Preview
CAUSE NO. 048·232432·08
CONTINENTAL SERVICING CO., § IN THE DISTRICT COURT OF
L.L.C., §
§
Plaintiff and Counter· Defendants, §
§
vs. §
§
SWS B, LTD. f/k/a FSB FINANCIAL, §
LTD.; REGIONAL ACCEPTANCE §
CORPORATION; SWS A, L.L.C. f/k/a §
FSBF, L.L.C. f/k/a FSB FINANCIAL, §
L.L.C., JOHN DOE/ENTITY § TARRANT COUNTY, TEXAS
NOS. 1·4, STEVEN BURKE, AND §
SOUTHWEST SECURITIES, FSB, §
§
Defendants, Counter-Plaintiffs §
and Third·Party Plaintiffs, §
§
vs. §
§
HAYTHAM ELZAYN, §
§
Third· Party Defendant. §
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE
Defendants, Counter-Plaintiffs, and Third· Party Plaintiffs SWS B, Ltd. f/k/a
FSB Financial, Ltd., SWS A, LLC f/k/a FSBF, LLC, f/k/a FSB Financial, LLC,
Southwest Securities, FSB and Steven Burke (collectively, the "SWS Defendants")
file this Supplement to and Reply in Support of Their Motion to Clarify the Record,
or in the Alternative, Motion to Reopen the Evidence, and respectfully show the
Court as follows:
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 1
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE
D·1981027_2.DOC
I.
Introduction
The SWS Defendants believed at trial that Plaintiffs Exhibit 20 was
admitted and acted at trial- without objection from or clarification by any party or
the Court- as though the exhibit had been admitted. If this Court concludes the
exhibit was not admitted, the Court should exercise its authority under Rule 270
(and possibly its duty under well·established case law). What the SWS Defendants
seek is simple and straightforward: reopen the evidence solely for the purpose of
admitting Plaintiffs Exhibit 20, admit Plaintiffs Exhibit 20, and then close the
evidence.
Strangely, Plaintiff objects to the Court admitting its own document - a
document created by Plaintiff, produced by Plaintiff, discussed at length during Mr.
Amaya's two depositions, testified to extensively by Mr. Amaya at trial, relied on by
Mr. Amaya in doing his Damage Model, discussed by other witnesses at trial, and
referenced multiple times during trial by the SWS Defendants as being admitted.
In its Response, Plaintiff attempts to do many things, but it does not attempt to
legitimately address the merits of the SWS Defendants' Motion. Instead, Plaintiff
continues its unsubstantiated smear campaign against the SWS Defendants 1 and
re-urges its closing arguments- which have nothing to do with the pending Motion.
Plaintiffs objection to the admission of Plaintiffs Exhibit 20 is telling. Plaintiff
I Plaintiff has developed a routine habit and practice in this case of unsubstantiated and unfounded
allegations. For example, the Court will recall Plaintiffs counsel announcing to the Court and on the
record that it would need to recall Mr. Burke to the stand to testify for a third time because Plaintiff
had documents that demonstrated that Mr. Burke "lied" during his prior testimony. Of course,
Plaintiff never recalled Mr. Burke and never presented any such documents to the Court or anyone
else. Plaintiffs tactic was merely another attempt to tarnish Mr. Burke's reputation.
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 2
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE
D-1981027_2.DOC
realizes the impact Plaintiffs Exhibit 20 has on its Damage Model. Through
misapplication of the standards for reopening the evidence and multiple attempted
diversions, Plaintiff hopes to keep its own document out of the record.
The SWS Defendants respectfully request that the Court grant the Motion
and then bring closure to the trial court phase of this litigation.
II.
Argument
A. Supplement to Motion to Reopen
The SWS Defendants request that the Court reopen the record and admit
Plaintiffs Exhibit 20 into evidence. A true and correct copy of Plaintiffs Exhibit 20
is attached for the Court's convenience.z The attached Plaintiffs Exhibit 20 is
identical to the version tendered to the Court at the beginning of trial and contained
in the Court's set of trial exhibit notebooks.3 Further, the attached Plaintiffs
Exhibit 20 is identical to the version relied upon by Mr. Amaya in creating his
Damage Model4 and testified to extensively by Mr. Amaya during his examination
at trial.5 Upon the admission of Plaintiffs Exhibit 20, the SWS Defendants request
that the record for this case be closed.
2 See Tab 1 to Mfidavit of Vincent P. Circelli ("Circelli Mf."), attached hereto as Exhibit "A."
3 Circelli Mf., Exhibit "A," at ~ 2.
4 Plaintiffs Exhibits 21 and 21a.
s Cross-Examination of Mike Amaya by SWS Defendants ("Amaya Testimony") (May 2, 2011), 78:2·9;
81:1·6; 87:13·22, excerpts attached hereto as Exhibit "B" and the entire transcript attached hereto as
Exhibit "C"; Circelli Mf., Exhibit "A," at ~ 2.
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 3
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE
D·l981027_2.DOC
B. Reply in Support of Motion to Reopen
In its Response, Plaintiff misapplies the factors set forth in the well-
established case law regarding Rule 270. The record in this case clearly
demonstrates that the SWS Defendants have satisfied each of the factors considered
when assessing whether to reopen the evidence.
1. Plaintiff misapplies the diligence standard.
This is not your typical motion to reopen. The SWS Defendants did not seek,
discover, or produce evidence alter trial. The SWS Defendants did not wait to see
how the trial played out and obtain new evidence in hopes of improving their
chances. And given the arbitrary time limits placed on the SWS Defendants by the
Court, no one can accuse the SWS Defendants of not moving as efficiently and
diligently through trial as possible. The SWS Defendants believed at trial that
Plaintiffs Exhibit 20 was offered and admitted. On multiple occasions during trial,
counsel for the SWS Defendants referred to the exhibit as having been admitted
and treated the exhibit as though it had been admitted. Plaintiffs counsel never
objected. Immediately upon learning that Plaintiffs Exhibit 20 may not have been
admitted, the SWS Defendants took steps to investigate and remedy the confusion.
The SWS Defendants more than satisfy the diligence requirement. 6
6 Lifestyle Mobile Homes v. Ricks, 653 S.W.2d 602, 604 (Tex. App.-Beaumont 1983, writ refd n.r.e.)
(noting that the party was diligent in bringing its motion to reopen upon his discovery that evidence
had been inadvertently omitted during trial in affirming trial court's decision to reopen the
evidence).
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 4
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE
D·l981027_2.DOC
2. Plaintiffs Exhibit 20 is decisive.
Plaintiffs Exhibit 20 is not cumulative but additive. The Court can and
should disregard the Damage Model based on the current record. Mr. Amaya's
admissions about the unreliability of his Damage Model on cross examination are
difficult, if not impossible, for Plaintiff or this Court to overcome. Specifically, Mr.
Amaya testified to numerous representative categories of deficiencies in the model.
Plaintiffs Exhibit 20 and all the discrepancies and questions that come with it
provide an additionalbasis for discrediting and disregarding the Damage Model as
it demonstrates more depth and breadth of the problems which time did not allow
on cross examination.
3. There is no undue delay as a result of the Motion.
The SWS Defendants' Motion has not caused undue delay. Plaintiff suggests
that "the Court has been unduly diverted from focusing on the substantive merits of
the case."7 But this is the substantive merit ofthe case. Plaintiffs Exhibit 20 goes
to the heart of the Damage Model and guts any claim for monetary relief by
Plaintiff.
The Court has not yet rendered its decision. And the requested relief is
simple - 1) open the record, 2) admit a document tendered by Plaintiff, testified to
extensively during the course of trial, treated by the SWS Defendants as having
already been admitted, and referred to on several occasions as having been
admitted, and 3) close the record. It is not necessary for the parties or the Court to
7 Plaintiffs Response to SWS Defendants' Motion to Clarify the Record, or in the Alternative, Motion
to Reopen the Evidence ("Plaintiffs Response"), p. 6.
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 5
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE
D·l981027_2.DOC
further investigate or debate the source of the exhibit or question its relevance.
This is a straightforward request that can and should be dealt with quickly and
easily.
4. Refusal to admit Plaintiffs Exhibit 20 will cause injustice.
If the Court denies this Motion and accepts the Damage Model as an accurate
summary of Plaintiffs Exhibit 20, an accurate statement of damages suffered by
Plaintiff, or some form of expert report, the SWS Defendants will suffer an injustice.
The SWS Defendants certainly believe the Court can and should disregard the
Damage Model based on the current record- including numerous uncontroverted
admissions by Mr. Amaya- it has in front of it. But Plaintiffs Exhibit 20 delivers
an additional, undeniable, crushing blow to Plaintiffs claimed damages.
5. Rule 270 is not for horse trading.
As one of its diversionary tactics, Plaintiff contends that if the Court grants
the SWS Defendants Rule 270 Motion, the Court must also reopen the record for a
whole host of unspecified witnesses and documents. Plaintiffs request overreaches
for many reasons and is without factual or legal support. If the Court reopens the
record to admit Plaintiffs Exhibit 20, Plaintiff "requests that all evidence regarding
[Plaintiffs] damages be reopened."B Whether the SWS Defendants met their
burden in their motion (which they easily did under the well-established law) has
no bearing on whether Plaintiff has met its burden under Rule 270 (which it clearly
has not). The SWS Defendants have found no case that applies Rule 270 in the
s Plaintiffs Response, p. 7.
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 6
THEm MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE, MOTION TO REOPEN THE EVIDENCE
D·l981027_2.DOC
horse trading manner requested by Plaintiff, or providing a benefit to all if one
demonstrates it is entitled to it.
Plaintiff has not met- and has not even attempted to meet - the factors for
reopening the evidence set out in Texas Rule of Civil Procedure 270 and well·
established case law. Further, Plaintiff has not even identified for the Court what
evidence it intends to offer if"allevidence regarding [Plaintiffs] damages" is
reopened.
Interestingly, Plaintiff also requests that "a sponsoring witness be called and
questioned and that the proponent lay a proper evidentiary foundation before
Plaintiffs Exhibit 20 is offered and admitted into the record in accordance with the
Texas Rules of Evidence."9 Mr. Amaya testified at length regarding the creation
and use of Plaintiffs Exhibit 20. There certainly can be no question as to the
exhibit's authenticity, and while the SWS Defendants challenge the accuracy of the
document's data, no one objects to the admissibility of the document under the
Texas Rules. It cannot be that Plaintiff intends to challenge the admissibility of the
document it created and its own expert claims to have relied upon in creating his
Damage Model. The request for a "sponsoring witness" is nothing more than an
improper and untimely attempt to explain away the endless errors in the Damage
Model. Plaintiffs requests to reopen all evidence relating to damages and to call a
"sponsoring witness" for Plaintiffs Exhibit 20 should be denied.
9 Plaintiffs Response, p. 7.
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 7
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE
D·l981027_2.DOC
Conclusion
The SWS Defendants respectfully request that this Court reopen the record
simply to admit Plaintiffs Exhibit 20 and to grant to the SWS Defendants' all other
relief to which they may be entitled.
Respectfully submitted,
!LJ
Thomas J.
f.UL
Williams
State Bar No. 21578500
Vincent P. Circelli
State Bar No. 24058804
HAYNES AND BOONE, LLP
201 Main Street, Suite 2200
Fort Worth, Texas 76102
Telephone: (817) 347·6600
Telecopier: (817) 347·6650
Marty L. Brimmage, Jr.
State Bar No. 00793386
Lacy M. Lawrence
State Bar No. 24055913
HAYNES AND BOONE, LLP
2323 Victory Avenue, Suite 700
Dallas, Texas 75219
Telephone: (214) 651·5000
Telecopier: (214) 651·5940
ATTORNEYS FOR DEFENDANTS,
COUNTER-PLAINTIFFS AND
THIRD· PARTY PLAINTIFFS
SWS B, LTD. flk/a FSB FINANCIAL,
LTD. AND SWS A, L.L.C. f/k/a FSBF,
L.L.C. f/k/a FSB FINANCIAL, L.L.C.,
SOUTHWEST SECURITIES, FSB,
AND STEVEN BURKE
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF PageS
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE
D-1981027_2.DOC
CERTIFICATE OF SERVICE
This is to certify that a true and correct copy of the foregoing has been served
on all counsel of record on this 29th day of July, 2011, in accordance with the Texas
Rules of Civil Procedure.
Geff Anderson By Hand Delivery
Murray Camp
Anderson, Smyer, Riddle & Kuehler, L.L.P.
1604 8th Avenue
Fort Worth, Texas 76104
Kenneth C. Johnston By Certified Mail, Return Receipt Requested
Michael P. Ridulfo
Kane Russell Coleman & Logan PC
3700 Thanksgiving Tower
1601 Elm Street
Dallas, Texas 75201
l!J
SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 9
THEIR MOTION TO CLARIFY THE RECORD,
OR IN THE ALTERNATIVE, MOTION TO REOPEN THE EVIDENCE
D·l981027_2.DOC
CAUSE NO. 048·232432·08
CONTINENTAL SERVICING CO., § IN THE DISTRICT COURT OF
L.L.C., §
§
Plaintiff and Counter Defendants, §
§
vs. §
§
SWS B, LTD. flkla FSB FINANCIAL, §
LTD.; REGIONAL ACCEPTANCE §
CORPORATION; SWS A, L.L.C. flkla §
FSBF, L.L.C. ffk/a FSB FINANCIAL, §
L.L.C., JOHN DOE/ENTITY § TARRANT COUNTY, TEXAS
NOS. 1·4, STEVEN BURKE, AND §
SOUTHWEST SECURITIES, FSB, §
§
Defendants, Counter-Plaintiffs §
And Third· Party Plaintiffs, §
§
vs. §
§
HAYTHAMELZAYN, §
§
Third· Party Defendant. § 48TH JUDICIAL DISTRICT
AFFIDAVIT OF VINCENT P. CIRCELLI
STATE OF TEXAS §
§
COUNTY OF TARRANT §
BEFORE ME, the undersigned Notary Public, on this day personally
appeared Vincent P. Circelli, known to me to be the person whose name is
subscribed below, who being duly sworn, stated as follows:
1. "My name is Vincent P. Circelli. I am over twenty·one (21) years of
age, have never been convicted of a felony or other crime of moral turpitude, and
suffer from no mental or physical disability that would render me incompetent to
AFFIDAVIT OF VINCENT P. CIRCELLI Page 1
D·l981434_1.DOC
make this Affidavit. I am able to swear, and I hereby do swear, that all ofthe facts
in this Affidavit are true and correct and within my personal knowledge, or are
known to me through my duties and responsibilities as an attorney with the firm of
Haynes and Boone, LLP. In that capacity, I represent SWS B, Ltd. f/k/a FSB
Financial, Ltd. and SWS A, L.L.C. f/k/a FSBF, L.L.C. f/k/a FSB Financial, L.L.C.,
Steven Burke, and Southwest Securities, FSB (collectively, the "SWS Defendants").
in the above-referenced action.
2. Attached hereto at Tab 1 is a true and correct copy of Plaintiffs
Exhibit 20. The attached Plaintiffs Exhibit 20 is identical to the version tendered
to the Court at the beginning of trial and contained in the Court's set of trial exhibit
notebooks. Further, the attached Plaintiffs Exhibit 20 is identical to the version
Mr. Amaya was questioned about during his examination at trial.
FURTHER AFFIANT SAYETH NOT.
Vincent P. Circelli
SWORN AND SUBSCRIBED before me on this 2.PL day of July, 2011.
.:-''~!Y¥~~~,~
I ~~~·."~
: ~~/IGF'~-:..$
'l" 11uu11\
CHERI W. BROWN
Notary Public, State of Texas
>·'~.--,x::..,:'.s
My Commission Expires
February 27, 2013
Notary Public, State of Texas
(PERSONALIZED SEAL)
AFFIDAVIT OF VINCENT P. CIRCELLI Page 2
D-1981434_1.DOC
·<'
Dates:1 0/01/05- 11/09/10 Interest not collected or C/0 Nl Banks $111,989.26
Collection Total Bank 00 $732,328.78 $41,674.00
Less Reversed -$114,392.82 $16,159.86
Total $617,935.96 $3,137.36
Total $172,960.48
CollecHon Total Bank91 $30,002.26
Less Reversed -$188.62
Total $30,713.64
Repo Fees $63,912.85
C/0 Collection Bank 90 $439.80 Cancellations/Mise $3,447.39
less Reversed $0.00 $67,360.24
Total $439.80
C/0 Collection Bar1k 91 $600.30
less Reversed $0.00
Total $600.30
Total Collection $617,935.96 Total Interest and Fees 5172,960.46
$30,713.64 . $67,360.24
$439.60 $240,320.72
$600.30
$649,689.70
Paid FSB 2,056,449.07
Minus Amount Collected -649,689.70
1 ,406, 7 59.37
Add Interest and Fees 240,320.72
1,647,080.09
ALL 01280
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Preview
CAUSE NO. 048·232432·08 CONTINENTAL SERVICING CO., § IN THE DISTRICT COURT OF L.L.C., § § Plaintiff and Counter· Defendants, § § vs. § § SWS B, LTD. f/k/a FSB FINANCIAL, § LTD.; REGIONAL ACCEPTANCE § CORPORATION; SWS A, L.L.C. f/k/a § FSBF, L.L.C. f/k/a FSB FINANCIAL, § L.L.C., JOHN DOE/ENTITY § TARRANT COUNTY, TEXAS NOS. 1·4, STEVEN BURKE, AND § SOUTHWEST SECURITIES, FSB, § § Defendants, Counter-Plaintiffs § and Third·Party Plaintiffs, § § vs. § § HAYTHAM ELZAYN, § § Third· Party Defendant. § SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE Defendants, Counter-Plaintiffs, and Third· Party Plaintiffs SWS B, Ltd. f/k/a FSB Financial, Ltd., SWS A, LLC f/k/a FSBF, LLC, f/k/a FSB Financial, LLC, Southwest Securities, FSB and Steven Burke (collectively, the "SWS Defendants") file this Supplement to and Reply in Support of Their Motion to Clarify the Record, or in the Alternative, Motion to Reopen the Evidence, and respectfully show the Court as follows: SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 1 THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE D·1981027_2.DOC I. Introduction The SWS Defendants believed at trial that Plaintiffs Exhibit 20 was admitted and acted at trial- without objection from or clarification by any party or the Court- as though the exhibit had been admitted. If this Court concludes the exhibit was not admitted, the Court should exercise its authority under Rule 270 (and possibly its duty under well·established case law). What the SWS Defendants seek is simple and straightforward: reopen the evidence solely for the purpose of admitting Plaintiffs Exhibit 20, admit Plaintiffs Exhibit 20, and then close the evidence. Strangely, Plaintiff objects to the Court admitting its own document - a document created by Plaintiff, produced by Plaintiff, discussed at length during Mr. Amaya's two depositions, testified to extensively by Mr. Amaya at trial, relied on by Mr. Amaya in doing his Damage Model, discussed by other witnesses at trial, and referenced multiple times during trial by the SWS Defendants as being admitted. In its Response, Plaintiff attempts to do many things, but it does not attempt to legitimately address the merits of the SWS Defendants' Motion. Instead, Plaintiff continues its unsubstantiated smear campaign against the SWS Defendants 1 and re-urges its closing arguments- which have nothing to do with the pending Motion. Plaintiffs objection to the admission of Plaintiffs Exhibit 20 is telling. Plaintiff I Plaintiff has developed a routine habit and practice in this case of unsubstantiated and unfounded allegations. For example, the Court will recall Plaintiffs counsel announcing to the Court and on the record that it would need to recall Mr. Burke to the stand to testify for a third time because Plaintiff had documents that demonstrated that Mr. Burke "lied" during his prior testimony. Of course, Plaintiff never recalled Mr. Burke and never presented any such documents to the Court or anyone else. Plaintiffs tactic was merely another attempt to tarnish Mr. Burke's reputation. SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 2 THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE D-1981027_2.DOC realizes the impact Plaintiffs Exhibit 20 has on its Damage Model. Through misapplication of the standards for reopening the evidence and multiple attempted diversions, Plaintiff hopes to keep its own document out of the record. The SWS Defendants respectfully request that the Court grant the Motion and then bring closure to the trial court phase of this litigation. II. Argument A. Supplement to Motion to Reopen The SWS Defendants request that the Court reopen the record and admit Plaintiffs Exhibit 20 into evidence. A true and correct copy of Plaintiffs Exhibit 20 is attached for the Court's convenience.z The attached Plaintiffs Exhibit 20 is identical to the version tendered to the Court at the beginning of trial and contained in the Court's set of trial exhibit notebooks.3 Further, the attached Plaintiffs Exhibit 20 is identical to the version relied upon by Mr. Amaya in creating his Damage Model4 and testified to extensively by Mr. Amaya during his examination at trial.5 Upon the admission of Plaintiffs Exhibit 20, the SWS Defendants request that the record for this case be closed. 2 See Tab 1 to Mfidavit of Vincent P. Circelli ("Circelli Mf."), attached hereto as Exhibit "A." 3 Circelli Mf., Exhibit "A," at ~ 2. 4 Plaintiffs Exhibits 21 and 21a. s Cross-Examination of Mike Amaya by SWS Defendants ("Amaya Testimony") (May 2, 2011), 78:2·9; 81:1·6; 87:13·22, excerpts attached hereto as Exhibit "B" and the entire transcript attached hereto as Exhibit "C"; Circelli Mf., Exhibit "A," at ~ 2. SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 3 THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE D·l981027_2.DOC B. Reply in Support of Motion to Reopen In its Response, Plaintiff misapplies the factors set forth in the well- established case law regarding Rule 270. The record in this case clearly demonstrates that the SWS Defendants have satisfied each of the factors considered when assessing whether to reopen the evidence. 1. Plaintiff misapplies the diligence standard. This is not your typical motion to reopen. The SWS Defendants did not seek, discover, or produce evidence alter trial. The SWS Defendants did not wait to see how the trial played out and obtain new evidence in hopes of improving their chances. And given the arbitrary time limits placed on the SWS Defendants by the Court, no one can accuse the SWS Defendants of not moving as efficiently and diligently through trial as possible. The SWS Defendants believed at trial that Plaintiffs Exhibit 20 was offered and admitted. On multiple occasions during trial, counsel for the SWS Defendants referred to the exhibit as having been admitted and treated the exhibit as though it had been admitted. Plaintiffs counsel never objected. Immediately upon learning that Plaintiffs Exhibit 20 may not have been admitted, the SWS Defendants took steps to investigate and remedy the confusion. The SWS Defendants more than satisfy the diligence requirement. 6 6 Lifestyle Mobile Homes v. Ricks, 653 S.W.2d 602, 604 (Tex. App.-Beaumont 1983, writ refd n.r.e.) (noting that the party was diligent in bringing its motion to reopen upon his discovery that evidence had been inadvertently omitted during trial in affirming trial court's decision to reopen the evidence). SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 4 THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE D·l981027_2.DOC 2. Plaintiffs Exhibit 20 is decisive. Plaintiffs Exhibit 20 is not cumulative but additive. The Court can and should disregard the Damage Model based on the current record. Mr. Amaya's admissions about the unreliability of his Damage Model on cross examination are difficult, if not impossible, for Plaintiff or this Court to overcome. Specifically, Mr. Amaya testified to numerous representative categories of deficiencies in the model. Plaintiffs Exhibit 20 and all the discrepancies and questions that come with it provide an additionalbasis for discrediting and disregarding the Damage Model as it demonstrates more depth and breadth of the problems which time did not allow on cross examination. 3. There is no undue delay as a result of the Motion. The SWS Defendants' Motion has not caused undue delay. Plaintiff suggests that "the Court has been unduly diverted from focusing on the substantive merits of the case."7 But this is the substantive merit ofthe case. Plaintiffs Exhibit 20 goes to the heart of the Damage Model and guts any claim for monetary relief by Plaintiff. The Court has not yet rendered its decision. And the requested relief is simple - 1) open the record, 2) admit a document tendered by Plaintiff, testified to extensively during the course of trial, treated by the SWS Defendants as having already been admitted, and referred to on several occasions as having been admitted, and 3) close the record. It is not necessary for the parties or the Court to 7 Plaintiffs Response to SWS Defendants' Motion to Clarify the Record, or in the Alternative, Motion to Reopen the Evidence ("Plaintiffs Response"), p. 6. SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 5 THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE D·l981027_2.DOC further investigate or debate the source of the exhibit or question its relevance. This is a straightforward request that can and should be dealt with quickly and easily. 4. Refusal to admit Plaintiffs Exhibit 20 will cause injustice. If the Court denies this Motion and accepts the Damage Model as an accurate summary of Plaintiffs Exhibit 20, an accurate statement of damages suffered by Plaintiff, or some form of expert report, the SWS Defendants will suffer an injustice. The SWS Defendants certainly believe the Court can and should disregard the Damage Model based on the current record- including numerous uncontroverted admissions by Mr. Amaya- it has in front of it. But Plaintiffs Exhibit 20 delivers an additional, undeniable, crushing blow to Plaintiffs claimed damages. 5. Rule 270 is not for horse trading. As one of its diversionary tactics, Plaintiff contends that if the Court grants the SWS Defendants Rule 270 Motion, the Court must also reopen the record for a whole host of unspecified witnesses and documents. Plaintiffs request overreaches for many reasons and is without factual or legal support. If the Court reopens the record to admit Plaintiffs Exhibit 20, Plaintiff "requests that all evidence regarding [Plaintiffs] damages be reopened."B Whether the SWS Defendants met their burden in their motion (which they easily did under the well-established law) has no bearing on whether Plaintiff has met its burden under Rule 270 (which it clearly has not). The SWS Defendants have found no case that applies Rule 270 in the s Plaintiffs Response, p. 7. SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 6 THEm MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE, MOTION TO REOPEN THE EVIDENCE D·l981027_2.DOC horse trading manner requested by Plaintiff, or providing a benefit to all if one demonstrates it is entitled to it. Plaintiff has not met- and has not even attempted to meet - the factors for reopening the evidence set out in Texas Rule of Civil Procedure 270 and well· established case law. Further, Plaintiff has not even identified for the Court what evidence it intends to offer if"allevidence regarding [Plaintiffs] damages" is reopened. Interestingly, Plaintiff also requests that "a sponsoring witness be called and questioned and that the proponent lay a proper evidentiary foundation before Plaintiffs Exhibit 20 is offered and admitted into the record in accordance with the Texas Rules of Evidence."9 Mr. Amaya testified at length regarding the creation and use of Plaintiffs Exhibit 20. There certainly can be no question as to the exhibit's authenticity, and while the SWS Defendants challenge the accuracy of the document's data, no one objects to the admissibility of the document under the Texas Rules. It cannot be that Plaintiff intends to challenge the admissibility of the document it created and its own expert claims to have relied upon in creating his Damage Model. The request for a "sponsoring witness" is nothing more than an improper and untimely attempt to explain away the endless errors in the Damage Model. Plaintiffs requests to reopen all evidence relating to damages and to call a "sponsoring witness" for Plaintiffs Exhibit 20 should be denied. 9 Plaintiffs Response, p. 7. SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 7 THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE D·l981027_2.DOC Conclusion The SWS Defendants respectfully request that this Court reopen the record simply to admit Plaintiffs Exhibit 20 and to grant to the SWS Defendants' all other relief to which they may be entitled. Respectfully submitted, !LJ Thomas J. f.UL Williams State Bar No. 21578500 Vincent P. Circelli State Bar No. 24058804 HAYNES AND BOONE, LLP 201 Main Street, Suite 2200 Fort Worth, Texas 76102 Telephone: (817) 347·6600 Telecopier: (817) 347·6650 Marty L. Brimmage, Jr. State Bar No. 00793386 Lacy M. Lawrence State Bar No. 24055913 HAYNES AND BOONE, LLP 2323 Victory Avenue, Suite 700 Dallas, Texas 75219 Telephone: (214) 651·5000 Telecopier: (214) 651·5940 ATTORNEYS FOR DEFENDANTS, COUNTER-PLAINTIFFS AND THIRD· PARTY PLAINTIFFS SWS B, LTD. flk/a FSB FINANCIAL, LTD. AND SWS A, L.L.C. f/k/a FSBF, L.L.C. f/k/a FSB FINANCIAL, L.L.C., SOUTHWEST SECURITIES, FSB, AND STEVEN BURKE SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF PageS THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE. MOTION TO REOPEN THE EVIDENCE D-1981027_2.DOC CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the foregoing has been served on all counsel of record on this 29th day of July, 2011, in accordance with the Texas Rules of Civil Procedure. Geff Anderson By Hand Delivery Murray Camp Anderson, Smyer, Riddle & Kuehler, L.L.P. 1604 8th Avenue Fort Worth, Texas 76104 Kenneth C. Johnston By Certified Mail, Return Receipt Requested Michael P. Ridulfo Kane Russell Coleman & Logan PC 3700 Thanksgiving Tower 1601 Elm Street Dallas, Texas 75201 l!J SWS DEFENDANTS' SUPPLEMENT TO AND REPLY IN SUPPORT OF Page 9 THEIR MOTION TO CLARIFY THE RECORD, OR IN THE ALTERNATIVE, MOTION TO REOPEN THE EVIDENCE D·l981027_2.DOC CAUSE NO. 048·232432·08 CONTINENTAL SERVICING CO., § IN THE DISTRICT COURT OF L.L.C., § § Plaintiff and Counter Defendants, § § vs. § § SWS B, LTD. flkla FSB FINANCIAL, § LTD.; REGIONAL ACCEPTANCE § CORPORATION; SWS A, L.L.C. flkla § FSBF, L.L.C. ffk/a FSB FINANCIAL, § L.L.C., JOHN DOE/ENTITY § TARRANT COUNTY, TEXAS NOS. 1·4, STEVEN BURKE, AND § SOUTHWEST SECURITIES, FSB, § § Defendants, Counter-Plaintiffs § And Third· Party Plaintiffs, § § vs. § § HAYTHAMELZAYN, § § Third· Party Defendant. § 48TH JUDICIAL DISTRICT AFFIDAVIT OF VINCENT P. CIRCELLI STATE OF TEXAS § § COUNTY OF TARRANT § BEFORE ME, the undersigned Notary Public, on this day personally appeared Vincent P. Circelli, known to me to be the person whose name is subscribed below, who being duly sworn, stated as follows: 1. "My name is Vincent P. Circelli. I am over twenty·one (21) years of age, have never been convicted of a felony or other crime of moral turpitude, and suffer from no mental or physical disability that would render me incompetent to AFFIDAVIT OF VINCENT P. CIRCELLI Page 1 D·l981434_1.DOC make this Affidavit. I am able to swear, and I hereby do swear, that all ofthe facts in this Affidavit are true and correct and within my personal knowledge, or are known to me through my duties and responsibilities as an attorney with the firm of Haynes and Boone, LLP. In that capacity, I represent SWS B, Ltd. f/k/a FSB Financial, Ltd. and SWS A, L.L.C. f/k/a FSBF, L.L.C. f/k/a FSB Financial, L.L.C., Steven Burke, and Southwest Securities, FSB (collectively, the "SWS Defendants"). in the above-referenced action. 2. Attached hereto at Tab 1 is a true and correct copy of Plaintiffs Exhibit 20. The attached Plaintiffs Exhibit 20 is identical to the version tendered to the Court at the beginning of trial and contained in the Court's set of trial exhibit notebooks. Further, the attached Plaintiffs Exhibit 20 is identical to the version Mr. Amaya was questioned about during his examination at trial. FURTHER AFFIANT SAYETH NOT. Vincent P. Circelli SWORN AND SUBSCRIBED before me on this 2.PL day of July, 2011. .:-''~!Y¥~~~,~ I ~~~·."~ : ~~/IGF'~-:..$ 'l" 11uu11\ CHERI W. BROWN Notary Public, State of Texas >·'~.--,x::..,:'.s My Commission Expires February 27, 2013 Notary Public, State of Texas (PERSONALIZED SEAL) AFFIDAVIT OF VINCENT P. CIRCELLI Page 2 D-1981434_1.DOC ·<' Dates:1 0/01/05- 11/09/10 Interest not collected or C/0 Nl Banks $111,989.26 Collection Total Bank 00 $732,328.78 $41,674.00 Less Reversed -$114,392.82 $16,159.86 Total $617,935.96 $3,137.36 Total $172,960.48 CollecHon Total Bank91 $30,002.26 Less Reversed -$188.62 Total $30,713.64 Repo Fees $63,912.85 C/0 Collection Bank 90 $439.80 Cancellations/Mise $3,447.39 less Reversed $0.00 $67,360.24 Total $439.80 C/0 Collection Bar1k 91 $600.30 less Reversed $0.00 Total $600.30 Total Collection $617,935.96 Total Interest and Fees 5172,960.46 $30,713.64 . $67,360.24 $439.60 $240,320.72 $600.30 $649,689.70 Paid FSB 2,056,449.07 Minus Amount Collected -649,689.70 1 ,406, 7 59.37 Add Interest and Fees 240,320.72 1,647,080.09 ALL 01280 74£1519 360270 Nfcole & Erte Cuwenhoa~r JHMEG~1PSC08902 'J/2}00 6122106 R8demptlon Fee 7f5140 383052 tsmlko ctmon ,B3EJ46XSWN111034 12/3010:1 Ftepo Ct.ilrice!l!iltlcn Fea $ 715140 33857 4r-1'.2CV11W~SOJ1757TJ Delll'ih R Chlrge~ 3/14100 Repo C2.rteoll.atron fee $ 715140 33003- Shar1 Meslei 2G1 W~4"r»«l12047G 3/22/tH! 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