Preview
FILED
DALLAS COUNTY
1/5/2017 11:04:58 AM
FELICIA PITRE
DISTRICT CLERK
CAUSE NO. DC-16-00007
SUNIL RAMNANI, § IN THE DISTRICT COURT
MUKHTIAR GREWAL, §
and HARDEEP GREWAL, §
§
Plaintiffs, §
§
v. § OF DALLAS COUNTY, TEXAS
§
ZAYA YOUNAN, YOUNAN §
PROPERTIES, INC., YOUNAN §
INVESTMENT PROPERTIES, L.P., §
BRIAN HENNESSEY, NARBEH §
TATEVOSSIAN, QUENTIN §
THOMPSON, DELOITTE AND §
TOUCHE, L.L.P., EQUITY OFFICE §
MANAGEMENT, L.L.C., NORTHMARQ §
CAPITAL, LLC, PROMARK §
CAPITAL GROUP, RKM CAPITAL, and §
RICHARD SCANDALIATO, §
§
Defendants. § 95TH JUDICIAL DISTRICT
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’
DISCOVERY RESPONSES
I.
INTRODUCTION AND RELEVANT FACTS
Plaintiffs file this Supplement to Plaintiffs’ Motion to Compel Defendants’ Discovery
Responses (“Plaintiffs’ Supplement”) and ask the Court to order Zaya Younan (“Younan”) to
fully respond to Plaintiffs’ discovery requests. Specifically, Plaintiffs ask the Court to order
Younan to admit (or deny) he did not report the millions of dollars he received in undisclosed
kickbacks to the Internal Revenue Service (“IRS”). Should he deny this, and state that he did
report these payments, Plaintiffs then ask the Court to order Younan to identify how he
characterized these payments on his tax return and to produce the documentation used to
generate this reporting.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 1
Younan’s position that seeking the above financial related information amounts to
seeking the production of an income tax return itself is inaccurate. In fact, this is the very type of
information typically produced in lieu of a party’s actual tax return in order to preserve any
applicable privacy rights. See, e.g., In re Williams, 328 S.W.3d 103, 106 (Tex. App.—Corpus
Christi 2010) (stating “[t]rial courts should not allow discovery of private financial records, such
as tax returns, when there are other adequate methods to ascertain net worth, such as audited
financial reports or W-2 statements.”). Here, Plaintiffs are not seeking the tax returns but instead
are seeking the existence of disclosures to the IRS and/or any supporting documentation (i.e. W-
2 statements, 1099s, etc.) to generate the disclosures on the returns. Therefore, Plaintiffs do not
agree that in order to obtain this discovery Plaintiffs must first meet a higher standard normally
associated with obtaining personal income tax returns – i.e. that the requested information is both
relevant and material.
Notwithstanding, this supplement is meant to demonstrate that the materiality and
relevance standard regarding this discovery is easily met, if not overwhelmingly obvious, should
the Court wish to apply this heightened standard.
Additionally, Younan continues to offer conflicting information as to whether these
payments in dispute were reported to the IRS. Younan has now twice testified 1 under oath that
he did report these payments to the IRS. However, in his discovery responses he states that he is
unable to determine if he reported the kickbacks on his tax return, and he refuses to formerly
admit or deny these payments were disclosed to the IRS. Thus, Plaintiffs are left guessing as to
what version of events Younan will present at trial. Now more than ever, an order compelling
these responses is critical.
1
Zaya Younan’s Deposition was just recently taken again on December 6, 2016.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 2
II.
ARGUMENT
The Texas Supreme court has allowed the production of tax returns, or portions thereof, if
Plaintiffs can show the requested returns are relevant and material to the cause of action. See
Crane v. Tunks, 160 Tex. 182, 328 S.W.2d 434, 440 (1959); Martin v. Darnell, 960 S.W.2d 838,
844 (Tex.App.—Amarillo 1997) (orig. proceeding) (declining to hold that federal income tax
returns are protected by privilege or constitutional right of privacy where relevant). Courts allow
the discovery of income tax returns because the pursuit of justice between litigants outweighs the
privacy right in the documents. Maresca v. Marks, 362 S.W.2d 299, 301 (Tex. 1962) (orig.
proceeding); see also In re Lissiak, No. 12-16-00067-CV, 2016 Tex. App. LEXIS 4544, at *5
(App.—Tyler 2016); See also Neville v. Brewster, 163 Tex. 155, 352 S.W. 2d 449, 451 (1962)
(stating “[it] was incumbent upon the court to exclude those matters which were irrelevant and
yet afford to the adversary all information that might be relevant and material to his cause of
action.”).
A. Discovery Regarding Whether The Younan Defendants Disclosed The
Kickbacks To The IRS Is Both Relevant And Material To This Case.
Applying this standard to the discovery currently sought (which is far less intrusive than
seeking the actual tax returns), Younan’s disclosures to the IRS and the supporting
documentation pertaining to said disclosures, if any, is undeniably relevant and material, if not
critical, to the case at hand. See Tex. R. Civ. P. 192.3(a). Younan’s disclosures and concealment
of his scheme to receive millions in undisclosed and under-the-table kickbacks lies at the heart of
this suit. Plaintiffs have proven this scheme was common practice for every one of the
investments at issue and have further established these arrangements and kickbacks have never
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 3
been disclosed to any of the investors, including Plaintiffs. Younan has testified as much,
stating:
Q. And you don't have any written documentation showing that you told any
of my clients about these advisory fees or these loan broker fees that you
were getting in your pocket in connection with the acquisition of Park
Central and Central Expressway; do you?
A. You mean for the fees that we earned? I don't recall. If they asked, we
discussed it probably.
Q. That's not my question. My question is, you don't have any written
documents showing in writing that you communicated that you, Zaya
Younan, were getting these advisory fees and these -- these loan broker
fees in connection with Park Central and Central Expressway? You don't
have any written document, correct?
A. That's correct. 2
***
Q. You've taken these fees on everything my client has invested in, right?
A. Pardon me?
Q. You've taken these fees that you've described, for example, a cut of a loan
broker fee, you've taken that on every investment my clients have made,
haven't you?
MR. CHILDERS: Objection; form.
A. THE WITNESS: Depends from transaction to transaction, but most likely,
yes. 3
Despite all this, Younan will argue to the jury that these “handshake” agreements along
with the failure to document and disclose the receipt of millions of dollars are all common
practices in the industry. And in the face of the overwhelming evidence to the contrary, Younan
continues to claim this conduct was legitimate and that he wasn’t trying to hide anything from
anyone. Younan has further testified as much:
2
See Plaintiffs Motion to Compel Defendant’s Discovery Responses (“Plaintiffs” Motion”) at Exhibit A 40:25-
41:12.
3
Id. at 151:13-21.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 4
Q. And so why on a $900,000 payment on one transaction, $750,000 on
another, $1.65 million worth of transaction, why is it that you didn't want
any written record of that?
MR. CHILDERS: Objection; form.
A. THE WITNESS: I didn't say that I want or I didn't want. It was just never
thought of. We never thought about we need to have any record of it.
Q. (BY MR. MALESOVAS) Why?
A. It's something commonly done in our industry. You don't document
everything. If somebody ask you, you can explain it to them as I have
explained it to you today. 4
***
Q. All right. My question to you is, have you ever done another transaction
where you got $1.5 million, you were – you were supposed to get 1.5
million from the transaction, yet, you had no written documentation
reflecting that and no written communication with anyone about that?
MR. CHILDERS: Objection; form.
THE WITNESS: I don't believe so.
Q. (BY MR. MALESOVAS) You wanted to hide that from everybody
involved, didn't you?
MR. CHILDERS: Objection; form.
A. THE WITNESS: No, I did not.
Q. (BY MR. MALESOVAS) That's why you didn't have any written
communication about it, isn't it?
MR. CHILDERS: Objection; form.
A. THE WITNESS: That's not correct.
Q. (BY MR. MALESOVAS) But you have no explanation for the jury why
you have no written documentation regarding these payments, do you?
MR. CHILDERS: Objection; form.
A. THE WITNESS: I have plenty of explanation. I've been doing this for a
long period of time, and these transactions and handshakes are conducted
all the time. 5
4
Id. at 78:21-79:6.
5
Id. at 94:9-95:5.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 5
Younan’s reliance on this as a defense (that this conduct is legitimate and all above
board), in and of itself, eliminates his entitlement to any privacy and makes full discovery into
this issue appropriate. As such, Plaintiffs have an absolute right to demonstrate to the jury the
truth and that this defense is complete and utter nonsense. See In re Colonial Pipeline Co., 968
S.W.2d 938, 941 (Tex. 1998) (orig. proceeding) (“the ultimate purpose of discovery is to seek
the truth, so that disputes may be decided by what the facts reveal, not by what facts are
concealed.”). Plaintiffs can establish this by presenting evidence for the jury that it was and is
Younan’s pattern and practice to hide these payments from everyone – even the IRS.
Evidence that Younan hid this conduct from the IRS would undoubtedly increase the
probability that Younan hid these same payments from Plaintiffs, making it undeniably relevant.
See Tex. R. Evid. 401. Plaintiffs also claim that Younan set up an elaborate method of
concealing this information from everyone. He inflated the purchase price of each property,
entered into secret deals with each seller, or other affiliates, then had unearned fees paid to
related parties, had those related parties pay the lion’s share of these undisclosed fees to himself,
and there was never any paperwork reflecting the business purpose of any of this. No 1099s
were issued. No contracts were signed. No invoices were sent. Millions were exchanged on a
handshake. And, as Plaintiffs believe, nothing was ever reported to the IRS. And assuming
nothing was reported to the IRS, this bolsters the argument that this entire transaction was illegal,
was a fraud and was structured in a manner to conceal the illegality and fraud from everyone –
including the IRS.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 6
1. The Younan Defendants have provided conflicting information regarding
what they reported to the IRS making the requested information even more
material.
Younan’s reporting of these illegal kickbacks has already been the subject of discovery
without objection. Specifically, in his deposition taken last year, when asked about the payments
he received from one of the brokers at issue, Defendant Hennessey, Younan testified he did
report these on his tax returns. He stated:
Q. And did you report -- the payment of the advisory fee that Brian
Hennessey/West Ridge made to you on the Central Expressway, Park
Central property, did you report that as income on your tax return?
A. I believe we did.
MR. CHILDERS: Objection; form.
A. THE WITNESS: I believe we did, of course.
Q. (BY MR. MALESOVAS) And did you report the -- let me back up. And
so you believe you reported the portion of the -- what you're calling
advisory fee that Mr. Hennessey paid you on the Central Expressway and
Park Central, you believe you reported that as income on your personal tax
return?
MR. CHILDERS: Same objection. You can answer, Zaya.
A. THE WITNESS: On the personal, that's correct. 6
Then, approximately one year later, in their responses to the discovery requests at issue,
when asked the exact same question regarding the payments from Hennessey, the Younan
Defendants backtracked. Specifically, they stated they don’t know if they reported these
payments to the IRS and refused to either admit or deny this request. After their objections, their
response states:
“…Subject to and without waiving their objections, the Younan Defendants admit
that one or more of the Younan Defendants received the $700,000 payment
evidenced in Exhibit A from Brian Hennessey in connection with Park Central in
2005; however, regarding the remainder of the request, a reasonable inquiry was
made but the information known or easily obtainable is insufficient to enable
6
Exhibit A at 38:4-17
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 7
the Younan Defendants to admit or deny. Further subject to and without
waiving their objections, the Younan Defendants are in the process of
investigating the information referenced in this request and reserve the right to
7
supplement their response upon completion of the investigation.
This exact response was also given for each of the other illegal payments at issue. 8
Nevertheless, in his December 6, 2016 deposition taken in this case, Younan testified again that
he did report each of the payments he received from the relevant brokers on his returns. 9
Importantly, however, Younan also testified he no longer has the relevant tax returns and got rid
of them years ago. 10 Fortunately though, the IRS still has the returns, and Younan’s CPA may as
well.
To pin down the truth, it’s vitally important the Court require Younan to either admit they
did not report these payments to the IRS or, alternatively, identify how they reported these
payments and provide the supporting documentation. If he doesn’t have the tax returns, then the
Court should require him to order the returns form the IRS, and to make formal demand on his
CPA’s for copies of the returns, as well as their work papers used to prepare the returns. Younan
absolutely cannot be allowed to maintain their conflicting positions which would assuredly
mislead the jury and prejudice Plaintiffs.
2. Younan has also waived any right to privacy defense by testifying he
reported these fees to the IRS without objection.
As noted above, Younan has been asked in two prior depositions (one of which came
after Defendants served their discovery responses) if he reported these payments to the IRS.
Importantly, at no point did Younan or his counsel claim that an answer would invade his right to
privacy. Instead, Younan voluntarily answered the questions by repeatedly testifying he did
7
Plaintiffs’ Motion at Exhibit E.
8
Id.
9
Id. at 301:12-16.
10
See the December 6, 2016 Deposition of Zaya Younan attached as exhibit “A” at 143:12-145:15; 191:21-193:7.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 8
report the payments as income on his tax returns. Thus, Younan cannot now come back and say
Plaintiffs have to accept his answer as the gospel truth and that they are precluded from testing it.
If inquiring into this matter was truly an invasion of his privacy, he or his counsel should have,
and could have, raised this issue in either deposition. By failing to do so, this argument has been
waived.
Younan would have this Court take his testimony as the last word on the issue, yet
preclude Plaintiffs from testing the truth of this testimony by claiming that testing it – through
interrogatories and the production of the records – invades his privacy. Thankfully, that is not
the way it works.
3. The Younan Defendants are offensively using their disclosures to the IRS as
a sword and a shield and therefore they have further waived any applicable
privileges or right to privacy.
The Younan Defendants have also filed harassment lawsuits against each of the Plaintiffs
concerning the very same partnerships at issue. 11 Specifically, the Younan Defendants have
filed a lawsuit against each Plaintiff alleging they made “capital calls” on several of the
partnerships at issue because the partnerships were operating at a deficit. The Younan
Defendants further allege that Plaintiffs’ failure to participate in these capital calls damaged the
Younan Defendants, who purportedly “loaned” money to each partnership, and also breached
each partnerships’ respective entity agreement.
This amounts to an “offensive use” of these communications resulting in a waiver of any
privilege or right to privacy. More specifically, The Younan Defendants cannot seek affirmative
relief from Plaintiffs on these very same partnerships but hide evidence that would impact their
claims. See e.g. Republic Ins. Co. v. Davis, 856 S.W.2d 158, 161 (Tex. 1993) (holding a
11
Exhibit B.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 9
privileged communication may be waived when a party “use[s] one hand to seek affirmative
relief in court and with the other lower[s] an iron curtain of silence against otherwise pertinent
and proper questions which may have a bearing upon his right to maintain his action.”).
The Younan Defendants are not only using their disclosures to the IRS as a defense in
this litigation, making them relevant, but they are also seeking damages against Plaintiffs for
deficits incurred by the partnerships and for recoupment of money the Younan Defendants
allegedly loaned to the partnerships. Evidence that Younan was hiding his conduct from the IRS
(that he was inappropriately taking money from the partnerships), if believed by the fact finder,
would probably determine the outcome of one or more causes of action. Republic Ins. Co. v.
Davis, 856 S.W.2d at 163. Also, because the disclosure of the protected communication is the
only means by which Plaintiffs can obtain this evidence, the Younan Defendants are offensively
using their protected communications resulting in the waiver of any privileges or right to privacy
of those communications. For these reasons as well, Plaintiffs Motion should be granted.
4. Plaintiffs are not seeking this information to establish Younan’s general
character for truthfulness or credibility.
Younan’s only other argument against the discovery of this information is that it is only
extrinsic evidence being used to attack Younan’s character and is therefore inadmissible.12
However, Plaintiffs are not seeking to attack Younan’s truthfulness or credibility by inquiring
into a prior instance or instances of untruthfulness. See Tex. R. Evid. 609. Quite the opposite,
Plaintiffs are inquiring into the truthfulness of Younan regarding the very incidents in question –
the kickbacks.
12
See Defendants’ Amended Response to Plaintiffs’ Motion to Compel Information Related to Defendant Zaya
Younan’s Tax Returns at III (A).
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 10
III.
CONCLUSION AND PRAYER
Younan cannot be allowed to take the absurd position that his conduct is common
practice and legitimate but simultaneously withhold vital information that would prove this to be
false. For these reasons, Plaintiffs respectfully request the Court to grant Plaintiffs’ Motion to
Compel Discovery Responses, filed on October 25, 2016, and the relief requested therein as
supplemented by this Supplement to Plaintiffs’ Motion to Compel Discovery Responses within
seven (7) days of the ruling of this Court.
DATED this 5th day of January, 2017.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 11
Respectfully submitted,
FEE, SMITH, SHARP & VITULLO, L.L.P.
________________________________
Anthony L. Vitullo
State Bar No. 20595500
Ryan T. Steinbrunner
State Bar No. 24093201
Three Galleria Tower
13155 Noel Road, Suite 1000
Dallas, Texas 75240
(972) 934-9100
(972) 934-9200 [Fax]
lvitullo@feesmith.com
rsteinbrunner@feesmith.com
and
John L. Malesovas
Malesovas Law Firm
State Bar No. 12857300
1801 South Mopac Expressway, Suite 320
Austin, TX 78746
Telephone: (512) 708-1777
Telecopier: (512) 708-1779
john@malesovas.com
ATTORNEYS FOR PLAINTIFFS
.
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 12
CERTIFICATE OF SERVICE
This is to certify that a true and correct copy of the above and foregoing document has
been served on all counsel of record on January 5, 2017, in accordance with the Texas Rules of
Civil Procedure to:
John Kincade
Winstead, P.C.
500 Winstead Building
2728 North Harwood Street
Dallas, TX 75201
214-745-5390 Facsimile
jkincade@winstead.com
Attorneys for Defendants, Zaya Younan, Younan Properties, Inc., Younan Investment
Properties, Inc., and Younan Investment Properties, L.P.
Stephen D. Taylor
Winstead, P.C.
300 Throckmorton Street, Suite 1700
Fort Worth, TX 76102
817-420-8201 Facsimile
staylor@winstead.com
Attorneys for Defendants, Zaya Younan, Younan Properties, Inc., Younan Investment
Properties, Inc., and Younan Investment Properties, L.P.
Gregory A. Fayer (Pro Hac V ice)
Michelle K. Millard (Pro Hac Vice)
Elliot B. Gipson (Pro Hac Vice)
Fayer Gipson LLP
2029 Century Park East, Suite 3535
Los Angeles, CA 90067
310-557-3589 Facsimile
gfayer@fayergipson.com
Attorneys for Defendants, Zaya Younan, Younan Properties, Inc., Younan Investment
Properties, Inc., and Younan Investment Properties, L.P.
James M. McCown
Amy K. Maher
Nesbitt, Vassar & McCown, L.L.P.
15851 Dallas Parkway, Suite 800
Addison, TX 75001
972-371-2410 Facsimile
jmccown@nvmlaw.com
amaher@nvmlaw.com
Attorneys for Defendants, Brian Hennessey and Narbeh Tatevossian
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 13
Auston Cherry
Cowles & Thompson, P.C.
901 Main Street, Suite 3900
Dallas, TX 75202
214-672-2129 Facsimile
acherry@cowlesthompson.com
Attorneys for Defendant, Quentin Thompson
Joseph R. Knight
Ewell, Brown, Blanke & Knight, LLP
111 Congress Avenue, 28th Floor
Austin, TX 78701
877-851-6384 Facsimile
jknight@ebbklaw.com
Attorneys for Defendant, Deloitte & Touche LLP
Mark W. Rasmussen
Elyse J. Lyons
Jones Day
2727 North Harwood Street
Dallas, TX 75201
214-969-5100 Facsimile
mrasmussen@jonesday.com
elyons@jonesday.com
Attorneys for Defendant, Equity Office Management, L.L.C.
Richard D. Anigian
Haynes and Boone, LLP
2323 Victory Avenue, Suite 700
Dallas, TX 75219
214-651-5940 Facsimile
rick.anigian@haynesboone.com
Attorneys for Defendant, NorthMarq Capital, LLC
_________________________________
Ryan T. Steinbrunner
SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES
Page 14
Page 1 Page 3
CAUSE NO. DC-16-0007 1 INDEX
SUNIL RAMNANI, ) IN THE DISTRICT COURT PAGE
MUKHTIAR GREWAL ) 2 Appearances 2
and HARDEEP GREWAL, ) 3 Index 3-5
Plaintiffs )
v. ) OF DALLAS COUNTY, TEXAS
4 ZAYA YOUNAN
) Examination by Mr. Vitullo 6
ZAYA YOUNAN, YOUNAN ) 5
PROPERTIES, INC., ) Witness Signature Page 333
YOUNAN INVESTMENT ) 6
PROPERTIES, L.P., ) Reporter's Jurat 338
BRIAN HENNESSEY, NARBEH) 7
TATEVOSSIAN, AND ) 8
QUENTIN THOMPSON ) 95th JUDICIAL DISTRICT
9
************************************* 10
ORAL AND VIDEOTAPED DEPOSITION OF 11
ZAYA YOUNAN 12
DECEMBER 6, 2016 13
************************************* 14
THE ORAL AND VIDEOTAPED DEPOSITION of 15
ZAYA YOUNAN, produced as a witness at the 16
instance of the Plaintiff, and duly sworn, was
taken in the above-styled and numbered cause on
17
the 6th day of December 2016, from 9:02 a.m. to 18
5:04 p.m., before DARLA CHAVEZ, Certified 19
Shorthand Reporter in and for the State of Texas, 20
reported by stenographic and computer-aided 21
transcription, in the Offices of Winstead, P.C., 22
500 Winstead Building, 2728 North Harwood Street, 23
Dallas, TX75201, pursuant to the Texas Rules of 24
Civil Procedure and the provisions stated on the
record or attached hereto.
25
Page 2 Page 4
1 APPEARANCES 1 -- EXHIBIT INDEX --
2 FOR THE PLAINTIFF:
ANTHONY L. VITULLO NO. DESCRIPTION PAGE
State Bar No. 20595500 2 1 Depo Notice 6
3 TAYLOR A. HORTON 2 IP Agreement 43
State Bar No. 24086402 3 3 Settlement Statement
65/75
4 Fee, Smith, Sharp & 4 Buyer's Statement
68/75
Vitullo, LLP 4 5 Investment 86
5 Three Galleria Tower
6 Northmarq check 97
13155 Noel Road, Suite 1000
6 Dallas, Texas 75240 5 7 Billing Notice98
Tele: 972-934-9100 8 Hennessey Check 99
7 FAX: 972-934-9200 6 9 PC Agreement 100
E lvitullo@feesmith.com 10 Operating Agreement
123
8 7 11 EP Closing Statement
129
FOR THE DEFENDANTS:GREGORY A. FAYER 12 EP Closing Statement
131
9 State Bar No. 8 13 $250,000 check RPros
137
Fayer Gipson, LLP 14 $500,000 EP check139
10 2029 Century Park East 9 15 Letter Agreement152
Suite 3535 16 Buyer's Statement
163
11 Los Angeles, CA 90067 10 17 O.A. YPI One North Arlg
174
Tele: 310-557-3558 18 Monies received 176
12 Fax:310-557-3589 11 19 C.St. ONA 179
E: GFAYER@FAYERGIPSON.COM
13
20 Check -QT 188
J. BRIAN VANDERWOUDE 12 21 Check-YIP 189
14 Winstead PC 22 C. St. Norfolk 201
500 Winstead Bldg. 13 23 LBJ Ltd. Partn. Ag.
229
15 2728 North Harwood Street 24 C.St. 4851 231
Dallas, TX 75201 14 25 Check 233
16 Tele: 214-745-5496 26 4851 S/Cl. St. 237
Fax:214-745-5390 15 27 Cl. St. East Ontario
260
17 Email 28 Ltr 273
Bvanderwoude@winstead.com 16 29 1.5 million Central Park
276
18 30 Dr. Softa Buyer's St.
279
19 FOR DEFENDANT JAMES M. MCCOWN 17 31 Buyer's St. 283
Nesbitt, Vassar&McCown,LLP 32 Lakeside/Four Forest
292
20 15851 Dallas Parkway 18 33 Mike O'Donovan ltr.
297
Suite 830
34 Younan Affidavit306
21 Addison, Texas 75001
Tele: 972-371-2420 19 35 Ben Fried Email 310
22 Fax:972-371-2410 36 Deloitte Touche Ind. Au
313
E jmccowan@nvmlaw.com 20
23 21
24 ALSO PRESENT: 22
VIDEOGRAPHER -ELITE VIDEOGRAPHY 23
25 24
25
1 (Pages 1 to 4)
EXHIBIT A
Page 5 Page 7
1 (Proceedings began at 9:02 a.m.) 1 A. No.
2 VIDEOGRAPHER: Tape 1, video 2 Q. Did you talk to anybody, other than your
3 deposition of Zaya Younan. Today is Tuesday, 3 lawyers, of course?
4 December 6th, 2016. We are now on the record at 4 A. No.
5 approximately 9:02 a.m. Witness may now be sworn 5 Q. Did you talk
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FILED DALLAS COUNTY 1/5/2017 11:04:58 AM FELICIA PITRE DISTRICT CLERK CAUSE NO. DC-16-00007 SUNIL RAMNANI, § IN THE DISTRICT COURT MUKHTIAR GREWAL, § and HARDEEP GREWAL, § § Plaintiffs, § § v. § OF DALLAS COUNTY, TEXAS § ZAYA YOUNAN, YOUNAN § PROPERTIES, INC., YOUNAN § INVESTMENT PROPERTIES, L.P., § BRIAN HENNESSEY, NARBEH § TATEVOSSIAN, QUENTIN § THOMPSON, DELOITTE AND § TOUCHE, L.L.P., EQUITY OFFICE § MANAGEMENT, L.L.C., NORTHMARQ § CAPITAL, LLC, PROMARK § CAPITAL GROUP, RKM CAPITAL, and § RICHARD SCANDALIATO, § § Defendants. § 95TH JUDICIAL DISTRICT SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES I. INTRODUCTION AND RELEVANT FACTS Plaintiffs file this Supplement to Plaintiffs’ Motion to Compel Defendants’ Discovery Responses (“Plaintiffs’ Supplement”) and ask the Court to order Zaya Younan (“Younan”) to fully respond to Plaintiffs’ discovery requests. Specifically, Plaintiffs ask the Court to order Younan to admit (or deny) he did not report the millions of dollars he received in undisclosed kickbacks to the Internal Revenue Service (“IRS”). Should he deny this, and state that he did report these payments, Plaintiffs then ask the Court to order Younan to identify how he characterized these payments on his tax return and to produce the documentation used to generate this reporting. SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 1 Younan’s position that seeking the above financial related information amounts to seeking the production of an income tax return itself is inaccurate. In fact, this is the very type of information typically produced in lieu of a party’s actual tax return in order to preserve any applicable privacy rights. See, e.g., In re Williams, 328 S.W.3d 103, 106 (Tex. App.—Corpus Christi 2010) (stating “[t]rial courts should not allow discovery of private financial records, such as tax returns, when there are other adequate methods to ascertain net worth, such as audited financial reports or W-2 statements.”). Here, Plaintiffs are not seeking the tax returns but instead are seeking the existence of disclosures to the IRS and/or any supporting documentation (i.e. W- 2 statements, 1099s, etc.) to generate the disclosures on the returns. Therefore, Plaintiffs do not agree that in order to obtain this discovery Plaintiffs must first meet a higher standard normally associated with obtaining personal income tax returns – i.e. that the requested information is both relevant and material. Notwithstanding, this supplement is meant to demonstrate that the materiality and relevance standard regarding this discovery is easily met, if not overwhelmingly obvious, should the Court wish to apply this heightened standard. Additionally, Younan continues to offer conflicting information as to whether these payments in dispute were reported to the IRS. Younan has now twice testified 1 under oath that he did report these payments to the IRS. However, in his discovery responses he states that he is unable to determine if he reported the kickbacks on his tax return, and he refuses to formerly admit or deny these payments were disclosed to the IRS. Thus, Plaintiffs are left guessing as to what version of events Younan will present at trial. Now more than ever, an order compelling these responses is critical. 1 Zaya Younan’s Deposition was just recently taken again on December 6, 2016. SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 2 II. ARGUMENT The Texas Supreme court has allowed the production of tax returns, or portions thereof, if Plaintiffs can show the requested returns are relevant and material to the cause of action. See Crane v. Tunks, 160 Tex. 182, 328 S.W.2d 434, 440 (1959); Martin v. Darnell, 960 S.W.2d 838, 844 (Tex.App.—Amarillo 1997) (orig. proceeding) (declining to hold that federal income tax returns are protected by privilege or constitutional right of privacy where relevant). Courts allow the discovery of income tax returns because the pursuit of justice between litigants outweighs the privacy right in the documents. Maresca v. Marks, 362 S.W.2d 299, 301 (Tex. 1962) (orig. proceeding); see also In re Lissiak, No. 12-16-00067-CV, 2016 Tex. App. LEXIS 4544, at *5 (App.—Tyler 2016); See also Neville v. Brewster, 163 Tex. 155, 352 S.W. 2d 449, 451 (1962) (stating “[it] was incumbent upon the court to exclude those matters which were irrelevant and yet afford to the adversary all information that might be relevant and material to his cause of action.”). A. Discovery Regarding Whether The Younan Defendants Disclosed The Kickbacks To The IRS Is Both Relevant And Material To This Case. Applying this standard to the discovery currently sought (which is far less intrusive than seeking the actual tax returns), Younan’s disclosures to the IRS and the supporting documentation pertaining to said disclosures, if any, is undeniably relevant and material, if not critical, to the case at hand. See Tex. R. Civ. P. 192.3(a). Younan’s disclosures and concealment of his scheme to receive millions in undisclosed and under-the-table kickbacks lies at the heart of this suit. Plaintiffs have proven this scheme was common practice for every one of the investments at issue and have further established these arrangements and kickbacks have never SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 3 been disclosed to any of the investors, including Plaintiffs. Younan has testified as much, stating: Q. And you don't have any written documentation showing that you told any of my clients about these advisory fees or these loan broker fees that you were getting in your pocket in connection with the acquisition of Park Central and Central Expressway; do you? A. You mean for the fees that we earned? I don't recall. If they asked, we discussed it probably. Q. That's not my question. My question is, you don't have any written documents showing in writing that you communicated that you, Zaya Younan, were getting these advisory fees and these -- these loan broker fees in connection with Park Central and Central Expressway? You don't have any written document, correct? A. That's correct. 2 *** Q. You've taken these fees on everything my client has invested in, right? A. Pardon me? Q. You've taken these fees that you've described, for example, a cut of a loan broker fee, you've taken that on every investment my clients have made, haven't you? MR. CHILDERS: Objection; form. A. THE WITNESS: Depends from transaction to transaction, but most likely, yes. 3 Despite all this, Younan will argue to the jury that these “handshake” agreements along with the failure to document and disclose the receipt of millions of dollars are all common practices in the industry. And in the face of the overwhelming evidence to the contrary, Younan continues to claim this conduct was legitimate and that he wasn’t trying to hide anything from anyone. Younan has further testified as much: 2 See Plaintiffs Motion to Compel Defendant’s Discovery Responses (“Plaintiffs” Motion”) at Exhibit A 40:25- 41:12. 3 Id. at 151:13-21. SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 4 Q. And so why on a $900,000 payment on one transaction, $750,000 on another, $1.65 million worth of transaction, why is it that you didn't want any written record of that? MR. CHILDERS: Objection; form. A. THE WITNESS: I didn't say that I want or I didn't want. It was just never thought of. We never thought about we need to have any record of it. Q. (BY MR. MALESOVAS) Why? A. It's something commonly done in our industry. You don't document everything. If somebody ask you, you can explain it to them as I have explained it to you today. 4 *** Q. All right. My question to you is, have you ever done another transaction where you got $1.5 million, you were – you were supposed to get 1.5 million from the transaction, yet, you had no written documentation reflecting that and no written communication with anyone about that? MR. CHILDERS: Objection; form. THE WITNESS: I don't believe so. Q. (BY MR. MALESOVAS) You wanted to hide that from everybody involved, didn't you? MR. CHILDERS: Objection; form. A. THE WITNESS: No, I did not. Q. (BY MR. MALESOVAS) That's why you didn't have any written communication about it, isn't it? MR. CHILDERS: Objection; form. A. THE WITNESS: That's not correct. Q. (BY MR. MALESOVAS) But you have no explanation for the jury why you have no written documentation regarding these payments, do you? MR. CHILDERS: Objection; form. A. THE WITNESS: I have plenty of explanation. I've been doing this for a long period of time, and these transactions and handshakes are conducted all the time. 5 4 Id. at 78:21-79:6. 5 Id. at 94:9-95:5. SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 5 Younan’s reliance on this as a defense (that this conduct is legitimate and all above board), in and of itself, eliminates his entitlement to any privacy and makes full discovery into this issue appropriate. As such, Plaintiffs have an absolute right to demonstrate to the jury the truth and that this defense is complete and utter nonsense. See In re Colonial Pipeline Co., 968 S.W.2d 938, 941 (Tex. 1998) (orig. proceeding) (“the ultimate purpose of discovery is to seek the truth, so that disputes may be decided by what the facts reveal, not by what facts are concealed.”). Plaintiffs can establish this by presenting evidence for the jury that it was and is Younan’s pattern and practice to hide these payments from everyone – even the IRS. Evidence that Younan hid this conduct from the IRS would undoubtedly increase the probability that Younan hid these same payments from Plaintiffs, making it undeniably relevant. See Tex. R. Evid. 401. Plaintiffs also claim that Younan set up an elaborate method of concealing this information from everyone. He inflated the purchase price of each property, entered into secret deals with each seller, or other affiliates, then had unearned fees paid to related parties, had those related parties pay the lion’s share of these undisclosed fees to himself, and there was never any paperwork reflecting the business purpose of any of this. No 1099s were issued. No contracts were signed. No invoices were sent. Millions were exchanged on a handshake. And, as Plaintiffs believe, nothing was ever reported to the IRS. And assuming nothing was reported to the IRS, this bolsters the argument that this entire transaction was illegal, was a fraud and was structured in a manner to conceal the illegality and fraud from everyone – including the IRS. SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 6 1. The Younan Defendants have provided conflicting information regarding what they reported to the IRS making the requested information even more material. Younan’s reporting of these illegal kickbacks has already been the subject of discovery without objection. Specifically, in his deposition taken last year, when asked about the payments he received from one of the brokers at issue, Defendant Hennessey, Younan testified he did report these on his tax returns. He stated: Q. And did you report -- the payment of the advisory fee that Brian Hennessey/West Ridge made to you on the Central Expressway, Park Central property, did you report that as income on your tax return? A. I believe we did. MR. CHILDERS: Objection; form. A. THE WITNESS: I believe we did, of course. Q. (BY MR. MALESOVAS) And did you report the -- let me back up. And so you believe you reported the portion of the -- what you're calling advisory fee that Mr. Hennessey paid you on the Central Expressway and Park Central, you believe you reported that as income on your personal tax return? MR. CHILDERS: Same objection. You can answer, Zaya. A. THE WITNESS: On the personal, that's correct. 6 Then, approximately one year later, in their responses to the discovery requests at issue, when asked the exact same question regarding the payments from Hennessey, the Younan Defendants backtracked. Specifically, they stated they don’t know if they reported these payments to the IRS and refused to either admit or deny this request. After their objections, their response states: “…Subject to and without waiving their objections, the Younan Defendants admit that one or more of the Younan Defendants received the $700,000 payment evidenced in Exhibit A from Brian Hennessey in connection with Park Central in 2005; however, regarding the remainder of the request, a reasonable inquiry was made but the information known or easily obtainable is insufficient to enable 6 Exhibit A at 38:4-17 SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 7 the Younan Defendants to admit or deny. Further subject to and without waiving their objections, the Younan Defendants are in the process of investigating the information referenced in this request and reserve the right to 7 supplement their response upon completion of the investigation. This exact response was also given for each of the other illegal payments at issue. 8 Nevertheless, in his December 6, 2016 deposition taken in this case, Younan testified again that he did report each of the payments he received from the relevant brokers on his returns. 9 Importantly, however, Younan also testified he no longer has the relevant tax returns and got rid of them years ago. 10 Fortunately though, the IRS still has the returns, and Younan’s CPA may as well. To pin down the truth, it’s vitally important the Court require Younan to either admit they did not report these payments to the IRS or, alternatively, identify how they reported these payments and provide the supporting documentation. If he doesn’t have the tax returns, then the Court should require him to order the returns form the IRS, and to make formal demand on his CPA’s for copies of the returns, as well as their work papers used to prepare the returns. Younan absolutely cannot be allowed to maintain their conflicting positions which would assuredly mislead the jury and prejudice Plaintiffs. 2. Younan has also waived any right to privacy defense by testifying he reported these fees to the IRS without objection. As noted above, Younan has been asked in two prior depositions (one of which came after Defendants served their discovery responses) if he reported these payments to the IRS. Importantly, at no point did Younan or his counsel claim that an answer would invade his right to privacy. Instead, Younan voluntarily answered the questions by repeatedly testifying he did 7 Plaintiffs’ Motion at Exhibit E. 8 Id. 9 Id. at 301:12-16. 10 See the December 6, 2016 Deposition of Zaya Younan attached as exhibit “A” at 143:12-145:15; 191:21-193:7. SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 8 report the payments as income on his tax returns. Thus, Younan cannot now come back and say Plaintiffs have to accept his answer as the gospel truth and that they are precluded from testing it. If inquiring into this matter was truly an invasion of his privacy, he or his counsel should have, and could have, raised this issue in either deposition. By failing to do so, this argument has been waived. Younan would have this Court take his testimony as the last word on the issue, yet preclude Plaintiffs from testing the truth of this testimony by claiming that testing it – through interrogatories and the production of the records – invades his privacy. Thankfully, that is not the way it works. 3. The Younan Defendants are offensively using their disclosures to the IRS as a sword and a shield and therefore they have further waived any applicable privileges or right to privacy. The Younan Defendants have also filed harassment lawsuits against each of the Plaintiffs concerning the very same partnerships at issue. 11 Specifically, the Younan Defendants have filed a lawsuit against each Plaintiff alleging they made “capital calls” on several of the partnerships at issue because the partnerships were operating at a deficit. The Younan Defendants further allege that Plaintiffs’ failure to participate in these capital calls damaged the Younan Defendants, who purportedly “loaned” money to each partnership, and also breached each partnerships’ respective entity agreement. This amounts to an “offensive use” of these communications resulting in a waiver of any privilege or right to privacy. More specifically, The Younan Defendants cannot seek affirmative relief from Plaintiffs on these very same partnerships but hide evidence that would impact their claims. See e.g. Republic Ins. Co. v. Davis, 856 S.W.2d 158, 161 (Tex. 1993) (holding a 11 Exhibit B. SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 9 privileged communication may be waived when a party “use[s] one hand to seek affirmative relief in court and with the other lower[s] an iron curtain of silence against otherwise pertinent and proper questions which may have a bearing upon his right to maintain his action.”). The Younan Defendants are not only using their disclosures to the IRS as a defense in this litigation, making them relevant, but they are also seeking damages against Plaintiffs for deficits incurred by the partnerships and for recoupment of money the Younan Defendants allegedly loaned to the partnerships. Evidence that Younan was hiding his conduct from the IRS (that he was inappropriately taking money from the partnerships), if believed by the fact finder, would probably determine the outcome of one or more causes of action. Republic Ins. Co. v. Davis, 856 S.W.2d at 163. Also, because the disclosure of the protected communication is the only means by which Plaintiffs can obtain this evidence, the Younan Defendants are offensively using their protected communications resulting in the waiver of any privileges or right to privacy of those communications. For these reasons as well, Plaintiffs Motion should be granted. 4. Plaintiffs are not seeking this information to establish Younan’s general character for truthfulness or credibility. Younan’s only other argument against the discovery of this information is that it is only extrinsic evidence being used to attack Younan’s character and is therefore inadmissible.12 However, Plaintiffs are not seeking to attack Younan’s truthfulness or credibility by inquiring into a prior instance or instances of untruthfulness. See Tex. R. Evid. 609. Quite the opposite, Plaintiffs are inquiring into the truthfulness of Younan regarding the very incidents in question – the kickbacks. 12 See Defendants’ Amended Response to Plaintiffs’ Motion to Compel Information Related to Defendant Zaya Younan’s Tax Returns at III (A). SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 10 III. CONCLUSION AND PRAYER Younan cannot be allowed to take the absurd position that his conduct is common practice and legitimate but simultaneously withhold vital information that would prove this to be false. For these reasons, Plaintiffs respectfully request the Court to grant Plaintiffs’ Motion to Compel Discovery Responses, filed on October 25, 2016, and the relief requested therein as supplemented by this Supplement to Plaintiffs’ Motion to Compel Discovery Responses within seven (7) days of the ruling of this Court. DATED this 5th day of January, 2017. SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 11 Respectfully submitted, FEE, SMITH, SHARP & VITULLO, L.L.P. ________________________________ Anthony L. Vitullo State Bar No. 20595500 Ryan T. Steinbrunner State Bar No. 24093201 Three Galleria Tower 13155 Noel Road, Suite 1000 Dallas, Texas 75240 (972) 934-9100 (972) 934-9200 [Fax] lvitullo@feesmith.com rsteinbrunner@feesmith.com and John L. Malesovas Malesovas Law Firm State Bar No. 12857300 1801 South Mopac Expressway, Suite 320 Austin, TX 78746 Telephone: (512) 708-1777 Telecopier: (512) 708-1779 john@malesovas.com ATTORNEYS FOR PLAINTIFFS . SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 12 CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the above and foregoing document has been served on all counsel of record on January 5, 2017, in accordance with the Texas Rules of Civil Procedure to: John Kincade Winstead, P.C. 500 Winstead Building 2728 North Harwood Street Dallas, TX 75201 214-745-5390 Facsimile jkincade@winstead.com Attorneys for Defendants, Zaya Younan, Younan Properties, Inc., Younan Investment Properties, Inc., and Younan Investment Properties, L.P. Stephen D. Taylor Winstead, P.C. 300 Throckmorton Street, Suite 1700 Fort Worth, TX 76102 817-420-8201 Facsimile staylor@winstead.com Attorneys for Defendants, Zaya Younan, Younan Properties, Inc., Younan Investment Properties, Inc., and Younan Investment Properties, L.P. Gregory A. Fayer (Pro Hac V ice) Michelle K. Millard (Pro Hac Vice) Elliot B. Gipson (Pro Hac Vice) Fayer Gipson LLP 2029 Century Park East, Suite 3535 Los Angeles, CA 90067 310-557-3589 Facsimile gfayer@fayergipson.com Attorneys for Defendants, Zaya Younan, Younan Properties, Inc., Younan Investment Properties, Inc., and Younan Investment Properties, L.P. James M. McCown Amy K. Maher Nesbitt, Vassar & McCown, L.L.P. 15851 Dallas Parkway, Suite 800 Addison, TX 75001 972-371-2410 Facsimile jmccown@nvmlaw.com amaher@nvmlaw.com Attorneys for Defendants, Brian Hennessey and Narbeh Tatevossian SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 13 Auston Cherry Cowles & Thompson, P.C. 901 Main Street, Suite 3900 Dallas, TX 75202 214-672-2129 Facsimile acherry@cowlesthompson.com Attorneys for Defendant, Quentin Thompson Joseph R. Knight Ewell, Brown, Blanke & Knight, LLP 111 Congress Avenue, 28th Floor Austin, TX 78701 877-851-6384 Facsimile jknight@ebbklaw.com Attorneys for Defendant, Deloitte & Touche LLP Mark W. Rasmussen Elyse J. Lyons Jones Day 2727 North Harwood Street Dallas, TX 75201 214-969-5100 Facsimile mrasmussen@jonesday.com elyons@jonesday.com Attorneys for Defendant, Equity Office Management, L.L.C. Richard D. Anigian Haynes and Boone, LLP 2323 Victory Avenue, Suite 700 Dallas, TX 75219 214-651-5940 Facsimile rick.anigian@haynesboone.com Attorneys for Defendant, NorthMarq Capital, LLC _________________________________ Ryan T. Steinbrunner SUPPLEMENT TO PLAINTIFFS’ MOTION TO COMPEL DEFENDANTS’ DISCOVERY RESPONSES Page 14 Page 1 Page 3 CAUSE NO. DC-16-0007 1 INDEX SUNIL RAMNANI, ) IN THE DISTRICT COURT PAGE MUKHTIAR GREWAL ) 2 Appearances 2 and HARDEEP GREWAL, ) 3 Index 3-5 Plaintiffs ) v. ) OF DALLAS COUNTY, TEXAS 4 ZAYA YOUNAN ) Examination by Mr. Vitullo 6 ZAYA YOUNAN, YOUNAN ) 5 PROPERTIES, INC., ) Witness Signature Page 333 YOUNAN INVESTMENT ) 6 PROPERTIES, L.P., ) Reporter's Jurat 338 BRIAN HENNESSEY, NARBEH) 7 TATEVOSSIAN, AND ) 8 QUENTIN THOMPSON ) 95th JUDICIAL DISTRICT 9 ************************************* 10 ORAL AND VIDEOTAPED DEPOSITION OF 11 ZAYA YOUNAN 12 DECEMBER 6, 2016 13 ************************************* 14 THE ORAL AND VIDEOTAPED DEPOSITION of 15 ZAYA YOUNAN, produced as a witness at the 16 instance of the Plaintiff, and duly sworn, was taken in the above-styled and numbered cause on 17 the 6th day of December 2016, from 9:02 a.m. to 18 5:04 p.m., before DARLA CHAVEZ, Certified 19 Shorthand Reporter in and for the State of Texas, 20 reported by stenographic and computer-aided 21 transcription, in the Offices of Winstead, P.C., 22 500 Winstead Building, 2728 North Harwood Street, 23 Dallas, TX75201, pursuant to the Texas Rules of 24 Civil Procedure and the provisions stated on the record or attached hereto. 25 Page 2 Page 4 1 APPEARANCES 1 -- EXHIBIT INDEX -- 2 FOR THE PLAINTIFF: ANTHONY L. VITULLO NO. DESCRIPTION PAGE State Bar No. 20595500 2 1 Depo Notice 6 3 TAYLOR A. HORTON 2 IP Agreement 43 State Bar No. 24086402 3 3 Settlement Statement 65/75 4 Fee, Smith, Sharp & 4 Buyer's Statement 68/75 Vitullo, LLP 4 5 Investment 86 5 Three Galleria Tower 6 Northmarq check 97 13155 Noel Road, Suite 1000 6 Dallas, Texas 75240 5 7 Billing Notice98 Tele: 972-934-9100 8 Hennessey Check 99 7 FAX: 972-934-9200 6 9 PC Agreement 100 E lvitullo@feesmith.com 10 Operating Agreement 123 8 7 11 EP Closing Statement 129 FOR THE DEFENDANTS:GREGORY A. FAYER 12 EP Closing Statement 131 9 State Bar No. 8 13 $250,000 check RPros 137 Fayer Gipson, LLP 14 $500,000 EP check139 10 2029 Century Park East 9 15 Letter Agreement152 Suite 3535 16 Buyer's Statement 163 11 Los Angeles, CA 90067 10 17 O.A. YPI One North Arlg 174 Tele: 310-557-3558 18 Monies received 176 12 Fax:310-557-3589 11 19 C.St. ONA 179 E: GFAYER@FAYERGIPSON.COM 13 20 Check -QT 188 J. BRIAN VANDERWOUDE 12 21 Check-YIP 189 14 Winstead PC 22 C. St. Norfolk 201 500 Winstead Bldg. 13 23 LBJ Ltd. Partn. Ag. 229 15 2728 North Harwood Street 24 C.St. 4851 231 Dallas, TX 75201 14 25 Check 233 16 Tele: 214-745-5496 26 4851 S/Cl. St. 237 Fax:214-745-5390 15 27 Cl. St. East Ontario 260 17 Email 28 Ltr 273 Bvanderwoude@winstead.com 16 29 1.5 million Central Park 276 18 30 Dr. Softa Buyer's St. 279 19 FOR DEFENDANT JAMES M. MCCOWN 17 31 Buyer's St. 283 Nesbitt, Vassar&McCown,LLP 32 Lakeside/Four Forest 292 20 15851 Dallas Parkway 18 33 Mike O'Donovan ltr. 297 Suite 830 34 Younan Affidavit306 21 Addison, Texas 75001 Tele: 972-371-2420 19 35 Ben Fried Email 310 22 Fax:972-371-2410 36 Deloitte Touche Ind. Au 313 E jmccowan@nvmlaw.com 20 23 21 24 ALSO PRESENT: 22 VIDEOGRAPHER -ELITE VIDEOGRAPHY 23 25 24 25 1 (Pages 1 to 4) EXHIBIT A Page 5 Page 7 1 (Proceedings began at 9:02 a.m.) 1 A. No. 2 VIDEOGRAPHER: Tape 1, video 2 Q. Did you talk to anybody, other than your 3 deposition of Zaya Younan. Today is Tuesday, 3 lawyers, of course? 4 December 6th, 2016. We are now on the record at 4 A. No. 5 approximately 9:02 a.m. Witness may now be sworn 5 Q. Did you talk