Preview
Filed 11 Ma’ 9 P4:07
Chris Daniel - District Clerk
Harris Coun!
ED101) 016304526
By: irma medina
Cause No. 2011 19031
G. TERRY JONES IN THE DISTRICT COURT OF
HARRIS COUNTY, TEXAS
INOVA TECHNOLOGY, INC. JUDICIAL DISTRICT
Subject to Defendant’s Special Appearance,
Defendant’s Motion to Quash or Stay Subpoena
(or Defendant’s Motion for New Trial)
Plaintiff filed a petition herein requesting the Court to order a subpoena
for a third party deposition here in Harris County for a proceeding in
California. Defendant was never served with citation of that petition and
thus never answered the petition. The Court granted the petition and
ordered the issuance of the subpoena on April 19, 2011. Defendant has
since filed a Special Appearance herein and a Motion for Protective Order
in the California proceeding. Given this, Defendant requests the Court to
quash or stay the subpoena issued herein until the Texas Special
Appearance proceeding and the California Protective Order proceeding
are both decided. Defendant is exercising its valid procedural and
substantive defenses in Texas and California and thus should be given
the opportunity to do so without the deposition taking place. Should the
Court not quash or stay the subpoena, the entire purpose of the special
appearance and motion for protective order would become moot and
thus would unfair and prejudicial to Defendant.
TO THE HONORABLE JUDGE CAROLINE E. BAKER:
INOVA TECHNOLOGY, INC., Defendant requests th Court to quash or stay the
subpoena issued by this Court as a result of the Order granted on April 19, 2011 due to
Defendant's Special Appearance herein and Defendant's Motion for Protective Order in
California, which will be heard by that court on June 14, 2011 Should this Court consider its
April 19 Order to be a final judgment herein, then this Motion should be considered as
Defendant's Motion for New Trial.
Procedural History
On March 28, 2011, Plaintiff filed his Petition to Auxiliary Court to Take Foreign
Deposition and for Issuance of Subpoena. Plaintiff failed to serve Defendant with citation herein.
On April 19, 2011, this Court signed an Order granting the Petition and authorizing
the Subpoena to be issued, despite no service of citation on Defendant. The Subpoena has been
issued, and the deposition is currently set for May 13, 2011.
On April 22, 2011, Defendant filed its Defendant’s Special Appearance and set it for
submission on May 9, 2011.
Meanwhile, in the original California proceeding that is the basis of the Petition
herein, on April 26, 2011, Defendant filed its Notice of Motion and Motion for Protective Order;
Memorandum of Points and Authorities in Support Thereof; Separate Statement of Issues in Dispute;
Declarations of Douglas L. Hallett and Bob Bates See certified copy attached hereto as Exhibit A.
Defendant's Motion for Protective Order will be heard by the Superior Court of the State of
California for the County of Los Angeles Central District on June 14, 2011.
Defendant now files this Defendant’s Motion to Quash or Stay Subpoena and requests
Court to quash or stay the subpoena pending the outcome of both the special appearance
proceeding herein and the protective order proceeding in California. Due to the time
constraints involved, Defendant requests an emergency hearing on this matter, to be heard no
later than May 12, 2011, as the deposition sought to be quashed or stayed is set for May 13, 2011
Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of
Stay Subpoena (or Defendant's Motion for New Trial)
Cause No. 201119031; Harris County 295D
Texas Special Appearance Proceeding
Defendant's Special Appearance has been submitted to th Court fora
determination without a hearing. Plaintiff responded but did not request a hearing. Defendant
replied to Plaintiff's Response.
The deposition at issue herein is set by subpoena for May 13, 2011. Unless this Court
tends to rule on Defendant's Special Appearance without a hearing before May 13, 2011, this
Court should quash or stay the subpoena pending this Court's ruling on Defendant's Special
Appearance. Should th Court rule that Plaintiff failed to either prove jurisdiction or properly
serve Defendant with citation pursuant to the Texas Rules of Civil Procedure (or both), then this
Court would necessarily grant Defendant's Special Appearance and thus void its April 19
Order granting the Petition and authorizing the subpoena.
Even if this Court determines that it does not need personal jurisdiction over the
Defendant herein, proper service with citation is mandatory to give Defendant proper notice of
deadlines and hearings on the subject matter of this suit. When Plaintiff failed to serve
Defendant with citation and this Court signed the Order without service being effected,
Defendant was robbed of its legal and rightful opportunity to respond to the Petition before the
Order was signed. Defendant did not answer the Petition because it was never served with
citation and thus was not required to answer. Defendant was surprised when this Court signed
the Order without service being effected on Defendant.
Defendant has a right to be heard by this Court regarding the merits of Petition in
relation to the procedural interplay between Texas and California courts. Ultimately, the
Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of
Stay Subpoena (or Defendant's Motion for New Trial)
Cause No. 201119031; Harris County 295D
California court should rule on the merits of the deposition proceeding that is subject of
Plaintiff's Petition herein and this Court’s April 19 Order.
California Protective Order Proceeding
Defendant filed its Motion for Protective Order in the California court on the basis
that the commission issued by the Clerk of that court “is unwarranted, burdensome, and
oppressive, includes broad categories of documents which are confidential and proprietary,
requests materials not likely to lead to the discovery of admissible evidence, and is not
reasonably necessary for plaintiff to prosecute his case.” See page 2 of Exhibit A.
It is important to note that the California proceeding is an improper attempt by
Plaintiff to involve Defendant, an SEC compliant company wholly and separately distinct from
am Radly, and its subsidiaries in Plaintiff's personal suit with Radly. This has been an
ongoing effort by Plaintiff. Plaintiff previously sued Defendant in Los Angeles Superior Court,
case no. BC 380967, arising out of the same exact alleged obligation. On the eve of trial in that
first suit, Plaintiff had not stated a claim to the satisfaction of that court, and, with Defendant's
Demurrer (equivalent to a Motion to Dismiss) pending just weeks before the trial, Plaintiff
voluntarily dismissed the first suit on November 4, 2009. Until he can demonstrate to the
satisfaction of the California court that he can at least state a claim, any discovery should not be
allowed.
In Plaintiff's Response to Defendant's Special Appearance herein, Plaintiff asserts that
Defendant made payments directly to Radly prior to the entry of judgment in favor of Plaintiff
and then diverted those payments to companies to which Radly is related. This is the entire
Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of
Stay Subpoena (or Defendant's Motion for New Trial)
Cause No. 201119031; Harris County 295D
basis of the California action. It is based on a misreading of Defendant’s 2009 and 2010 Forms
K. In fact, those Forms 10 K (again, the entire underlying factual basis for Plaintiff’s lawsuit)
make clear that no payments ever went directly to Radly prior to the judgment date and that
such payments as were going to companies to which Radly is related ceased being made long
prior to the judgment date as well. See pages 3 5 of Exhibit A.
In California, when the allegations of a complaint are contradicted by the material
referred to in and attached to such complaint, the attachments take precedence and are
sufficient to defeat the allegations of the Complaint as a matter of law. That is exactly what
happened in the California proceeding. The only alleged factual basis for Plaintiff's claims
therein is refuted by the documents Plaintiff attached to his Complaint therein. Further, the
current First Amended Complaint represents Plaintiff's second attempt to try to state a claim
against Defendant in the current California proceeding. Plaintiff voluntarily dropped his initial
Complaint when Defendant demurred to it. The current First Amended Complaint is no more
likely to succeed. That is for the California court to decide at the upcoming June 14 hearing
therein.
Furthermore, as the Motion for Protective Order also indicates, Plaintiff has already
been provided with voluminous information that demonstrates that no transfers of the kind
alleged ever took place. See pages 6 9 of Exhibit A. Plaintiff has come to Texas to seek material
from Defendant's public accountants because the extensive material with which he has already
been provided indicates his claims are without basis and thus he believes this is a means of
impugning Defendant and putting pressure on Radly.
Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of
Stay Subpoena (or Defendant's Motion for New Trial)
Cause No. 201119031; Harris County 295D
What's most important here is that this proceeding is basically a sideshow to the
California proceeding. Furthermore, the Commission that was issued has not been
substantively reviewed by the California court. The Commission itself was issued by the Clerk
of the California court as a ministerial act without substantive judicial review by the Court
itself. Defendant's Motion for Protective Order puts the Commission squarely before the Court
and thus the Commission will be substantively reviewed by the Court on June 14, 2011. Given
this, this Court should not honor the Commission and force the deposition herein without first
allowing the parties to get a substantive judicial review of the Commission in California
Should the Court not quash or stay the subpoena pending the outcome of the special
appearance proceeding herein and the protective order proceeding in California, the entire
purpose of these proceedings would become moot once the deposition takes place. This would
have an unfair and unreasonable effect on Defendant, which is attempting to raise valid
procedural and substantive defenses to these proceedings. As previously noted, the
Commission that was signed by the Clerk of the California court has not had any substantive
judicial review and thus this Court should allow that review to take place by the California
court before proceeding (the basis of the Motion for Protective Order in California). Even
should this Court disagree with such a review, Defendant is entitled to be properly served in
this proceeding (the basis of the Special Appearance herein).
Given the timing of the deposition, Defendant requests an emergency hearing on
this Motion.
Subject to Defendant’s Special Appearance, Defendant's Motion to Quash or Page of
Stay Subpoena (or Defendant's Motion for New Trial)
Cause No. 201119031; Harris County 295D
For these reasons, should this Court not grant Defendant INOVA TECHNOLOGY,
INC.’s Special Appearance, Defendant asks the Court quash or stay the subpoena issued as a
result of the Court’s April 19, 2011 Order herein. To the extent that this Court considers its
April 19, 2011 Order herein to be a final judgment, Defendant asks the Court to grant a new trial
herein and set this matter for hearing and thus quash or stay the subpoena until such time as
the new trial takes place and this Court rules upon Defendant's Motion.
Respectfully submitted,
SANCHEZ LAW FIRM
By:
BENJAMIN K. SANCHEZ
Texas Bar No. 24006288
P.O. Box 800725
Houston, TX 77280
Tel:
Fax:
mail: bsanchez@sanchezlawfirm.com
COUNSEL FOR DEFENDANT
Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of
Stay Subpoena (or Defendant's Motion for New Trial)
Cause No. 201119031; Harris County 295D
Certi icate of Service
Thereby certify that a copy of Defendant's Special Appearance was served on Plaintiff, through
counsel of record, pursuant to Texas Rules of Civil Procedure 21 and 21a, on May 9, 2011, as
follows:
Via facsimile 214
Brian A. Calhoun
CALHOUN PILGRIM LLP
325 N. St. Paul St., Suite 3950
Dallas, TX 75201
Tel:
BENJAMIN K. SANCHEZ
Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of
Stay Subpoena (or Defendant's Motion for New Trial)
Cause No. 201119031; Harris County 295D
Preview
Filed 11 Ma’ 9 P4:07 Chris Daniel - District Clerk Harris Coun! ED101) 016304526 By: irma medina Cause No. 2011 19031 G. TERRY JONES IN THE DISTRICT COURT OF HARRIS COUNTY, TEXAS INOVA TECHNOLOGY, INC. JUDICIAL DISTRICT Subject to Defendant’s Special Appearance, Defendant’s Motion to Quash or Stay Subpoena (or Defendant’s Motion for New Trial) Plaintiff filed a petition herein requesting the Court to order a subpoena for a third party deposition here in Harris County for a proceeding in California. Defendant was never served with citation of that petition and thus never answered the petition. The Court granted the petition and ordered the issuance of the subpoena on April 19, 2011. Defendant has since filed a Special Appearance herein and a Motion for Protective Order in the California proceeding. Given this, Defendant requests the Court to quash or stay the subpoena issued herein until the Texas Special Appearance proceeding and the California Protective Order proceeding are both decided. Defendant is exercising its valid procedural and substantive defenses in Texas and California and thus should be given the opportunity to do so without the deposition taking place. Should the Court not quash or stay the subpoena, the entire purpose of the special appearance and motion for protective order would become moot and thus would unfair and prejudicial to Defendant. TO THE HONORABLE JUDGE CAROLINE E. BAKER: INOVA TECHNOLOGY, INC., Defendant requests th Court to quash or stay the subpoena issued by this Court as a result of the Order granted on April 19, 2011 due to Defendant's Special Appearance herein and Defendant's Motion for Protective Order in California, which will be heard by that court on June 14, 2011 Should this Court consider its April 19 Order to be a final judgment herein, then this Motion should be considered as Defendant's Motion for New Trial. Procedural History On March 28, 2011, Plaintiff filed his Petition to Auxiliary Court to Take Foreign Deposition and for Issuance of Subpoena. Plaintiff failed to serve Defendant with citation herein. On April 19, 2011, this Court signed an Order granting the Petition and authorizing the Subpoena to be issued, despite no service of citation on Defendant. The Subpoena has been issued, and the deposition is currently set for May 13, 2011. On April 22, 2011, Defendant filed its Defendant’s Special Appearance and set it for submission on May 9, 2011. Meanwhile, in the original California proceeding that is the basis of the Petition herein, on April 26, 2011, Defendant filed its Notice of Motion and Motion for Protective Order; Memorandum of Points and Authorities in Support Thereof; Separate Statement of Issues in Dispute; Declarations of Douglas L. Hallett and Bob Bates See certified copy attached hereto as Exhibit A. Defendant's Motion for Protective Order will be heard by the Superior Court of the State of California for the County of Los Angeles Central District on June 14, 2011. Defendant now files this Defendant’s Motion to Quash or Stay Subpoena and requests Court to quash or stay the subpoena pending the outcome of both the special appearance proceeding herein and the protective order proceeding in California. Due to the time constraints involved, Defendant requests an emergency hearing on this matter, to be heard no later than May 12, 2011, as the deposition sought to be quashed or stayed is set for May 13, 2011 Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of Stay Subpoena (or Defendant's Motion for New Trial) Cause No. 201119031; Harris County 295D Texas Special Appearance Proceeding Defendant's Special Appearance has been submitted to th Court fora determination without a hearing. Plaintiff responded but did not request a hearing. Defendant replied to Plaintiff's Response. The deposition at issue herein is set by subpoena for May 13, 2011. Unless this Court tends to rule on Defendant's Special Appearance without a hearing before May 13, 2011, this Court should quash or stay the subpoena pending this Court's ruling on Defendant's Special Appearance. Should th Court rule that Plaintiff failed to either prove jurisdiction or properly serve Defendant with citation pursuant to the Texas Rules of Civil Procedure (or both), then this Court would necessarily grant Defendant's Special Appearance and thus void its April 19 Order granting the Petition and authorizing the subpoena. Even if this Court determines that it does not need personal jurisdiction over the Defendant herein, proper service with citation is mandatory to give Defendant proper notice of deadlines and hearings on the subject matter of this suit. When Plaintiff failed to serve Defendant with citation and this Court signed the Order without service being effected, Defendant was robbed of its legal and rightful opportunity to respond to the Petition before the Order was signed. Defendant did not answer the Petition because it was never served with citation and thus was not required to answer. Defendant was surprised when this Court signed the Order without service being effected on Defendant. Defendant has a right to be heard by this Court regarding the merits of Petition in relation to the procedural interplay between Texas and California courts. Ultimately, the Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of Stay Subpoena (or Defendant's Motion for New Trial) Cause No. 201119031; Harris County 295D California court should rule on the merits of the deposition proceeding that is subject of Plaintiff's Petition herein and this Court’s April 19 Order. California Protective Order Proceeding Defendant filed its Motion for Protective Order in the California court on the basis that the commission issued by the Clerk of that court “is unwarranted, burdensome, and oppressive, includes broad categories of documents which are confidential and proprietary, requests materials not likely to lead to the discovery of admissible evidence, and is not reasonably necessary for plaintiff to prosecute his case.” See page 2 of Exhibit A. It is important to note that the California proceeding is an improper attempt by Plaintiff to involve Defendant, an SEC compliant company wholly and separately distinct from am Radly, and its subsidiaries in Plaintiff's personal suit with Radly. This has been an ongoing effort by Plaintiff. Plaintiff previously sued Defendant in Los Angeles Superior Court, case no. BC 380967, arising out of the same exact alleged obligation. On the eve of trial in that first suit, Plaintiff had not stated a claim to the satisfaction of that court, and, with Defendant's Demurrer (equivalent to a Motion to Dismiss) pending just weeks before the trial, Plaintiff voluntarily dismissed the first suit on November 4, 2009. Until he can demonstrate to the satisfaction of the California court that he can at least state a claim, any discovery should not be allowed. In Plaintiff's Response to Defendant's Special Appearance herein, Plaintiff asserts that Defendant made payments directly to Radly prior to the entry of judgment in favor of Plaintiff and then diverted those payments to companies to which Radly is related. This is the entire Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of Stay Subpoena (or Defendant's Motion for New Trial) Cause No. 201119031; Harris County 295D basis of the California action. It is based on a misreading of Defendant’s 2009 and 2010 Forms K. In fact, those Forms 10 K (again, the entire underlying factual basis for Plaintiff’s lawsuit) make clear that no payments ever went directly to Radly prior to the judgment date and that such payments as were going to companies to which Radly is related ceased being made long prior to the judgment date as well. See pages 3 5 of Exhibit A. In California, when the allegations of a complaint are contradicted by the material referred to in and attached to such complaint, the attachments take precedence and are sufficient to defeat the allegations of the Complaint as a matter of law. That is exactly what happened in the California proceeding. The only alleged factual basis for Plaintiff's claims therein is refuted by the documents Plaintiff attached to his Complaint therein. Further, the current First Amended Complaint represents Plaintiff's second attempt to try to state a claim against Defendant in the current California proceeding. Plaintiff voluntarily dropped his initial Complaint when Defendant demurred to it. The current First Amended Complaint is no more likely to succeed. That is for the California court to decide at the upcoming June 14 hearing therein. Furthermore, as the Motion for Protective Order also indicates, Plaintiff has already been provided with voluminous information that demonstrates that no transfers of the kind alleged ever took place. See pages 6 9 of Exhibit A. Plaintiff has come to Texas to seek material from Defendant's public accountants because the extensive material with which he has already been provided indicates his claims are without basis and thus he believes this is a means of impugning Defendant and putting pressure on Radly. Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of Stay Subpoena (or Defendant's Motion for New Trial) Cause No. 201119031; Harris County 295D What's most important here is that this proceeding is basically a sideshow to the California proceeding. Furthermore, the Commission that was issued has not been substantively reviewed by the California court. The Commission itself was issued by the Clerk of the California court as a ministerial act without substantive judicial review by the Court itself. Defendant's Motion for Protective Order puts the Commission squarely before the Court and thus the Commission will be substantively reviewed by the Court on June 14, 2011. Given this, this Court should not honor the Commission and force the deposition herein without first allowing the parties to get a substantive judicial review of the Commission in California Should the Court not quash or stay the subpoena pending the outcome of the special appearance proceeding herein and the protective order proceeding in California, the entire purpose of these proceedings would become moot once the deposition takes place. This would have an unfair and unreasonable effect on Defendant, which is attempting to raise valid procedural and substantive defenses to these proceedings. As previously noted, the Commission that was signed by the Clerk of the California court has not had any substantive judicial review and thus this Court should allow that review to take place by the California court before proceeding (the basis of the Motion for Protective Order in California). Even should this Court disagree with such a review, Defendant is entitled to be properly served in this proceeding (the basis of the Special Appearance herein). Given the timing of the deposition, Defendant requests an emergency hearing on this Motion. Subject to Defendant’s Special Appearance, Defendant's Motion to Quash or Page of Stay Subpoena (or Defendant's Motion for New Trial) Cause No. 201119031; Harris County 295D For these reasons, should this Court not grant Defendant INOVA TECHNOLOGY, INC.’s Special Appearance, Defendant asks the Court quash or stay the subpoena issued as a result of the Court’s April 19, 2011 Order herein. To the extent that this Court considers its April 19, 2011 Order herein to be a final judgment, Defendant asks the Court to grant a new trial herein and set this matter for hearing and thus quash or stay the subpoena until such time as the new trial takes place and this Court rules upon Defendant's Motion. Respectfully submitted, SANCHEZ LAW FIRM By: BENJAMIN K. SANCHEZ Texas Bar No. 24006288 P.O. Box 800725 Houston, TX 77280 Tel: Fax: mail: bsanchez@sanchezlawfirm.com COUNSEL FOR DEFENDANT Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of Stay Subpoena (or Defendant's Motion for New Trial) Cause No. 201119031; Harris County 295D Certi icate of Service Thereby certify that a copy of Defendant's Special Appearance was served on Plaintiff, through counsel of record, pursuant to Texas Rules of Civil Procedure 21 and 21a, on May 9, 2011, as follows: Via facsimile 214 Brian A. Calhoun CALHOUN PILGRIM LLP 325 N. St. Paul St., Suite 3950 Dallas, TX 75201 Tel: BENJAMIN K. SANCHEZ Subject to Defendant's Special Appearance, Defendant's Motion to Quash or Page of Stay Subpoena (or Defendant's Motion for New Trial) Cause No. 201119031; Harris County 295D