons executed” that appears in the file; thus,
there is no way for Defendant McNair to determine when service occurred as to the
Complaint and Summons in this case. Assuming that the date of service is the date Mr.
McNair received the Complaint and Summons, April 24, 2014, the filing deadline would
be the 19
th
of May, 2014, with the “three-day mailbox rule”. See FRCP Rule 6(e).
Therefore, this Supplement is filed timely. In the event that this Court rules otherwise,
Defendant McNair rests on his Motion for Additional Time.
II.
MOTION PURSUANT TO FRCP RULES 9(b) and 12(b)(6)
2. The Court reviews motions under Rule 12(b)(6) “accepting all well-
pleaded facts as true and viewing those facts in the light most favorable to the plaintiffs.”
Stokes v. Gann, 498 F.3d 483, 484 (5th Cir. 2007) (per curiam). However, the Court “will
not strain to find inferences favorable to the plaintiff.” Southland Sec. Corp. v. INSpire
Ins. Solutions Inc., 365 F.3d 353, 361 (5th Cir. 2004) (internal quotations omitted).
3. To avoid dismissal for failure to state a claim, a plaintiff must meet Fed.
R. Civ. P. 8(a)(2)’s pleading requirements. Rule 8(a)(2) requires a plaintiff to plead “a
short and plain statement of the claim showing that the pleader is entitled to relief.” In
Ashcroft v. Iqbal, the Supreme Court held that Rule 8(a)(2) requires that “the well-
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- 3 -
pleaded facts” must “permit the court to infer more than the mere possibility of
misconduct.” 129 S.Ct. 1937, 1950 (2009) (quoting Rule 8(a)(2)). “Only a complaint that
states a plausible claim for relief survives a motion to dismiss.” Id. (citing Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “[A] complaint does not need detailed
factual allegations, but must provide the plaintiff’s grounds for entitlement to relief—
including factual allegations that when assumed to be true raise a right to relief above the
speculative level.” Lormand v. US Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009)
(internal quotation marks removed).
4. FRCP Rule 9(b) provides that “[i]n alleging fraud or mistake, a party must
state with particularity the circumstances constituting fraud or mistake. Malice, intent,
knowledge, and other conditions of a person's mind may be alleged generally.” In order
to satisfy the pleading requirement pursuant to F.R.C.P. 9(b), the plaintiff must specify
the statements contended to be fraudulent, identify the speaker, state when and where the
statements were made, and explain why the statements were fraudulent. Southland Sec.
Corp. v Inspire Ins. Solutions Inc., 365 F.3d 353, 362 (5th Cir. 2004). “[M]ere conclusory
allegations of fraud are insufficient.” Moore v. Kayport Package Exp., Inc., 885 F.2d 531,
540 (9th Cir. 1989). See Oppenheimer v. Prudential Sec. Inc., 94 F.3d 189, 195 (5th Cir.
1996) (upholding district court’s dismissal of fraud claims where the plaintiff failed to
allege when an allegedly fraudulent sales charge was incurred or the extent of her
damages); Red Rock v. JAFCO Ltd., 1996 WL 97549, at *3 (5th Cir. Feb. 16, 1996)
(holding that the plaintiff’s allegations did not satisfy Rule 9(b) where they failed to
allege the time, place, or content of any misrepresentations). “To plead fraud adequately,
the plaintiff must ‘specify the statements contended to be fraudulent, identify the speaker,
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state when and where the statements were made, and explain why the statements were
fraudulent.’” Sullivan v. Leor Energy, LLC, 600 F.3d 542, 551 (5th Cir. 2010) (quoting
ABC Arbitrage v. Tchuruk, 291 F.3d 336, 350 (5
th
Cir. 2002)).
III.
ANALYSIS OF COMPLAINT
5. Plaintiff is an LLC organized under the laws of the Commonwealth of
Virginia. Paragraph 1 of the Complaint. Plaintiff was organized on or about March 12,
2014.
2
Paragraph 17 of the Complaint, Plaintiff alleges that “Baron conspired with the
defendant McNair to have McNair use shell entities that he controlled in a concerted
effort to fraudulently convince the U.S. District Court and other third-parties, that
McNair’s shells were legitimate, authorized trustees, and that McNair had been duly and
lawfully appointed as the manager of the LLCs since July 3, 2013.” However, Plaintiff
fails to specify the statements alleged to be fraudulent, identify the speaker, identify the
listener, state when and where the statements were made, explain why the statements
were fraudulent as to Plaintiff, a complete stranger, and explain how Plaintiff herein was
harmed by such alleged representations from a causation point of view.
6. Paragraph 18 alleges that “Baron and McNair conspired to have McNair
and the entities he controlled use mail and wire fraud in a scheme to falsely represent that
Lisa Katz was replaced as the operations manager of the LLCs and McNair had been the
true manager since July 3, 2013. However, Plaintiff fails to specify the statements
alleged to be fraudulent, identify the speaker, identify the recipient, state when and where
2
The Court can take judicial notice of the Secretary of State’s Website where the Court can ascertain the
date of organization of Plaintiff. For convenience, the internet page is attached hereto. The web page is:
https://sccefile.scc.virginia.gov/Business/
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the statements were made, and explain why the statements were fraudulent as to Plaintiff
and how they caused Plaintiff injury and the extent of such injury.
7. In paragraph 19 of the Complaint, Plaintiff alleges: “The artifice was
clearly devised and intended to defraud and obtain property by means of false and
fraudulent representations made through wire communications from the Cook Islands to
Dallas Texas and other locations in the United States beginning on or about March,
2014.” In making these allegations, Plaintiff fails to specify or describe what property
was obtained, and fails to specify the statements contended to be fraudulent, identify the
speaker or the listener, state when and where the statements were made, explain why the
statements were fraudulent as to Plaintiff, the amount of damages caused by such alleged
statements and how such damages were proximately caused by such statements.
8. In paragraph 20, Plaintiff alleges: “McNair is not, as he knowingly and
fraudulently represented, the director of RPV Limited. Nor, pursuant to Cook Islands law,
is RPV Limited authorized as the Trustee of the Village Trust. Rather, McNair conspired
with Baron and Baron’s counsel Simon to make the fraudulent communications by wire
in violation of 18 U.S.C. 1343. The action is a predicate RICO act in a scheme designed
to use wire fraud to obtain control over millions of dollars in assets.” Plaintiff fails to
allege when and where the statements were made, and explain why such statements were
fraudulent as to Plaintiff or how Plaintiff was damaged and in what amount. Plaintiff
fails to allege how Plaintiff, who was not even in existence at the time, was harmed by
such alleged fraudulent statements.
9. In paragraph 21, Plaintiff alleges: “Specifically, in March 2014 McNair
conspired with Baron’s counsel Simon to have Simon doctor an affidavit by
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superimposing missing dates to a pdf copy of the document in an effort to fraudulently
induce the judge into believing that the original affidavit and jurat were properly
executed when they were not. Simon then fraudulently certified to the U.S. District
Judge, by wire, that the doctored pdf copy of the affidavit he filed was a true and accurate
copy of the original.” In making these allegations, Plaintiff fails to specify how the
Plaintiff, who was not even in existence at the time, was damaged by such alleged fraud.
There is simply no causation alleged or injury claimed that is cognizable based on the
allegations.
10. In paragraph 24 of the Complaint, Plaintiff alleges: “Having failed in their
attempt to persuade the Court, Baron and McNair conspired to redouble their efforts and
engage on a stepped-up campaign of fraud to frustrate the Court’s orders. To that end,
Baron and McNair conspired to engage in wire fraud and extortion to interfere with the
possession of the assets released by the Court.” However, Plaintiff fails to allege when
and where the statements were made, and explain why such statements were fraudulent,
and fails to allege how Plaintiff, who was not even in existence at the time, was harmed
by such alleged fraudulent statements.
11. In paragraph 25, Plaintiff alleges: The essence of the Baron-McNair
scheme was to use wire fraud to convince third parties that McNair’s shell companies
were legitimate and had appointed him, and not Lisa Katz, as the manager of Novo Point
LLC and Quantec LLC. The scheme was designed to combine threats and fraud to secure
the transfer of the assets to McNair– despite the U.S. District Court Order to the contrary.
Plaintiff fails to allege the identities of the “third parties”, and fails to allege what the
fraudulent statements were, when and where the statements were made, and explain why
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such statements were fraudulent, and fails to allege how Plaintiff, who was not even in
existence at the time, was harmed by such alleged fraudulent statements.
12. In paragraph 28, Plaintiff alleges: “McNair’s representations were
fraudulent and known by him to be fraudulent. McNair received legal counsel from his
own lawyer that where, under Cook Islands law his shell company RPV Limted was not
authorized to act as trustee of the Village Trust, his shell company could not appoint him
as manager or fire Lisa Katz.” Plaintiff fails to identify what legal counsel allegedly so
advised McNair, when such advice was given, how Plaintiff came learn that such lawyer
gave such advice. Again, to specific fraudulent statements are identified. No date is
specified as to when such statements were made. There is no allegation as to how such
alleged false statements harmed Plaintiff, who was not in existence at the time such
alleged statements were made.
13. In paragraph 29, Plaintiff alleges: To further the carrying out of his
scheme, as above described, McNair knowingly and fraudulently represented the
opposite, that Payne was not authorized to act for the LLCs in any capacity. Plaintiff
fails to identify to whom such representations were made, when they were made, whether
they were made to Plaintiff, what the relationship is between Payne and Plaintiff, and
how such alleged false statements harmed Plaintiff.
14. In Paragraph 30, Plaintiff alleges: “In light of Baron’s reputation for
vexatious litigation, McNair’s fraud and threats have been effective in interfering with
Domain Vault’s contracts with the domain name registrar and impeding Domain Vault’s
access to domain development partners, causing an estimated annual loss to Domain
Vault of $500,000.00. The recipients of McNair’s letters acted in reliance on the
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fraudulent representations and froze the domain names owned by Domain Vault LLC.”
Plaintiff has failed to set forth with sufficient particularity any alleged fraudulent
statements or threats that was made by McNair, when such alleged fraudulent statements
and threats were made, how they was made, the parties such alleged fraudulent
statements and threats were directed to, whether any such alleged fraudulent statements
and threats were made to Plaintiff and how Plaintiff was harmed by such alleged
fraudulent statements and threats. Plaintiff fails to explains how such alleged fraudulent
statements and threats interfered with Plaintiff’s business when Plaintiff did not even
exist at the time these alleged fraudulent statements and threats were made. Plaintiff fails
to allege the name or each person who allegedly relied on such alleged fraudulent
statements and threats. In paragraph 30, Plaintiff further alleges: “Thus, as the proximate
result of McNair’s conspiracy to commit wire fraud and wire fraud, Domain Vault was
cut off from management of its domain name assets and thereby suffered and continues to
suffer substantial injury to its business including the ability to use or transfer its
property.” Plaintiff fails to identify the domain names allegedly interfered with or when
such domain names were actually transferred to Plaintiff, who transferred such domain
names to Plaintiff or how McNair even knew about the existence of Plaintiff.
15. In paragraph 31, Plaintiff alleges: “Some of the domain names that
McNair has interfered with directly effect and are engaged in interstate commerce. The
business of Domain Vault that has been interfered is engaged in interstate commerce,
including the interstate leasing of domain names. McNair has directly impeded Domain
Vault’s interstate and international commercial activity by interfering with Domain
Vault’s contractual relationship with its registrars, effectively cutting off Domain Vault’s
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ability to contract for an income stream, and preventing Domain Vault from conducting
its business operations.” Plaintiff fails to identify one domain name that is engaged in
interstate commerce, nor has Plaintiff identified exactly what it is that McNair is alleged
to have done to interfere with Plaintiff’s alleged domain names, nor has Plaintiff alleged
any facts from which it can be ascertained when such interference and exactly how such
alleged interference damaged Plaintiff. Further, Plaintiff has failed to suggest to the
Court how it has any ongoing business given the fact that it only came into existence
within the last 60 days. Plaintiff has failed to identify one act McNair has alleged engage
in to impede Plaintiff’s interstate and international commercial activity, the date of such
alleged acts, whether McNair had any knowledge of Plaintiff’s relationship with its
registrars, whether McNair even had knowledge of Plaintiff’s existence at the time such
acts allegedly occurred, and how Plaintiff could have been harmed by such acts.
16. Defendant McNair is a resident of the Cook Islands. McNair is a Barrister
and Solicitor authorized to engage in the practice law in the Cook Islands. A true and
correct copy of the initial page of Mr. McNair’s passport issued by New Zealand
(Number LH454254) is attached to the McNair Declaration as Exhibit “1”. See ECF
Doc 6-1, which is incorporated herein for all purposes as though fully set forth.
17. In paragraphs 32 and 33, Plaintiff describes McNair’s alleged RICO
enterprise. Plaintiff alleges a “continuous pattern of related acts of wire fraud having the
same purpose” However, RICO recovery requires detailed pleading of elements. Merely
citing the correct legal formulations are insufficient, where there is no factual support for
contentions made in the Complaint. See, e.g., Davis v. Hudgins, 896 F. Supp. 561, 573
(E.D.Va. 1995). In Pelletier v. Zweifel, 921 F.2d 1465 (11th Cir. 1991), the court stated:
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When a private plaintiff relies on a violation of the mail or wire fraud
statutes as a predicate act for civil RICO, he faces an additional hurdle
before he can obtain recovery: he must show not only that the mail or wire
fraud statutes have been violated, but also that he has suffered injury as a
result of the violation. Section 1964(c) provides civil remedies to those
persons who are injured “by reason of” racketeering activity. As we note
above, when the government prosecutes a defendant under the mail and
wire fraud statutes, it is not required to show that the intended victim was
actually deceived and suffered injury. See Durland, 161 U.S. at 313–15,
16 S.Ct. at 511–12; United States v. Dynalectric Co., 859 F.2d 1559, 1576
(11th Cir.1988). A civil RICO plaintiff must show, however, that he was
injured by reason of the defendant's acts of deception. As the Supreme
Court stated in Sedima, “the plaintiff only has standing if, and can only
recover to the extent that, he has been injured in his business or property
by the conduct constituting the violation.” 473 U.S. at 496, 105 S.Ct. at
3285. The Court went on to hold that the plaintiff's damages must “flow
from the commission of the predicate acts.” Id. at 497, 105 S.Ct. at 3285.
Section 1964(c), as interpreted by the Supreme Court and lower courts,
thus imposes a proximate cause requirement: the plaintiff's injury must
have been proximately caused by the commission of the predicate acts.
See Zervas v. Faulkner, 861 F.2d 823, 834–35 (5th Cir.1988);
Brandenburg v. Seidel, 859 F.2d 1179, 1189 (4th Cir.1988); Sperber v.
Boesky, 849 F.2d 60, 64 (2d Cir.1988).
Id. at 1499. Plaintiff’s Complaint fails to state a claim because Plaintiff fails to allege
that it has suffered injury as a result of the acts of deception allegedly engaged in by
McNair. Paragraph 10 of Defendant McNair’s declaration states:
Defendant McNair has never met with or talked to any person representing
himself to be an agent, officer, director or shareholder of Plaintiff.
Defendant McNair never heard of or knew about Plaintiff or any
transactions Plaintiff allegedly engaged in with Novo Point, LLC and
Quantec, LLC.
Defendant McNair is not engaged in any business in any jurisdiction in the
United States.
Defendant McNair is not in any contractual relationship with any resident
of any jurisdiction in the United States.
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During the months of February and March 2014, Defendant McNair,
solely in his representative capacity as a manager of Novo Point, LLC and
Quantec, LLC, attempted to terminate a contract that was allegedly in
existence between Lisa Katz, the alleged Texas Manager for Novo Point,
LLC and Quantec, LLC, two Cook Island entities. Such activities were
initiated by Defendant McNair from the Cook Islands, and were
undertaken by several letters and emails by issuing notice of termination
in accordance with the terms of the subject agreement.
During the months of February and March 2014, Defendant McNair,
solely in his representative capacity as a manager of Novo Point, LLC and
Quantec, LLC, has also attempted to terminate a Texas attorney allegedly
engaged by Ms. Katz to represent Novo Point, LLC and Quantec LLC,
Gary Payne. Such activities were initiated by Defendant McNair solely
from the Cook Islands and were undertaken by several letters and emails
written and issued in the Cook Islands.
The above activities were all undertaken by Defendant McNair in a
representative capacity and not in an individual capacity. His capacity as
a representative was explicitly stated in each communication.
18. Texas employs the fiduciary-shield doctrine. Hollis v Hill, 232 F.3d 460,
467 (5
th
Cir. [Tex] 2000). Under the fiduciary-shield doctrine, a person who enters the
state solely as fiduciary for another may not be sued in Texas. In Hollis, the Court stated:
“We find our decision buttressed by the legal authority dealing with close
corporations.
We concede that many of Hill's alleged “oppressive” acts,
including the diminution and eventual termination of salary, the failure to
deliver financial information, the closing of one of the company's offices,
termination of employment, and the cessation of benefits, are classic
examples of acts typically shielded from judicial scrutiny under the
business judgment rule. Generally, employees who are adversely affected
by such officer and director decisions may not claim oppression by those
in control of the corporation, even if they are also shareholders of the
corporation.
“
Id.
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IV.
CONCLUSION: PLAINTIFF’S LAWSUIT MUST
BE DISMISSED BECAUSE PLAINTIFF HAS NOT
STATED A CLAIM UPON WHICH RELIEF CAN BE GRANTED
19. Plaintiff has failed to state a claim upon which relief can be granted
because, under both RICO and the two Texas state law causes of action alleged, Plaintiff
cannot recover from a complete stranger for acts and alleged fraudulent statements that
allegedly occurred before Plaintiff ever came into existence, and certainly before Plaintiff
ever acquired the alleged domain names at issue. Here, there can be no causation
because the acts complained of all occurred as between McNair, on the one hand, and
Lisa Katz and Christopher Payne, on the other hand, as established by Plaintiff’s
allegations in the Complaint.
20. McNair never met Plaintiff, never heard of Plaintiff’s name until McNair
was served with Plaintiff’s complaint on April 24, 2014, and never directed any of the
alleged actions towards Plaintiff. There simply is no, and, as a matter of law, cannot be
any, causation between the acts complained of and Plaintiff’s alleged damages or injury.
21. In fact, no causation has been alleged by Plaintiff as between the acts
complained of and Plaintiff. There can be no reliance. Furthermore, none of the
allegedly fraudulent representations made by McNair were made to Plaintiff. Plaintiff
cannot maintain a cause of action against McNair, individually, since every act Plaintiff
complains of was engaged in by McNair in a representative capacity, and he is, therefore,
protected by the fiduciary shield doctrine.
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V.
IF NECESSARY, COURT SHOULD TREAT
THIS MOTION AS A SUMMARY JUDGMENT MOTION
22. A motion under Rule 12(b)(6) will be treated as one for summary udgment
under Rule 56 when matters outside the pleadings are presented and not excluded by the
Court. Fed. R. Civ. P. 12(d); Fed. R. Bankr. P. 7012(b). Under Rule 56, summary
judgment is appropriate where “the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a); Fed. R. Bankr. P. 7056. In the event a motion to dismiss is converted to one for
summary judgment, a court must first give the parties notice and then may consider all
evidence presented. Rodriguez v. Rutter, 310 F. App’x 623, 626 (5th Cir. 2009).
Respectfully submitted this 19
th
day of May 2014.
/s/ Leonard H. Simon
Leonard H. Simon, Esq.
TBN: 18387400; SDOT: 8200
The Riviana Building
2777 Allen Parkway, Suite 800
Houston, Texas 77019
(713) 737-8207 (Direct)
(832) 202-2810 (Direct Fax)
lsimon@pendergraftsimon.com
ATTORNEYS IN CHARGE FOR
DAVID R. MCNAIR
OF COUNSEL:
PENDERGRAFT & SIMON
The Riviana Building
2777 Allen Parkway, Suite 800
Houston, Texas 77019
(713) 528-8555 (Main)
(713) 868-1267 (Main Fax)
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CERTIFICATE OF SERVICE
This is to certify that on the 19
th
day of May 2014, a true and correct copy of the
above and foregoing was served through the Court’s ECF filing system and by Email upon
counsel for the Plaintiff,
Andrew C. Powell
5302A Beltline Rd.
Dallas, Texas 75254
Tel. 214-295-5058
Fax 214-261-2232
apowell@attorney-email.com.
/s/Leonard H. Simon
Leonard H. Simon
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SCC ID: S4959955
Entity Type: Limited Liability Company
Jurisdiction of Formation: VA
Date of Formation/Registration: 3/12/2014
Status: Active
Principal Office
Drawer 670804
Dallas TX75367
Registered Agent/Registered Office
REGISTERED AGENTS INC.
4445 CORPORATION LANE
STE 264
VIRGINIA BEACH VA 23462
VIRGINIA BEACH CITY 228
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Effective Date: 3/12/2014
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