Preview
FILED
4/12/2022 1:21 PM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Madison McCarrier DEPUTY
CAUSE NO. DC-20-07067
IPWE, INC. and ERICH § IN THE DISTRICT COURT
SPAN GENBERG, §
§
Plaintiffs/Counter-Defendants, §
§
v_ § DALLAS COUNTY, TEXAS
§
LUCKY DIAMOND PRODUCTIONS, §
INC. and WENDY DIAMOND, §
§
Defendants/Counter-Plaintiffs. §
95th JUDICIAL DISTRICT
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE
COME NOW, Plaintiffs/Counter—Defendants IPwe, Inc. (“IPwe”) and Erich Spangenberg
(“Spangenberg”) (collectively, “Plaintiffs”), and file this Emergency Motion for Continuance (the
“Motion”) requesting that the Court continue trial in this matter for approximately 90 days. In
support of the Motion, Plaintiffs respectfully show the Court as follows:
I. INTRODUCTION AND EMERGENCY NATURE 0F MOTION
1. Plaintiffs have been forced to change counsel multiple times in this case through
no fault of their own. Plaintiffs’ original counsel of choice represented Plaintiffs in this case for
approximately seventeen (17) months before moving to a new law firm and being unable to bring
this case with her. Then, six (6) weeks before this case is set for trial, the attorney who replaced
Plaintiffs’ original counsel also left his law firm, this time taking an in-house position. In his place,
Plaintiffs were assigned a replacement attorney, and this engagement lasted only nineteen (19)
days before Plaintiffs realized they were not aligned with the new attorney selected for them.
2. Plaintiffs’ former counsel moved to withdraw from this case on March 29, 2022.
The Court granted that motion and permitted Plaintiffs’ counsel to withdraw from this case on
April 5, 2022—twenty (20) days before trial is set to begin. Plaintiffs acted quickly and retained
new counsel immediately, and the undersigned counsel entered their Notice of Appearance on
PLAINTIFFs’ EMERGENCY MOTION FOR CONTINUANCE Page 1
April 8, 2022. Plaintiffs now ask the Court for a continuance of the current trial setting for a period
of approximately 90 days to allow their new counsel to prepare for trial. Absent such relief,
Plaintiffs will be forced to proceed to trial with counsel who are allowed seventeen (l7) days to
prepare, while Defendants/Counter-Plaintiffs’ counsel have been involved with this case for nearly
two (2) years.
3. Plaintiffs file this Motion as an Emergency Motion for Continuance given
impending deadlines in this case. Under the current scheduling order, the parties are to exchange
witness and exhibit lists only ten (10) days after Plaintiffs’ counsel appeared in this case and are
required to meet and confer regarding admissibility and pretrial objections only seven (7) days
after such appearance. Accordingly, Plaintiffs respectfully request an expedited hearing date and
urgent consideration of this Motion.
II. BACKGROUND
4. Plaintiffs filed this lawsuit on May 20, 2022 against Defendants/Counter-Plaintiffs
Lucky Diamond Productions, Inc. (“LDP”) and Wendy Diamond (“Diamond”) (collectively,
“Defendants”). Plaintiffs seek a declaratory judgment that no money is owed to Defendants under
three (3) separate contracts between the parties and that Diamond is not, as she claims, entitled to
receive a three percent (3%) equity interest in IPwe.
5. Defendants have asserted counterclaims against Plaintiffs alleging breaches of the
same three contracts as well as for breach of an alleged contract between the parties comprised of
several emails and phone calls. Defendants contend these communications entitle Diamond to a
significant equity ownership in IPwe. In total, Defendants have asserted nine (9) counterclaims
against Plaintiffs, including: four (4) claims for breach of contract; fraud/fraudulent inducement;
quantum meruit; unjust enrichment; promissory estoppel; and statutory fraud under Tex. Bus. &
Comm. Code § 27.01.
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 2
6. At the outset of this case, Plaintiffs retained Amy LaValle from the firm Wick
Phillips Gould & Martin, LLP (“Wick Phillips”) as their counsel. Ms. LaValle represented
Plaintiffs for the first seventeen (17) months of this case until approximately October 27, 2021,
when she moved to Withdraw from the case. The record in this case shows that Ms. LaValle
withdrew because she left Wick Phillips and was unable to take this case with her to her new firm.‘
7. At that time, Nick Nelson, counsel who had worked with Ms. LaValle on this case
since its inception, was designated as new lead counsel for Plaintiffs? Mr. Nelson served as lead
counsel in this case for over four (4) months until he also left Wick Phillips.3 The record in this
case shows that Mr. Nelson could not take this case with him in his new role because he left Wick
Phillips to become President and Chief Executive Officer of an outside company, CTW Logistics.4
8. After Mr. Nelson’s withdrawal, Michael Baum of Wick Phillips was selected as
replacement counsel for Plaintiffs. Mr. Baum filed a designation of lead counsel for Plaintiffs on
March 10, 2022. Prior to this time, Mr. Baum’s name had never appeared on a pleading in this
case. Further, automated certificates of service generated by electronic filing systems show that
Mr. Baum had not been a designated recipient of any documents filed in this case as recently as
February 24, 2022.5
9. Mr. Baum and the firm of Wick Phillips moved to withdraw as counsel in this case
on March 29, 2022—only nineteen (l9) days after Mr. Baum appeared as lead counsel.6 Among
the reasons cited in support of the request to withdraw as counsel was Plaintiffs’ dissatisfaction
See Reply in Support of Motion to Withdraw as Counsel, filed on April 2022.
1
1,
2
See id.
3
See id.
4
See id.
Reporter’s Certification for the Deposition of Erich Spangenberg at 5-6, filed on February 24, 2022.
5
See
6
Motion to Withdraw as Counsel, filed on March 29, 2022.
See
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 3
with the “multiple transitions of lead counsel” that had occurred throughout the case.7 The Court
granted Wick Phillips’ request to withdraw as counsel on April 5, 2022.
10. On April 5, 2022, the Court also denied a request for continuance filed
contemporaneously With the request to withdraw as counsel. As a result, trial remains specially
set for April 25, 2022. Defendants opposed the previous motion for a continuance, arguing that
the motion did not set forth good cause for the continuances Defendants also explained that their
concerns over a delayed trial were “exacerbated by the fact that Plaintiffs have not yet hired
replacement counsel.”9
11. Immediately after Wick Phillips was permitted to withdraw from this case,
Plaintiffs began working to retain the law firm of Reed Smith LLP as replacement counsel. The
undersigned attorneys filed their Notice of Appearance on behalf of Plaintiffs only three (3) days
later on April 8, 2022.10
III. ARGUMENT AND AUTHORITIES
12. A court may grant a motion for continuance where sufficient cause is shown.“ In
this case, there is ample cause for the Court to continue the current trial setting.
13. The Texas Supreme Court explained that “[w]hen a trial court allows an attorney
to voluntarily withdraw, it must give the party time to secure new counsel and time for the new
counsel to investigate the case and prepare for trial?” In such circumstances, the party seeking
the continuance need only show “that his failure to be represented by counsel was not the result of
7
See Reply in Support of Motion to Withdraw as Counsel, filed on April 1, 2022.
8
Defendants/Counter-Plaintiffs’ Consolidated Opposition to Motions to Withdraw as Counsel and for Continuance
(the “Opposition”) at 3, filed on March 31, 2022 (“There is no attempt to establish good cause for either the
withdrawal of counsel or the continuance of a trial[.]”).
9
Id.
1°
See Notice of Appearance and Designation of Lead Counsel, filed on April 8, 2022.
11
See Tex. R. Civ. P. 251; Tex. Civ. Prac. & Rem. Code § 132.001.
12
Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986) (citing cases) (emphasis added).
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 4
his own fault or negligence?” When a party meets this burden, the denial of a continuance to
allow new counsel to prepare for trial is an abuse of discretion.”
14. Here, the record unequivocally shows that Plaintiffs’ change of counsel was not the
result of their own fault or negligence. Plaintiffs’ chosen counsel, Ms. LaValle, left Wick Phillips
and could not take this case with her.” A few months later, Mr. Nelson, the attorney who replaced
Ms. LaValle, also left the firm.” Mr. Nelson accepted a position as the President and Chief
Executive Officer of a logistics company, and therefore he, too, was unable to continue
representing Plaintiffs following his departure from Wick Phillips.”
15. These changes were clearly beyond Plaintiffs’ control and resulted in Plaintiffs
being assigned unfamiliar counsel approximately six (6) weeks before trial. As noted above, the
record indicates that Mr. Baum had never appeared in this case in any capacity before being
designated as Plaintiffs’ lead counsel on March 10, 2022. It quickly became apparent that the
latest change of counsel thrust upon Plaintiffs was not satisfactory, as Mr. Baum and the firm of
Wick Phillips moved to withdraw as counsel for Plaintiffs only nineteen (l9) days later.” Through
this Motion, Plaintiffs do not seek to disparage their former counsel or their ability in any way;
however, the fact remains that Plaintiffs were without their chosen counsel once Ms. LaValle and
then Mr. Nelson left Wick Phillips. Courts have often explained that “the right to be represented
by counsel of choice is a valuable one,” and litigants should not be deprived of that right absent
compelling reason.” Here, there is no compelling reason to deny Plaintiffs their choice of counsel,
McKinney v. City of Cedar Hill, No. 05-12-00368-CV, 2012 Tex. App. LEXIS 9932, at *3 (Tex. App—Dallas
13
2012, no pet.) (citing Villegas, 711 S.W.2d at 626).
14
Villegas, 711 S.W.2d at 626-27 (“[T]he trial court abused its discretion [by denying a motion for continuance]
because the evidence shows that Villegas was not negligent or at fault in causing his attorney’s withdrawal”).
15
See Reply in Support of Motion to Withdraw as Counsel.
16
Id.
17
Id.
18
See Motion to Withdraw as Counsel filed on March 29, 2022.
19
In re Vossdale Townhouse Ass ’n, Ina, 302 S.W.3d 890, 893 (Tex. App—Houston [14th Dist] 2009, orig.
proceeding) (emphasis added); see also Moss v. Malone, 880 S.W.2d 45, 50 (Tex. App—Tyler 1994, writ denied);
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 5
and Plaintiffs should not be forced to choose between (1) retaining new counsel with less than a
month to prepare for trial or (2) proceeding without their counsel of choice.
16. The Texas Supreme Court in Villegas held that a party was not at fault for his
attorneys’ request to withdraw where the purpose cited in the motion to withdraw was
“irreconcilable differences?” Therefore, because the trial court permitted Villegas’ attorney to
withdraw on the eve of trial, the Texas Supreme Court found that the trial court erred by denying
Villegas’ request for a continuance.” In this case, the facts supporting a finding that Plaintiffs are
not at fault for their change in counsel are even stronger, given that Plaintiffs’ original counsel
simply left their firm and withdrew from the case. Accordingly, this Court should “give [Plaintiffs]
time to secure new counsel and time for the new counsel to investigate the case and prepare
for trial.”22
l7. Plaintiffs acted quickly in securing new counsel, as the undersigned attorneys filed
their Notice of Appearance only three (3) days after Wick Phillips was permitted to withdraw.
Even with this diligence, Plaintiffs’ new counsel does not have sufficient time to investigate the
case and prepare for trial absent a continuance of the current trial setting. For example, Plaintiffs’
counsel has been in contact with Plaintiffs’ former counsel since April 8, 2022 attempting to
effectuate a transfer of Plaintiffs’ files and discovery material; however, Plaintiffs’ counsel was
unable to obtain all of the documents produced in discovery until approximately 3 :00 pm. on April
11, 2022.23 This fact weighs in favor of continuing the trial date.“ Plaintiffs’ counsel was unable
In re El Paso Healthcare Syst., Ltd, 225 S.W.3d 146, 152 (Tex. App—El Paso 2005, orig. proceeding); Keller
Indus., Inc. v. Blanton, 804 S.W.2d 182, 185 (Tex. App—Houston [14th Dist] 1991, orig. proceeding).
2°
Villegas, 711 S.W.2d at 625.
21
Id. at 626-27.
22
Id. at 626 (emphasis added).
23
Wick Phillips personnel have endeavored to accommodate the urgent request for a transfer of discovery materials,
but technology issues hindered the prompt transfer of the documents produced by the parties in discovery.
24
See id. (noting that Villegas had been unable to quickly obtain access to files necessary for trial).
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 6
to even begin to attempt review of the tens of thousands of pages of documents produced in
discovery until seven (7) days before the deadline to exchange trial exhibit lists.”
18. From the time Plaintiffs’ counsel was permitted to Withdraw, Plaintiffs had only
twenty (20) days to obtain new counsel and for counsel to prepare for trial. Other courts have held
that even longer periods were insufficient.“ In Moss, the trial court permitted counsel to withdraw
and scheduled the case for bench trial seventeen (17) days later.” Moss appeared on the day of
trial, notified the court that she had retained new counsel, and requested additional time to prepare
for trial.” Moss then appeared at the rescheduled trial and informed the court that her counsel was
unable to attend that day and requested an additional continuance of thirty days, which the trial
court denied.” The appellate court held that the trial court’s denial of the second request for a
continuance was an abuse of discretion because Moss had not been given “meaningful time to
find new counsel and prepare for trial.”3° The court based its decision on the fact that Moss was
only given seventeen days to obtain counsel, seek a continuance, and then prepare for trial in an
additional 28 days.“ Here, the twenty (20) days provided to Plaintiffs to both obtain new counsel
and prepare for trial is significantly less than the 45 total days that the court in Moss found to be
insufficient.
l9. Plaintiffs also note that several of the bases for Defendants’ opposition to the
previous motion for continuance are no longer applicable with respect to the present Motion. First,
Defendants argued that the previous motion failed to set forth good cause for the continuance.
Here, good cause has been established, since Texas law mandates that a party whose counsel has
25
Plaintiffs’ counsel are still working to process the entirety of documents produced by the parties in discovery.
Based on the Bates-labels affixed to the documents used as exhibits during depositions in this case, however, it
appears that the total number of pages produced in discovery exceeds at least 14,000.
26
Moss, 880 S.W.2d at 46-48.
27
Id. at 46.
28
Id.
29
Id. at 46-48.
3°
Id. at 51.
31
Id.
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 7
been pennitted to withdraw be given adequate time to obtain new counsel and prepare for trial
when the lack of representation is not the fault of the party.”
20. Defendants also argued that concerns over undue delay were “exacerbated by the
fact that Plaintiffs have not yet hired replacement counsel.” This concern has since been resolved,
as Plaintiffs acted immediately in securing new counsel who are working to prepare for trial as
quickly as possible. Plaintiffs do not seek a lengthy delay, nor do they ask the Court to re-open
discovery. Plaintiffs simply ask that the Court provide their counsel adequate time to familiarize
themselves with the issues and the file and prepare for trial. Absent this relief, Plaintiffs will suffer
undue prejudice and be significantly disadvantaged at trial. Indeed, forcing Plaintiffs to proceed
to trial at this time would amount to depriving Plaintiffs of the effective assistance of counsel.
21. This continuance is not sought for delay only, but so that justice may be done.
IV. CONCLUSION
22. Through no fault of their own, Plaintiffs choice of counsel left their law firm and
were forced to withdraw as Plaintiffs’ counsel on two separate occasions. Plaintiffs should not be
forced to proceed to trial with an unfamiliar attorney assigned to their case weeks before trial.
Moreover, as that attorney and his firm were permitted to withdraw as counsel only twenty (20)
days before trial, Plaintiffs are entitled to sufficient time to permit their new counsel to investigate
the case and prepare for trial. Plaintiffs accordingly request that the Court grant this Motion and
reset the trial date in this case for a period of approximately 90 days.
WHEREFORE, PREMISES CONSIDERED, for the reasons above, Plaintiffs request that
the Court grant their Motion for Continuance, resetting the trial date for at approximately 9O days.
Villegas, 711 S.W.2d at 626; Moss, 880 S.W.2d at 51; Thurman v. Buy George Resale, L.L. C., 2014 Tex. App.
32
LEXIS 3613.
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 8
Plaintiffs also pray for any other further relief to which they may be entitled, both in law or in
equity.
Respectfully submitted,
/s/ E. Steve Smith
Mark L. J ohansen
State Bar No. 10670240
Steve Smith
State Bar No. 24095623
REED SMITH LLP
2850 N. Harwood St., Suite 1500
Dallas, Texas 75201
Phone: 469-680-4214
Facsimile: 469-680-4299
Email: miohansen@reedsmith.com
stevesmith@reedsmith.com
R. Alan York
ayork@reedsmith.com
Texas Bar No. 22167500
REED SMITH LLP
811 Main St., Suite 1700
Houston, Texas 77002
7 1 3-469-3 800
713-469-3899 (fax)
ATTORNEYS FOR PLAINTIFFS/COUNTER—
DEFENDANTS IPWE, INC. AND ERICH
SPAN GENBERG
PLAINTIFFs’ EMERGENCY MOTION FOR CONTINUANCE Page 9
CLIENT APPROVAL
Pursuant to Local Rule 3.0l(b), the undersigned approves the filing of and the relief
requested by the foregoing Plaintiffs’ Emergency Motion for Continuance.
Ml
Eriéh Spangenberg
STATE 0F TEXAS §
§
COUNTY 0F DALLAS §
My name is Eric Steven Smith, my date of birth is February 14, 1990, and my address is
2850 N. Harwood Street, Suite 1500, Dallas, Texas 75201. I declare under penalty of peijury that
the factual statements contained in the foregoing Motion for Continuance are within my personal
knowledge and are true and correct.
Executed in Dallas County, State of Texas, on the 11th day of April, 2022.
/s/ E. Steve Smith
Steve Smith
PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 10
CERTIFICATE OF CONFERENCE
The undersigned hereby certifies that counsel for Plaintiffs conferred with counsel for
Defendants Via email on April 12, 2022 to determine whether Defendants oppose the relief
requested. Counsel for Defendants indicated that Defendants do oppose this Motion, and Plaintiffs
therefore submit the Motion for the Court’s consideration.
/s/ E. Steve Smith
Steve Smith
CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the above and foregoing
has been served on all counsel of record Via email on this 12th day of April 2022.
/s/ E. Steve Smith
Steve Smith
PLAINTIFFs’ EMERGENCY MOTION FOR CONTINUANCE Page 11
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.
Shikendra Rhea on behalf of Steve Smith
Bar No. 24095623
Srhea@ReedSmith.com
Envelope ID: 63497178
Status as of 4/13/2022 8:02 AM CST
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Lisa STsai ltsai@rctlegal.com 4/12/2022 1:21 :57 PM SENT
Brandon Lewis 24060165 blewis@rctlegal.com 4/12/2022 1:21:57 PM SENT
Schyler Parker schyler.parker@wickphillips.com 4/12/2022 1:21:57 PM SENT
Gwen Gonzales gwen.gonzales@wickphillips.com 4/12/2022 1:21:57 PM SENT
Susie Wade swade@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT
Kira Lytle klytle@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT
Benjamin Nabors bnabors@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT
Enrique Ramirez eramirez@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT
Jodie Wingerter jwingerter@reidcollins.com 4/12/2022 1:21:57 PM SENT
Associated Case Party: LUCKY DIAMOND PRODUCTIONS, INC
Name BarNumber Email TimestampSubmitted Status
Jeffrey MTillotson jtillotson@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT
Jonathan RPatton jpatton@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT
Joseph Alrrobali airrobali@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT
Gregory Clift clift@roggedunngroup.com 4/12/2022 1:21:57 PM SENT
EFiling Admin efiling@roggedunngroup.com 4/12/2022 1:21:57 PM SENT
Rashella Widdoes - Paralegal widdoes@RoggeDunnGroup.com 4/12/2022 1:21:57 PM SENT
Associated Case Party: IPWE, INC
Name
Steve Smith
Michael LBaum
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.
Shikendra Rhea on behalf of Steve Smith
Bar No. 24095623
Srhea@ReedSmith.com
Envelope ID: 63497178
Status as of 4/13/2022 8:02 AM CST
Associated Case Party: IPWE, INC
Mark L.Johansen mjohansen@reedsmith.com 4/12/2022 1:21 :57 PM SENT
Liz Paulson |iz.paulson@wickphillips.com 4/12/2022 1:21 :57 PM SENT
Erich Spangenberg erich@ipwe.com 4/12/2022 1:21:57 PM SENT
Shikendra Rhea srhea@reedsmith.com 4/12/2022 1:21:57 PM SENT
Alicia Nixon anixon@reedsmith.com 4/12/2022 1:21:57 PM SENT
Associated Case Party: WENDY DIAMOND
Name BarNumber Email TimestampSubmitted Status
EFiling Admin efiling@roggedunngroup.com 4/12/2022 1:21:57 PM SENT
Gregory Clift clift@roggedunngroup.com 4/12/2022 1:21:57 PM SENT
Richard Roth rich@rrothlaw.com 4/12/2022 1:21:57 PM SENT
Associated Case Party: ERICH SPANGENBERG
Name BarNumber Email TimestampSubmitted Status
Mark L.Johansen mjohansen@reedsmith.com 4/12/2022 1:21:57 PM SENT
Steve Smith Stevesmith@reedsmith.com 4/12/2022 1:21:57 PM SENT
Alicia Nixon anixon@reedsmith.com 4/12/2022 1:21:57 PM SENT
Shikendra Rhea srhea@reedsmith.com 4/12/2022 1:21:57 PM SENT
Preview
FILED 4/12/2022 1:21 PM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS Madison McCarrier DEPUTY CAUSE NO. DC-20-07067 IPWE, INC. and ERICH § IN THE DISTRICT COURT SPAN GENBERG, § § Plaintiffs/Counter-Defendants, § § v_ § DALLAS COUNTY, TEXAS § LUCKY DIAMOND PRODUCTIONS, § INC. and WENDY DIAMOND, § § Defendants/Counter-Plaintiffs. § 95th JUDICIAL DISTRICT PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE COME NOW, Plaintiffs/Counter—Defendants IPwe, Inc. (“IPwe”) and Erich Spangenberg (“Spangenberg”) (collectively, “Plaintiffs”), and file this Emergency Motion for Continuance (the “Motion”) requesting that the Court continue trial in this matter for approximately 90 days. In support of the Motion, Plaintiffs respectfully show the Court as follows: I. INTRODUCTION AND EMERGENCY NATURE 0F MOTION 1. Plaintiffs have been forced to change counsel multiple times in this case through no fault of their own. Plaintiffs’ original counsel of choice represented Plaintiffs in this case for approximately seventeen (17) months before moving to a new law firm and being unable to bring this case with her. Then, six (6) weeks before this case is set for trial, the attorney who replaced Plaintiffs’ original counsel also left his law firm, this time taking an in-house position. In his place, Plaintiffs were assigned a replacement attorney, and this engagement lasted only nineteen (19) days before Plaintiffs realized they were not aligned with the new attorney selected for them. 2. Plaintiffs’ former counsel moved to withdraw from this case on March 29, 2022. The Court granted that motion and permitted Plaintiffs’ counsel to withdraw from this case on April 5, 2022—twenty (20) days before trial is set to begin. Plaintiffs acted quickly and retained new counsel immediately, and the undersigned counsel entered their Notice of Appearance on PLAINTIFFs’ EMERGENCY MOTION FOR CONTINUANCE Page 1 April 8, 2022. Plaintiffs now ask the Court for a continuance of the current trial setting for a period of approximately 90 days to allow their new counsel to prepare for trial. Absent such relief, Plaintiffs will be forced to proceed to trial with counsel who are allowed seventeen (l7) days to prepare, while Defendants/Counter-Plaintiffs’ counsel have been involved with this case for nearly two (2) years. 3. Plaintiffs file this Motion as an Emergency Motion for Continuance given impending deadlines in this case. Under the current scheduling order, the parties are to exchange witness and exhibit lists only ten (10) days after Plaintiffs’ counsel appeared in this case and are required to meet and confer regarding admissibility and pretrial objections only seven (7) days after such appearance. Accordingly, Plaintiffs respectfully request an expedited hearing date and urgent consideration of this Motion. II. BACKGROUND 4. Plaintiffs filed this lawsuit on May 20, 2022 against Defendants/Counter-Plaintiffs Lucky Diamond Productions, Inc. (“LDP”) and Wendy Diamond (“Diamond”) (collectively, “Defendants”). Plaintiffs seek a declaratory judgment that no money is owed to Defendants under three (3) separate contracts between the parties and that Diamond is not, as she claims, entitled to receive a three percent (3%) equity interest in IPwe. 5. Defendants have asserted counterclaims against Plaintiffs alleging breaches of the same three contracts as well as for breach of an alleged contract between the parties comprised of several emails and phone calls. Defendants contend these communications entitle Diamond to a significant equity ownership in IPwe. In total, Defendants have asserted nine (9) counterclaims against Plaintiffs, including: four (4) claims for breach of contract; fraud/fraudulent inducement; quantum meruit; unjust enrichment; promissory estoppel; and statutory fraud under Tex. Bus. & Comm. Code § 27.01. PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 2 6. At the outset of this case, Plaintiffs retained Amy LaValle from the firm Wick Phillips Gould & Martin, LLP (“Wick Phillips”) as their counsel. Ms. LaValle represented Plaintiffs for the first seventeen (17) months of this case until approximately October 27, 2021, when she moved to Withdraw from the case. The record in this case shows that Ms. LaValle withdrew because she left Wick Phillips and was unable to take this case with her to her new firm.‘ 7. At that time, Nick Nelson, counsel who had worked with Ms. LaValle on this case since its inception, was designated as new lead counsel for Plaintiffs? Mr. Nelson served as lead counsel in this case for over four (4) months until he also left Wick Phillips.3 The record in this case shows that Mr. Nelson could not take this case with him in his new role because he left Wick Phillips to become President and Chief Executive Officer of an outside company, CTW Logistics.4 8. After Mr. Nelson’s withdrawal, Michael Baum of Wick Phillips was selected as replacement counsel for Plaintiffs. Mr. Baum filed a designation of lead counsel for Plaintiffs on March 10, 2022. Prior to this time, Mr. Baum’s name had never appeared on a pleading in this case. Further, automated certificates of service generated by electronic filing systems show that Mr. Baum had not been a designated recipient of any documents filed in this case as recently as February 24, 2022.5 9. Mr. Baum and the firm of Wick Phillips moved to withdraw as counsel in this case on March 29, 2022—only nineteen (l9) days after Mr. Baum appeared as lead counsel.6 Among the reasons cited in support of the request to withdraw as counsel was Plaintiffs’ dissatisfaction See Reply in Support of Motion to Withdraw as Counsel, filed on April 2022. 1 1, 2 See id. 3 See id. 4 See id. Reporter’s Certification for the Deposition of Erich Spangenberg at 5-6, filed on February 24, 2022. 5 See 6 Motion to Withdraw as Counsel, filed on March 29, 2022. See PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 3 with the “multiple transitions of lead counsel” that had occurred throughout the case.7 The Court granted Wick Phillips’ request to withdraw as counsel on April 5, 2022. 10. On April 5, 2022, the Court also denied a request for continuance filed contemporaneously With the request to withdraw as counsel. As a result, trial remains specially set for April 25, 2022. Defendants opposed the previous motion for a continuance, arguing that the motion did not set forth good cause for the continuances Defendants also explained that their concerns over a delayed trial were “exacerbated by the fact that Plaintiffs have not yet hired replacement counsel.”9 11. Immediately after Wick Phillips was permitted to withdraw from this case, Plaintiffs began working to retain the law firm of Reed Smith LLP as replacement counsel. The undersigned attorneys filed their Notice of Appearance on behalf of Plaintiffs only three (3) days later on April 8, 2022.10 III. ARGUMENT AND AUTHORITIES 12. A court may grant a motion for continuance where sufficient cause is shown.“ In this case, there is ample cause for the Court to continue the current trial setting. 13. The Texas Supreme Court explained that “[w]hen a trial court allows an attorney to voluntarily withdraw, it must give the party time to secure new counsel and time for the new counsel to investigate the case and prepare for trial?” In such circumstances, the party seeking the continuance need only show “that his failure to be represented by counsel was not the result of 7 See Reply in Support of Motion to Withdraw as Counsel, filed on April 1, 2022. 8 Defendants/Counter-Plaintiffs’ Consolidated Opposition to Motions to Withdraw as Counsel and for Continuance (the “Opposition”) at 3, filed on March 31, 2022 (“There is no attempt to establish good cause for either the withdrawal of counsel or the continuance of a trial[.]”). 9 Id. 1° See Notice of Appearance and Designation of Lead Counsel, filed on April 8, 2022. 11 See Tex. R. Civ. P. 251; Tex. Civ. Prac. & Rem. Code § 132.001. 12 Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986) (citing cases) (emphasis added). PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 4 his own fault or negligence?” When a party meets this burden, the denial of a continuance to allow new counsel to prepare for trial is an abuse of discretion.” 14. Here, the record unequivocally shows that Plaintiffs’ change of counsel was not the result of their own fault or negligence. Plaintiffs’ chosen counsel, Ms. LaValle, left Wick Phillips and could not take this case with her.” A few months later, Mr. Nelson, the attorney who replaced Ms. LaValle, also left the firm.” Mr. Nelson accepted a position as the President and Chief Executive Officer of a logistics company, and therefore he, too, was unable to continue representing Plaintiffs following his departure from Wick Phillips.” 15. These changes were clearly beyond Plaintiffs’ control and resulted in Plaintiffs being assigned unfamiliar counsel approximately six (6) weeks before trial. As noted above, the record indicates that Mr. Baum had never appeared in this case in any capacity before being designated as Plaintiffs’ lead counsel on March 10, 2022. It quickly became apparent that the latest change of counsel thrust upon Plaintiffs was not satisfactory, as Mr. Baum and the firm of Wick Phillips moved to withdraw as counsel for Plaintiffs only nineteen (l9) days later.” Through this Motion, Plaintiffs do not seek to disparage their former counsel or their ability in any way; however, the fact remains that Plaintiffs were without their chosen counsel once Ms. LaValle and then Mr. Nelson left Wick Phillips. Courts have often explained that “the right to be represented by counsel of choice is a valuable one,” and litigants should not be deprived of that right absent compelling reason.” Here, there is no compelling reason to deny Plaintiffs their choice of counsel, McKinney v. City of Cedar Hill, No. 05-12-00368-CV, 2012 Tex. App. LEXIS 9932, at *3 (Tex. App—Dallas 13 2012, no pet.) (citing Villegas, 711 S.W.2d at 626). 14 Villegas, 711 S.W.2d at 626-27 (“[T]he trial court abused its discretion [by denying a motion for continuance] because the evidence shows that Villegas was not negligent or at fault in causing his attorney’s withdrawal”). 15 See Reply in Support of Motion to Withdraw as Counsel. 16 Id. 17 Id. 18 See Motion to Withdraw as Counsel filed on March 29, 2022. 19 In re Vossdale Townhouse Ass ’n, Ina, 302 S.W.3d 890, 893 (Tex. App—Houston [14th Dist] 2009, orig. proceeding) (emphasis added); see also Moss v. Malone, 880 S.W.2d 45, 50 (Tex. App—Tyler 1994, writ denied); PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 5 and Plaintiffs should not be forced to choose between (1) retaining new counsel with less than a month to prepare for trial or (2) proceeding without their counsel of choice. 16. The Texas Supreme Court in Villegas held that a party was not at fault for his attorneys’ request to withdraw where the purpose cited in the motion to withdraw was “irreconcilable differences?” Therefore, because the trial court permitted Villegas’ attorney to withdraw on the eve of trial, the Texas Supreme Court found that the trial court erred by denying Villegas’ request for a continuance.” In this case, the facts supporting a finding that Plaintiffs are not at fault for their change in counsel are even stronger, given that Plaintiffs’ original counsel simply left their firm and withdrew from the case. Accordingly, this Court should “give [Plaintiffs] time to secure new counsel and time for the new counsel to investigate the case and prepare for trial.”22 l7. Plaintiffs acted quickly in securing new counsel, as the undersigned attorneys filed their Notice of Appearance only three (3) days after Wick Phillips was permitted to withdraw. Even with this diligence, Plaintiffs’ new counsel does not have sufficient time to investigate the case and prepare for trial absent a continuance of the current trial setting. For example, Plaintiffs’ counsel has been in contact with Plaintiffs’ former counsel since April 8, 2022 attempting to effectuate a transfer of Plaintiffs’ files and discovery material; however, Plaintiffs’ counsel was unable to obtain all of the documents produced in discovery until approximately 3 :00 pm. on April 11, 2022.23 This fact weighs in favor of continuing the trial date.“ Plaintiffs’ counsel was unable In re El Paso Healthcare Syst., Ltd, 225 S.W.3d 146, 152 (Tex. App—El Paso 2005, orig. proceeding); Keller Indus., Inc. v. Blanton, 804 S.W.2d 182, 185 (Tex. App—Houston [14th Dist] 1991, orig. proceeding). 2° Villegas, 711 S.W.2d at 625. 21 Id. at 626-27. 22 Id. at 626 (emphasis added). 23 Wick Phillips personnel have endeavored to accommodate the urgent request for a transfer of discovery materials, but technology issues hindered the prompt transfer of the documents produced by the parties in discovery. 24 See id. (noting that Villegas had been unable to quickly obtain access to files necessary for trial). PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 6 to even begin to attempt review of the tens of thousands of pages of documents produced in discovery until seven (7) days before the deadline to exchange trial exhibit lists.” 18. From the time Plaintiffs’ counsel was permitted to Withdraw, Plaintiffs had only twenty (20) days to obtain new counsel and for counsel to prepare for trial. Other courts have held that even longer periods were insufficient.“ In Moss, the trial court permitted counsel to withdraw and scheduled the case for bench trial seventeen (17) days later.” Moss appeared on the day of trial, notified the court that she had retained new counsel, and requested additional time to prepare for trial.” Moss then appeared at the rescheduled trial and informed the court that her counsel was unable to attend that day and requested an additional continuance of thirty days, which the trial court denied.” The appellate court held that the trial court’s denial of the second request for a continuance was an abuse of discretion because Moss had not been given “meaningful time to find new counsel and prepare for trial.”3° The court based its decision on the fact that Moss was only given seventeen days to obtain counsel, seek a continuance, and then prepare for trial in an additional 28 days.“ Here, the twenty (20) days provided to Plaintiffs to both obtain new counsel and prepare for trial is significantly less than the 45 total days that the court in Moss found to be insufficient. l9. Plaintiffs also note that several of the bases for Defendants’ opposition to the previous motion for continuance are no longer applicable with respect to the present Motion. First, Defendants argued that the previous motion failed to set forth good cause for the continuance. Here, good cause has been established, since Texas law mandates that a party whose counsel has 25 Plaintiffs’ counsel are still working to process the entirety of documents produced by the parties in discovery. Based on the Bates-labels affixed to the documents used as exhibits during depositions in this case, however, it appears that the total number of pages produced in discovery exceeds at least 14,000. 26 Moss, 880 S.W.2d at 46-48. 27 Id. at 46. 28 Id. 29 Id. at 46-48. 3° Id. at 51. 31 Id. PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 7 been pennitted to withdraw be given adequate time to obtain new counsel and prepare for trial when the lack of representation is not the fault of the party.” 20. Defendants also argued that concerns over undue delay were “exacerbated by the fact that Plaintiffs have not yet hired replacement counsel.” This concern has since been resolved, as Plaintiffs acted immediately in securing new counsel who are working to prepare for trial as quickly as possible. Plaintiffs do not seek a lengthy delay, nor do they ask the Court to re-open discovery. Plaintiffs simply ask that the Court provide their counsel adequate time to familiarize themselves with the issues and the file and prepare for trial. Absent this relief, Plaintiffs will suffer undue prejudice and be significantly disadvantaged at trial. Indeed, forcing Plaintiffs to proceed to trial at this time would amount to depriving Plaintiffs of the effective assistance of counsel. 21. This continuance is not sought for delay only, but so that justice may be done. IV. CONCLUSION 22. Through no fault of their own, Plaintiffs choice of counsel left their law firm and were forced to withdraw as Plaintiffs’ counsel on two separate occasions. Plaintiffs should not be forced to proceed to trial with an unfamiliar attorney assigned to their case weeks before trial. Moreover, as that attorney and his firm were permitted to withdraw as counsel only twenty (20) days before trial, Plaintiffs are entitled to sufficient time to permit their new counsel to investigate the case and prepare for trial. Plaintiffs accordingly request that the Court grant this Motion and reset the trial date in this case for a period of approximately 90 days. WHEREFORE, PREMISES CONSIDERED, for the reasons above, Plaintiffs request that the Court grant their Motion for Continuance, resetting the trial date for at approximately 9O days. Villegas, 711 S.W.2d at 626; Moss, 880 S.W.2d at 51; Thurman v. Buy George Resale, L.L. C., 2014 Tex. App. 32 LEXIS 3613. PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 8 Plaintiffs also pray for any other further relief to which they may be entitled, both in law or in equity. Respectfully submitted, /s/ E. Steve Smith Mark L. J ohansen State Bar No. 10670240 Steve Smith State Bar No. 24095623 REED SMITH LLP 2850 N. Harwood St., Suite 1500 Dallas, Texas 75201 Phone: 469-680-4214 Facsimile: 469-680-4299 Email: miohansen@reedsmith.com stevesmith@reedsmith.com R. Alan York ayork@reedsmith.com Texas Bar No. 22167500 REED SMITH LLP 811 Main St., Suite 1700 Houston, Texas 77002 7 1 3-469-3 800 713-469-3899 (fax) ATTORNEYS FOR PLAINTIFFS/COUNTER— DEFENDANTS IPWE, INC. AND ERICH SPAN GENBERG PLAINTIFFs’ EMERGENCY MOTION FOR CONTINUANCE Page 9 CLIENT APPROVAL Pursuant to Local Rule 3.0l(b), the undersigned approves the filing of and the relief requested by the foregoing Plaintiffs’ Emergency Motion for Continuance. Ml Eriéh Spangenberg STATE 0F TEXAS § § COUNTY 0F DALLAS § My name is Eric Steven Smith, my date of birth is February 14, 1990, and my address is 2850 N. Harwood Street, Suite 1500, Dallas, Texas 75201. I declare under penalty of peijury that the factual statements contained in the foregoing Motion for Continuance are within my personal knowledge and are true and correct. Executed in Dallas County, State of Texas, on the 11th day of April, 2022. /s/ E. Steve Smith Steve Smith PLAINTIFFS’ EMERGENCY MOTION FOR CONTINUANCE Page 10 CERTIFICATE OF CONFERENCE The undersigned hereby certifies that counsel for Plaintiffs conferred with counsel for Defendants Via email on April 12, 2022 to determine whether Defendants oppose the relief requested. Counsel for Defendants indicated that Defendants do oppose this Motion, and Plaintiffs therefore submit the Motion for the Court’s consideration. /s/ E. Steve Smith Steve Smith CERTIFICATE OF SERVICE The undersigned hereby certifies that a true and correct copy of the above and foregoing has been served on all counsel of record Via email on this 12th day of April 2022. /s/ E. Steve Smith Steve Smith PLAINTIFFs’ EMERGENCY MOTION FOR CONTINUANCE Page 11 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. Shikendra Rhea on behalf of Steve Smith Bar No. 24095623 Srhea@ReedSmith.com Envelope ID: 63497178 Status as of 4/13/2022 8:02 AM CST Case Contacts Name BarNumber Email TimestampSubmitted Status Lisa STsai ltsai@rctlegal.com 4/12/2022 1:21 :57 PM SENT Brandon Lewis 24060165 blewis@rctlegal.com 4/12/2022 1:21:57 PM SENT Schyler Parker schyler.parker@wickphillips.com 4/12/2022 1:21:57 PM SENT Gwen Gonzales gwen.gonzales@wickphillips.com 4/12/2022 1:21:57 PM SENT Susie Wade swade@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT Kira Lytle klytle@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT Benjamin Nabors bnabors@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT Enrique Ramirez eramirez@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT Jodie Wingerter jwingerter@reidcollins.com 4/12/2022 1:21:57 PM SENT Associated Case Party: LUCKY DIAMOND PRODUCTIONS, INC Name BarNumber Email TimestampSubmitted Status Jeffrey MTillotson jtillotson@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT Jonathan RPatton jpatton@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT Joseph Alrrobali airrobali@tillotsonlaw.com 4/12/2022 1:21:57 PM SENT Gregory Clift clift@roggedunngroup.com 4/12/2022 1:21:57 PM SENT EFiling Admin efiling@roggedunngroup.com 4/12/2022 1:21:57 PM SENT Rashella Widdoes - Paralegal widdoes@RoggeDunnGroup.com 4/12/2022 1:21:57 PM SENT Associated Case Party: IPWE, INC Name Steve Smith Michael LBaum 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. Shikendra Rhea on behalf of Steve Smith Bar No. 24095623 Srhea@ReedSmith.com Envelope ID: 63497178 Status as of 4/13/2022 8:02 AM CST Associated Case Party: IPWE, INC Mark L.Johansen mjohansen@reedsmith.com 4/12/2022 1:21 :57 PM SENT Liz Paulson |iz.paulson@wickphillips.com 4/12/2022 1:21 :57 PM SENT Erich Spangenberg erich@ipwe.com 4/12/2022 1:21:57 PM SENT Shikendra Rhea srhea@reedsmith.com 4/12/2022 1:21:57 PM SENT Alicia Nixon anixon@reedsmith.com 4/12/2022 1:21:57 PM SENT Associated Case Party: WENDY DIAMOND Name BarNumber Email TimestampSubmitted Status EFiling Admin efiling@roggedunngroup.com 4/12/2022 1:21:57 PM SENT Gregory Clift clift@roggedunngroup.com 4/12/2022 1:21:57 PM SENT Richard Roth rich@rrothlaw.com 4/12/2022 1:21:57 PM SENT Associated Case Party: ERICH SPANGENBERG Name BarNumber Email TimestampSubmitted Status Mark L.Johansen mjohansen@reedsmith.com 4/12/2022 1:21:57 PM SENT Steve Smith Stevesmith@reedsmith.com 4/12/2022 1:21:57 PM SENT Alicia Nixon anixon@reedsmith.com 4/12/2022 1:21:57 PM SENT Shikendra Rhea srhea@reedsmith.com 4/12/2022 1:21:57 PM SENT