G A R Y N. S C H E P P S
A T T O R N E Y & C O U N S E L O R
DRAWER 670804
DALLAS, TEXAS 75367
TELEPHONE
FACSIMILE
214-210-5940
214-347-4031
April 1, 2011
VIA EMAIL (and PACER)
Hon. Judge W. Royal Furgeson, Jr.
United States District Judge
1100 Commerce Street, Room 1359
Dallas, Texas 75242-1001
Re: 3-09CV0988-F In Re Jeff Baron Receivership
Your Honor,
We swore an oath to protect and defend the constitution. Far too many young men
have shed their blood defending our constitutional rights, to allow the constitution to be
subverted for expedience.
The Seventh Amendment guarantees every American, including Jeff Baron, the
right to trial by jury. E.g., Ross v. Bernhard, 396 U.S. 531, 542 (1970). I am ashamed of
the attorneys working so hard to subvert the constitution for the jingle of silver.
If Jeff 'wins' and is afforded the constitutional right to trial by jury, we all win. If
he loses, we all lose.
If your honor finds this letter helpful, please pay my fee. Your honor hired me to
be Jeff's trial counsel, but your honor has not paid the bill for the work. There are over
700 hours of work accumulated since your honor hired me.
Very truly yours,
Gary N. Schepps
Court ordered trial counsel for Jeff Baron
Your honor may find that protecting the constitution also leads to a good result for all
involved. If helpful for you honor’s consideration, the moment the receivership is
dissolved–it has stretched already four long months, we will ask the ‘claimant’ attorneys
to join us at the State Bar fee dispute committee to arbitrate.
Case 3:09-cv-00988-F Document 423 Filed 04/01/11 Page 1 of 2 PageID 16359
Hon. Judge W. Royal Furgeson, Jr.
April 1, 2011
Page 2
__________________________________
I note also that the receiver has billed a whopping sum. As your honor is aware, Jeff has
been 100% neutralized in the bankruptcy court. Yet, in addition to the receiver, Ray
Urbanik still came up with an additional half million dollar bill during this period.
Jeff funded more than a million and a half dollars to the bankruptcy to pay creditor (ie.,
attorney’s) claims in that case in full. There is no justification for Urbanik’s bill– Jeff
has been out of the game in that court for four months.
Is this really what your honor intended ?
Case 3:09-cv-00988-F Document 423 Filed 04/01/11 Page 2 of 2 PageID 16360
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., §
MANILA INDUSTRIES, INC., and §
MUNISH KRISHAN, §
Plaintiffs. §
§ Civil Action No. 3-09CV0988-F
v. §
§ Motion for Expedited Relief
JEFFREY BARON, and §
ONDOVA LIMITED COMPANY, §
Defendants. §
MOTION FOR LEAVE TO FILE: MOTION PURSUANT TO 28 U.S.C. 144
TO THE HONORABLE JUDGE ROYAL FURGESON:
COMES NOW JEFF BARON, and moves this Court to grant leave to file the
following motion pursuant to 28 U.S.C. §144:
Based upon a careful review of the record of the case, and based upon the Court’s
ruling with respect to the ‘unfounded’ nature of the statements made with respect to Peter
Barrett, the undersigned counsel certifies that Jeff Baron’s affidavit and statements that he
cannot receive fair and impartial treatment nor a fair and impartial hearing before Judge
Furgeson with respect to attorneys’ claims has been made in good faith.
WHEREFORE, the SECTION 144 AFFIDAVIT OF JEFFREY BARON is
presented to this Court, for a determination of whether the facts and reasons set out in
the affidavit give fair support to the charge of a bent of mind that may prevent or
impede impartiality of judgment with respect the claims of attorneys and the respective
defenses thereto.
Case 3:09-cv-00988-F Document 498 Filed 04/27/11 Page 1 of 3 PageID 18374
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Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
Texas State Bar No. 00791608
5400 LBJ Freeway, Suite 1200
Dallas, Texas 75240
(214) 210-5940 - Telephone
(214) 347-4031 - Facsimile
E-mail: legal@schepps.net
COURT ORDERED TRIAL
COUNSEL FOR JEFF BARON
Case 3:09-cv-00988-F Document 498 Filed 04/27/11 Page 2 of 3 PageID 18375
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CERTIFICATE OF SERVICE
This is to certify that this brief was served this day on all parties who receive
notification through the Court’s electronic filing system.
CERTIFICATE OF GOOD FAITH
DATED: April 27, 2011.
Based upon a careful review of the record of the case, and based upon the Court’s
ruling with respect to the ‘unfounded’ nature of the statements made with respect to
Peter Barrett, the undersigned counsel certifies that Jeff Baron’s affidavit and
statements that he cannot receive fair and impartial treatment nor a fair and impartial
hearing before Judge Furgeson with respect to attorneys’ claims has been made in
good faith.
I am a solo practitioner and this motion was presented as quickly as I was able after
the Court’s ruling with respect to the Barrett issues. I carefully reviewed the material
to provide this certificate and present this motion and there was delay due to 5
intervening days for which I have a firm religious commitment not to work (4 days of
Passover and a Sabbath). The prior two business days have been religious holidays,
and that is why this motion is filed now and not on Monday. This motion has been
made in good faith and is not intended as a surprise or as a procedural maneuver.
/s/ Gary N. Schepps
Gary N. Schepps
Case 3:09-cv-00988-F Document 498 Filed 04/27/11 Page 3 of 3 PageID 18376
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., §
MANILA INDUSTRIES, INC., and §
MUNISH KRISHAN, §
Plaintiffs. §
§ Civil Action No. 3-09CV0988-F
v. §
§
JEFFREY BARON, and §
ONDOVA LIMITED COMPANY, §
Defendants. §
POST TRIAL BRIEF:
SPECIFIC EVIDENCE BASED DEFENSES
TO THE HONORABLE JUDGE ROYAL FURGESON:
COMES NOW JEFF BARON, and makes this post trial briefing, setting out a
summary of evidence based defenses based on the ‘evidence’ admitted by the Court:
Pronske and Patel
In his ‘claim’ affidavit Pronske swears “There are no engagement
agreements relating to the representation”. However, as a fiduciary, an
attorney has an ethical obligation to have an agreement with their client, see
e.g., Goffney, below.
Pronske Swears “True and correct copies of ALL of my invoices relating
to the Representation are attached hereto as Exhibit ‘A’ ”. However, the only
invoices in Exhibit A are from February 2011. Pursuant to the ‘claim’ affidavit,
there was no contract, and no invoice was provided until over a year and a half
after the representation began (over six months after the representation ended).
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 1 of 9 PageID 18446
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Goffney v. Rabson, 56 S.W.3d 186, 193 fn. 5 (Tex.App.- Houston [14th
Dist.] 2001, pet. denied) (failure to reduce a fee agreement to writing is an
ethical violation, failure to provide billing statements is an ethical violation);
Jackson Law Office, P.C. v. Chappell, 37 S.W.3d 15, 22-23 (Tex.App.---Tyler
2000, pet. denied)(same); Burgin v. Godwin, 167 S.W.2d 614, 619
(Tex.Civ.App.-- Amarillo 1942,writ ref'd w.o.m)(ethical duty to keep client
informed as the exact status brought about by the contractual relationship);
Burrow v. Arce, 997 S.W.2d 229, 241 (Tex. 1999) (Fee forfeiture is remedy
for attorney’s clear violation of their ethical duty).
Pronske’s prior testimony established he was paid a $75,000.00 payment
up front. Per his own evidence, no contrary billing was sent out until
February, 2011–after this receivership and subsequent to his testimony.
Carrington, Coleman, Sloman & Blumenthal, LLP
Affidavit expressly not based on personal knowledge.
No contract initially provided. ‘Draft’ contract signed with Ondova only.
Aldous Law Firm / Rasansky Law Firm (joint venture)
Resolved in global settlement.
Schurig Jetel Beckett Tackett
Does not segregate billing.
Settled and paid as part of global settlement agreement as part of the
supplemental settlement. Contract was entered after Shurig represented Jeff,
and therefore by law must be presumed invalid. Archer v. Griffith, 390
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 2 of 9 PageID 18447
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S.W.2d 735 (Tex. 1964) (“There is a presumption of unfairness or invalidity
attaching to the contract, and the burden of showing its fairness and
reasonableness is on the attorney”).
Comparing contract terms and billing statement shows billing beyond
Scope of work authorized “advice and consultation on administrative legal
and tax issues associated with the foreign trusts” . Contract construed against
drafter & fiduciary Schurig, and, the (i).. (vi) specifications are construed as
specifications of the “advice and consultation on administrative legal and tax
issues associated with the foreign trusts”.
Schurig admits she represented Mr. Baron beginning “in October 2005” (in
a joint representation with Mr. Krishan). #1 Schurig was conflicted and
could not ethically represent Baron in the present litigation or settlement. #2
As a matter of long established Texas law, when an attorney currently
representing a client enters into a new contract or fee arrangement, the
agreement is, as a matter of law, presumed to be invalid. See Archer, above.
Asiatrust is a proxy of Schurig, and is not in any way controlled by Jeff
Baron. Asiatrust has itself filed claims against Baron. The amount claimed
from Baron is only $1,331.50.
Powers and Taylor
Were paid in full on hourly portion (in fact, they owe $7,500.00 to Jeff per
their own paperwork), and lost the lawsuit they sued on. No money due
pursuant to the fee contract they have provided the Court, as they did not
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 3 of 9 PageID 18448
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meet the contingency condition in their contract.
Admits in own ‘evidence’ that they are simply making up their fee
demand, and that it is not based on any actual contract term. Powers and
Taylor sued to recover money due from the use of PhoneCards.com. Powers
and Taylor failed in any way to recover on that claim. The settlement
required Jeff to give up half ownership of the PhoneCards.com, and give up
all the money he claimed was due him with respect to PhoneCards.com.
The attorneys’ own evidence shows that there was no billing for the now
claimed contingency amount when the settlement was executed in August,
2010, or the next month in September 2010, or the next month in October
2010, or ever. This new amount claimed, pursuant to the lawyers’ own
evidence, was made for the receivership ‘proceedings’.
The attorneys’ admit their fees were limited (by agreement) to a
maximum of $10,000 per month. They admit they exceeded that limit and
seem to want this Court to have them paid anyhow. Notably, that additional
time now claimed does not appear on the attorney’s actual billing records
they themselves submitted. Per the firm’s billing records, ie. per their own
evidence, Jeff Baron is owed a $7,500.00 retainer refund.
Gary G. Lyon
Lyon’s own billing evidence (All the statements prior to September) prove
that Lyon’s fixed hourly rate was $40.00 per hour. He clearly billed at that
rate. Then, without any explanation, a new billing rate appears as of
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 4 of 9 PageID 18449
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September with almost ten fold higher at $300.00 per hour.
Lyon swore in his affidavit that his fees were “fixed at an hourly rate”. It
is undisputable that his hourly rate was $40.00 per hour. This is
established by his statements for May, 2010, June 2010, July 2010 and
August 2010. Then, in September, contrary to Lyon’s sworn statement of
a “fixed .. hourly rate”, Lyon attempts to unilaterally charge a fee that is
almost ten times higher than his fixed hourly rate. What happened in
September ? Lyon’s co-counsel Pronske, began his ‘scorched earth’ policy
against Jeff, testified to in the FRAP 8(1) hearing held on January 4, 2011.
Lyon is not licensed in Texas, did not comply with disciplinary disclosure
rules. Per Texas law cannot charge fee for Texas state law work. (For example,
the billed for work includes “appearance before Dallas County District Court”).
Testified to a substantially lower bill in prior proceedings in this Court.
Dean Ferguson
In his hearing testimony admitted he was paid $22,000.00. Admits he agreed
to give flat rate in August. At page 67 (1/4/11 hearing) “The initial retainer
was five thousand dollars, and then there was an agreement to pay additional
amounts of money for August. I agreed to reduce -- give a flat rate for August”).
In his affidavit ‘claim’ Dean Ferguson swears there was an agreed upon
rate of $300.00. However, in his sworn testimony on January 4, 2011, Dean
Ferguson said there was “not a set agreement” for the $300.00 and he told
Jeff “we needed to reach on an agreement as to the fee”.
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 5 of 9 PageID 18450
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Dean Ferguson swears his representation began on July 22, 2010 and the
unsigned engagement contract he proffers is dated a week after his
representation began. The contract is notably unsigned. Even if it had been
signed, as a matter of Texas law, there is a presumption of invalidity
attaching to the contract terms Ferguson claims. Archer v. Griffith, 390
S.W.2d 735 (Tex. 1964).
Bickel & Brewer
Arbitration clause. I.e., Jeff is entitled –by contract– to have the claim
heard by arbitration, and not ‘summary proceedings’.
Billing does not segregate work, ie., Jeff vs. Ondova.
Includes billing for collection
Robert J. Garrey
Per his own affidavit he worked 2 weeks on a $8500 per month agreed
contract.
Previously made a $1 Million dollar claim.
Hohmann, Taube & Summers, LLP
Settled and paid as part of global settlement agreement as part of the
supplemental settlement.
Work clearly duplicative of other billings.
Michael B. Nelson, Inc.
Submitted contract appears to be a doctored forgery.
Not licensed in Texas.
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 6 of 9 PageID 18451
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Mateer & Shaffer, LLP
Does not segregate billing.
Work seems to be for Ondova.
Broome Law Firm, PLLC
Arbitration Clause.
Contract limited to $10,000.00 per month (by own evidence), unless there
is express written modification that month. No such modifications were
provided (per Broome’s own evidence).
Broome’s Evidence claims to include all contract agreements and
modifications.
No authorization shown to exceed the $10,000.00 per month limit.
Received $18,000 and worked 2.5 months.
Fee, Smith, Sharp & Vitullo, LLP
Arbitration Clause.
Per own evidence, signed only in capacity of Ondova (per their own
evidence).
Work not segregated, seems work for Ondova. Ie., bankruptcy issue.
Hitchcock Evert, LLP
Settled and paid as part of global settlement agreement as part of the
supplemental settlement.
Reyna Hinds & Crandall
Receiver did not produce affidavit for the undersigned counsel to review.
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 7 of 9 PageID 18452
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Three Key Overall Issues
There is clearly duplicative, unreasonable billing. However, evidence of such
requires the opinion of an Expert and the Court would not allow Jeff to retain an
expert to provide such evidence.
Discovery and document production such as requests for the attorneys
demand letters and responses and sufficient time to investigate and respond is
required to properly defend the claims. These were requested but not provided.
These ‘claims’ are from almost exclusively non-diverse ‘claimants’ (the
diverse are under $75,000.00). Non-diversity means lack of Subject Matter
jurisdiction over the claims. Similarly, no pleadings filed by the claimants or on
the claims and thus no Subject Matter jurisdiction over the claims.
Respectfully submitted,
/s/ Gary N. Schepps
Gary N. Schepps
Texas State Bar No. 00791608
5400 LBJ Freeway, Suite 1200
Dallas, Texas 75240
(214) 210-5940 - Telephone
(214) 347-4031 - Facsimile
Email: legal@schepps.net
FOR JEFFREY BARON
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 8 of 9 PageID 18453
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CERTIFICATE OF SERVICE
This is to certify that the forgoing document was served this day on all parties who
receive notification through the Court’s electronic filing system.
/s/ Gary N. Schepps
Gary N. Schepps
Case 3:09-cv-00988-F Document 502 Filed 05/01/11 Page 9 of 9 PageID 18454
2
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
3
(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
4
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
5
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
6
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
7
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.
Case 3:09-cv-00988-F Document 507 Filed 05/03/11 Page 6 of 6 PageID 18541
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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
NETSPHERE, INC., §
MANILA INDUSTRIES, INC., and §
MUNISH KRISHAN, §
Plaintiffs. §
§ Civil Action No. 3-09CV0988-F
v. §
§
JEFFREY BARON, and §
ONDOVA LIMITED COMPANY, §
Defendants. §
MOTION FOR LEAVE TO FILE: SECOND 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:
A. WHAT THIS EVIDENCE PROVES
EXHIBIT A - THE RECEIVER’S EMAIL
This email:
(1) Establishes that the receiver is not an impartial and indifferent person.
The email proves the receiver is clearly an advocate and not acting with
impartiality, and has therefore breached their duty as receiver and their
assessment is invalid because it is an assessment of an advocate. See
Texas American Bancshares, Inc. v. Clarke, 740 F.Supp. 1243, 1253
Case 3:09-cv-00988-F Document 518 Filed 05/05/11 Page 1 of 4 PageID 18664
-3-
(N.D.Tex.1990) (receiver “owes a duty of strict impartiality”).
(2) The email also establishes that receiver’s assessment has not been
reasonable, nor unbiased. For example:
a. The email proves that to the receiver’s assessment, evidence
that Mr. Lyon’s billing rate was $40.00 per hour is “not
evidence” and does change the receiver’s assessment nor (to
the receiver’s mind) controvert Mr. Lyon’s claim for
payment at the rate of $300.00. The fact that Mr. Lyon was
paid at $40.00 per hour, and the evidence proves he was
billing at that rate, to the receiver is “no evidence”.
Notably, the evidence the receiver views (and argues) as
“no evidence” clearly and unambiguously establishes that
even after September 2010, Lyon was 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’. Yet, to the receiver’s view, this is not evidence
which controverts Mr. Lyon’s ‘claim’ that his rate was
$300.00 per hour, and is therefore due over $75,000.00.
Case 3:09-cv-00988-F Document 518 Filed 05/05/11 Page 2 of 4 PageID 18665
-4-
b. The receiver views the proof that after the global settlement
was reached 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” as
“no evidence” to controvert Taylor’s current claim that he
has a near $80,000.00 past due fee.
B. WHY THE EVIDENCE WAS NOT RAISED EARLIER
This material was in the exclusive possession of the receiver.
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 remove the
receiver as biased, and if a receiver is to be appointed, appoint an unbiased and
impartial receiver who is not an active advocate against Jeff.
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
Case 3:09-cv-00988-F Document 518 Filed 05/05/11 Page 3 of 4 PageID 18666
-5-
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
Case 3:09-cv-00988-F Document 518 Filed 05/05/11 Page 4 of 4 PageID 18667
1
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: SUR-REPLY TO STAN BROOME’S
FALSE, MISLEADING, AND FRAUDULENT
REPLY [DOC 478] AND AFFIDAVIT [DOC 478-1]
TO THE HONORABLE JUDGE ROYAL FURGESON:
COMES NOW JEFF BARON, and moves this Court to grant leave to file
the following sur-reply to Stan Broome’s false, misleading, and fraudulent reply
[DOC 478] and affidavit [DOC 478-1]:
A. AGAIN A FALSE AND MISLEADING ATTORNEY’S AFFIDAVIT,
AGAIN A FRAUDULENT ATTORNEY’S CLAIM
1. Mr. Broom asserts on page 1 of his reply [DOC 478] that:
“Baron states that his contract with the Broome Law Firm,
pllc was capped at $10,000.00 per month. This is simply
not true.”
2. Mr. Broom then swears in his affidavit [DOC 478-1] that:
“4. Jeff Baron signed an engagement letter with Broome
Law Firm, pllc. The engagement letter stated that
Case 3:09-cv-00988-F Document 522 Filed 05/06/11 Page 1 of 6 PageID 18688
2
Broome Law Firm, pile would not invoice more than
$10,000.00 in fees in anyone calendar month. If the fees
in any one month were to exceed $10,000.00, those fees
would not be waived, but would rollover and be
invoiced the next month, or the next month in which fees
did not exceed $10,000.00.”
3. Mr. Broome’s assertions – sworn to under oath – are straightforward.
There is no ambiguity in his claim. Mr. Broome swears that there was no cap on
his fees. Mr. Broome swears he was authorized to work as much as he desired, and
the only limit was the amount he could invoice in any one month for “cash flow”
considerations. Mr. Broome swears that he was authorized to work as much as he
desired, and could “roll over” fees for as many months as necessary. Notably, Mr.
Broome does not dispute that he was paid $10,000.00 per month for the months he
worked, but swears his agreement with Mr. Baron did not cap his fees at that
amount.
4. Jeff Baron’s practice, as should now be clear to the Court, was to set a
fixed monthly fee cap with each lawyer he retained so that he could control the fee
obligation incurred in any month. The attorneys were paid at their agreed rates.
Stan Broome is no different. Stan Broome’s sworn statements to the contrary
are false, misleading, and fraudulent.
THE PROOF AGAINST STAN BROOME:
5. If Mr. Broome’s own original claim affidavit is examined closely, we see
Case 3:09-cv-00988-F Document 522 Filed 05/06/11 Page 2 of 6 PageID 18689
3
that on page 3 of his contract with Mr. Baron (produced by Mr. Broome as
evidence) that what the agreement actually provides is:
2. BLF will not incur fees in anyone calendar month
that exceed $10,000.00 without obtaining the written
permission (through e-mail or some other writing) from
Client. Client agrees to promptly respond to any
notification that the projected fees may exceed this capped
amount in any calendar month, and give clear instructions
on how to proceed.
6. In other words, directly contrary to Mr. Broome’s latest sworn
affidavit, his contract expressly “capped” the amount of fees to be incurred in
any calendar month. The contract is explicit. “BLF will not incur fees in any
one calendar month that exceed $10,000 without obtaining the written permission
.. from Client”.
7. Since Broome drafted the agreement, any ambiguity is construed as a
matter of law against him. However, there is no ambiguity. The contract is clear
and explicit. Broome agreed to “cap” his “fees” not to exceed $10,000.00 in any
calendar month. This provision is distinct from the provision limiting per month
invoicing.
1
1
The per month invoicing limit for cash flow purposes is numbered “1”. The separate invoicing
provision states “Fees invoiced in anyone calendar month shall not exceed $10,000.00. If the
fees in anyone month shall exceed $10,000.00, those fees shall not be waived, but shall roll over
and be invoiced the next month, or the next month in which fees do not exceed $10,000.00.”
That provision, numbered “1”, is clearly distinct from the provision numbered “2” capping the
amount of fees which could be incurred in any one month.
Case 3:09-cv-00988-F Document 522 Filed 05/06/11 Page 3 of 6 PageID 18690
4
8. Stan Broome, wants to collect for more than the capped $10,000.00 fee
limit he agreed to. Accordingly, Mr. Broom did not disclose nor mention the
second paragraph of his fee cap terms, which expressly capped fees at $10,000.00
monthly. Instead, Mr. Broome mentioned only the first part of the fee terms,
relating to invoicing. Mr. Broome is an attorney, and his trick is a sophisticated
one. But it is still a trick. Mr. Broome’s affidavit is false, misleading and
fraudulent. His claim is based on fraud. There is no other word to describe it. Mr.
Broome is an attorney, and clearly knows what he agreed with Jeff. Broome simply
falsely represented the terms of that agreement.
9. Notably, there is a clear pattern with respect to ‘claims’ against Mr. Baron.
Attorneys worked for flat fees or capped monthly rates. They ‘aver—under oath–
various facts which, an examination of their own records proves to be false.
THE KEY ETHICAL ISSUES:
10. Mr. Broome feigns unawareness as to any ‘ethical’ violation on his part.
The issue is as follows: As was established in evidence during the January 4, 2011
FRAP 8(a) evidentiary hearing, Mr. Chesnin vigorously attempted to secure Mr.
Broome’s cooperation to substitute in as counsel for Broome. It was clear this
Court and the bankruptcy court were concerned with allegations that Jeff was firing
lawyers. An attorney has the duty not to work against their client’s interest, or
take steps to the injury of their client. Broome refused to allow substitution, and
Case 3:09-cv-00988-F Document 522 Filed 05/06/11 Page 4 of 6 PageID 18691
5
insisted on filing a motion to withdraw. That was used to the detriment of his
client, as an express ‘basis’ of the receivership motion. Most disturbing, as
testified to in the February 4, 2011 hearing, the receivership motion was filed
less than 60 minutes after Mr. Broome filed his motion to withdraw.
11. It is simply not credible that Mr. Urbanik could prepare, and present his
receivership motion– based in part on Mr. Broome’s withdrawal– less than 60
minutes after notice of that withdrawal was filed. The circumstances evidence that
Mr. Broome had sold out his client, and was working in coordination with Mr.
Urbanik. There is no rational basis for Broome to refuse allowing Mr. Chesnin
(an AV rated trial lawyer) to file for substitution. The only apparent
motivation for Broome’s refusing to allow substitution was that Mr. Broome
desired, apparently to serve as grounds for Mr. Urbanik’s motion, to file a
motion for withdrawal. Broome was clearly under the ethical duty to avoid
taking actions detrimental to his client. He clearly breached that obligation.
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
Case 3:09-cv-00988-F Document 522 Filed 05/06/11 Page 5 of 6 PageID 18692
6
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
Case 3:09-cv-00988-F Document 522 Filed 05/06/11 Page 6 of 6 PageID 18693
2
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: THIRD 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:
A. WHAT THIS EVIDENCE PROVES
EXHIBIT A - THE CRANDALL INVOICE
This invoice:
(1) This invoice establishes once again the fraudulent basis of once again an
attorney's false claim. Mr. Crandall falsely stated under oath that during
the course of her representation her fees were fixed at an hourly rate.
That is false, untrue. As proved by Exhibit A, Ms. Crandall billed at
a flat rate. Contrary to Ms. Crandall’s claim that her signed agreement
Case 3:09-cv-00988-F Document 523 Filed 05/06/11 Page 1 of 5 PageID 18694
3
was to receive $300.00 per hour (an agreement she never produced),
page two of her own invoice states unequivocally, “(Flat Rate)
$5,000.00”. There is no ambiguity about it.
(2) Once again, the receiver invited an attorney to make a ‘claim’, clearly
false, that the attorney was to be paid $300.00 per hour, but was paid
less. Exhibit A proves that, just as with one after another of the attorney
‘claimants’, the attorneys agreed to flat or capped rates, and were paid at
their agreed rate. The ‘claims’ against Jeff Baron, as demonstrated by
yet another false and fraudulent affidavit filed by yet another ‘claimant’
attorney solicited by the receiver, are false. Clearly, attorneys do not
just show up at a court's doorstep with false claims– someone solicited
them to come.
(3) Notably, we have asked the receiver to produce the complete billings, all
demand letters, all response correspondence for each attorney claim.
The receiver has refused. As this invoice establishes, the reason is clear.
With all due respect these ‘claims’ are garbage. For example, from
Pronske, who was paid a $75,000.00 fee up front, never sent out an
engagement letter or contract, never sent out an invoice, never sent out a
billing statement, never sent out a report as to any 'retainer' or retainer
balance, but when the settlement agreement was to be finalized,
Case 3:09-cv-00988-F Document 523 Filed 05/06/11 Page 2 of 5 PageID 18695
4
demanded a quarter million dollar bonus, claiming the $75,000.00 was a
retainer that had long ago been used up (just Pronske didn’t get around
to sending out any billing or notice of that at the time), to Stan Broome
who claimed the limit on his work was merely a per month invoicing
limit that rolled over to the next month-– but where, contrary to his
sworn testimony, his contract clearly capped incurring fees to
$10,000.00 per month without express written content to exceed that cap
in any month, to Lyon who fraudulently claimed his billing rate was
$300 per hour and $75,000.00 in fees were past due, when his rate was
really $40.00 per hour, and he had been paid, to Taylor who now claims
a large 'contingency' fee, but who did not mention such a fee to his client
when the settlement was entered, and represented to his client that “We'll
probably have a very small bill that will go out at the first of September,
but that should be the last one.”, and now to Crandall who fraudulently
makes the claim that during the course of her representation of Jeff, her
fees were at an hour rate. Her own invoice clearly establishes that
during the course of the representation her rates were fixed at a flat rate,
not an hourly rate. Out and out false factual claims made under oath.
1
1
The attorneys’ claims have now been shown over and over and over to be based on the
attorneys’ false sworn statements. But, it is Jeff Baron who is in receivership, based on these
'claims'. In retrospect, a receivership should never have been imposed based on mere ‘claims’.
To cover up the fraudulent nature of the attorney’s claims there is now an attempt to burn a hole
Case 3:09-cv-00988-F Document 523 Filed 05/06/11 Page 3 of 5 PageID 18696
5
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.
2
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
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.
in the Constitution and cut out Jeff's Seventh Amendment right to a trial by jury. The attorneys
know their claims are garbage. Although they all swore to uphold the constitution, now they
don't want due process when it comes to investigating and testing their claims. Jeff has been
prevented from hiring an investigator, Jeff has been prevented from hiring an expert, Jeff has
been denied discovery and denied access to the underlying evidence that clearly relates to the
‘claims’. As time is allowed counsel to review the material carefully: over and over the claims
are revealed to be false and fraudulent. The receiver and the attorneys yell at the Court that due
process is not necessary, that rushed ‘summary proceedings’ are a good idea. But due process, in
large and liberal quantities, is exactly what is necessary here.
2
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 523 Filed 05/06/11 Page 4 of 5 PageID 18697
6
C. RELIEF REQUESTED
Jeff Baron requests the Court to consider this evidence with respect to the
Court’s consideration of the receiver’s motions.
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
Case 3:09-cv-00988-F Document 523 Filed 05/06/11 Page 5 of 5 PageID 18698