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Cause No.2016-49450
HEMANT GAJARAWALA, Individually § IN THE DISTRICT COURT OF
§
Plaintiff, §
§
DEVSJ CONCRETE, LLC, derivatively on behalf §
Of Texas Concrete Enterprise IV, LLC § HARRIS COUNTY, TEXAS
Intervenor Plaintiff §
§
vs. §
§
SOMAIAH KURRE §
§
Defendant § 80 JUDICIAL DISTRICT
INTERVENOR PLAINTIFF’S FIRST AMENDED PETITIONIN INTERVENTION
TO THE HONORABLE JUDGE OF SAID COURT:
Intervenor Plaintiff, DEVSJ Concrete, LLC, DEVSJ or “Intervenor on its own
behalf and derivatively on behalf of Texas Concrete Enterprise IV, LLC files this First
Amended Petition in Intervention, pursuant to Tex. R. Civ. P. 60 and 61, complaining of
Somaiah Kurre ( Kurre” or Defendant , and in support thereof would respectfully show the
Court the following:
I. DISCOVERY CONTROL PLAN
1.1 Intervenor intends conduct discovery under Level 2 and affirmatively pleads
that it seeks monetary relief in excess of including actual damages, penalties, pre
judgment interest, costs, expenses, and attorney fees IV 190.3(a) and cmt. 2.
II. PARTIES
2.1 Intervenor Plaintiff DEVSJ i closely held Texas limited liability company with
is principal place of business in Fort Bend County, Texas.
Derivative claimant Texas Concrete Enterprise IV, LLC is a closely held Texas
limited liability company with its primary place of business in Harris County, Texas.
Defendant Somaiah Kurre is an individual who resides in Harris County, Texas.
Mr. Kurre has been served with process and has appeared in this case through counsel. Pursuant
to Tex. Civ. Prac. & Rem. Code § 30.014, the last three numbers of Defendant’s driver’s license
number are 305and the last three numbers of Defendant’s Social Security Number are
III. JURISDICTION AND VENUE
This Court has jurisdiction over this cause in that it involves an amount in
controversy in excess of the minimum jurisdictional limit. ODE §24.007(a) and (b)
Venue is proper in Harris County, Texas under the general venue provision because Defendant
resides in Harris County RAC ODE §§ 15.002(1) (3).Finally, an
agreement executed by Defendant provides that venue for any collection or enforcement action
shall be in Harris County.Finally, Intervenor has a justiciable interest in this matter pursuant to
Tex. R. Civ. P. 60 and 61 and is therefor properly before the Court.
IV. FACTS
Texas Concrete Enterprises , LLC (“Texas Concrete IV”) is a closely held,
Texas limited liability company
Intervenor, DEVSJ Concrete, LLC (“DEVSJ”) owns a 35% interest and
Defendant owns a 65% interest in Texas Concrete IV.
Hemant Gajarawala (“Mr. Gajarawala”), the Plaintiff is the original proceeding, is
the sole managing member of DEVSJ and is a manager and the CFO of Texas Concrete IV.
Defendant is a manager and the President of Texas Concrete IV.
Texas oncrete IV’s primary business and purpose is to and operat
concrete productionplant in Kendleton, Texas (the “Kendleton Plant”)
Defendant owns and operates multiple concrete plant facilities in and around the
greater Houston areaand other parts of Texas
Mr. Gajarawala had no experience operating a concrete plant facility prior to the
venture with Defendant, but would serve as the chief financial officer for Texas Concrete IV
with the duty to, among other things, handle all of the company’s money matters including
being the primary contact for the company’s lenders, vendors and employees and resolving those
issues with proper business judgment
Subsequent to the execution of the Company Agreement on October 14, 2014, the
parties agreed that Texas Concrete IV needed funding for working capital to get the Kendleton
lant up and running.
Knowing that Mr. Gajarawala (1) had no experience operating a concrete plant
facility or similar business and (2) would have to rely upon Defendant’s expertise in operating
the Kendleton lant, Defendant promised, represented and ensured Mr. Gajarawala and DEVSJ
that if Mr. Gajarawala and DEVSJ helped the company obtain approximately $830,000 in
working capital, the Kendleton Plant could generate millions of dollars ingross profits.
efendant further promised, represented and assured Mr. Gajarawala and DEVSJ
that Defendant would use his vast experience operating multiple concrete plants to, among other
things, ensure that the concrete plant is up and running and producing concrete at the plant s top
capacity in a timely mannerand that the produced concrete is sold to the public
In reliance upon Defendant’s promises, representations, and assurances Mr.
Gajarawala utilized his long standing business relationship with bankers Allegiance Bank to
obtain the funding Defendant claimed the company needed to generate the many millions of
dollars in profits.
Texas Concrete IV successfully borrowed, via two loan transactions,
approximately $835,000.00 from Allegiance Bank in reliance upon Defendant’s representations,
promises, and assurances.
The full amounts of both loan transactions were personally guaranteed by Mr.
Gajarawala and DEVSJ, based exclusively upon Defendant’s promises, representations, and
assurances.
After obtaining the loans and executing the personal guarantee , Mr. Gajarawala
and DEVSJ learned, via sworn oral deposition testimony by Defendant in this case, that
Defendant made multiple false representations to the bank regarding collateral pledged to secure
both loans.
Such misrepresentations by Defendant place the loans at risk of being called and
put DEVSJ and Mr. Gajarawala’s personal assets, credit worthiness, good will, and business
relationships at risk should the bank decide to call the bank notes as such representations may
well constituteevents of default.
Additionally, Texas Concrete IV has an obligation under the terms of both notes
with Allegiance Bank to have an operating concrete plant in place.
Despite his promises, representations and assurances and despite his absolute
fiduciary obligations to Texas Concrete IV, Defendant has failed and refused to meet his
obligations to get the Kendleton Plant up and running and has provided absolutely zero suppor
to protect the interests of the company.
Moreover, despite repeated requests and demands from Mr. Gajarawala, DEVSJ,
and Allegiance Bank that Defendant perform as promised and required Defendant continues to
fail and refuse to meet his obligations causing significant harm to Texas Concrete IV and placing
Mr. Gajarawala’s personal assets, credit worthiness, good will, and business relationships that
were built over several decades at risk.
In addition to failing to ensure an operational Kendleton Plant, Defendant has
failed and refused to timely provide various forms of documentation such as financial statements
and tax form to Allegiance Bank despite express requirements for same as part of the loan
agreements with Allegiance Bank.
Again, Defendant’s misrepresentations concerning collateral, the failure to have
an operational Kendleton Plant and the failure to provide documentation to Allegiance Bank as
required are all potentially events of default under the terms of the two notes with Allegiance
Bank.
As a direct result of Defendant’s refusal to act, Allegiance Bank indicated its
intent to call the notes secured by real and personal property owned by Texas Concrete IV, and
that arepersonally guaranteed by Mr. Gajarawala
After repeated attempts to seek Defendant’s attendance at properly called
meetings per the Company Agreement, Defendant’s repeated refusal to abide by his fiduciary
obligations and to do as he promised, represented, and assured, left Mr. Gajarawala with no
choice but to seek to mitigate his damages and to learn from scratch how to operate a concrete
plant without any assistance from Defendant.
As such, Mr. Gajarawala worked tirelessly to complete the construction of the
concrete plant site, obtain working vehicles, employees, sales persons and to otherwise turn a
operational, incomplete concrete plant site into a running operation that could service its
debts.
Defendant’s refusal and failure to do as promised, represented, and assured
caused much of the Allegiance ank loan funds to be wasted. In his attempt to continue to save
Texas Concrete IV and his personal assets, credit worthiness, good will, and business
relationships that were built over several decades Mr. Gajarawala has also been forced to infuse,
by way of personal loans to the company, more than $1 million in personal operating capital.
These loans were made out of necessity and have been instrumental in making
sure all Texas Concrete IV’s debts are serviced timely and has resulted in making sure the
Kendleton lant is operational as required by the Allegiance Bank loan.
But for Mr. Gajarawala’s action to save the company and mitigate the significant
damage caused by Defendant’s unlawful conduct Allegiance Bank would likely have called both
notes and placed the personal and real property assets of Texas Concrete IV, Mr. Gajarawala,
DEVSJ, and of Defendant at risk. Without question, even if the bank was never forced to seize
assets to satisfy the debts, Mr. Gajarawala and DEVSJ’s credit worthiness and good will would
have been destroyed and decades of business relationships would have been destroyed.
Mr. Gajarawala was duped by Defendant to put his own neck on the line under the
guise of millions of dollars in profits to be made from the Kendleton lant. To date Mr.
Gajarawala has spent more than $1 million of his own dollars to mitigate his losses.
Moreover, as a direct result of Defendant’s refusal to act, Texas Concrete IV has
generated zero income and has lost significant expected profits that it would have earned if the
plant had become operational and been maintained as required and promised by Defendant. he
lost profits are well into the millions of dollars.
Mr. Gajarawala and DEVSJ continued to ensure that all note payments due
and owing on the note to Allegiance Bank are paid timely
Further, Defendant is also attempting to undo the transfer of a certain 4.649 acre
tract (“Land”), more or less, that was conveyed to Texas Concrete IV by Defendant via
Correction General Warranty Deed (“Correction Deed”). The Land was previously owned by
Shree Radha, LLC (“Shree Radha”), a limited liability company f which Defendant is not only
a 25% owner, but also the president. The Correction Deed was executed at Allegiance Bank’s
request to also allow Texas Concrete IV to sign a Deed of Trust covering same to secure
financing for Texas Concrete IV. Defendant knowingly and willingly executed both the
Correction Deed and the Deed of Trust at Allegiance Bank’s request and for the sole purpose of
obtaining financing for Texas Concrete IV.
It now appears that Defendant executed the documents effectuating the transfer of
the Land without the knowledge, consent, or approval of Shree Radha, or with the intent to
defraud Texas Concrete IV. Shree Radha has retained Defendant’s counsel’s previous law
partner, and is now threatening to initiate legal proceedings against Texas Concrete IV if a
Rescission Deed is not summarily executed to return ownership of the Land to Shree Radha. The
timing of the demand letter, on the eve of trial, and the interrelatedness of the parties serve only
to invite additional scrutiny to Defendant’s motives and actions in executing the Correction Deed
and the subsequent Deed of Trust, and to Defendant’s claims that he was allegedly defrauded.
Lastly, Shree Radha has sent a demand letter threatening litigation and accusing
Mr. Gajarawala, and/or Texas Concrete IV of fraud and deception to Allegiance Bank, thereby
not only defaming, Mr. Gajarawala and Texas Concrete IV, but also disparaging Mr. Gajarawala
and Texas Concrete IV’s future business opportunities.
V. CAUSE OF ACTION
Plaintiff alleges and incorporates by reference all allegations and facts set fort
in paragraphs 1.1 through 4.as if specifically restated herein.
Count Derivative Claim of Texas Concrete IV for Breach of Fiduciary Duty
DEVSJ presently owns a 35% membership interest in Texas oncrete IV, a
closely held Texas limited liability company and has standing to bring this derivative action on
behalf of the Texas Concrete IV
Defendant presently owns a 65% membership interest in Texas Concrete IV and
is also an officer of the company.
Defendant as a manager and the President of Texas Concrete IV ha a fiduciary
relationshipwith Texas oncrete IV.
As more fully described in the fact section above, Defendant’s improper actions
and/or inactions constitute breach of his fiduciary duties to Texas Concrete IV.
Defendant’s breach has resulted in significant damages to Texas Concrete IV for
which the company hereby sues
Additionally, Defendant’s breach of his fiduciary duties were clearly
intentional. As such Texas Concrete IV seek and is entitled to exemplary damages resulting
from Defendant’s intentional acts.
Because Texas Concrete IV is a closely held company, DEVSJ has the right to
bring this action derivatively on behalf of the company and DEVSJ asserts that justice requires
that the Court award DEVSJ damages directly based upon ownership interest in the company
as allowed under relevant Texas law.
Count Breach of Company Agreement
Additionally, or in the alternative he Company Agreement is a valid and
enforceable contract. As more fully provided above, the Defendant’s unlawful conduct directly
violates the terms thereof and Defendant has therefore breached the agreement. Defendant
breach has caused DEVSJ actual damages for which DEVSJ now sues. These damages are
within the jurisdictional limits of this Court.
Count Declaratory Judgment Action
(Expulsion Provision of Company Agreement)
Additionally, or in the alternative, a justiciable controversy exists between DEVS
and Defendant with respect to the expulsion provision of the Company Agreement (paragraph
15.04). As more fully provided for above, Defendant’s unlawful conduct directly violates the
terms thereof and Defendant has therefore breached the agreeme
Defendant’s unlawful actions are such that they trigger the expulsion provision of
the Company Agreement because Defendant has (1) willfully violated provisions of the
Company Agreement; (2) committed fraud,theft or gross negligence against the Company or one
or more Members of the Company, or (3) engaged in wrongful conduct that adversely and
materially affects the business or operation of the Company.DEVSJ seeks a declaration from
this Court declaring that the Defendant (1) willfully violated provisions of the Company
Agreement; (2) committed fraud, theft or gross negligence against the Company or one or more
Members of the Company, and/or (3) engaged in wrongful conduct that adversely and materially
affects the business or operation of the Company and further declaring that DEVSJ, as a member
of Texas oncrete IV, shall be allowed to proceed to expel Defendant from Texas Concrete IV
pursuant to the terms of the Company Agreement.
Count Defamation
Defendant published false statement to third parties concerning Mr. Gajarawala,
and Texas Concrete IV. Th statements directly refer to Mr. Gajarawala, in his capacity as a
member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV,
unequivocally. Th statement ere made in written form and Defendant reasonably calculated
that the statement would injure Mr. Gajarawala, in his capacity as a member, manager, and/or
officer of Texas Concrete IV and Texas Concrete IV’s reputation as an honest businessman
and/or company and bring financial injury to Mr. Gajarawala, in his capacity as a member,
manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV. Defendant acted with
actual malice, or at the very least negligence when he made his defamatory statements with full
knowledge that his statements were false.
Because of Defendant’s malicious and/or negligent false statements, Mr.
Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV /or
Texas Concrete IV have suffered actual damages in the form of injury to their reputation, as well
as the following special damages: lost profits, lost sales, and loss of income, all within the
jurisdictional limits of this Court. Lastly, Defendant specifically accused Mr. Gajarawala, in his
capacity as a member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV
of committing the crimes of fraud and real estate fraud, as well as deception. These false
representations constitute libe per se. Further, as Defendant made such representations with
malice, Intervenor and/or Texas Concrete IV are entitled to exemplary damages under the Civil
Practices and Remedies Code section 41.003 et seq
Count Business Disparagement
Defendant published false and disparaging statement to third parties concerning
Mr. Gajarawala, and/or Texas Concrete IV. Th statements directly refer to Mr. Gajarawala, in
his capacity as a member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete
IV, unequivocally. Th statements were made in written form and Defendant reasonably
calculated that the statement would injure Mr. Gajarawala, in his capacity as a member,
manager, and/or officer of Texas Concrete IV, and Texas Concrete IV’s reputation as an honest
businessman and/or company and bring financial injury to Mr. Gajarawala, in his capacity as a
member, manager, and/or officer of Texas Concrete IV and/or Texas Concrete IV. Defendant
acted with actual malice when he made his disparaging statements, with full knowledge that his
statements were false. Further, Defendant published said statements without privilege or
immunity.
Because of Defendant’s malicious disparaging and false statements, Mr.
Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV, and/or
Texas Concrete IV have suffered actual and special damages in the following form injury to
their business reputation , lost profits, lost sales, and loss of income, all within the jurisdictional
limits of this Court. Lastly, Defendant specifically accused Mr. Gajarawala, in his capacity as a
member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV of committing
the crimes of fraud and real estate fraud, as well as deception. Further, as Defendant made such
disparaging and false representations with malice, Intervenor and/or Texas Concrete IV are
entitled to exemplary damages under the Civil Practices and Remedies Code section 41.003 et
seq
VI. ATTORNEY’SFEES
ecause the derivative action brought by DEVSJ on behalf of Texas Concrete IV
provide a substantial benefit to Texas Concrete IV, DEVS is entitled to recover all attorney
fees incurred by elated to the derivative action.Moreover DEVSJ seeks attorney’s fees from
Defendant pursuant to Tex. Civ. Prac. & Rem. Code Chs. 37 and 38.
VII. CONDITIONS PRECEDENT
All conditions precedent to Intervenor Plaintiff’s claims for relief have been
performed, waived or have otherwise occurred.
PRAYER
For the foregoing reasons, Intervenor Plaintiff asks that it be awarded a judgment against
Defendantforthe following
ctual damages;
Exemplary Damages for intentional Breach of Fiduciary Duty, Defamation, and/or
Business Disparagement;
Special damages for Defamation and/or Business Disparagement;
Declaratory relief as stated herein above;
Pre judgment and post judgment interest;
Court costsatto rney’s fees, and collection costs
All otherrelief, at law or in equity, to which Intervenor Plaintiff is justly entitled.
Respectfully submitted,
ATHERN
By:/s/Isaac Villarreal
Isaac Villarreal
Texas Bar No. 24054553
ivillarreal@mccathernlaw.com
Andrew T. Green
Texas Bar No. 24069823
agreen@mccathernlaw.com
Eric M. Utermohlen
Texas Bar No. 24103974
eutermohlen@mccathernlaw.com
2000 West Loop South, Suite
Houston, TX 77027
Tel. (832) 533
Fax (832) 213
ATTORNEYS FOR INTERVENOR
PLAINTIFF
CERTIFICATE OF SERVICE
I hereby certify that on this day of December, a true and correct copy of the
foregoing and/or attached was served on each attorney of record or party in accordance with the
Texas Rules of Civil Procedure as follows:
John D. Charbonnet, Jr. Via file
OCHMAN HARBONNET
12012 Wickchester, Suite 150
Houston, Texas 77079
jdcharbonnet@kdclaw.com
Attorney for Defendant
/s/ Isaac Villarreal
Isaac Villarreal
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Cause No.2016-49450 HEMANT GAJARAWALA, Individually § IN THE DISTRICT COURT OF § Plaintiff, § § DEVSJ CONCRETE, LLC, derivatively on behalf § Of Texas Concrete Enterprise IV, LLC § HARRIS COUNTY, TEXAS Intervenor Plaintiff § § vs. § § SOMAIAH KURRE § § Defendant § 80 JUDICIAL DISTRICT INTERVENOR PLAINTIFF’S FIRST AMENDED PETITIONIN INTERVENTION TO THE HONORABLE JUDGE OF SAID COURT: Intervenor Plaintiff, DEVSJ Concrete, LLC, DEVSJ or “Intervenor on its own behalf and derivatively on behalf of Texas Concrete Enterprise IV, LLC files this First Amended Petition in Intervention, pursuant to Tex. R. Civ. P. 60 and 61, complaining of Somaiah Kurre ( Kurre” or Defendant , and in support thereof would respectfully show the Court the following: I. DISCOVERY CONTROL PLAN 1.1 Intervenor intends conduct discovery under Level 2 and affirmatively pleads that it seeks monetary relief in excess of including actual damages, penalties, pre judgment interest, costs, expenses, and attorney fees IV 190.3(a) and cmt. 2. II. PARTIES 2.1 Intervenor Plaintiff DEVSJ i closely held Texas limited liability company with is principal place of business in Fort Bend County, Texas. Derivative claimant Texas Concrete Enterprise IV, LLC is a closely held Texas limited liability company with its primary place of business in Harris County, Texas. Defendant Somaiah Kurre is an individual who resides in Harris County, Texas. Mr. Kurre has been served with process and has appeared in this case through counsel. Pursuant to Tex. Civ. Prac. & Rem. Code § 30.014, the last three numbers of Defendant’s driver’s license number are 305and the last three numbers of Defendant’s Social Security Number are III. JURISDICTION AND VENUE This Court has jurisdiction over this cause in that it involves an amount in controversy in excess of the minimum jurisdictional limit. ODE §24.007(a) and (b) Venue is proper in Harris County, Texas under the general venue provision because Defendant resides in Harris County RAC ODE §§ 15.002(1) (3).Finally, an agreement executed by Defendant provides that venue for any collection or enforcement action shall be in Harris County.Finally, Intervenor has a justiciable interest in this matter pursuant to Tex. R. Civ. P. 60 and 61 and is therefor properly before the Court. IV. FACTS Texas Concrete Enterprises , LLC (“Texas Concrete IV”) is a closely held, Texas limited liability company Intervenor, DEVSJ Concrete, LLC (“DEVSJ”) owns a 35% interest and Defendant owns a 65% interest in Texas Concrete IV. Hemant Gajarawala (“Mr. Gajarawala”), the Plaintiff is the original proceeding, is the sole managing member of DEVSJ and is a manager and the CFO of Texas Concrete IV. Defendant is a manager and the President of Texas Concrete IV. Texas oncrete IV’s primary business and purpose is to and operat concrete productionplant in Kendleton, Texas (the “Kendleton Plant”) Defendant owns and operates multiple concrete plant facilities in and around the greater Houston areaand other parts of Texas Mr. Gajarawala had no experience operating a concrete plant facility prior to the venture with Defendant, but would serve as the chief financial officer for Texas Concrete IV with the duty to, among other things, handle all of the company’s money matters including being the primary contact for the company’s lenders, vendors and employees and resolving those issues with proper business judgment Subsequent to the execution of the Company Agreement on October 14, 2014, the parties agreed that Texas Concrete IV needed funding for working capital to get the Kendleton lant up and running. Knowing that Mr. Gajarawala (1) had no experience operating a concrete plant facility or similar business and (2) would have to rely upon Defendant’s expertise in operating the Kendleton lant, Defendant promised, represented and ensured Mr. Gajarawala and DEVSJ that if Mr. Gajarawala and DEVSJ helped the company obtain approximately $830,000 in working capital, the Kendleton Plant could generate millions of dollars ingross profits. efendant further promised, represented and assured Mr. Gajarawala and DEVSJ that Defendant would use his vast experience operating multiple concrete plants to, among other things, ensure that the concrete plant is up and running and producing concrete at the plant s top capacity in a timely mannerand that the produced concrete is sold to the public In reliance upon Defendant’s promises, representations, and assurances Mr. Gajarawala utilized his long standing business relationship with bankers Allegiance Bank to obtain the funding Defendant claimed the company needed to generate the many millions of dollars in profits. Texas Concrete IV successfully borrowed, via two loan transactions, approximately $835,000.00 from Allegiance Bank in reliance upon Defendant’s representations, promises, and assurances. The full amounts of both loan transactions were personally guaranteed by Mr. Gajarawala and DEVSJ, based exclusively upon Defendant’s promises, representations, and assurances. After obtaining the loans and executing the personal guarantee , Mr. Gajarawala and DEVSJ learned, via sworn oral deposition testimony by Defendant in this case, that Defendant made multiple false representations to the bank regarding collateral pledged to secure both loans. Such misrepresentations by Defendant place the loans at risk of being called and put DEVSJ and Mr. Gajarawala’s personal assets, credit worthiness, good will, and business relationships at risk should the bank decide to call the bank notes as such representations may well constituteevents of default. Additionally, Texas Concrete IV has an obligation under the terms of both notes with Allegiance Bank to have an operating concrete plant in place. Despite his promises, representations and assurances and despite his absolute fiduciary obligations to Texas Concrete IV, Defendant has failed and refused to meet his obligations to get the Kendleton Plant up and running and has provided absolutely zero suppor to protect the interests of the company. Moreover, despite repeated requests and demands from Mr. Gajarawala, DEVSJ, and Allegiance Bank that Defendant perform as promised and required Defendant continues to fail and refuse to meet his obligations causing significant harm to Texas Concrete IV and placing Mr. Gajarawala’s personal assets, credit worthiness, good will, and business relationships that were built over several decades at risk. In addition to failing to ensure an operational Kendleton Plant, Defendant has failed and refused to timely provide various forms of documentation such as financial statements and tax form to Allegiance Bank despite express requirements for same as part of the loan agreements with Allegiance Bank. Again, Defendant’s misrepresentations concerning collateral, the failure to have an operational Kendleton Plant and the failure to provide documentation to Allegiance Bank as required are all potentially events of default under the terms of the two notes with Allegiance Bank. As a direct result of Defendant’s refusal to act, Allegiance Bank indicated its intent to call the notes secured by real and personal property owned by Texas Concrete IV, and that arepersonally guaranteed by Mr. Gajarawala After repeated attempts to seek Defendant’s attendance at properly called meetings per the Company Agreement, Defendant’s repeated refusal to abide by his fiduciary obligations and to do as he promised, represented, and assured, left Mr. Gajarawala with no choice but to seek to mitigate his damages and to learn from scratch how to operate a concrete plant without any assistance from Defendant. As such, Mr. Gajarawala worked tirelessly to complete the construction of the concrete plant site, obtain working vehicles, employees, sales persons and to otherwise turn a operational, incomplete concrete plant site into a running operation that could service its debts. Defendant’s refusal and failure to do as promised, represented, and assured caused much of the Allegiance ank loan funds to be wasted. In his attempt to continue to save Texas Concrete IV and his personal assets, credit worthiness, good will, and business relationships that were built over several decades Mr. Gajarawala has also been forced to infuse, by way of personal loans to the company, more than $1 million in personal operating capital. These loans were made out of necessity and have been instrumental in making sure all Texas Concrete IV’s debts are serviced timely and has resulted in making sure the Kendleton lant is operational as required by the Allegiance Bank loan. But for Mr. Gajarawala’s action to save the company and mitigate the significant damage caused by Defendant’s unlawful conduct Allegiance Bank would likely have called both notes and placed the personal and real property assets of Texas Concrete IV, Mr. Gajarawala, DEVSJ, and of Defendant at risk. Without question, even if the bank was never forced to seize assets to satisfy the debts, Mr. Gajarawala and DEVSJ’s credit worthiness and good will would have been destroyed and decades of business relationships would have been destroyed. Mr. Gajarawala was duped by Defendant to put his own neck on the line under the guise of millions of dollars in profits to be made from the Kendleton lant. To date Mr. Gajarawala has spent more than $1 million of his own dollars to mitigate his losses. Moreover, as a direct result of Defendant’s refusal to act, Texas Concrete IV has generated zero income and has lost significant expected profits that it would have earned if the plant had become operational and been maintained as required and promised by Defendant. he lost profits are well into the millions of dollars. Mr. Gajarawala and DEVSJ continued to ensure that all note payments due and owing on the note to Allegiance Bank are paid timely Further, Defendant is also attempting to undo the transfer of a certain 4.649 acre tract (“Land”), more or less, that was conveyed to Texas Concrete IV by Defendant via Correction General Warranty Deed (“Correction Deed”). The Land was previously owned by Shree Radha, LLC (“Shree Radha”), a limited liability company f which Defendant is not only a 25% owner, but also the president. The Correction Deed was executed at Allegiance Bank’s request to also allow Texas Concrete IV to sign a Deed of Trust covering same to secure financing for Texas Concrete IV. Defendant knowingly and willingly executed both the Correction Deed and the Deed of Trust at Allegiance Bank’s request and for the sole purpose of obtaining financing for Texas Concrete IV. It now appears that Defendant executed the documents effectuating the transfer of the Land without the knowledge, consent, or approval of Shree Radha, or with the intent to defraud Texas Concrete IV. Shree Radha has retained Defendant’s counsel’s previous law partner, and is now threatening to initiate legal proceedings against Texas Concrete IV if a Rescission Deed is not summarily executed to return ownership of the Land to Shree Radha. The timing of the demand letter, on the eve of trial, and the interrelatedness of the parties serve only to invite additional scrutiny to Defendant’s motives and actions in executing the Correction Deed and the subsequent Deed of Trust, and to Defendant’s claims that he was allegedly defrauded. Lastly, Shree Radha has sent a demand letter threatening litigation and accusing Mr. Gajarawala, and/or Texas Concrete IV of fraud and deception to Allegiance Bank, thereby not only defaming, Mr. Gajarawala and Texas Concrete IV, but also disparaging Mr. Gajarawala and Texas Concrete IV’s future business opportunities. V. CAUSE OF ACTION Plaintiff alleges and incorporates by reference all allegations and facts set fort in paragraphs 1.1 through 4.as if specifically restated herein. Count Derivative Claim of Texas Concrete IV for Breach of Fiduciary Duty DEVSJ presently owns a 35% membership interest in Texas oncrete IV, a closely held Texas limited liability company and has standing to bring this derivative action on behalf of the Texas Concrete IV Defendant presently owns a 65% membership interest in Texas Concrete IV and is also an officer of the company. Defendant as a manager and the President of Texas Concrete IV ha a fiduciary relationshipwith Texas oncrete IV. As more fully described in the fact section above, Defendant’s improper actions and/or inactions constitute breach of his fiduciary duties to Texas Concrete IV. Defendant’s breach has resulted in significant damages to Texas Concrete IV for which the company hereby sues Additionally, Defendant’s breach of his fiduciary duties were clearly intentional. As such Texas Concrete IV seek and is entitled to exemplary damages resulting from Defendant’s intentional acts. Because Texas Concrete IV is a closely held company, DEVSJ has the right to bring this action derivatively on behalf of the company and DEVSJ asserts that justice requires that the Court award DEVSJ damages directly based upon ownership interest in the company as allowed under relevant Texas law. Count Breach of Company Agreement Additionally, or in the alternative he Company Agreement is a valid and enforceable contract. As more fully provided above, the Defendant’s unlawful conduct directly violates the terms thereof and Defendant has therefore breached the agreement. Defendant breach has caused DEVSJ actual damages for which DEVSJ now sues. These damages are within the jurisdictional limits of this Court. Count Declaratory Judgment Action (Expulsion Provision of Company Agreement) Additionally, or in the alternative, a justiciable controversy exists between DEVS and Defendant with respect to the expulsion provision of the Company Agreement (paragraph 15.04). As more fully provided for above, Defendant’s unlawful conduct directly violates the terms thereof and Defendant has therefore breached the agreeme Defendant’s unlawful actions are such that they trigger the expulsion provision of the Company Agreement because Defendant has (1) willfully violated provisions of the Company Agreement; (2) committed fraud,theft or gross negligence against the Company or one or more Members of the Company, or (3) engaged in wrongful conduct that adversely and materially affects the business or operation of the Company.DEVSJ seeks a declaration from this Court declaring that the Defendant (1) willfully violated provisions of the Company Agreement; (2) committed fraud, theft or gross negligence against the Company or one or more Members of the Company, and/or (3) engaged in wrongful conduct that adversely and materially affects the business or operation of the Company and further declaring that DEVSJ, as a member of Texas oncrete IV, shall be allowed to proceed to expel Defendant from Texas Concrete IV pursuant to the terms of the Company Agreement. Count Defamation Defendant published false statement to third parties concerning Mr. Gajarawala, and Texas Concrete IV. Th statements directly refer to Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV, unequivocally. Th statement ere made in written form and Defendant reasonably calculated that the statement would injure Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV and Texas Concrete IV’s reputation as an honest businessman and/or company and bring financial injury to Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV. Defendant acted with actual malice, or at the very least negligence when he made his defamatory statements with full knowledge that his statements were false. Because of Defendant’s malicious and/or negligent false statements, Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV /or Texas Concrete IV have suffered actual damages in the form of injury to their reputation, as well as the following special damages: lost profits, lost sales, and loss of income, all within the jurisdictional limits of this Court. Lastly, Defendant specifically accused Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV of committing the crimes of fraud and real estate fraud, as well as deception. These false representations constitute libe per se. Further, as Defendant made such representations with malice, Intervenor and/or Texas Concrete IV are entitled to exemplary damages under the Civil Practices and Remedies Code section 41.003 et seq Count Business Disparagement Defendant published false and disparaging statement to third parties concerning Mr. Gajarawala, and/or Texas Concrete IV. Th statements directly refer to Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV, unequivocally. Th statements were made in written form and Defendant reasonably calculated that the statement would injure Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV, and Texas Concrete IV’s reputation as an honest businessman and/or company and bring financial injury to Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV and/or Texas Concrete IV. Defendant acted with actual malice when he made his disparaging statements, with full knowledge that his statements were false. Further, Defendant published said statements without privilege or immunity. Because of Defendant’s malicious disparaging and false statements, Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV have suffered actual and special damages in the following form injury to their business reputation , lost profits, lost sales, and loss of income, all within the jurisdictional limits of this Court. Lastly, Defendant specifically accused Mr. Gajarawala, in his capacity as a member, manager, and/or officer of Texas Concrete IV, and/or Texas Concrete IV of committing the crimes of fraud and real estate fraud, as well as deception. Further, as Defendant made such disparaging and false representations with malice, Intervenor and/or Texas Concrete IV are entitled to exemplary damages under the Civil Practices and Remedies Code section 41.003 et seq VI. ATTORNEY’SFEES ecause the derivative action brought by DEVSJ on behalf of Texas Concrete IV provide a substantial benefit to Texas Concrete IV, DEVS is entitled to recover all attorney fees incurred by elated to the derivative action.Moreover DEVSJ seeks attorney’s fees from Defendant pursuant to Tex. Civ. Prac. & Rem. Code Chs. 37 and 38. VII. CONDITIONS PRECEDENT All conditions precedent to Intervenor Plaintiff’s claims for relief have been performed, waived or have otherwise occurred. PRAYER For the foregoing reasons, Intervenor Plaintiff asks that it be awarded a judgment against Defendantforthe following ctual damages; Exemplary Damages for intentional Breach of Fiduciary Duty, Defamation, and/or Business Disparagement; Special damages for Defamation and/or Business Disparagement; Declaratory relief as stated herein above; Pre judgment and post judgment interest; Court costsatto rney’s fees, and collection costs All otherrelief, at law or in equity, to which Intervenor Plaintiff is justly entitled. Respectfully submitted, ATHERN By:/s/Isaac Villarreal Isaac Villarreal Texas Bar No. 24054553 ivillarreal@mccathernlaw.com Andrew T. Green Texas Bar No. 24069823 agreen@mccathernlaw.com Eric M. Utermohlen Texas Bar No. 24103974 eutermohlen@mccathernlaw.com 2000 West Loop South, Suite Houston, TX 77027 Tel. (832) 533 Fax (832) 213 ATTORNEYS FOR INTERVENOR PLAINTIFF CERTIFICATE OF SERVICE I hereby certify that on this day of December, a true and correct copy of the foregoing and/or attached was served on each attorney of record or party in accordance with the Texas Rules of Civil Procedure as follows: John D. Charbonnet, Jr. Via file OCHMAN HARBONNET 12012 Wickchester, Suite 150 Houston, Texas 77079 jdcharbonnet@kdclaw.com Attorney for Defendant /s/ Isaac Villarreal Isaac Villarreal