Preview
342-265591-13 FILED
TARRANT COUNTY
3/29/2016 1:51:28 PM
THOMAS A. WILDER
CAUSE NO. 342 265591 13 DISTRICT CLERK
EAST OF MADISON, LLC § IN THE DISTRICT COURT OF
§
Plaintiff §
§
v. § TARRANT COUNTY, TEXAS
§
MICHAEL ABBOTT AND §
AMY ABBOTT §
§ 342nd JUDICIAL DISTRICT
Defendants. §
PLAINTIFF’S MOTION TO AMEND SCHEDULING ORDER
TO THE HONORABLE JUDGE OF SAID COURT:
NOW COMES, Plaintiff East of Madison, LLC (“Plaintiff”) in the above entitled and
numbered cause, and files this, its Motion to Amend Scheduling Order, and for such would
respectfully show the Court the following:
I.
BACKGROUND
1. Plaintiff is the holder of a promissory note (the “Note”) for a principle amount of
$375,000.00. The promissory note in question relates to a loan made by Plaintiff to Defendants
Michael and Amy Abbott (collectively, “Defendants”) for the purchase of a residence while
Defendant Michael Abbott was employed by Plaintiff. Pursuant to the terms of the Note,
repayment was to be made by October 9, 2009. Further, the Note provided that the maturity may
be accelerated upon termination of Defendant Michael Abbott’s employment for cause.
2. Defendant Michael Abbott’s employment was terminated for cause on April 29, 2009,
and Plaintiff elected to accelerate the Note. Defendants have failed to repay the Note. Even if
Michael Abbott had not been terminated for cause, the term of the Note expired in October of
2009.
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3. Suit was filed in this matter on April 26, 2013. Pursuant to an Agreed Level 3
Scheduling Order trial was set for November 17, 2014, with discovery ending on October 20,
2014. The case was later continued twice, principally due to serious health issues with
Defendant Michael Abbott.
4. On September 1, 2015 Defendants filed their Emergency Motion for Continuance.
Defendants now represented by new counsel sought leave to amend their answer to add a
counterclaim and for a continuance to allow for such amendment. On September 1, 2015 the
Court granted the motion for leave, resetting trial for April 11, 2016. At the hearing, the Court
indicated that it would allow additional discovery due to the new claims and left it to the parties
to negotiate an agreed scheduling order.
5. On November 2, 2015 Defendants filed their First Amended Answer and Counterclaim.
This pleading added, for the first time, counterclaims for fraud, fraudulent inducement,
promissory fraud, deceit, negligent misrepresentation, and equitable rescission. The
counterclaim further seeks exemplary damages.
6. Despite repeated efforts, the parties have reached an impasse regarding discovery. The
principle dispute between the parties is Plaintiff’s desire to designate a handwriting expert.
Plaintiff contends this expert would be relevant to Defendants’ counterclaims, as well as its
original claims. Defendants contend that such an expert would not be relevant to Defendants’
counterclaims. Accordingly, Plaintiff brings the instant Motion.
II.
SUMMARY OF RELIEF REQUESTED
Plaintiff seeks a docket control order resetting the discovery deadlines, including the
expert designation deadlines in light of the Court’s recent order granting Defendants’ leave to file
their counterclaim. Defendants object to this relief to the extent it allows Plaintiff to designate a
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handwriting expert. Texas law, however, mandates additional discovery when new claims are
added, and a handwriting expert would be relevant to the new counterclaims. Accordingly, the
Court should grant the Motion and reset the discovery and expert deadlines.
III.
ARGUMENTS AND AUTHORITIES
Texas Rule of Civil Procedure 190.5 provides that a court must allow additional
discovery relating to an amended pleading when: (1) the amendment took place after the deadline
to conduct discovery; and (2) the adverse party would be unfairly prejudiced without such
additional discovery. Defendants’ First Amended Answer and Counterclaim was filed over a
year after the discovery period ended. This amended pleading added a counterclaim for breach of
contract for the first time. Clearly, pursuant to Rule 190.5 new discovery is mandated in this
case. This new discovery is mandated regardless of whether the new claims could or should have
been anticipated. In re Marathon Oil (East Texas) L.P., No. 12-13-00182-CV, 2013 WL 401151
at * 3 (Tex. App. – Tyler Aug. 7, 2013), order vacated upon compliance by 2013 WL 4859306
(Sept. 11, 2013) (granted mandamus petition and ordered new discovery when plaintiff added
claims and defenses). “A defendant is ‘not required to guess what unpleaded claims might apply
and negate them.’” Id (quoting Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006)).
The parties have attempted to discuss and agree to a new scheduling order, but have
reached an impasse. The principle point of dispute is that Defendants do not want to allow
Plaintiff the opportunity to designate a handwriting expert to counter Defendant Amy Abbott’s
claim that her signature on the note was forged. Defendants claim that this expert would not be
relevant to the counterclaims. This argument is without merit. Defendants counterclaims are
principally for various incarnations of fraud and negligent misrepresentation.
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These claims all revolve around the same factual allegations. Defendants claim that the
$375,000 which is the subject of the promissory notes underlying this lawsuit was never intended
to be a loan, but was instead intended to be a “gift” to Defendants, to pay for relocation costs
associated with the Abbott’s relocation from Texas to California for Michael Abbott’s
employment with Plaintiff. Defendants’ First Amended Answer and Counterclaim at ¶ 6. Since
this factual account is totally inconsistent with the fact that Defendants signed two promissory
notes, one in 2005 and one in 2007, Defendants must necessarily offer an explanation for the
presence of these notes. Defendants contend that Michael Abbott was “tricked” into signing the
last page of the document and did not know what he was signing. Id. at ¶¶ 7 & 10. Defendants
further contend that Amy Abbott never signed either promissory note, but that her signature was
forged both times. Id. at ¶¶ 7 & 11.
If Plaintiff can establish that the signatures on the promissory notes belong to Amy
Abbott, or to her husband Michael, that completely undercuts Defendants’ factual contentions. A
signed promissory note is completely inconsistent with Defendants’ allegations that the $375,000
was compensation for relocation expenses rather than a loan, and thus undermines the central
contention for Defendants’ fraud and negligent misrepresentation causes of action. The best way
to establish whose signature is on those promissory notes is through the use of a handwriting
expert. Therefore, a fair reading of Rule 190.5 requires that the Court reset this deadline. Expert
discovery is an important part of the discovery process, and Plaintiff believes that the use of an
expert to examine Defendant Amy Abbott’s handwriting will aid the Court – who will preside
over a bench trial – in determining the truth of Ms. Abbott’s counterclaims.
This situation is very similar to the Twelfth Court of Appeals’ decision in In re Bird, No.
12-13-00031-CV, 2013 WL 2407228 (Tex. App. – Tyler May 31, 2013, no pet.). In Bird,
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Relator Mike Bird sought a writ of mandamus directing the trial court to vacate its amended
scheduling order. Id. at * 1. Bird had not disclosed certain damages he was seeking in his
personal injury lawsuit against All American Party and Tent Rentals, Inc. and Cecil Isbell
(collectively, “All American”) until after the expert designation deadlines had expired. Id. at *2.
All American sought, and was granted a continuance with a resetting of the expert designation
deadlines. Id. Bird sought to overturn this decision by mandamus. Bird’s petition was rejected.
Based upon the facts shown by the mandamus record, the trial court reasonably
could have found that good cause existed for resetting All American’s deadline
for designating expert witnesses or that the interest of justice required it. See TEX.
R. CIV. P. 190.5, 191.1, Smith Cnty. Loc. Rule 3.2. Specifically, the trial court
reasonably could have found that Bird’s delay in disclosing the nature and amount
of his damages gave him an unfair advantage because the deadline for All
American’s designation of expert witnesses had passed. Thus, absent an
amendment of the scheduling order, All American would be unable to obtain an
expert witness to assist in its defense against these damage allegations.
Id. at *3. Similarly, since Defendants did not add their counterclaim until after the entire
discovery period had expired, Plaintiff would be completely deprived of any expert to address
Defendants’ counterclaim for damages. Plaintiff’s prior decision not to designate a handwriting
expert was driven by the fact that it was the Plaintiff and was not facing any counterclaim for
damages, a calculous that has obviously been altered by the newly-added counterclaim. Plaintiff
would thus be prejudiced if it was not allowed to designate experts in response to Defendants’
counterclaims, especially considering that Defendants are seeking exemplary damages.
The Second Court of Appeals also addressed an analogous situation in In re Kings
Ridge Homeowners Assoc., Inc., 303 S.W.3d 773 (Tex. App. – Fort Worth 2010, orig.
proceeding). Kings Ridge involved a lawsuit between the developers and building contractors of
adjacent developments in Denton County, Texas. Id. at 776. Kings Ridge Homeowners
Associate, Inc. (“HOA”) was added as a party after the expert designation deadlines had expired.
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Id. at 777. HOA then designated an engineer as a potential expert witness. The original
defendants moved to strike this expert, and that motion was granted. Id. at 778. The HOA
sought, and was granted, a writ of mandamus overruling this decision. The Court of Appeals
held that it was an abuse of discretion to refuse to allow the expert to testify when there was no
applicable expert designation period which applied to the HOA. Id. at 782-783. However, the
Court also noted that “[c]ertainly, the better practice would have been for all parties, upon
HOA’s joinder, to have submitted to the trial court a modified or new agreed scheduling order to
establish a new discovery period and deadlines.”
Mindful that an amended scheduling order is the better practice, Plaintiff has diligently
sought such an amended order from Defendants, but Defendants have refused to agree to reset
the expert deadlines as described above. Accordingly, Plaintiff files the instance motion in an
attempt to resolve this issue at this time, and hopefully alleviate the need to resolve any future
motion to strike. As was the case in both King and Bird, Plaintiff has not had an opportunity to
designate experts relating to Defendants’ newly-added counterclaims, and Plaintiff should be
granted such an opportunity pursuant to TEX. R. CIV. P. 190.5.
V.
CONCLUSION
Defendants added counterclaims for fraud, fraudulent inducement, promissory fraud,
deceit, negligent misrepresentation, and equitable rescission (including exemplary damages) over
a year after the discovery period had expired. Plaintiff has sought to have a new agreed
scheduling order entered to allow discovery on these claims, but Defendants have refused to
allow Plaintiff to designate a handwriting expert to examine Defendant Amy Abbott’s claim that
her signature on the Note underlying this lawsuit was fraudulently signed. Pursuant to TEX. R.
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CIV. P. 190.5, and the decisions of the courts in King and Bird, the Court must grant Plaintiff an
opportunity to designate experts relevant to these new counterclaims.
WHEREFORE PREMISES CONSIDERED, Plaintiff respectfully requests the Court
Grant this Motion to Amend Scheduling Order, that the Court reset the discovery and expert
designation deadlines to allow Plaintiff to conduct discovery and designate experts relating to
these new counterclaims, along with such other relief to which Plaintiff may show itself justly
entitled.
Respectfully submitted,
ADKERSON, HAUDER & BEZNEY, P.C.
BY: /s/ Darrell G. Adkerson
DARRELL G. ADKERSON
State Bar No. 00909700
1700 Pacific Ave.
Ste. 4450
Dallas, Texas 75201
214-740-2500 - Telephone
214-740-2504 – Direct Dial
214-740-2501 – Facsimile
Darrell@ahblaw.net
ATTORNEYS FOR DEFENDANT
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342-265591-13
CERTIFICATE OF SERVICE
This is to certify that counsel for Plaintiffs has conferred with counsel for Defendant on
the above-referenced matter, and counsel for Defendants is opposed to the relief sought herein as
described in the Motion.
/s/ Darrell G. Adkerson
DARRELL G. ADKERSON
CERTIFICATE OF SERVICE
This is to certify that on this, the 29th day of March, 2016, a true and correct copy of the
above and foregoing document has been forwarded to the counsel of record via electronic
service:
Michael Gruber
Brian Farlow
Barbara Wohlrabe
GRUBER HURST ELROD JOHANSEN
HAIL SHANK, LLP
1445 Ross Avenue, Ste. 2500
Dallas, TX 75202
Mark C. Hill
Austin F. Pennington
MYERS & HILL
2525 Ridgmar Blvd., Ste. 150
Fort Worth, TX 76116
Albert Perez, Jr.
Law Office of Albert Perez, Jr.
100 N. Barranca St., Ste. 700
West Covina, CA 91791
/s/ Darrell G. Adkerson
DARRELL G. ADKERSON
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