Preview
FILED
11/1/202310:56 AM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Brandon Keys DEPUTY
CAUSE NO. DC-21-11406
MILTON 635 GRAVOIS ROAD LLC, THE DISTRICT COURT
§§§§§§§§§§§§§§
IN
635 GRAVOIS ROAD LEASING LLC, and
635 GRAVOIS ROAD REAL ESTATE,
LLC,
Plaintiffs,
v. 44TH JUDICIAL DISTRICT
TRT HOLDINGS, INC.,
RBR REAL ESTATE HOLDINGS, LLC,
BRIAN ZELMAN, and ADAM ZEITSIFF,
DALLAS COUNTY, TEXAS
Defendants.
DEFENDANTS’ MOTION TO QUASH PLAINTIFF’S TRIAL SUBPOENA TO
TRT HOLDINGS, |NC.’S CORPORATE REPRESENTATIVE
Defendants move to quash Plaintiffs’ improper trial subpoena issued to TRT
Holdings, Inc.’s (“TRT”) Corporate Representative. In support, Defendants would
respectfully show as follows:
I. SUMMARY
Plaintiffs' trial subpoena to TRT’s Corporative Representative blatantly disregards
this Court’s ruling denying Plaintiffs' motion to compel discovery of Defendants’ net worth
and is a futile attempt to circumvent Texas’ well-established discovery rules. The Court
should quash the trial subpoena for at least three reasons:
First, TRCP 176.3(b) prohibits a party from using a subpoena to circumvent
a discovery order, yet Plaintiffs improperly to solicit evidence of TRT’s net worth
through a trial subpoena after the Court has already denied their motion to compel
discovery of this evidence. Noticeably, the subpoena is silent as to the proposed trial
testimony topics, and TRT is not listed on their Witness List. Rather, they bury their intent
DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF
TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 1
to solicit improper net worth discovery in their Rule 166 Disclosures, listing “TRT
Corporate Representative with knowledge of Defendant TRT's net worth.”
Second, Plaintiffs have no basis to introduce evidence of TRT’s net worth.
See Durban v. Guajardo, 79 S.W.3d 198, 210-211 (Tex. App.—Dallas 2002, no pet.)
(“nothing...[in] Texas case law indicates that evidence of the defendant’s net worth is a
necessary element for the plaintiff to recover any exemplary damages").
Third, the probative value of admitting TRT’s net worth outweighs the likely
benefit. The Texas Supreme Court has admonished trial courts to be cautious admitting
irrelevant evidence of a defendant’s net worth because the jury may overemphasize it as
opposed to the “reprehensibility” of the defendant’s alleged conduct. This scenario is likely
here.
Accordingly, Defendants request the Court quash Plaintiffs’ Trial Subpoena to TRT
Holdings’ Corporate Representative.
ll. RELEVANT PROCEDURAL HISTORY
On July 10, 2023, Plaintiffs filed a Motion to Compel the Discovery of Defendants’
Net Worth (the “Motion”). In the Motion, Plaintiffs argue TRT’s net worth is “relevant and
discoverable as to the recovery of exemplary damages.” Id. at
Defendants responded to the Motion on August 4, 2023, explaining that Plaintiffs
could not succeed on the merits of their fraud claims for exemplary damages given the
applicable law and undisputed facts. Id.
On August 9, 2023, the Court, via Judge Bonnie Goldstein sitting by assignment,
held a hearing on Plaintiffs’ Motion. (See Ex. _) and thereafter denied Plaintiffs’ Motion
on September 25, 2023. Id. Specifically, the Court held: “Plaintiffs have not shown a
DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF
TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 2
substantial likelihood they will prevail on the merits of their claims so as to warrant the net
worth discovery they seek.” Id.
Then, despite the Court’s order, on October 23, 2023, Plaintiffs’ served Rule 166
Disclosures, at 28, listing a as a witness a TRT corporate representative “with knowledge
of Defendant TRT's net worth.” The disclosures do not list any other topics for TRT’s
corporate representative. The same day, Plaintiffs also attempted to serve a trial
subpoena addressed to the “Corporate Representative of TRT Holdings, Inc.” but listed
no topics.
Ill. ARGUMENTS AND AUTHORITIES
Plaintiffs improperly seek TRT’s net worth under the guise of a trial subpoena
addressed to TRT’s corporate representative to “prove” an award of punitive damages.
But Texas Rule of Civil Procedure 176.3 states: “A subpoena may not be used for
discovery to an extent, in a manner, or at a time other than as provided by the rules
governing discovery.” Tex. R. Civ. P. 176.3(b). Further, the Rule “prohibits the use of a
subpoena to circumvent the discovery rules.” See id., cmt. 2.
To award punitive damages, the Texas Civil Practice and Remedies Code
§ 41 .01 1 (a), permits the trier of fact to consider evidence of the defendant’s net worth as
one of six factors in awarding exemplary damages. Tex. Civ. Prac. & Rem. Code
§ 41 .01 1 (a). The mechanism for being entitled to discover information on a defendant’s
net worth expressly requires the requesting party to first file a motion demonstrating “a
substantial likelihood of success on the merits of a claim” before a court may authorize
discovery of the evidence. Tex. Civ. Prac. & Rem. Code § 41 .01 15(a).
Second, to recover punitive damages, a plaintiff is not required to introduce
DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF
TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 3
evidence as to defendant’s net worth. See Soon Phat, LP v. Alvarado, 396 S.W.3d 78,
(Tex. App—Houston [14th Dist] 2013, pet. denied). For example, Texas courts have
found that “[n]othing in chapter 41 of the Texas Civil Practice and Remedies Code . . . or
other Texas case law indicates that evidence of the defendant’s net worth is a necessary
element for the plaintiff to recover any exemplary damages.” Durban v. Guajardo, 79
S.W.3d 198, 210-211 (Tex. App.—Dallas 2002, no pet.). In Durban, the court upheld the
exemplary damages award even though the trial court had denied the defendant's request
to introduce evidence of his net worth. Id. The court found that, if the award was an
enormous penalty to the defendant, who had been found guilty of assault, then it was
deserved, and if the award was a mere annoyance, then the lack of evidence of his net
worth benefited him rather than harmed him. Id. at 211; see also Range] v. Robinson,
2007 WL 625042, at *7 (Tex. App—Houston [1st Dist] 2007, no pet.) (holding that
plaintiffs need not produce evidence of the defendant’s net worth to recover punitive
damages).
evidence must be relevant to be admissible, and trial courts are still
permitted to exclude relevant evidence if its probative value is substantially outweighed
by the danger of unfair prejudice, confusion of the issues, or misleading the jury. See
TEX.R. EVID. 403; Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex.
1998). Consistent with these rules, courts agree that “discovery into a defendant’s net
worth may consume a disproportionate amount of attention inasmuch as net worth is only
one among several factors the jury should considers.” In re Jacobs, 300 S.W.3d 35, 50
n.8 (Tex. App.—Houston [14th Dist.] 2009, orig. proceeding).
In fact, Texas courts have held that a defendant’s net worth “is not even the most
DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF
TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 4
important factor in reviewing an amount of punitive damages.” Id. (citing Owens-Corning
Fiberglas, 972 S.W.2d at 45-46).
Indeed, “net-worth discovery may serve little practical purposes in many cases,” In
re Jacobs, 300 S.W.3d at 50 n.8, because the jury may focus a disproportionate amount
of attention as to a defendant’s net worth, as opposed to “the degree of reprehensibility”
of the defendant’s alleged conduct, Owens-Corning Fiberglas, 972 S.W.2d at 45-46. The
degree of reprehensibility of the defendant’s alleged conduct is “perhaps the most
important indicium” of the reasonableness of a punitive damages award. Id.
Here, by attempting to serve a trial subpoena on a TRT corporate representative,
Plaintiffs attempt to circumvent this Court’s denial of their motion to compel TRT’s net
worth. The procedural rule governing subpoenas prohibits this. See Tex. R. Civ. P.
176.3(b), cmt. 2. Not to mention, under Texas law, Plaintiffs are not required to produce
evidence of TRT Holdings’ net worth to recover punitive damages, thus rendering this
subpoena moot and begging the question of why they seek to introduce this irrelevant
evidence in the first place if not to prejudice Defendants by painting TRT as a deep-pocket
party.
Even if it is relevant, the proposed testimony will not aid the trier of fact in its award
of punitive damages. Rather, if admitted, the probative value of evidence about TRT’s net
worth will be substantially outweighed by a danger of unfair prejudice, confusing the
issues, and misleading the jury. Because evidence of TRT’s net worth invites the jury to
focus improperly on TRT’s net worth as opposed to the (i) Defendants’ alleged conduct,
(ii) the degree of reprehensibility, if any, of that conduct, and (iii) the five other factors they
should consider when deciding to award punitive damages.
DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF
TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 5
IV. PRAYER
For the foregoing reasons, Defendants respectfully request the Court quash the
subpoena directed at TRT Holdings, lnc.'s Corporate Representative and that Defendant
TRT Holdings, Inc. be protected from having to produce a Corporate Representative for
trial presentation.
Date: November 1, 2023 Respectfully submitted,
AKERMAN LLP
/s/ Elliot Strader
Elliot Strader
Texas Bar No. 24063966
elliot.strader@akerman.com
Xakema Henderson
Texas Bar No. 24107805
xakema.henderson@akerman.com
2001 Ross Avenue, Suite 3600
Dallas, Texas 75201
Tel: 214-720-4300
Fax: 214-981-9339
Counsel for Defendants
CERTIFICATE OF SERVICE
|
hereby certify that a true and correct copy of the foregoing was served on all
counsel of record in accordance with the Texas Rules of Civil Procedure on November 1,
2023.
/s/ Elliot Strader
DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF
TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 6
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.
Elliot Strader
Bar No. 24063966
elliot.strader@akerman.com
Envelope ID: 81185268
Filing Code Description: Motion - Quash
Filing Description: TRIAL SUBPOENA TO TRT HOLDINGS
Status as of 11/1/2023 2:48 PM CST
Associated Case Party: TRT HOLDINGS, INC.
Name BarNumber Email TimestampSubmitted Status
Elliot Strader elliot.strader@akerman.com 11/1/2023 10:56:24 AM SENT
Xakema Henderson xakema.henderson@akerman.com 11/1/2023 10:56:24 AM SENT
Case Contacts
Name BarNumber Email TimestampSubmitted Status
Robert LeMay rlemay@krcl.com 11/1/2023 10:56:24 AM SENT
Jaime DeWees jdewees@krcl.com 11/1/2023 10:56:24 AM SENT
Teresa Rowe trowe@krcl.com 11/1/2023 10:56:24 AM SENT
Connie Nims cnims@krcl.com 11/1/2023 10:56:24 AM SENT
Bree Kimball BKimball@krcl.com 11/1/2023 10:56:24 AM SENT
Associated Case Party: MILTON 635 GRAVOIS ROAD LLC
Name BarNumber Email TimestampSubmitted Status
Collin Delano cdelano@krcl.com 11/1/2023 10:56:24 AM SENT
Preview
FILED 11/1/202310:56 AM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS Brandon Keys DEPUTY CAUSE NO. DC-21-11406 MILTON 635 GRAVOIS ROAD LLC, THE DISTRICT COURT §§§§§§§§§§§§§§ IN 635 GRAVOIS ROAD LEASING LLC, and 635 GRAVOIS ROAD REAL ESTATE, LLC, Plaintiffs, v. 44TH JUDICIAL DISTRICT TRT HOLDINGS, INC., RBR REAL ESTATE HOLDINGS, LLC, BRIAN ZELMAN, and ADAM ZEITSIFF, DALLAS COUNTY, TEXAS Defendants. DEFENDANTS’ MOTION TO QUASH PLAINTIFF’S TRIAL SUBPOENA TO TRT HOLDINGS, |NC.’S CORPORATE REPRESENTATIVE Defendants move to quash Plaintiffs’ improper trial subpoena issued to TRT Holdings, Inc.’s (“TRT”) Corporate Representative. In support, Defendants would respectfully show as follows: I. SUMMARY Plaintiffs' trial subpoena to TRT’s Corporative Representative blatantly disregards this Court’s ruling denying Plaintiffs' motion to compel discovery of Defendants’ net worth and is a futile attempt to circumvent Texas’ well-established discovery rules. The Court should quash the trial subpoena for at least three reasons: First, TRCP 176.3(b) prohibits a party from using a subpoena to circumvent a discovery order, yet Plaintiffs improperly to solicit evidence of TRT’s net worth through a trial subpoena after the Court has already denied their motion to compel discovery of this evidence. Noticeably, the subpoena is silent as to the proposed trial testimony topics, and TRT is not listed on their Witness List. Rather, they bury their intent DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 1 to solicit improper net worth discovery in their Rule 166 Disclosures, listing “TRT Corporate Representative with knowledge of Defendant TRT's net worth.” Second, Plaintiffs have no basis to introduce evidence of TRT’s net worth. See Durban v. Guajardo, 79 S.W.3d 198, 210-211 (Tex. App.—Dallas 2002, no pet.) (“nothing...[in] Texas case law indicates that evidence of the defendant’s net worth is a necessary element for the plaintiff to recover any exemplary damages"). Third, the probative value of admitting TRT’s net worth outweighs the likely benefit. The Texas Supreme Court has admonished trial courts to be cautious admitting irrelevant evidence of a defendant’s net worth because the jury may overemphasize it as opposed to the “reprehensibility” of the defendant’s alleged conduct. This scenario is likely here. Accordingly, Defendants request the Court quash Plaintiffs’ Trial Subpoena to TRT Holdings’ Corporate Representative. ll. RELEVANT PROCEDURAL HISTORY On July 10, 2023, Plaintiffs filed a Motion to Compel the Discovery of Defendants’ Net Worth (the “Motion”). In the Motion, Plaintiffs argue TRT’s net worth is “relevant and discoverable as to the recovery of exemplary damages.” Id. at Defendants responded to the Motion on August 4, 2023, explaining that Plaintiffs could not succeed on the merits of their fraud claims for exemplary damages given the applicable law and undisputed facts. Id. On August 9, 2023, the Court, via Judge Bonnie Goldstein sitting by assignment, held a hearing on Plaintiffs’ Motion. (See Ex. _) and thereafter denied Plaintiffs’ Motion on September 25, 2023. Id. Specifically, the Court held: “Plaintiffs have not shown a DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 2 substantial likelihood they will prevail on the merits of their claims so as to warrant the net worth discovery they seek.” Id. Then, despite the Court’s order, on October 23, 2023, Plaintiffs’ served Rule 166 Disclosures, at 28, listing a as a witness a TRT corporate representative “with knowledge of Defendant TRT's net worth.” The disclosures do not list any other topics for TRT’s corporate representative. The same day, Plaintiffs also attempted to serve a trial subpoena addressed to the “Corporate Representative of TRT Holdings, Inc.” but listed no topics. Ill. ARGUMENTS AND AUTHORITIES Plaintiffs improperly seek TRT’s net worth under the guise of a trial subpoena addressed to TRT’s corporate representative to “prove” an award of punitive damages. But Texas Rule of Civil Procedure 176.3 states: “A subpoena may not be used for discovery to an extent, in a manner, or at a time other than as provided by the rules governing discovery.” Tex. R. Civ. P. 176.3(b). Further, the Rule “prohibits the use of a subpoena to circumvent the discovery rules.” See id., cmt. 2. To award punitive damages, the Texas Civil Practice and Remedies Code § 41 .01 1 (a), permits the trier of fact to consider evidence of the defendant’s net worth as one of six factors in awarding exemplary damages. Tex. Civ. Prac. & Rem. Code § 41 .01 1 (a). The mechanism for being entitled to discover information on a defendant’s net worth expressly requires the requesting party to first file a motion demonstrating “a substantial likelihood of success on the merits of a claim” before a court may authorize discovery of the evidence. Tex. Civ. Prac. & Rem. Code § 41 .01 15(a). Second, to recover punitive damages, a plaintiff is not required to introduce DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 3 evidence as to defendant’s net worth. See Soon Phat, LP v. Alvarado, 396 S.W.3d 78, (Tex. App—Houston [14th Dist] 2013, pet. denied). For example, Texas courts have found that “[n]othing in chapter 41 of the Texas Civil Practice and Remedies Code . . . or other Texas case law indicates that evidence of the defendant’s net worth is a necessary element for the plaintiff to recover any exemplary damages.” Durban v. Guajardo, 79 S.W.3d 198, 210-211 (Tex. App.—Dallas 2002, no pet.). In Durban, the court upheld the exemplary damages award even though the trial court had denied the defendant's request to introduce evidence of his net worth. Id. The court found that, if the award was an enormous penalty to the defendant, who had been found guilty of assault, then it was deserved, and if the award was a mere annoyance, then the lack of evidence of his net worth benefited him rather than harmed him. Id. at 211; see also Range] v. Robinson, 2007 WL 625042, at *7 (Tex. App—Houston [1st Dist] 2007, no pet.) (holding that plaintiffs need not produce evidence of the defendant’s net worth to recover punitive damages). evidence must be relevant to be admissible, and trial courts are still permitted to exclude relevant evidence if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. See TEX.R. EVID. 403; Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). Consistent with these rules, courts agree that “discovery into a defendant’s net worth may consume a disproportionate amount of attention inasmuch as net worth is only one among several factors the jury should considers.” In re Jacobs, 300 S.W.3d 35, 50 n.8 (Tex. App.—Houston [14th Dist.] 2009, orig. proceeding). In fact, Texas courts have held that a defendant’s net worth “is not even the most DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 4 important factor in reviewing an amount of punitive damages.” Id. (citing Owens-Corning Fiberglas, 972 S.W.2d at 45-46). Indeed, “net-worth discovery may serve little practical purposes in many cases,” In re Jacobs, 300 S.W.3d at 50 n.8, because the jury may focus a disproportionate amount of attention as to a defendant’s net worth, as opposed to “the degree of reprehensibility” of the defendant’s alleged conduct, Owens-Corning Fiberglas, 972 S.W.2d at 45-46. The degree of reprehensibility of the defendant’s alleged conduct is “perhaps the most important indicium” of the reasonableness of a punitive damages award. Id. Here, by attempting to serve a trial subpoena on a TRT corporate representative, Plaintiffs attempt to circumvent this Court’s denial of their motion to compel TRT’s net worth. The procedural rule governing subpoenas prohibits this. See Tex. R. Civ. P. 176.3(b), cmt. 2. Not to mention, under Texas law, Plaintiffs are not required to produce evidence of TRT Holdings’ net worth to recover punitive damages, thus rendering this subpoena moot and begging the question of why they seek to introduce this irrelevant evidence in the first place if not to prejudice Defendants by painting TRT as a deep-pocket party. Even if it is relevant, the proposed testimony will not aid the trier of fact in its award of punitive damages. Rather, if admitted, the probative value of evidence about TRT’s net worth will be substantially outweighed by a danger of unfair prejudice, confusing the issues, and misleading the jury. Because evidence of TRT’s net worth invites the jury to focus improperly on TRT’s net worth as opposed to the (i) Defendants’ alleged conduct, (ii) the degree of reprehensibility, if any, of that conduct, and (iii) the five other factors they should consider when deciding to award punitive damages. DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 5 IV. PRAYER For the foregoing reasons, Defendants respectfully request the Court quash the subpoena directed at TRT Holdings, lnc.'s Corporate Representative and that Defendant TRT Holdings, Inc. be protected from having to produce a Corporate Representative for trial presentation. Date: November 1, 2023 Respectfully submitted, AKERMAN LLP /s/ Elliot Strader Elliot Strader Texas Bar No. 24063966 elliot.strader@akerman.com Xakema Henderson Texas Bar No. 24107805 xakema.henderson@akerman.com 2001 Ross Avenue, Suite 3600 Dallas, Texas 75201 Tel: 214-720-4300 Fax: 214-981-9339 Counsel for Defendants CERTIFICATE OF SERVICE | hereby certify that a true and correct copy of the foregoing was served on all counsel of record in accordance with the Texas Rules of Civil Procedure on November 1, 2023. /s/ Elliot Strader DEFENDANTS’ MOTION TO QUASH PLAINTIFFS’ TRIAL SUBPOENA OF TRT HOLDINGS, INC.’S CORPORATE REPRESENTATIVE PAGE 6 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. Elliot Strader Bar No. 24063966 elliot.strader@akerman.com Envelope ID: 81185268 Filing Code Description: Motion - Quash Filing Description: TRIAL SUBPOENA TO TRT HOLDINGS Status as of 11/1/2023 2:48 PM CST Associated Case Party: TRT HOLDINGS, INC. Name BarNumber Email TimestampSubmitted Status Elliot Strader elliot.strader@akerman.com 11/1/2023 10:56:24 AM SENT Xakema Henderson xakema.henderson@akerman.com 11/1/2023 10:56:24 AM SENT Case Contacts Name BarNumber Email TimestampSubmitted Status Robert LeMay rlemay@krcl.com 11/1/2023 10:56:24 AM SENT Jaime DeWees jdewees@krcl.com 11/1/2023 10:56:24 AM SENT Teresa Rowe trowe@krcl.com 11/1/2023 10:56:24 AM SENT Connie Nims cnims@krcl.com 11/1/2023 10:56:24 AM SENT Bree Kimball BKimball@krcl.com 11/1/2023 10:56:24 AM SENT Associated Case Party: MILTON 635 GRAVOIS ROAD LLC Name BarNumber Email TimestampSubmitted Status Collin Delano cdelano@krcl.com 11/1/2023 10:56:24 AM SENT