On October 01, 2018 a
Jefferson Smith's Motion to Dismiss Jetall's Counterclaims Pursuant to Texas Tax Code Section 171.252 and Plea to Jurisdiction
was filed
involving a dispute between
Jefferson Smith L L C,
Choudhri, Ali,
Jetall Companies Inc,
and
Jetall Companies Inc,
Quinlan, John,
Choudhri, Ali,
for Other Property
in the District Court of Harris County.
Preview
2/1/2019 4:36 PM
Marilyn Burgess - District Clerk Harris County
Envelope No. 30881805
By: TERESA KIRBY
Filed: 2/1/2019 4:36 PM
CAUSE NO. 2018-69591
JEFFERSON SMITH, L.L.C., § IN THE DISTRICT COURT OF
§
Plaintiff, §
§
§
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VS. § HARRIS COUNTY, TEXAS
§
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JETALL COMPANIES, INC. and §
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ALI CHOUDHRI, §
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Defendants. § 215th JUDICIAL DISTRICT
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JEFFERSON SMITH’S MOTION TO DISMISS JETALL’S
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COUNTERCLAIMS PURSUANT TO TEX. TAX CODE §171.252
AND PLEA TO JURISDICTION Bu
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Plaintiff Jefferson Smith, L.L.C. files this Motion to Dismiss Counter-Plaintiff
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Jetall’s Counterclaims Pursuant to Tex. Tax. Code §171.252 and Plea to Jurisdiction and
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would respectfully show the Court as follows:
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I.
SUMMARY
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Many months ago, the Texas Comptroller forfeited Jetall’s
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1. corporate privileges
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based on its failure to pay nearly $100,000 in franchise taxes.
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Texas law is clear: because Jetall’s corporate privileges have been forfeited, it
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2.
of
may not assert any counterclaims in this litigation.
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3. Accordingly, the Court should dismiss and/or strike Jetall’s counterclaims.
II.
ARGUMENT
4. The Texas comptroller must forfeit the corporate privileges of a corporation that
fails to timely pay its franchise tax or that fails to file the required franchise-tax report.
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Tex. Tax Code §171.251. “If the corporate privileges of a corporation are forfeited under
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this subchapter . . . the corporation shall be denied the right to sue or defend in a court of
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this state[.]” Tex. Tax Code §171.252 (emphasis added). Thus, if a defendant’s
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corporate privileges have been forfeited, then the defendant may not seek affirmative
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relief by filing counterclaims. See Cruse v. O’Quinn, 273 S.W.3d 766, 770-71 (Tex.
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App.—Houston [14th Dist.] 2008, pet. denied).
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Texas Comptroller
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5. In this case, the forfeited Jetall’s status for failure to pay
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franchise taxes:
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(See Print-Out of Jetall’s Corporate Status; Ex. A)1. Jetall’s “forfeited” status is further
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confirmed by an October 5, 2018 tax lien that the State of Texas filed against Jetall’s property
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based on its failure to pay franchise taxes for tax year 2017. (See State of Texas Tax Lien
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Against Jetall; Ex. B).
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6. Because Jetall’s corporate privileges have been terminated due to its failure to pay
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franchise taxes, Tex. Tax Code §171.252 prohibits Jetall from filing or maintaining any claims in
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this action. Those claims should be struck and/or dismissed.
1
The attached declaration of Darren Braun authenticates Exhibits A and B.
3
III.
CONCLUSION
7. Plaintiff respectfully requests that this Court dismiss and/or strike Jetall’s
counterclaims, and that it grant Plaintiff all other relief to which it is entitled at law or
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equity.
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Dated: February 1, 2019 Respectfully submitted,
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MAHENDRU, P.C.
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By:
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Ashish Mahendru
Texas Bar No. 00796980
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Darren Braun
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Texas Bar No. 24082267
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639 Heights Boulevard
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Houston, Texas 77007
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(713) 571-1519 (Telephone)
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(713) 651-0776 (Facsimile)
amahendru@thelitigationgroup.com
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dbraun@thelitigationgroup.com
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ATTORNEYS FOR PLAINTIFF
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CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing instrument has been
provided to all counsel of record in accordance with the applicable Texas Rules of Civil
Procedure on this 1st day of February, 2019.
Via Email:
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Lloyd E. Kelley Kelley@lloydekelley.com
THE KELLEY LAW FIRM
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2726 Bissonnet, Ste. 240
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PMB 12
Houston, Texas 77005
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James D. Pierce jim@jamespierce.com
Comerica Bank Building
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One Sugar Creek Center Blvd.
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Suite 1080
Sugarland, Texas 77478 Bu
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Ashish Mahendru
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5
Document Filed Date
February 01, 2019
Case Filing Date
October 01, 2018
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2/1/2019 4:36 PM Marilyn Burgess - District Clerk Harris County Envelope No. 30881805 By: TERESA KIRBY Filed: 2/1/2019 4:36 PM CAUSE NO. 2018-69591 JEFFERSON SMITH, L.L.C., § IN THE DISTRICT COURT OF § Plaintiff, § § § k ler VS. § HARRIS COUNTY, TEXAS § tC JETALL COMPANIES, INC. and § ric ALI CHOUDHRI, § § ist Defendants. § 215th JUDICIAL DISTRICT sD es JEFFERSON SMITH’S MOTION TO DISMISS JETALL’S rg COUNTERCLAIMS PURSUANT TO TEX. TAX CODE §171.252 AND PLEA TO JURISDICTION Bu n ily Plaintiff Jefferson Smith, L.L.C. files this Motion to Dismiss Counter-Plaintiff ar M Jetall’s Counterclaims Pursuant to Tex. Tax. Code §171.252 and Plea to Jurisdiction and of would respectfully show the Court as follows: e ffic I. SUMMARY yO Many months ago, the Texas Comptroller forfeited Jetall’s op 1. corporate privileges C based on its failure to pay nearly $100,000 in franchise taxes. ial Texas law is clear: because Jetall’s corporate privileges have been forfeited, it fic 2. of may not assert any counterclaims in this litigation. Un 3. Accordingly, the Court should dismiss and/or strike Jetall’s counterclaims. II. ARGUMENT 4. The Texas comptroller must forfeit the corporate privileges of a corporation that fails to timely pay its franchise tax or that fails to file the required franchise-tax report. k Tex. Tax Code §171.251. “If the corporate privileges of a corporation are forfeited under ler tC this subchapter . . . the corporation shall be denied the right to sue or defend in a court of ric this state[.]” Tex. Tax Code §171.252 (emphasis added). Thus, if a defendant’s ist sD corporate privileges have been forfeited, then the defendant may not seek affirmative es relief by filing counterclaims. See Cruse v. O’Quinn, 273 S.W.3d 766, 770-71 (Tex. rg App.—Houston [14th Dist.] 2008, pet. denied). Bu Texas Comptroller n 5. In this case, the forfeited Jetall’s status for failure to pay ily franchise taxes: ar M of e ffic yO op C ial fic of Un 2 k ler tC ric ist sD es rg Bu n ily ar M of e ffic (See Print-Out of Jetall’s Corporate Status; Ex. A)1. Jetall’s “forfeited” status is further O confirmed by an October 5, 2018 tax lien that the State of Texas filed against Jetall’s property y op based on its failure to pay franchise taxes for tax year 2017. (See State of Texas Tax Lien C Against Jetall; Ex. B). ial fic 6. Because Jetall’s corporate privileges have been terminated due to its failure to pay of franchise taxes, Tex. Tax Code §171.252 prohibits Jetall from filing or maintaining any claims in Un this action. Those claims should be struck and/or dismissed. 1 The attached declaration of Darren Braun authenticates Exhibits A and B. 3 III. CONCLUSION 7. Plaintiff respectfully requests that this Court dismiss and/or strike Jetall’s counterclaims, and that it grant Plaintiff all other relief to which it is entitled at law or k equity. ler tC Dated: February 1, 2019 Respectfully submitted, ric MAHENDRU, P.C. ist sD es rg By: Bu Ashish Mahendru Texas Bar No. 00796980 n Darren Braun ily Texas Bar No. 24082267 ar 639 Heights Boulevard M Houston, Texas 77007 of (713) 571-1519 (Telephone) e (713) 651-0776 (Facsimile) amahendru@thelitigationgroup.com ffic dbraun@thelitigationgroup.com yO ATTORNEYS FOR PLAINTIFF op C ial fic of Un 4 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing instrument has been provided to all counsel of record in accordance with the applicable Texas Rules of Civil Procedure on this 1st day of February, 2019. Via Email: k ler Lloyd E. Kelley Kelley@lloydekelley.com THE KELLEY LAW FIRM tC 2726 Bissonnet, Ste. 240 ric PMB 12 Houston, Texas 77005 ist sD James D. Pierce jim@jamespierce.com Comerica Bank Building es One Sugar Creek Center Blvd. rg Suite 1080 Sugarland, Texas 77478 Bu n ily ar M Ashish Mahendru of e ffic yO op C ial fic of Un 5