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• CAUSE NO. 352-214202-05
•
RAYMOND SPOTH, GEORGE RAY, INC., § IN THE DISTRICT COURT
PSI PARTNERS, LTD., AND PSI GP, LLC §
AS THE GENERAL PARTNER OF PSI §
PARTNERS, LTD., § -...;
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PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE
Pursuant to Rule 251 and Rule 252 of the Texas Rules of Civil Procedure, Plaintiffs make
and files this their Motion for Continuance with respect to the September 18, 2006, trial setting
in the above-entitled and numbered case and in support would show the Court as follows:
FACTUAL BACKGROUND
1. This case involves a partnership dissolution and associated claims. On or about
September 29, 2003, Plaintiff Raymond Spoth ("Mr. Spoth") and Defendant Paul Peebles ("Mr.
Peebles") formed PSI Partners, Ltd., which operated as a management company in Colleyville,
Texas. The parties to this lawsuit had approximately a three-year relationship from 2003-2006.
2. The agreement between Mr. Spoth and Mr. Peebles regarding loan origination
fees and fee splits was that the originating loan officer would be paid first. The originating loan
officer would be paid based on a percentage of his/her originations during the month of the
closing.
3. Plaintiffs propounded their first request for production of documents on
Defendants on March 8, 2006, with the discovery responses being due within 30 days of receipt
of service. Through a series of Rule 11 agreements, the deadline for Defendants' responses and
PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page I
document production
•
was continued until May 22, 2006.
•
Defendants first production did not
contain loan origination files, HUD1 statements, closing worksheets, and copies of lender and
title company checks for 2003-2006, and attempts to resolve these issues without court
intervention were unsuccessful. Accordingly, Plaintiffs filed their first Motion to Compel with
the Court on June 7, 2006. Defendants then filed a tit-for-tat motion to compel. Plaintiffs and
Defendants then entered into a series of discussions, whereby Defendants agreed to produce,
among other things, loan origination files, HUD1 statements, closing worksheets, and copies of
lender and title company checks from 2003-2006. Plaintiffs and Defendants then entered into a
Rule 11 agreement memorializing this agreement and dismissing all motions to compel then
pending before the Court.
In July 2006, pursuant to the parties' Rule 11 agreement, Plaintiffs arranged for a copy
service to copy loan origination files located in Mr. Peebles' garage at his personal residence.
See Affidavit of Judith E. Smith ("Smith Affidavit"), ~~ 3-8, attached hereto as Exhibit A. Once
Plaintiffs received the copied files, it became apparent that Defendants had produced "raw" loan
origination files for the years 2003, 2005, and 2006, with no redaction of personal identifying
information. See Smith Affidavit,~~ 3-8. These loan origination files should contain HUD-1s,
closing worksheets, and copies of lender and titlecompany checks reflecting all monies paid to
First Old Capital, Inc. and any related entities in connection with these files. See Smith
Affidavit, ~~ 3-8, but most do not contain all the information which should be kept in said files.
Additionally, Defendants only produced one loan origination file for 2003, none for 2004 and
only two for the period of January through June 2005. See Smith Affidavit, ~~ 3-8.
Additionally, see, the chart of loan origination files produced by Defendants which is attached as
Exhibit C to Plaintiffs' Motion to Compel filed August 10, 2006.
PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page 2
4.
•
On September 6, 2006, the
•
Court issued a letter-ruling denying Plaintiffs Motion
to Compel stating "a Motion to Enforce the Rule 11 Agreement, not a Motion to Compel, would
have been the appropriate vehicle to put this issue before the court for determination." The Court
did not issue a ruling on Plaintiffs' Motion for Continuance.
5. Plaintiffs have contemporaneously filed a Motion to Enforce Rule 11 Agreement.
The present Renewed Motion for Continuance is based upon and related to the Motion to
Enforce.
6. Plaintiffs have been requesting the loan origination files, HUDl statements,
closing worksheets, and copies of lender and title company checks for months, which are
immediately relevant to Plaintiffs' calculation of damages. Defendants continue to unreasonably
object to Plaintiffs' request as overly burdensome and refuse to produce these documents related
to the partnership.
7. Because the discovery of such evidence is necessary for Plaintiffs to calculate
damages and enable Plaintiffs to present a viable claim at trial, but yet all attempts to resolve
these issues without have been unsuccessful, Plaintiffs are forced to file this Motion with the
Court respectfully requesting the following relief:
(1) in relation to Plaintiffs' Motion to Enforce Rule 11 Agreement, the
Court order Plaintiffs to produce loan origination files for 2003-2004, including
HUD-1 s, closing worksheets, and copies of lender and title company checks;
(2) the Court extend the discovery deadline (and other deadlines under the
Scheduling Order, as appropriate) to allow Plaintiffs reasonable and sufficient
time to review the loan origination files and compute damages;
(3) with reference to Plaintiffs' Renewed Motion for Continuance, the
Court continue the trial date in this case until after January 1, 2007 to allow
Plaintiffs reasonable and sufficient time to complete discovery and prepare for
trial.
PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page 3
• ARGUMENTS AND AUTHORITIES
•
8. Pursuant to Rule 251 a continuance can be granted for sufficient cause if the
motion is verified or supported by affidavit. Tex. R. Civ. P. 251. The Court has its discretion to
determine what constitutes sufficient cause for purposes of a continuance. State v. Wood
Ordistrib., Inc., 751 S.W.2d 863, 865 (Tex. 1998).
9. This motion for continuance is being filed as a result of Defendants failure to
comply with the Rule 11 Agreement and failure to produce documents, specifically loan
origination files, HUDl statements, closing worksheets, and copies of lender and title company
checks for 2003-2004. Accordingly, Plaintiffs are prejudiced, unable to complete discovery,
compute their damages relating to unpaid loan origination fees and fee splits, and adequately
prepare for trial or present a viable claim.
10. The Court has not ruled on any previously sought continuance of the trial.
11. The continuance requested herein is not being sought for delay only but so that
justice can be done.
WHEREFORE, PREMISES CONSIDERED, Plaintiffs request that its Renewed Motion
for Continuance be set for hearing and following the hearing the Court grant the continuance and
postpone the September 18, 2006, trial setting for a period of not less than ninety (90) days.
Plaintiffs request such other and further relief, both at law and in equity, as to which Plaintiffs
may show themselves to be justly entitled.
PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page 4
• Respectfully submitted,
•
~~CKPC
William Frank Carroll
State Bar No. 03892500
Jennifer L. Murphy
State Bar No. 24027560
Thomas B. Alleman
State Bar No. 01017485
5400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270-2199
(214) 754-5400 Telephone
(214) 745-5390 Facsimile
ATTORNEYS FOR RAYMOND SPOTH,
GEORGE RAY, INC., PSI PARTNERS, LTD.,
AND PSI GP, LLC AS THE GENERAL
PARTNER OF PSI PARTNERS, LTD.,
DUE TO THE IMPENDING TRIAL DATE, PLAINTIFFS REQUEST AN
EMERGENCY HEARING OF THIS MOTION.
PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE - Page 5
. '
• •
CERTIFICATE OF CONFERENCE
The undersigned counsel certifies that a conference was held on September 8th, 2006
with Defendants' Counsel's office on the merits of this motion. Defendants' Counsel is opposed
to this motion. A reasonable effort has been made to resolve the dispute without the necessity of
court intervention and the effort failed. Therefore, it is presented to the Court for determination.
FIAT
A hearing on this motion will be conducted atq~;:j::) o'clockC......m. on thelC>~ day of
~~Y , 2006, in the courtroom of the 352nd District Court in Tarrant County, Texas.
SIGNED this 8--\h day of ~0-e\t.Lby-, 2006.
PJDGE~Y£
CERTIFICATE OF SERVICE
The undersigned counsel affirms that the above document was ~ed pursuant to the
Texas Rules of Civil Procedure on all counsel or parties of record this ~-·_'day of September,
2006.
4487979v.l 44752/1
PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page 6
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• CAUSE NO. 352-214202-05 • RAYMOND SPOTH, GEORGE RAY, INC., § IN THE DISTRICT COURT PSI PARTNERS, LTD., AND PSI GP, LLC § AS THE GENERAL PARTNER OF PSI § PARTNERS, LTD., § -...; ...,... § ...... 0 "' = = cr< ~'-:2 PLAINTIFFS, § § o - -,..:;.. (./) "t_> (/) fT1 -o 2 .., V. § OFTARRANTCOUNT~XA~ -'-" ~~ r ~ =-II § ~)'7 fl1 PAUL PEEBLES, AND FIRST OLD § ~,·::E.. r- ~ l2·a ~ c.:> CAPITAL, INC., § 1"'1- :;::~r .. § ;:!<:.0 U1 f-<. DEFENDANTS. § 352N° JUDICIAL DISTRIC~ "~ PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE Pursuant to Rule 251 and Rule 252 of the Texas Rules of Civil Procedure, Plaintiffs make and files this their Motion for Continuance with respect to the September 18, 2006, trial setting in the above-entitled and numbered case and in support would show the Court as follows: FACTUAL BACKGROUND 1. This case involves a partnership dissolution and associated claims. On or about September 29, 2003, Plaintiff Raymond Spoth ("Mr. Spoth") and Defendant Paul Peebles ("Mr. Peebles") formed PSI Partners, Ltd., which operated as a management company in Colleyville, Texas. The parties to this lawsuit had approximately a three-year relationship from 2003-2006. 2. The agreement between Mr. Spoth and Mr. Peebles regarding loan origination fees and fee splits was that the originating loan officer would be paid first. The originating loan officer would be paid based on a percentage of his/her originations during the month of the closing. 3. Plaintiffs propounded their first request for production of documents on Defendants on March 8, 2006, with the discovery responses being due within 30 days of receipt of service. Through a series of Rule 11 agreements, the deadline for Defendants' responses and PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page I document production • was continued until May 22, 2006. • Defendants first production did not contain loan origination files, HUD1 statements, closing worksheets, and copies of lender and title company checks for 2003-2006, and attempts to resolve these issues without court intervention were unsuccessful. Accordingly, Plaintiffs filed their first Motion to Compel with the Court on June 7, 2006. Defendants then filed a tit-for-tat motion to compel. Plaintiffs and Defendants then entered into a series of discussions, whereby Defendants agreed to produce, among other things, loan origination files, HUD1 statements, closing worksheets, and copies of lender and title company checks from 2003-2006. Plaintiffs and Defendants then entered into a Rule 11 agreement memorializing this agreement and dismissing all motions to compel then pending before the Court. In July 2006, pursuant to the parties' Rule 11 agreement, Plaintiffs arranged for a copy service to copy loan origination files located in Mr. Peebles' garage at his personal residence. See Affidavit of Judith E. Smith ("Smith Affidavit"), ~~ 3-8, attached hereto as Exhibit A. Once Plaintiffs received the copied files, it became apparent that Defendants had produced "raw" loan origination files for the years 2003, 2005, and 2006, with no redaction of personal identifying information. See Smith Affidavit,~~ 3-8. These loan origination files should contain HUD-1s, closing worksheets, and copies of lender and titlecompany checks reflecting all monies paid to First Old Capital, Inc. and any related entities in connection with these files. See Smith Affidavit, ~~ 3-8, but most do not contain all the information which should be kept in said files. Additionally, Defendants only produced one loan origination file for 2003, none for 2004 and only two for the period of January through June 2005. See Smith Affidavit, ~~ 3-8. Additionally, see, the chart of loan origination files produced by Defendants which is attached as Exhibit C to Plaintiffs' Motion to Compel filed August 10, 2006. PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page 2 4. • On September 6, 2006, the • Court issued a letter-ruling denying Plaintiffs Motion to Compel stating "a Motion to Enforce the Rule 11 Agreement, not a Motion to Compel, would have been the appropriate vehicle to put this issue before the court for determination." The Court did not issue a ruling on Plaintiffs' Motion for Continuance. 5. Plaintiffs have contemporaneously filed a Motion to Enforce Rule 11 Agreement. The present Renewed Motion for Continuance is based upon and related to the Motion to Enforce. 6. Plaintiffs have been requesting the loan origination files, HUDl statements, closing worksheets, and copies of lender and title company checks for months, which are immediately relevant to Plaintiffs' calculation of damages. Defendants continue to unreasonably object to Plaintiffs' request as overly burdensome and refuse to produce these documents related to the partnership. 7. Because the discovery of such evidence is necessary for Plaintiffs to calculate damages and enable Plaintiffs to present a viable claim at trial, but yet all attempts to resolve these issues without have been unsuccessful, Plaintiffs are forced to file this Motion with the Court respectfully requesting the following relief: (1) in relation to Plaintiffs' Motion to Enforce Rule 11 Agreement, the Court order Plaintiffs to produce loan origination files for 2003-2004, including HUD-1 s, closing worksheets, and copies of lender and title company checks; (2) the Court extend the discovery deadline (and other deadlines under the Scheduling Order, as appropriate) to allow Plaintiffs reasonable and sufficient time to review the loan origination files and compute damages; (3) with reference to Plaintiffs' Renewed Motion for Continuance, the Court continue the trial date in this case until after January 1, 2007 to allow Plaintiffs reasonable and sufficient time to complete discovery and prepare for trial. PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page 3 • ARGUMENTS AND AUTHORITIES • 8. Pursuant to Rule 251 a continuance can be granted for sufficient cause if the motion is verified or supported by affidavit. Tex. R. Civ. P. 251. The Court has its discretion to determine what constitutes sufficient cause for purposes of a continuance. State v. Wood Ordistrib., Inc., 751 S.W.2d 863, 865 (Tex. 1998). 9. This motion for continuance is being filed as a result of Defendants failure to comply with the Rule 11 Agreement and failure to produce documents, specifically loan origination files, HUDl statements, closing worksheets, and copies of lender and title company checks for 2003-2004. Accordingly, Plaintiffs are prejudiced, unable to complete discovery, compute their damages relating to unpaid loan origination fees and fee splits, and adequately prepare for trial or present a viable claim. 10. The Court has not ruled on any previously sought continuance of the trial. 11. The continuance requested herein is not being sought for delay only but so that justice can be done. WHEREFORE, PREMISES CONSIDERED, Plaintiffs request that its Renewed Motion for Continuance be set for hearing and following the hearing the Court grant the continuance and postpone the September 18, 2006, trial setting for a period of not less than ninety (90) days. Plaintiffs request such other and further relief, both at law and in equity, as to which Plaintiffs may show themselves to be justly entitled. PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page 4 • Respectfully submitted, • ~~CKPC William Frank Carroll State Bar No. 03892500 Jennifer L. Murphy State Bar No. 24027560 Thomas B. Alleman State Bar No. 01017485 5400 Renaissance Tower 1201 Elm Street Dallas, Texas 75270-2199 (214) 754-5400 Telephone (214) 745-5390 Facsimile ATTORNEYS FOR RAYMOND SPOTH, GEORGE RAY, INC., PSI PARTNERS, LTD., AND PSI GP, LLC AS THE GENERAL PARTNER OF PSI PARTNERS, LTD., DUE TO THE IMPENDING TRIAL DATE, PLAINTIFFS REQUEST AN EMERGENCY HEARING OF THIS MOTION. PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE - Page 5 . ' • • CERTIFICATE OF CONFERENCE The undersigned counsel certifies that a conference was held on September 8th, 2006 with Defendants' Counsel's office on the merits of this motion. Defendants' Counsel is opposed to this motion. A reasonable effort has been made to resolve the dispute without the necessity of court intervention and the effort failed. Therefore, it is presented to the Court for determination. FIAT A hearing on this motion will be conducted atq~;:j::) o'clockC......m. on thelC>~ day of ~~Y , 2006, in the courtroom of the 352nd District Court in Tarrant County, Texas. SIGNED this 8--\h day of ~0-e\t.Lby-, 2006. PJDGE~Y£ CERTIFICATE OF SERVICE The undersigned counsel affirms that the above document was ~ed pursuant to the Texas Rules of Civil Procedure on all counsel or parties of record this ~-·_'day of September, 2006. 4487979v.l 44752/1 PLAINTIFFS' RENEWED MOTION FOR CONTINUANCE- Page 6