Preview
FILED
DALLAS COUNTY
1/29/2016 8:22:22 PM
FELICIA PITRE
DISTRICT CLERK
No. DC-15-08587
LOW T CENTER, LLC, §
§
Plaintiff and Counter- §
Defendant, §
§
v. § IN THE DISTRICT COURT OF
§
BECKMAN COULTER, INC., §
§
Defendant and Counter- § DALLAS COUNTY, TEXAS
Claimant, §
v. §
§
HERKARE HOLDINGS, LLC, § 191ST JUDICIAL DISTRICT
§
Third-Party Defendant. §
§
§
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY
AMENDMENTS AND MOTION TO STRIKE SAME AND SUPPLEMENT TO
CORRECT THE RECORD
Beckman Coulter, Inc. (“BCI”) hereby files this supplement and motion to strike related
to the recent January 27, 2016 hearing (the “Hearing”) on BCI’s Motion for Partial Dismissal of
Plaintiff’s First Amended Petition. The untimely-filed Second and Third Amended Petitions
muddy the record and confirm why Low T’s fraud claim(s) finally should be dismissed with
prejudice pursuant to BCI’s motion to dismiss and the fraud claim(s) in the newly-filed Second
and Third Amended Petition ordered to be stricken.
I. INTRODUCTION
Since Monday, January 25, 2016 and notwithstanding the Court’s Hearing, Plaintiff has
filed two new pleadings—both of which allege different claims of fraud, and both of which raise
different and additional claims from the two sentence “fraudulent inducement” allegation found
in the Original Petition. Low T’s untimely filing of its Second Amended Petition a mere 36
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S
UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 1
hours before the Hearing, and its subsequent filing of its Third Amended Petition 12 hours after
the Hearing, has produced a mess for the Court to untangle with regard to the fraud claim that is
subject to the motion to dismiss—with each amendment raising different causes of action for
fraud. The amendments move from “fraudulent inducement” related to costs (in the Original
Petition) to “fraud” related to test results (in the First Amended Petition), to “promissory fraud”
(in the Second and Third Amended Petitions). Low T’s placement of a moving target on fraud
claim(s) is intentional and done in order to escape dismissal. Regardless, whatever new fraud-
based cause of action is pled will fail under clear Texas law. Accordingly, the motion to dismiss
the fraud claim(s) should be granted with prejudice and the fraud claim in the newly-filed
Second and Third Amended Petitions should be stricken.
II. LOW T’S UNTIMELY SECOND AND THIRD AMENDED PETITIONS
SHOULD BE STRICKEN FROM THE RECORD
When Rule 91a’s 60-day deadline is interpreted alongside the other Texas Rules of Civil
Procedure, such as Rule 65, it becomes clear that Rule 91a’s reference to “the first pleading
containing the challenged cause of action” is referring to only live pleadings.1
If, however, the Court views the 60-day deadline as barring BCI’s motion to dismiss as to
any causes of action contained in the Original Petition, Low T’s incorrect characterization of its
various fraud claims at the Hearing is important to clarify. What is clear from reviewing the
Original Petition and the First Amended Petition is that the “fraud” claim in the First Amended
Petition is not contained in the Original Petition. Although counsel stated at the hearing that
Low T simply “rearranged” the allegations, that is the point. Counsel read to the Court from
allegations in the Original Petition that purportedly were “rearranged,” but he specifically read
1
This is because when a plaintiff amends its petition—as opposed to filing a supplemental petition under Rule 69—
the previous petition “shall no longer be regarded as a part of the pleading in the record of the cause.” Tex. R.
Civ. P. 65. This point is further supported by common sense regarding party behavior and litigation strategy, which
would allow plaintiffs to de-fang Rule 91a by engaging in clever pleading strategies.
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S
UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 2
from paragraph 20 of the Original Petition supporting Low T’s original Texas Deceptive Trade
Practices Act (“DTPA”) claim, not from the non-existent “fraud” claim. Of course, Low T
replaced the DTPA claim in its Original Petition with a new cause of action in its First Amended
Petition—its fraud claim. That is why BCI can and should be permitted to move to dismiss the
fraud claim. And because the Second and Third Amended Petitions that Low T filed just before
and after the hearing now changes the fraud claim to “promissory fraud,” the Court should order
such new fraud-based cause of action and allegations stricken. Low T is purposefully moving
the target as to the fraud claim so that it cannot be subject to dismissal. That tact is
disingenuous, and the Court should finally dismiss the claim(s) with prejudice and strike the
relevant part of the Second and Third Amended Petition.2
At the January 27th hearing, Low T’s counsel omitted the fact that its Original Petition
included a cause of action for multiple violations of the DTPA. (See Pl.’s Original Pet. ¶¶ 19-
21.) Low T dropped its DTPA claim(s) when filing its First Amended Petition, apparently
realizing the complete inapplicability of the DTPA to this situation.
So why is this information noteworthy? Because the “Fraudulent Inducement”
section in the Original Petition morphed into a “Fraud and Fraudulent Inducement”
section in the First Amended Petition, adding a broader basis of recovery (as a general
fraud claim) and a host of additional facts from the DTPA claim(s) that did not apply to the
previous two sentence description of its fraudulent inducement claim. (Compare Pl.’s First
Amended Pet. ¶ 21, with Pl.’s Original Pet. ¶¶ 19-21, 23.)
In other words, the Original Petition, along with its DTPA claim(s), contained a two-
sentence “Fraudulent Inducement” section paragraph, (Pl.’s Original Pet. ¶ 21), which was only
2
Contrary to Low T’s assertion, both general fraud and fraudulent inducement claims are based in tort, and as such,
Texas law applies, as previously discussed. See Benchmark Elecs., Inc. v. J.M. Huber Corp., 343 F.3d 719, 726-28
(5th Cir. 2003).
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S
UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 3
connected to alleged misrepresentations “regarding the cost of reagants and supplies.” (Pl.’s
Original Pet. ¶¶ 11, 14.)3 But by comparison, the additional fraud claim added to the First
Amended were crammed into the newly titled “Fraud and Fraudulent Inducement Section” and
contain some of the following notable differences:
(i) The new paragraph includes allegations supporting the additional general fraud claim
that was not included in the Original Petition4;
(ii) The new paragraph adds new claims that BCI made allegedly fraudulent
misrepresentations related to the “accuracy of [BCI’s] equipment and testing”;
(iii) The new paragraph adds new conclusory statements not found anywhere in the
Original Petition, such as “Beckman, in making partial representations to Plaintiff, had a
duty to fully disclose its true cost-per-test” and “Although Beckman had a duty to make
full disclosure, Beckman and its agents did not do so, and materially concealed the
information from Plaintiff,” thereby raising for the first time that Low T could be relying
on a fraud by omission theory; and
(iv) The new paragraph adds “disgorgement” to the specific damages being requested.
See Pl.’s First Am. Pet. ¶ 21.
The above facts inevitably lead to the conclusion that Low T, after withdrawing its
doomed DTPA claim from its Original Petition, crammed a general fraud claim into same
paragraph and added a fraud claim. Whether Low T was wanting to hedge its fraudulent
inducement claim by also pleading a more general fraud claim or just wanted to partially save
some of its DTPA claim in a different form is of no consequence. What is of consequence is that
the more general fraud claim in the First Amended Petition was not in its Original Petition. The
Court, therefore, should granted BCI’s motion to dismiss as to this fraud claim, irrespective of
3
Counsel for Low T told the Court during the Hearing that paragraph 20 of the Original Petition supported
allegations in support of Low T’s fraudulent inducement claim. This is wrong—at least as to the Original Petition.
Paragraph 20 is a part of the Original Petition’s DTPA claims section and involves allegations that are distinct from
the Original Petition’s fraudulent inducement section.
4
See, e.g., Pl.’s First Am. Pet. ¶ 21 (“That Plaintiff was damaged by the fraudulent conduct of Beckman and has
been damaged as a result in an amount in excess of the minimum jurisdictional limits of this Court.”).
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S
UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 4
any potential timeliness issues that exist with BCI’s motion to dismiss as to the fraudulent
inducement.
In addition, as discussed in oral arguments at the Hearing, Texas law applies to Plaintiff’s
tort claim for breach of duty of good faith and fair dealing.5 And because Texas does not
recognize an implied duty of good faith and fair dealing, except in special circumstances not
applicable here, it is not possible for Low T to plead and prove the existence of such a duty under
Texas law. As a result, the Court should grant Beckman’s special exception related to the good
faith and fair dealing claim and dismiss it with prejudice.
III. SUPPLEMENT TO CORRECT THE RECORD REGARDING INCORRECT REPRESENTATIONS
During the Hearing, Low T made two incorrect statements regarding the case law that
were incorrect and need to be corrected.
First, Low T described Zheng v. Vacation Network, Inc., 468 S.W.3d 180, 186 (Tex.
App.—Houston [14th Dist.] 2015, pet. denied) as involving a petition completely missing a facts
section. That representation is absolutely false—one look at the Zheng’s original petition makes
clear that Low T’s description is a fabrication.6 Zheng’s Original Petition alleges just as much
detail in support of its fraud claim7 as the fraud-based claims in Low T’s First Amended Petition,
and the appellate court even recited the facts alleged in its decision. Zheng, 468 S.W.3d at 182.
5
See Caton v. Leach Corp., 896 F.2d 939, 943 (5th Cir. 1990) (applying Texas law and dismissing tort claims for
the breach of the duty of good faith and fair dealing despite contractual choice of law other than Texas); Miller v.
KFC Corp., No. 99-1566, 2010 WL 585763, at *6-8 (N.D. Tex. May 24, 2010) (same).
6
See Zheng’s Original Petition ¶¶ 7-12 (the Petition’s Facts Section, and clearly labeled as such), in Zheng v.
Vacation Network, Inc., No. 33555 (165th Dist. Ct., Harris County, Tex. June 5, 2013), attached hereto as Exhibit A.
7
See, e.g., Zheng’s Original Petition ¶ 8 (“Plaintiff endorsed the sales contract after attending a presentation at VNI
local office, 17175 Tomball Parkway, Ste. 5C2, Houston, Texas 77064, Jun 6, 2009.”); id. ¶ 9 (“Defendants had
been unable to provide the verbally promised service as a prerequisite of Plaintiff’s endorsement of the contract.”);
id. ¶ 15 (“Plaintiff would show that Defendants made materially false representations to secure Plaintiffs’
endorsement of the contract.”); id. ¶ 16 (“Plaintiff would further show that Defendants concealed or failed to
disclose material facts within the knowledge of Defendants, and the Defendants knew Plaintiff did not have
sufficient opportunity to discover the truth before Defendants induced Plaintiff to enter into the transaction.”); id.
¶ 17 (“As a proximate result of such Fraud, Plaintiff sustained the damages describe more fully herein below.”).
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S
UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 5
Thus, the 14th Court of Appeals’ description of Zheng’s petition as containing no supporting
facts is directly applicable to the description of facts in Low T’s First Amended Petition here.
In addition, counsel for Low T asserted that BCI had mis-cited Highland Capital
Management, LP v. Looper Reed &McGraw, P.C., 2016 WL 164528 (Tex. App.—Dallas Jan.
14, 2016, no pet. h.), stating that the dismissal and the Dallas Court of Appeals’ affirmance was
not based on an affirmative defense under 91a, but rather summary judgment. However, that is
simply not the case. There, Justice O’Neill stated that “Looper Reed filed a motion to dismiss
Highland’s suit under rule 91a, Texas Rules of Civil Procedure, on the ground that the attorney
immunity doctrine barred Highland’s claims. The trial court granted the motion in part . . . .” Id.
at *2. Justice O’Neill then affirmed that dismissal, holding that “The trial court properly granted
Looper Reed’s rule 91a motion to dismiss” based on the attorney immunity doctrine. Id. at *6.
IV. CONCLUSION
The proper interpretation of Rule 91a is that a First Amended Petition resets the 60-day
deadline here where the fraud-based claims have completely changed. But even if the Court
does not find that it resets as to the fraudulent inducement claim (which makes no sense given
that the Original Petition claim completely changes in the First Amended Petition to seek
different remedies and to base the claim on testing results and analyzing results), the First
Amended Petition did not include a cause of action for “Fraud.” Under clear Texas law, that
fraud claim should be dismissed. But to finally stop Low T from moving the target to escape
dismissal of any variant of fraud (including those filed in the recent Second and Third Amended
Petition), Low T’s fraud-based claims should be dismissed with prejudice and those new claims
in the Second and Third Amended Petition ordered to be stricken.
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S
UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 6
January 29, 2016 Respectfully Submitted,
/s/ Michelle Hartmann
Michelle Hartmann
State Bar No. 24032402
mhartmann@sidley.com
Casey A. Burton
State Bar No. 24058791
casey.burton@sidley.com
SIDLEY AUSTIN LLP
2001 Ross Avenue, Suite 3600
Dallas, Texas 75201
(214) 981-3300 (Telephone)
(214) 981-3400 (Facsimile)
ATTORNEYS FOR DEFENDANT AND
COUNTER-CLAIMANT BECKMAN COULTER,
INC.
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S
UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 7
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served on the
following electronically by transmission to an electronic filing service provider for service
through the state’s electronic filing manager on the 29th day of January, 2016:
David J. Moraine
Moraine & Associates, P.L.L.C.
60 Village Lane, Suite 110
Colleyville, Texas 76034
service@texcourts.com
/s/ Casey Burton
Casey A. Burton
SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S
UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 8
EXHIBIT A
Filed 13 June 5 A11:48
Chris Daniel - District Clerk
Harris County
2013-33555 / Court: 165 ED101J017525280
By: Nelson Cuero
1 CAUSE NO._________________
2
3
4
WEIZHONG ZHENG ) IN THE DISTRICT COURT
5 )
Plaintiff, )
6 ) ____JUDICIAL DISTRICT
)
7 vs. )
) OF HARRIS COUNTY,TEXAS
8 VACATION NETWORK, INC. )
)
9 )
AND LINH C. DINH )
10
)
JOINTLY AND SEVERALLY )
11
)
Defendants )
)
12
13
14
PLAINTIFF’S ORIGINAL PETITION
15
TO THE HONORALBLE JUDGE OF THE SAID COURT:
16
17 NOW COMES WEIZHONG ZHENG, hereinafter called Plaintiff, complaining
18 of Vacation Network, Inc. (hereinafter “VNI”) and Linh C. Dinh,
19 individually, Defendants herein, and for cause of action shows unto
20
the Court as follows:
21
DISCOVERY LEVEL
22
1. Plaintiff intends that discovery be conducted under Discovery
23
24 Level 1.
25 PARTIES AND SERVICE
26 2. Plaintiff, WEIZHONG ZHENG, is an individual whose address is
27
3506 Shadowwalk Drive, Houston, Texas 77082
28
- 1 -
Contract
1 3. Defendant Vacation Network, Inc. is a Georgia Corporation with
2 registered office at 3296 Summit Ridge Pkwy, Ste 1900, Duluth,
3
GA 30096, Day time phone: 1-678-473-0343.
4
4. Defendant, Linh C. Dinh is the President and the registered
5
agent of VNI, who may be served with process at 3296 Summit
6
7 Ridge Pkwy, Ste 1900, Duluth, GA 30096.
8 JURISDICTION AND VENUE
9 5. The subject matter in controversy is within the jurisdictional
10
limits of this court.
11
6. Venue of this action is proper in Harris County, Texas.
12
Pursuant to Texas Civil Practice & Remedies Code §15.002,
13
14 substantial part of the events or omissions giving rise to
15 Plaintiff’s claim occurred in Harris County, Texas.
16 FACTS
17
7. Defendants solicited response from Plaintiff in a mail sent to
18
Plaintiff address dated June 4, 2009.
19
8. Plaintiff endorsed the sales contract after attending a
20
21 presentation at VNI local office, 17175 Tomball Parkway, Ste.
22 5C2, Houston, Texas 77064, Jun 6, 2009. The contract contains
23
a waiver of rescission. Plaintiff paid the full contractual
24
amount of $7,299.00 on the same day.
25
9. Defendants had been unable to provide the verbally promised
26
27
service as a prerequisite of Plaintiff’s endorsement of the
28 contract.
- 2 -
Contract
1 10. Plaintiff sent Defendants certified letter postmarked
2 June 9, 2009, stating cancellation of the contract and
3
requesting full refund.
4
11. Plaintiff has not used any of the so called charter
5
benefits outlined in the contract.
6
7 12. Defendants offered modification to the contract, which
8 was explicitly declined by Plaintiff in an email message dated
9 July 1, 2009. Since then, Defendants have kept all payment
10
made by Plaintiff.
11
VIOLATION OF TEXAS TIMESHARE ACT
12
13. Plaintiff would show that the promotion by Defendants of
13
14 time share schemes in Texas had not been licensed by Texas
15 Real Estate Commission immediately before and shortly after
16 Plaintiff endorsed the contract.
17
14. Plaintiff would show that the rescission waiver clause in
18
the contract violated Texas Time Share Act §221.041 and
19
therefore is unenforceable. In violation of Texas Time Share
20
21 Act §221.041(b), Defendants have refused to honor plaintiff’s
22 timely mailed cancellation of contract and request for refund.
23
COMMON LAW FRAUD
24
15. Plaintiff would show that Defendants made materially
25
false representation in order to secure Plaintiffs’
26
27
endorsement of the contract.
28
- 3 -
Contract
1 16. Plaintiff would further show that Defendants concealed or
2 failed to disclose material facts within the knowledge of
3
Defendants, and that Defendants knew Plaintiff did not have
4
sufficient opportunity to discover the truth before Defendants
5
induced Plaintiff to enter into the transaction.
6
7 17. As a proximate result of such Fraud, Plaintiff sustained
8 the damages describe more fully herein below.
9 ECONOMIC AND ACUTAL DAMAGES
10
18. Plaintiff sustained the following economic and actual
11
damages as result of the actions and/or omission of Defendants
12
described hereinabove:
13
14 (a) Out-of-Pocket expenses, including but not limited to
15 $7,299.
16 (b) Court cost incurred by this litigation, including all
17
fees necessary in the event of an appeal of this cause to
18
the Court of Appeals and the Supreme Court of Texas, as
19
the Court deems equitable and just, as provided by common
20
21 law.
22 PRAYER
23
WHEREFORE, PREMISE CONSIDERED, Plaintiff, Weizhong Zheng,
24
respectfully prays that the Defendants be cited to appear and
25
answer herein, and that upon an final hearing of the cause,
26
27
judgment be entered for the Plaintiff against Defendants for the
28 economic and actual damages requested hereinabove in an amount in
- 4 -
Contract
1 excess of the minimum jurisdictional limits of the court, together
2 with prejudgment and post judgment interest at the maximum rate
3
allowed by law, costs of court, and such other and further relief
4
to which the Plaintiff may be entitled at law or in equity, whether
5
pled or unpled.
6
7
8
9
10
11
Respectfully submitted,
12
DATED: June 5, 2013
13
By:
14 WEIZHONG ZHENG
In Pro Per
15 3506 Shadowwalk Drive
Houston, Texas 77082
16 713-550-6374 (M)
chuckiez@earthlink.net
17
18
19
20
21
22
23
24
25
26
27
28
- 5 -
Contract
Preview
FILED DALLAS COUNTY 1/29/2016 8:22:22 PM FELICIA PITRE DISTRICT CLERK No. DC-15-08587 LOW T CENTER, LLC, § § Plaintiff and Counter- § Defendant, § § v. § IN THE DISTRICT COURT OF § BECKMAN COULTER, INC., § § Defendant and Counter- § DALLAS COUNTY, TEXAS Claimant, § v. § § HERKARE HOLDINGS, LLC, § 191ST JUDICIAL DISTRICT § Third-Party Defendant. § § § SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME AND SUPPLEMENT TO CORRECT THE RECORD Beckman Coulter, Inc. (“BCI”) hereby files this supplement and motion to strike related to the recent January 27, 2016 hearing (the “Hearing”) on BCI’s Motion for Partial Dismissal of Plaintiff’s First Amended Petition. The untimely-filed Second and Third Amended Petitions muddy the record and confirm why Low T’s fraud claim(s) finally should be dismissed with prejudice pursuant to BCI’s motion to dismiss and the fraud claim(s) in the newly-filed Second and Third Amended Petition ordered to be stricken. I. INTRODUCTION Since Monday, January 25, 2016 and notwithstanding the Court’s Hearing, Plaintiff has filed two new pleadings—both of which allege different claims of fraud, and both of which raise different and additional claims from the two sentence “fraudulent inducement” allegation found in the Original Petition. Low T’s untimely filing of its Second Amended Petition a mere 36 SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 1 hours before the Hearing, and its subsequent filing of its Third Amended Petition 12 hours after the Hearing, has produced a mess for the Court to untangle with regard to the fraud claim that is subject to the motion to dismiss—with each amendment raising different causes of action for fraud. The amendments move from “fraudulent inducement” related to costs (in the Original Petition) to “fraud” related to test results (in the First Amended Petition), to “promissory fraud” (in the Second and Third Amended Petitions). Low T’s placement of a moving target on fraud claim(s) is intentional and done in order to escape dismissal. Regardless, whatever new fraud- based cause of action is pled will fail under clear Texas law. Accordingly, the motion to dismiss the fraud claim(s) should be granted with prejudice and the fraud claim in the newly-filed Second and Third Amended Petitions should be stricken. II. LOW T’S UNTIMELY SECOND AND THIRD AMENDED PETITIONS SHOULD BE STRICKEN FROM THE RECORD When Rule 91a’s 60-day deadline is interpreted alongside the other Texas Rules of Civil Procedure, such as Rule 65, it becomes clear that Rule 91a’s reference to “the first pleading containing the challenged cause of action” is referring to only live pleadings.1 If, however, the Court views the 60-day deadline as barring BCI’s motion to dismiss as to any causes of action contained in the Original Petition, Low T’s incorrect characterization of its various fraud claims at the Hearing is important to clarify. What is clear from reviewing the Original Petition and the First Amended Petition is that the “fraud” claim in the First Amended Petition is not contained in the Original Petition. Although counsel stated at the hearing that Low T simply “rearranged” the allegations, that is the point. Counsel read to the Court from allegations in the Original Petition that purportedly were “rearranged,” but he specifically read 1 This is because when a plaintiff amends its petition—as opposed to filing a supplemental petition under Rule 69— the previous petition “shall no longer be regarded as a part of the pleading in the record of the cause.” Tex. R. Civ. P. 65. This point is further supported by common sense regarding party behavior and litigation strategy, which would allow plaintiffs to de-fang Rule 91a by engaging in clever pleading strategies. SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 2 from paragraph 20 of the Original Petition supporting Low T’s original Texas Deceptive Trade Practices Act (“DTPA”) claim, not from the non-existent “fraud” claim. Of course, Low T replaced the DTPA claim in its Original Petition with a new cause of action in its First Amended Petition—its fraud claim. That is why BCI can and should be permitted to move to dismiss the fraud claim. And because the Second and Third Amended Petitions that Low T filed just before and after the hearing now changes the fraud claim to “promissory fraud,” the Court should order such new fraud-based cause of action and allegations stricken. Low T is purposefully moving the target as to the fraud claim so that it cannot be subject to dismissal. That tact is disingenuous, and the Court should finally dismiss the claim(s) with prejudice and strike the relevant part of the Second and Third Amended Petition.2 At the January 27th hearing, Low T’s counsel omitted the fact that its Original Petition included a cause of action for multiple violations of the DTPA. (See Pl.’s Original Pet. ¶¶ 19- 21.) Low T dropped its DTPA claim(s) when filing its First Amended Petition, apparently realizing the complete inapplicability of the DTPA to this situation. So why is this information noteworthy? Because the “Fraudulent Inducement” section in the Original Petition morphed into a “Fraud and Fraudulent Inducement” section in the First Amended Petition, adding a broader basis of recovery (as a general fraud claim) and a host of additional facts from the DTPA claim(s) that did not apply to the previous two sentence description of its fraudulent inducement claim. (Compare Pl.’s First Amended Pet. ¶ 21, with Pl.’s Original Pet. ¶¶ 19-21, 23.) In other words, the Original Petition, along with its DTPA claim(s), contained a two- sentence “Fraudulent Inducement” section paragraph, (Pl.’s Original Pet. ¶ 21), which was only 2 Contrary to Low T’s assertion, both general fraud and fraudulent inducement claims are based in tort, and as such, Texas law applies, as previously discussed. See Benchmark Elecs., Inc. v. J.M. Huber Corp., 343 F.3d 719, 726-28 (5th Cir. 2003). SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 3 connected to alleged misrepresentations “regarding the cost of reagants and supplies.” (Pl.’s Original Pet. ¶¶ 11, 14.)3 But by comparison, the additional fraud claim added to the First Amended were crammed into the newly titled “Fraud and Fraudulent Inducement Section” and contain some of the following notable differences: (i) The new paragraph includes allegations supporting the additional general fraud claim that was not included in the Original Petition4; (ii) The new paragraph adds new claims that BCI made allegedly fraudulent misrepresentations related to the “accuracy of [BCI’s] equipment and testing”; (iii) The new paragraph adds new conclusory statements not found anywhere in the Original Petition, such as “Beckman, in making partial representations to Plaintiff, had a duty to fully disclose its true cost-per-test” and “Although Beckman had a duty to make full disclosure, Beckman and its agents did not do so, and materially concealed the information from Plaintiff,” thereby raising for the first time that Low T could be relying on a fraud by omission theory; and (iv) The new paragraph adds “disgorgement” to the specific damages being requested. See Pl.’s First Am. Pet. ¶ 21. The above facts inevitably lead to the conclusion that Low T, after withdrawing its doomed DTPA claim from its Original Petition, crammed a general fraud claim into same paragraph and added a fraud claim. Whether Low T was wanting to hedge its fraudulent inducement claim by also pleading a more general fraud claim or just wanted to partially save some of its DTPA claim in a different form is of no consequence. What is of consequence is that the more general fraud claim in the First Amended Petition was not in its Original Petition. The Court, therefore, should granted BCI’s motion to dismiss as to this fraud claim, irrespective of 3 Counsel for Low T told the Court during the Hearing that paragraph 20 of the Original Petition supported allegations in support of Low T’s fraudulent inducement claim. This is wrong—at least as to the Original Petition. Paragraph 20 is a part of the Original Petition’s DTPA claims section and involves allegations that are distinct from the Original Petition’s fraudulent inducement section. 4 See, e.g., Pl.’s First Am. Pet. ¶ 21 (“That Plaintiff was damaged by the fraudulent conduct of Beckman and has been damaged as a result in an amount in excess of the minimum jurisdictional limits of this Court.”). SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 4 any potential timeliness issues that exist with BCI’s motion to dismiss as to the fraudulent inducement. In addition, as discussed in oral arguments at the Hearing, Texas law applies to Plaintiff’s tort claim for breach of duty of good faith and fair dealing.5 And because Texas does not recognize an implied duty of good faith and fair dealing, except in special circumstances not applicable here, it is not possible for Low T to plead and prove the existence of such a duty under Texas law. As a result, the Court should grant Beckman’s special exception related to the good faith and fair dealing claim and dismiss it with prejudice. III. SUPPLEMENT TO CORRECT THE RECORD REGARDING INCORRECT REPRESENTATIONS During the Hearing, Low T made two incorrect statements regarding the case law that were incorrect and need to be corrected. First, Low T described Zheng v. Vacation Network, Inc., 468 S.W.3d 180, 186 (Tex. App.—Houston [14th Dist.] 2015, pet. denied) as involving a petition completely missing a facts section. That representation is absolutely false—one look at the Zheng’s original petition makes clear that Low T’s description is a fabrication.6 Zheng’s Original Petition alleges just as much detail in support of its fraud claim7 as the fraud-based claims in Low T’s First Amended Petition, and the appellate court even recited the facts alleged in its decision. Zheng, 468 S.W.3d at 182. 5 See Caton v. Leach Corp., 896 F.2d 939, 943 (5th Cir. 1990) (applying Texas law and dismissing tort claims for the breach of the duty of good faith and fair dealing despite contractual choice of law other than Texas); Miller v. KFC Corp., No. 99-1566, 2010 WL 585763, at *6-8 (N.D. Tex. May 24, 2010) (same). 6 See Zheng’s Original Petition ¶¶ 7-12 (the Petition’s Facts Section, and clearly labeled as such), in Zheng v. Vacation Network, Inc., No. 33555 (165th Dist. Ct., Harris County, Tex. June 5, 2013), attached hereto as Exhibit A. 7 See, e.g., Zheng’s Original Petition ¶ 8 (“Plaintiff endorsed the sales contract after attending a presentation at VNI local office, 17175 Tomball Parkway, Ste. 5C2, Houston, Texas 77064, Jun 6, 2009.”); id. ¶ 9 (“Defendants had been unable to provide the verbally promised service as a prerequisite of Plaintiff’s endorsement of the contract.”); id. ¶ 15 (“Plaintiff would show that Defendants made materially false representations to secure Plaintiffs’ endorsement of the contract.”); id. ¶ 16 (“Plaintiff would further show that Defendants concealed or failed to disclose material facts within the knowledge of Defendants, and the Defendants knew Plaintiff did not have sufficient opportunity to discover the truth before Defendants induced Plaintiff to enter into the transaction.”); id. ¶ 17 (“As a proximate result of such Fraud, Plaintiff sustained the damages describe more fully herein below.”). SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 5 Thus, the 14th Court of Appeals’ description of Zheng’s petition as containing no supporting facts is directly applicable to the description of facts in Low T’s First Amended Petition here. In addition, counsel for Low T asserted that BCI had mis-cited Highland Capital Management, LP v. Looper Reed &McGraw, P.C., 2016 WL 164528 (Tex. App.—Dallas Jan. 14, 2016, no pet. h.), stating that the dismissal and the Dallas Court of Appeals’ affirmance was not based on an affirmative defense under 91a, but rather summary judgment. However, that is simply not the case. There, Justice O’Neill stated that “Looper Reed filed a motion to dismiss Highland’s suit under rule 91a, Texas Rules of Civil Procedure, on the ground that the attorney immunity doctrine barred Highland’s claims. The trial court granted the motion in part . . . .” Id. at *2. Justice O’Neill then affirmed that dismissal, holding that “The trial court properly granted Looper Reed’s rule 91a motion to dismiss” based on the attorney immunity doctrine. Id. at *6. IV. CONCLUSION The proper interpretation of Rule 91a is that a First Amended Petition resets the 60-day deadline here where the fraud-based claims have completely changed. But even if the Court does not find that it resets as to the fraudulent inducement claim (which makes no sense given that the Original Petition claim completely changes in the First Amended Petition to seek different remedies and to base the claim on testing results and analyzing results), the First Amended Petition did not include a cause of action for “Fraud.” Under clear Texas law, that fraud claim should be dismissed. But to finally stop Low T from moving the target to escape dismissal of any variant of fraud (including those filed in the recent Second and Third Amended Petition), Low T’s fraud-based claims should be dismissed with prejudice and those new claims in the Second and Third Amended Petition ordered to be stricken. SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 6 January 29, 2016 Respectfully Submitted, /s/ Michelle Hartmann Michelle Hartmann State Bar No. 24032402 mhartmann@sidley.com Casey A. Burton State Bar No. 24058791 casey.burton@sidley.com SIDLEY AUSTIN LLP 2001 Ross Avenue, Suite 3600 Dallas, Texas 75201 (214) 981-3300 (Telephone) (214) 981-3400 (Facsimile) ATTORNEYS FOR DEFENDANT AND COUNTER-CLAIMANT BECKMAN COULTER, INC. SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 7 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was served on the following electronically by transmission to an electronic filing service provider for service through the state’s electronic filing manager on the 29th day of January, 2016: David J. Moraine Moraine & Associates, P.L.L.C. 60 Village Lane, Suite 110 Colleyville, Texas 76034 service@texcourts.com /s/ Casey Burton Casey A. Burton SUPPLEMENTAL BRIEFING RELATED TO PLAINTIFF’S UNTIMELY AMENDMENTS AND MOTION TO STRIKE SAME Page 8 EXHIBIT A Filed 13 June 5 A11:48 Chris Daniel - District Clerk Harris County 2013-33555 / Court: 165 ED101J017525280 By: Nelson Cuero 1 CAUSE NO._________________ 2 3 4 WEIZHONG ZHENG ) IN THE DISTRICT COURT 5 ) Plaintiff, ) 6 ) ____JUDICIAL DISTRICT ) 7 vs. ) ) OF HARRIS COUNTY,TEXAS 8 VACATION NETWORK, INC. ) ) 9 ) AND LINH C. DINH ) 10 ) JOINTLY AND SEVERALLY ) 11 ) Defendants ) ) 12 13 14 PLAINTIFF’S ORIGINAL PETITION 15 TO THE HONORALBLE JUDGE OF THE SAID COURT: 16 17 NOW COMES WEIZHONG ZHENG, hereinafter called Plaintiff, complaining 18 of Vacation Network, Inc. (hereinafter “VNI”) and Linh C. Dinh, 19 individually, Defendants herein, and for cause of action shows unto 20 the Court as follows: 21 DISCOVERY LEVEL 22 1. Plaintiff intends that discovery be conducted under Discovery 23 24 Level 1. 25 PARTIES AND SERVICE 26 2. Plaintiff, WEIZHONG ZHENG, is an individual whose address is 27 3506 Shadowwalk Drive, Houston, Texas 77082 28 - 1 - Contract 1 3. Defendant Vacation Network, Inc. is a Georgia Corporation with 2 registered office at 3296 Summit Ridge Pkwy, Ste 1900, Duluth, 3 GA 30096, Day time phone: 1-678-473-0343. 4 4. Defendant, Linh C. Dinh is the President and the registered 5 agent of VNI, who may be served with process at 3296 Summit 6 7 Ridge Pkwy, Ste 1900, Duluth, GA 30096. 8 JURISDICTION AND VENUE 9 5. The subject matter in controversy is within the jurisdictional 10 limits of this court. 11 6. Venue of this action is proper in Harris County, Texas. 12 Pursuant to Texas Civil Practice & Remedies Code §15.002, 13 14 substantial part of the events or omissions giving rise to 15 Plaintiff’s claim occurred in Harris County, Texas. 16 FACTS 17 7. Defendants solicited response from Plaintiff in a mail sent to 18 Plaintiff address dated June 4, 2009. 19 8. Plaintiff endorsed the sales contract after attending a 20 21 presentation at VNI local office, 17175 Tomball Parkway, Ste. 22 5C2, Houston, Texas 77064, Jun 6, 2009. The contract contains 23 a waiver of rescission. Plaintiff paid the full contractual 24 amount of $7,299.00 on the same day. 25 9. Defendants had been unable to provide the verbally promised 26 27 service as a prerequisite of Plaintiff’s endorsement of the 28 contract. - 2 - Contract 1 10. Plaintiff sent Defendants certified letter postmarked 2 June 9, 2009, stating cancellation of the contract and 3 requesting full refund. 4 11. Plaintiff has not used any of the so called charter 5 benefits outlined in the contract. 6 7 12. Defendants offered modification to the contract, which 8 was explicitly declined by Plaintiff in an email message dated 9 July 1, 2009. Since then, Defendants have kept all payment 10 made by Plaintiff. 11 VIOLATION OF TEXAS TIMESHARE ACT 12 13. Plaintiff would show that the promotion by Defendants of 13 14 time share schemes in Texas had not been licensed by Texas 15 Real Estate Commission immediately before and shortly after 16 Plaintiff endorsed the contract. 17 14. Plaintiff would show that the rescission waiver clause in 18 the contract violated Texas Time Share Act §221.041 and 19 therefore is unenforceable. In violation of Texas Time Share 20 21 Act §221.041(b), Defendants have refused to honor plaintiff’s 22 timely mailed cancellation of contract and request for refund. 23 COMMON LAW FRAUD 24 15. Plaintiff would show that Defendants made materially 25 false representation in order to secure Plaintiffs’ 26 27 endorsement of the contract. 28 - 3 - Contract 1 16. Plaintiff would further show that Defendants concealed or 2 failed to disclose material facts within the knowledge of 3 Defendants, and that Defendants knew Plaintiff did not have 4 sufficient opportunity to discover the truth before Defendants 5 induced Plaintiff to enter into the transaction. 6 7 17. As a proximate result of such Fraud, Plaintiff sustained 8 the damages describe more fully herein below. 9 ECONOMIC AND ACUTAL DAMAGES 10 18. Plaintiff sustained the following economic and actual 11 damages as result of the actions and/or omission of Defendants 12 described hereinabove: 13 14 (a) Out-of-Pocket expenses, including but not limited to 15 $7,299. 16 (b) Court cost incurred by this litigation, including all 17 fees necessary in the event of an appeal of this cause to 18 the Court of Appeals and the Supreme Court of Texas, as 19 the Court deems equitable and just, as provided by common 20 21 law. 22 PRAYER 23 WHEREFORE, PREMISE CONSIDERED, Plaintiff, Weizhong Zheng, 24 respectfully prays that the Defendants be cited to appear and 25 answer herein, and that upon an final hearing of the cause, 26 27 judgment be entered for the Plaintiff against Defendants for the 28 economic and actual damages requested hereinabove in an amount in - 4 - Contract 1 excess of the minimum jurisdictional limits of the court, together 2 with prejudgment and post judgment interest at the maximum rate 3 allowed by law, costs of court, and such other and further relief 4 to which the Plaintiff may be entitled at law or in equity, whether 5 pled or unpled. 6 7 8 9 10 11 Respectfully submitted, 12 DATED: June 5, 2013 13 By: 14 WEIZHONG ZHENG In Pro Per 15 3506 Shadowwalk Drive Houston, Texas 77082 16 713-550-6374 (M) chuckiez@earthlink.net 17 18 19 20 21 22 23 24 25 26 27 28 - 5 - Contract