Motion to Compel in GAMCO PROPERTIES, LLC, et al vs. WHAM TECH, INC., et al| Trellis.Law

On September 21, 2021 a Motion-Secondary was filed involving a dispute between Gamble, Lesa, Gamco Properties, Llc, Gamvest, Lp, and Wham Tech, Inc., Wham Technologies, Inc., for CNTR CNSMR COM DEBT in the District Court of Dallas County.

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FILED
7/ 14/2022 2:40 PM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Marissa Gomez DEPUTY

CAUSE NO. DC—21-14068

GAMCO PROPERTIES, LLC, IN THE DISTRICT COURT

§§§§§§§§§§§
GAMVEST, LP, and LESA GAMBLE,

Plainnfﬁv,

V. DALLAS COUNTY, TEXAS

WHAM TECH, INC. and WHAM
TECHNOLOGIES, INC.,

Defendants. 134th JUDICIAL DISTRICT

DEFENDANTS’ RESPONSE TO MOTION TO COMPEL

WHAM TECH, INC. and WHAM TECHNOLOGIES, INC. (collectively, “Defendants”)

respond to the Motion to Compel ﬁled on or about June 17, 2022 and set for hearing on July 21,

2022, respectﬁllly stating as follows:

l. There is a discovery dispute in this case because Plaintiffs have refused to propound

discovery requests seeking less than all of Defendants’ documents from January 1, 2015 through

the present.

2. Defendant WhamTech, Inc. (“WhamTech”) is a technology company that has

worked for years to develop What it believes to be valuable software.

3. Plaintiffs boldly assert the entire company is a farce.

4. Plaintiffs have no evidence of this. Indeed, Plaintiffs indicated in their Initial

Disclosures that they had “several hundred pages” of unspeciﬁed documents that they would

“produce in the near ﬁlture”. But, this has not been done.

5. In contrast, as reﬂected in the Declaration of WhamTech’s President, which

accompanies this response and establishes the fact set forth herein, WhamTech has produced

documentary evidence of communications to investors that detail WhamTech’s efforts to develop

DEFENDAN TS’ RESPONSE TO MOTION TO COMPEL — PAGE 1

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and to market its software, documents that reﬂect who has worked on the software, presentations

made to prospective customers that detail the nature of the software and why it is a better solution

that other products in the market, annual ﬁnancials for the period 2015 to 2021 that show how

much money it raised, and how it spent the money, including the funds Plaintiffs invested,

communications to and from prospective customers, correspondence from parties who have been

complimentary of the software, and other documents Plaintiffs requested in regard to their

investments.

6. In addition, WhamTech has identiﬁed witnesses who will substantiate its

assertions, including experts in the software in question and the market for such software.

7. Further, WhamTech has offered to allow the inspection of its software by an expert

of Plaintiffs’ choosing, but Plaintiffs have not retained an expert in this case. As a result, Plaintiffs

have no way of evaluating the software that WhamTech has spent tens of millions of dollars to

produce. All that Plaintiffs know is what WhamTech readily admits — WhamTech has spent a

large of amount of money on the development and marketing of software, and presently has not

succeeded in its business plan.

8. There is no need for a production of all of WhamTech’s records over a seven year

period to further illuminate facts that are not actually in dispute.

9. Fundamentally, the issue here is with the design of Plaintiffs’ discovery requests.

To explain, with their motion, Plaintiffs have submitted their discovery requests and Defendants’

objections and responses. The Court can see by examining these requests and the objections that

Plaintiffs have taken an approach of presenting broadly stated discovery requests that collectively

seek all documents WhamTech has for a seven-year period. For example, the ﬁrst document

request seeks:

DEFENDAN TS’ RESPONSE T0 MOTION TO COMPEL — PAGE 2
Page 2 of 1 1
A11 documents and/or communications exchanged between Defendants and any

third-party regarding the Claimed Assets, Putative Purchasers, Putative

Acquisitions, Investments, Offering(s), Investors, and/or Lawsuit from January 1,

2015 through present.

Because the “Claimed Assets” are the core assets around which WhamTech has put together a

business plan, this request seeks literally every document or communication exchanged between

Defendants and a third party in the last seven years.

10. Thus, Plaintiffs most fundamentally take the position that their overly broad

requests trigger an obligation on the part of Defendants to produce some quantum of documents

that is satisfactory to them. But, as explained in the comments to Rule 193, speciﬁcally Comment

2, when an overly broad request is submitted, there is no obligation triggered. The comment cites

Loftin v. Martin, 776 S.W.2d 145 (Tex. 1989), in which the Supreme Court held:

Loftin has requested all evidence that supports Lumbermens‘ allegations. The

request does not identify any particular class or type of documents but it is merely

a request that Loftin be allowed to generally peruse all evidence Lumbermens might

have. We hold that such request was vague, ambiguous, and overbroad and that the

trial court was within its sound discretion in sustaining Lumbermens' objection. N0

one seeks to deny Loftin's right to see evidence against him, but he must formulate

his requestfor production with a certain degree ofspeciﬁcity t0 allow Lumbermens

to comply.

Id. at 148. Therefore, the focus of the Court’s inquiry should be on the requests themselves, which

Plaintiffs do not attempt to defend or to explain in their motion. Plaintiffs instead assert

Defendants have simply selected some documents and produced what they wished. It is true that

Defendants have complied with their initial disclosure obligations and produced documents that

DEFENDANTS’ RESPONSE TO MOTION TO COMPEL — PAGE 3
Page 3 of 11
they believe bear upon the claims and defenses in the case. But, that is Defendants’ initial

disclosure obligation. The question presented here is Whether Defendants should have to

additionally produce all of their records for a seven year period. This is not a question of “picking

and choosing”. As explained in the Loftz'n case, the question is Whether Plaintiffs will propound

requests that are reasonable in scope and not unduly burdensome.

11. In regard to the overly broad nature of the requests, Defendants pointed out in

detailed objections the issues with each discovery request. Defendants identiﬁed the documents

produced. Defendants provided interrogatory answers and incorporated documents produced.

Defendants engaged in discussions endeavoring to identify a more narrow set of requested

documents. But, ultimately, Plaintiffs have refused to submit more narrowly deﬁned requests.

12. In addition to the fact the discovery requests are overly broad on their face,

Defendants tender herewith a Declaration that backs up the assertions of undue burden,

conﬁdential personal information of other investors, and proprietary information for which no

protective order has been offered. Defendants encourage the Court to review that Declaration in

full, and incorporate it by reference.

13. In regard to Plaintiffs’ misconstruction of Defendants’ position as being unwilling

to search a single computer, what the Defendants’ objections and the Declaration accompanying

this response states is that WhamTech maintains an ofﬁce with physical documents and various

independent computers containing electronic records, which WhamTech estimates number in the

millions. Much of the information sought is in the form of paper records and independently stored

electronic records that would have to be manually searched. In other words, there is not a singular

server that can be searched for responsive email. Defendants have therefore provided investor

communications that they separately kept, which are what Defendants used to update all investors

with regard to the progress made and the hopes for future success, but have objected to searching

DEFENDAN TS’ RESPONSE TO MOTION TO COMPEL — PAGE 4
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for every communication to or from Plaintiffs over a seven year period, believing them to be

innocuous or irrelevant. Notably, Plaintiffs did not produce any such communications, meaning

nothing of value likely exists. Additionally, Plaintiffs do not allege that, at the time of the

investments, Defendants made written statements beyond the offering documents. Thus, a search

for later emails, if they exist, would not be reasonably calculated to lead to the discovery of

admissible evidence on the question in this case, which is whether Defendants overstated the

company’s prospects at the time of the investment in 2015. And, such a search is burdensome, as

the accompanying Declaration establishes, and the objections originally explained.

14. In regard to Plaintiffs’ assertions that the facts of this case call for additional

discovery, Plaintiffs assert the fact that WhamTech produced ﬁnancials that show WhamTech has

spent approximately $54 million seeking to develop software and yet have been unable to produce

revenue means they should be entitled to more documents. This seems to be the heart of Plaintiffs’

complaint in this case. But, it is,of course, true that WhamTech has not produced revenue, but

that happens every day with technology companies that are trying to convince large companies to

adopt new software platforms. If the business plan works, it can be very successful. But, not all

business plans work. So, further production of documents does not change the fact that the

business plan has not succeeded. That fact is not disputed.

15. Plaintiffs belittle Defendants for attempting to focus discovery on the timeframe in

which Plaintiffs invested. But, Plaintiffs’ case targets the statements made at the time of their

investments. It therefore makes perfect sense to object to discovery seeking seven years of records,

since the question is what was said in 2015 when Plaintiffs invested and whether it was materially

true.

16. Plaintiffs make no arguments speciﬁcally in regard to their interrogatory responses.

Defendants accordingly stand upon their objections and responses.

DEFENDANTS’ RESPONSE TO MOTION TO COMPEL — PAGE 5
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WHEREFORE, PREMISES CONSIDERED, Defendants respectfully request that the

motion be denied.

Respectfully submitted,

/s/ Dennis L. Roossz'en
Dennis 1. Roossien
State Bar No. 00784873
MUNSCH HARDT KOPF & HARR, P.C.
500 N. Akard Street, Suite 3800
Dallas, Texas 75201
(214) 855-7500 (telephone)
droossien@munsch.com

ATTORNEYS FOR DEFENDANTS
WHAM TECH, INC. AND
WHAM TECHNOLOGIES, INC.

CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing Original Answer has been
served by ESERVE on this the 14th day of July, 2022, to:

Daniel P. Callahan
Kessler & Collins, PC
2100 Ross Avenue, Suite 750
Dallas, TX 75201
Email: dpc@kesslercollins.com

/s/ Dennis L. Roossien
Dennis L. Roossien

4861-9821-4656v.l 98030400002

DEFENDAN TS’ RESPONSE T0 MOTION TO COMPEL — PAGE 6
Page 6 of 11
CAUSE NO. DC—21-14068

GAMCO PROPERTIES, LLC, § IN THE DISTRICT COURT
GAMVEST, LP, and LESA GAMBLE, §

Plaintzﬂs, g

V. g DALLAS COUNTY, TEXAS
WHAM TECH, INC. and WHAM g
TECHNOLOGIES, INC, §

Defendants. g 134m JUDICIAL DISTRICT

DECLARATION OF MARK ARMSTRONG
1. My name is Mark Armstrong. I am of sound mind, am over 21, and suffer ﬁom no

legal or mental disabilities. I am fully competent to testify to the facts stated herein, which are

within my personal knowledge, true, and correct.

2. I am the President of WhamTech, Inc. (“WhamTech” , in which Plaintiffs invested,

and of Wham Technologies, Inc. (“WhamTechnologies”), which was formed for the sole purpose

of doing business in Texas.

3. WhamTech is a development stage company that is attempting to develop and to

market what it believes to be revolutionary soﬂware.

4. WhamTech maintains an ofﬁce with physical documents and various independent

computers containing electronic records. WhamTech estimates records number in the millions.

Much of the information sought is in the form of paper records and independently stored electronic

records that would have to be manually searched.

5. I have reviewed the document requests Plaintiffs have submitted in this case. The

requests are collectively so broad that they seek literally every such record.

DECLARATION 0F MARK ARMSTRONG — Page 1
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6. The records sought include conﬁdential and personal information submitted by

other investors. Specifically, WhamTech maintains a ﬁle on each investor that contains

conﬁdential information, including the investor’s personal ﬁnancial information demonstrating

that the investor is an accredited investor. Moreover, WhamTech does not generally disclose its

investor list.

7. The records sought include a substantial amount of irrelevant material. For

example, WhamTech has produced its annual ﬁnancial statements. There are records of each of

the payments or receipts reﬂected on those ﬁnancials. The production of some portion of this

material in order to validate the accuracy generally might be relevant. But, production of all of

the material is wholly unnecessary. Plaintiffs presently seek seven years of such information, in

regard to the receipt and expenditure of tens of millions of invested dollars.

8. The records also include proprietary material. WhamTech is working to develop

novel software. WhamTech’s internal communications among its software developers and the

software itselfare conﬁdential and proprietary. WhamTech has oﬁered to provide a demonstration

of the software and to arrange for an expert to review the software under a protective order, but

Plaintiffs have declined this offer. Plaintiffs have produced records, as discussed below, detailing

the nature of the software, including presentations to customers and correspondence favorably

commenting on the software.

9. Months of work would be involved separating conﬁdential, irrelevant, or

proprietary material in order to produce all records on particular subjects, as opposed to providing

categories of documents.

10. Additionally, such work is not necessary to the resolution of this case because

Plaintiffs disclosures state they believe “Defendants overstated the strength and viability of

DECLARATION 0F MARK ARMSTRONG — Page 2
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LLJoaeBBd
Defendants’ business, prospects for ﬁJture business, expected growth and anticipated returns on
Plaintiffs’ investments.” These are subjective matters that depend upon what was known to
Defendants at the time of the investments.
11. In contrast, the majority of the requests seek all documents over a seven-year
period.
12. For example, the ﬁrst document request seeks:
All documents and/or communications exchanged between Defendants and
any third-party regarding the Claimed Assets, Putative Purchasers, Putative
Acquisitions, Investments, Oﬁ‘ering(s), Investors, and/or Lawsuit ﬁom
January 1, 2015 through present.
13. Because the Claimed Assets are the core assets around which WhamTech has put
together a business plan, this request seeks literally every document or communication exchanged
between Defendants and a third party in the last seven years.
14. Similarly, the fourth document request seeks:
All documents and/or communications exchanged between representatives
of Wham Tech (commonly referred to as “internal” documents or
communications) regarding the Claimed Assets, Putative Purchasers,
Putative Acquisitions, Investments, Offering(s), Investors, and/or Lawsuit
ﬁom January l, 2015 through present.
15. Because the Claimed Assets are the core assets around which WhamTech has put
together a business plan, this request seeks literally every internal document or communication in
the last seven years.
—-
DECLARATION OF MARK ARMSTRONG Page 3
16. Plaintiffs’ discovery generally uses broad terms like the foregoing examples. The

defective nature of each of the discovery requests is pointed out in objections where appropriate.

17. I assisted in the preparation of all of the discovery responses. The factual

statements in the objections to the discovery responses are true and correct.

18. I have also assisted in the gathering of documents in this case. WhamTech has

produced communications to investors that detail WhamTech’s efforts going back to 2010 to

develop and to market its soﬂware. WhamTech has provided documents that reﬂect who has

worked on the soﬁware. WhamTech has provided presentations that it has made to prospective

customers that detail the nature of the software and why it is a better solution that other products

in the market. WhamTech has produced an exemplar of the oﬁ‘ering documents that it used to

raise money. WhamTech has produced annual ﬁnancials for the period 2015 to 2021 that show

how much money it raised, and how it spent the money, including the ﬁmds Plaintiffs invested.

WhamTech has produced communications to and ﬁom prospective customers. WhamTech has

produced correspondence ﬁom parties who have been complimentary of the soﬁware. WhamTech

has produced Plaintiﬂs’ investor ﬁles.

19. WhamTech has provided initial disclosures that identify witnesses who will testify

in rebuttal to Plaintiﬁs’ assertions in this case, and who will support and further explain the

information contained in the documents produced and the interrogatory responses provided.

20. Plaintiffs have not produced documents in support of their initial disclosures.

Plaintiffs stated that they have several hundred pages of responsive documents. Plaintiffs do not

describe what those documents may be.

DECLARATION 0F MARK ARMSTRONG — Page 4
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21. Plaintiffs state they have not retained an expert. Without retaining an expert,

Plaintiffs have no way of verifying or refuting whether WhamTech has, in fact, created Viable

software.

22. My name is Mark Armstrong. My date of birth is September 7, 1957. My address
is 5440 Harvest Hill, Suite 260, Dallas Texas 75230.

23. I declare under penalty of perjury that the foregoing is true and correct.

EXECUTED in Dallas County in the State of Texas on the 14th day of July, 2022.

arm...

DECLARATION 0F MARK ARMSTRONG — Page 5
Page 1 1 of 1 1
Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Lisa Garrett on behalf of Dennis Roossien
Bar No. 784873
lgarrett@munsch.com
Envelope ID: 66330288
Status as of 7/14/2022 3:13 PM CST
Associated Case Party: WHAM TECH, INC.

Name BarNumber Email TimestampSubmitted Status
Dennis Roossien droossien@munsch.com 7/14/2022 2:40:43 PM SENT
Lisa Garrett lgarrett@munsch.com 7/14/2022 2:40:43 PM SENT
Sharon BLACKSTOCK sblackstock@munsch.com 7/14/2022 2:40:43 PM SENT

Case Contacts

Name BarNumber Email TimestampSubmitted Status
Daniel P. Callahan 3648700 dpc@kesslercollins.com 7/14/2022 2:40:43 PM SENT
Francine Ly fly@dallascourts.org 7/14/2022 2:40:43 PM SENT
Gaile Willard gwillard@kesslercollins.com 7/14/2022 2:40:43 PM SENT

Case Info

Judge

TILLERY, DALE Track Judge’s New Case

Case No.

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Document Filed Date

July 14, 2022

Case Filing Date

September 21, 2021

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Motion-Secondary: GAMCO PROPERTIES, LLC, et al vs. WHAM TECH, INC., et al

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