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FILED
10/2/2020 11:27 PM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Martin Reyes DEPUTY
Martin Reyes
CAUSE NO. DC-20-10214
STEVEN WEBSTER, AARON WEBSTER, § IN THE DISTRICT COURT OF
and DENNIS WOODS,
Plaintiffs,
Vv. DALLAS COUNTY, TEXAS
DENNIS J. ROGERS, II and OMTC, INC.,
Defendants. 191ST JUDICIAL DISTRICT
DEFENDANTS OMTC, INC. AND DENNIS J. ROGERS IT’S RESPONSE IN
OPPOSITION TO PLAINTIFFS STEVEN WEBSTER AND DENNIS WOODS’S
MOTION FOR PARTIAL SUMMARY JUDGMENT AND
IN THE ALTERNATIVE MOTION FOR CONTINUANCE
HENNEMAN RAU LLP
By: /s/ Bradley M. Kirklin
Bradley M. Kirklin
State Bar No. 24046222
George H. Rau III
State Bar No. 24037335
815 Walker Street, Suite 1440
Houston, Texas 77002
Telephone: 713-955-6030
Facsimile: 713-955-6141
Email: bkirklin@hennemanrau.com
Email: grau@hennemanrau.com
ATTORNEYS FOR DEFENDANTS
OMTC, INC. & DENNIS J. ROGERS
TABLE OF CONTENTS
I SUMMARY OF THE ARGUMENT
IL. SUMMARY JUDGMENT EVIDENCE.............
Til. SUMMARY JUDGMENT FACTS
IV. LAW & ARGUMENT.
A Plaintiffs’ Motion for Partial Summary Judgment is premature and should
be denied or at a minimum continued until discovery can be conducted
The Levinthal factors clearly weigh in favor of a denial or continuance of
the summary judgment hearing because the case is barely two months old
and because the OMTC Defendants are vigorously defending the case and
diligently pursuing discovery.
Argument of counsel at a TRO hearing (or any hearing) is not evidence and
cannot be considered by the Court............
Plaintiffs’ Summary Judgment claim for breach of contract fails because
Defendants have asserted the affirmative defense of fraud in the
inducement, and the contract is between OMTC and Plaintiffs Steven
Webster and Dennis Wooda..............
Plaintiffs’ summary judgment claim for conversion fails because money not
identified as specific chattel cannot be converted, and because Plaintiffs do
not provide summary judgment evidence that the OMTC Defendants are
“unlawfully” in possession of the money, or that they are “refusing” to
return it
Plaintiffs’ money had and received summary judgment argument fails
because money had and received is an equitable remedy only available
when there are no other adequate legal remedies. ......... 11
V. CONCLUSION 13
VL PRAYER 13
TABLE OF AUTHORITIES
Cases
American Tobacco, Co., Inc. v. Grinnell,
951 S.W.2d 420, 425 (Tex.1997).
Amoco Prod. v. Smith,
946 S.W.2d 162, 164 (Tex. App.—El Paso 1997, no writ.).... 12
Best Buy Co. v. Barrera,
248 S.W.3d 160, at 162-63 (Tex. 2007).........0004 12
Chapa v. Garcia,
848 S.W.2d 667, 668 (Tex.1992).
Collins v. County of El Paso,
954 S.W.2d 137, 145 (Tex. App—EI Paso 1997, pet. denied.)
Cooper Water Sup. v. Elledge,
197 S.W.3d 826, 831 (Tex. App.—Fort Worth 2006), rev’d on other grounds, 240
S.W.3d 869 (Tex. 2007), 12
Daugherty v. Jacobs,
187 S.W.3d 607, 619 (Tex. App.—Houston [14th Dist.] 2006, no pet.) seeseeseeeeeeeeteneee 7
Dunn vy. Bank-Tec S.,
134 S.W.3d 315, 328 (Tex. App.— Amarillo 2003, no pet.) .......eseesesesssseseeesesesesesneseenescseenesees 7
Eckert v. Centennial Sav. Bank,
757 S.W.2d 392, 398 (Tex. App.—Dallas 1988, writ denied)... 10
Edlund v. Bounds,
842 S.W.2d 719, 727 (Tex. App.—Dallas 1992, writ denied) 10
Edwards v. Mid-Continent Office Distrib.,
252 S.W.3d 833, 837 (Tex. App.—Dallas 2008, pet. denied.) ........csessesessessseerereeteneetenes 11,12
Estate of Townes v. Townes,
867 S.W.2d 414, 419-20 (Tex. App.—Houston [14th Dist.] 1993, writ denied). 10
Jones v. Hunt,
74 Tex. 657, 12 S.W. 832, 833 (Tex.1889) . 10
Khorshid, Inc. v. Christian,
257 S.W.3d 748, 759 (Tex. App.— Dallas 2008, no pet.)......sceeseseeseseeseseseeseseeneacseereneeneesseeene 11
Levinthal v. Kelsey-Seybold Clinic, P.A.
902 S.W.2d 508 (Tex. App.—Houston [1 Dist.] 1994, no WYit.).......scecseesesseeseeeeeeeneerees passim
ii
McDuffie v. Blassingame,
883 S.W.2d 329, 336 (Tex. App.—Amarillo 1994, writ denied)
Myan Mgmt. Group, L.L.C. v. Adam Sparks Family Revocable Tr.,
292 S.W.3d 750, 754 (Tex. App.—Dallas 2009, no pet.)........sesessessssssesessesesesesesteneseseeneereneeeeee 9
Phippen v. Deere & Co.,
965 S.W.2d 713, 724 (Tex. App.—Houston [14" Dist.] no pet.) see 10
Rogers v. Daniel Oil & Royalty Co.
TNOISSW2d'89151894 (193 ))eeen passim
Service Lloyds Ins. Co. v. Clark,
714 S.W.2d 437, 438 (Tex. App.—Austin 1986, no writ)
Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc.,
300 S.W.3d 348, 365-66 (Tex. App.—Dallas 2009, pet. denied).............. 11
Texas Farmers Ins. v. Murphy,
996 S.W.2d 873, 879 (Tex. 1999); Reed v. Buck, 370 S.W.2d 867 (Tex.1963)
Waisath v. Lack's Stores, Inc.,
474 S.W.2d 444, 447 (Tex. 1971)...
Other Authorities
TEX. CONST. ART. I, § 19
TEX. R. CIV. P. 166a(C) oe
iii
CAUSE NO. DC-20-10214
STEVEN WEBSTER, AARON WEBSTER, § IN THE DISTRICT COURT OF
and DENNIS WOODS,
Plaintiffs,
Vv. DALLAS COUNTY, TEXAS
DENNIS J. ROGERS, II and OMTC, INC.,
Defendants. 191ST JUDICIAL DISTRICT
DEFENDANTS OMTC, INC. AND DENNIS J. ROGERS II’S RESPONSE IN
OPPOSITION TO PLAINTIFFS STEVEN WEBSTER AND DENNIS WOODS’S
MOTION FOR PARTIAL SUMMARY JUDGMENT AND IN THE ALTERNATIVE
MOTION FOR CONTINUANCE
Come now Defendants OMTC, Inc. (“OMTC”) and Dennis J. Rogers, II (“Rogers”)
(collectively, “OMTC Defendants” or “Defendants”) and file this Response in Opposition to
Plaintiffs Steven Webster and Dennis Woods’s (collectively, “Plaintiffs”) Motion for Partial
Summary Judgment (“Plaintiffs’ Motion’), and in the alternative file a Motion for Continuance,
and would show the Court as follows:
I SUMMARY OF THE ARGUMENT
On September 17, 2020, 48 days after filing this lawsuit, 27 days after Defendants
answered the lawsuit, and before the OMTC Defendants’ preliminary Rule 91a Motion to Dismiss
has been heard, Plaintiffs filed a Motion for Partial Summary Judgment on three of their causes of
action: breach of contract, conversion, and money had and received. Not only is such a summary
judgment motion premature, but Plaintiffs wholly fail to meet their burden of providing competent
summary judgment evidence to support each material element of breach of contract, conversion,
and money had and money received.
Additionally, Plaintiffs’ Motion was filed before any discovery has been exchanged,
including discovery into Defendants’ affirmative defenses, and before any depositions have
occurred. Currently, Rogers, both in his individual capacity and as the corporate representative of
Defendant OMTC, is scheduled to be deposed on October 15, 2020, and Defendants have
requested the deposition of Plaintiff Aaron Webster in November 2020. Therefore, granting
summary judgment at this nascent stage of the litigation would deprive Defendants of their due
process rights protected by the Rules and the Texas Constitution.! As will be discussed herein, in
Levinthal v. Kelsey-Seybold Clinic, P.A. 902 S.W.2d 508 (Tex. App.—Houston [1 Dist.] 1994,
no writ.), the Houston Court of Appeals held that it is reversible error to grant a summary judgment
in circumstances such as this.
Finally, by virtue of the Agreed Temporary Injunction, Plaintiffs’ rights are secured and
there should be no rush to judgment. Indeed, were the court to grant summary judgment in this
instance it would be akin to granting a default judgment immediately after a defendant has duly
appeared and answered. Therefore, Plaintiff's Motion for Partial Summary Judgment must be
denied, or in the alternative, continued 90-120 days so that discovery may be conducted and justice
may be done.
Il. SUMMARY JUDGMENT EVIDENCE
Exhibit A: Unsworn Declaration of Dennis J. Rogers, II (“Rogers Declaration”)
Exhibit B: Fuel Purchase Order between OMTC and Dennis Woods
Exhibit C: Fuel Purchase Order between OMTC and Steven Webster
Exhibit D: Defendants’ Request for Disclosure, Interrogatories, Request for Admissions,
and Request for Production
' “No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner
disfranchised, except by the due course of the law of the land.” TEX. CONST. ART. I, § 19.
2
Ill. SUMMARY JUDGMENT FACTS?
OMTC is a licensed wholesaler of fuel products in Texas. In and around early June 2020,
Rogers was introduced to Aaron Webster through an intermediary/broker, Patricia Waters
(“Waters”). Aaron Webster expressed an interest in purchasing large quantities of fuel from
OMTC for the purpose of reselling that fuel. Aaron Webster informed OMTC’s president, Rogers,
that he through his father, Steven Webster, had previously bought and sold large quantities of fuel
through Waters. Aaron Webster informed Rogers that Steven Webster and Dennis Woods
(“Woods”) had the requisite licenses to purchase large amounts of both diesel and jet fuel
(“Licenses”), and that he was experienced in the wholesale fuel distribution business. However,
based on information and belief, neither Steven Webster nor Woods possessed the requisite
Licenses necessary for the purchase and resale of fuel. Rogers has never met Aaron Webster,
Steven Webster, or Dennis Woods in person, and he only spoke to Steven Webster and Woods
once or twice.
In early June 2020, two individuals who identified themselves to Rogers as Blaine
McManus (“McManus”) and Gary Samson (“Samson”) approached Rogers, informed Rogers that
they were fuel brokers for Vitol Inc. (“Vitol”), and they informed Rogers about a fuel sale to occur
on or about June 29, 2020. Based on Aaron Webster’s representation regarding the Licenses and
his experience in the fuel wholesale and distribution business, on June 18, 2020, less than three
weeks after Rogers and Aaron Webster were introduced by Waters, OMTC, as Seller, entered into
a Fuel Purchase Order with Woods, as Buyer, wherein OMTC agreed to sell, and Woods agreed
to purchase jet fuel.? Also, on June 18, 2020, OMTC, as Seller, entered into a Fuel Purchase Order
? Ex. A-C, The Summary Judgment Facts Section is supported by Rogers’s Declaration as well as the Fuel Purchase
Orders.
3 Exhibit B.
with Steven Webster, as Buyer, wherein OMTC agreed to sell, and Steven Webster agreed to
purchase diesel fuel.*
On or about June 19, 2020, Rogers provided Aaron Webster, Steven Webster, and Woods
OMTC’s bank account number with Chase Bank, Account No. xxx7879 (“Account No.
xxx7879”). Account No. xxx7879 is exclusively an OMTC business account; it is not a Rogers
personal account. On or about June 19, 2020, Woods wired $2,142,000.00 to Account No.
xxx7879. That same day Steven Webster wired $4,410,000.00 to Account No. xxx7879.
Collectively, the amounts Woods and Webster wired to OMTC are referred to as “the Funds.”
On or about June 24, 2020, OMTC, believing that McManus and Samson were Vitol
representatives, wired the Funds from Account No. xxx7879 to a bank account that McManus and
Samson stated was a Vitol bank account. Soon thereafter, Rogers became concerned that
McManus and Samson were not Vitol representatives, and on or about July 1, 2020, he
immediately acted to recall the Funds. Rogers remained in constant communication with Aaron
Webster regarding the Funds from July 1, 2020 through the time Plaintiffs’ engaged counsel, and
then continued his communications with Plaintiffs’ counsel through the time Plaintiffs filed this
lawsuit. On or about August 6, 2020, OMTC returned the $2,142,000 to Woods, and he is actively
working to return the remainder of the Funds to Webster.°
Iv. LAW & ARGUMENT
A. Plaintiffs’ Motion for Partial Summary Judgment is premature and should be denied
or at a minimum continued until discovery can be conducted.
The purpose of summary judgment is not to deprive litigants of their right to a trial by jury
or to try a case by affidavit and deposition testimony. Collins v. County of El Paso, 954 S.W.2d
4 Exhibit C.
SEx. A.
137, 145 (Tex. App—EI Paso 1997, pet. denied.) The party moving for summary judgment, (in
this case Plaintiffs), bear the burden of proving, by presenting the court with summary judgment
evidence, that it is entitled to judgment as a matter of law because no fact issue exists. TEX. R.
Civ. P. 166a(c). In considering the traditional grounds raised by the party moving for summary
judgment, the Court is bound by certain principles: (1) in deciding whether there is a disputed
material fact issue precluding summary judgment, evidence favorable to the non-movant must be
taken as true; and (2) every reasonable inference must be indulged in favor of the non-movant and
any doubts must be resolved in the non-movant’s favor. See American Tobacco, Co., Inc. v.
Grinnell, 951 S.W.2d 420, 425 (Tex.1997).
When considering whether a trial court improperly granted a premature summary
judgment, Texas appellate courts consider the following non-exclusive list of factors in deciding
whether the trial court abused its discretion: (1) the length of time the case has been on file; (2) the
materiality of the discovery sought by the party opposing summary judgment; and (3) whether due
diligence was exercised in obtaining the discovery. Levinthal v. Kelsey-Seybold Clinic, P.A., 902
S.W.2d 508, 510 (Tex. App.—Houston [1st Dist.] 1994, no writ).° In Levinthal, the First Court
of Appeals provides:
This rule [Rule 166a(c)] clearly contemplates that the trial court will allow
the parties a reasonable opportunity to conduct discovery before granting a
summary judgment. The purpose of the discovery process is to allow parties
to obtain the fullest knowledge of facts and issues before the disposition of
their case. Chapa v. Garcia, 848 S.W.2d 667, 668 (Tex.1992). Discovery is
favored, and the rules governing discovery are to be liberally construed.
Service Lloyds Ins. Co. v. Clark, 714 S.W.2d 437, 438 (Tex. App.—Austin
1986, no writ).
6 See also, Verkin v. Southwest Ctr. One., Ltd, 784 S.W.2d 92, 94 (Tex. App—Houston [1* Dist.] 1990, writ denied;
Eckman v. Centennial Sav. Bank, 757 S.W.2d 392, 395 (Tex. App.—Dallas 1988, writ denied); Cedillo v. Jefferson,
802 S.W.2d 866, 868 (Tex. App.—Houston [1* Dist.] 1991, writ denied.)
5
Levinthal, 902 S.W.2d at 512.
B The Levinthal factors clearly weigh in favor of a denial or continuance of the summary
judgment hearing because the case is barely two months old and because the OMTC
Defendants are vigorously defending the case and diligently pursuing discovery.
Plaintiffs filed suit on July 29, 2020. The OMTC Defendants answered on August 24,
2020. No meaningful discovery has occurred. The OMTC Defendants are scheduled to give their
deposition on October 15, 2020, and the OMTC Defendants have sought the deposition of Plaintiff
Aaron Webster in November 2020. On October 2, 2020, the OMTC Defendants amended their
answer and asserted verified and affirmative defenses including: Rogers is not liable in his
individual capacity, fraud in the inducement, complete performance as to Woods, offset, no actual
injury or damage to Plaintiff Woods, and affirmative defenses as to Plaintiffs’ conversion and
money had and received claims.
Further, on October 2, 2020, the OMTC Defendants issued robust written discovery
including Requests for Disclosures, Requests for Admissions, Interrogatories, and Requests for
Production.” That discovery is due on Monday, November 2, 2020. Additionally, the OMTC
Defendants are still gathering documents and intend to produce same on October 9, 2020. This
case’s first trial setting is not until July 5, 2021.
In Levinthal, the First Court of Appeals found that the district court abused its discretion
where the district court granted a summary judgment against a plaintiff in favor of a defendant
when that case had only been on file for three months, no discovery had occurred, and where the
plaintiff had exercised due diligence in seeking material discovery. Levinthal, 902 S.W.2d at 510-
13. Here, it is Plaintiffs, seeking immediate summary judgment two months after filing suit when
no meaningful discovery has occurred, and Defendants are diligently defending the case.
7 Ex. D.
In Levinthal, the First Court of Appeals recognized that a trial court should give more
deference to a defendant moving for summary judgment because “a trial court can presume that a
plaintiff
has investigated its own case prior to filing same.” Levinthal, 902 S.W.2d at 511. Even
so, the First Court reversed the trial court’s granting of summary judgment stating, “[H]owever,
this presumption does not deny a plaintiff the right to engage in necessary discovery before
summary judgment is granted.” Jd. Necessarily then, the OMTC Defendants must be allowed to
conduct discovery of this case.
c. Argument of counsel at a TRO hearing (or any hearing) is not evidence and cannot
be considered by the Court.
In Plaintiffs’ Motion, as part of their “Undisputed Facts” section, Plaintiffs cite to
Defendants’ counsel’s argument at the Temporary Restraining Order hearing to support their
summary judgment arguments.’ Argument of counsel, however, is not evidence. See Daugherty
v. Jacobs, 187 S.W.3d 607, 619 (Tex. App.—Houston [14th Dist.] 2006, no pet.) (“[U]nsworn
statements by counsel are not evidence.”); Dunn v. Bank-Tec S., 134 S.W.3d 315, 328 (Tex.
App.—Amarillo 2003, no pet.) (“The mere argument of counsel is not evidence.”); McDuffie v.
Blassingame, 883 S.W.2d 329, 336 (Tex. App.—Amarillo 1994, writ denied) (“[S]tatements made
at trial by Ronald's counsel that he would have dismissed Carol had she correctly answered his
interrogatories is unsworn testimony and not proof of those facts.”) Therefore, the OMTC
Defendants object to Plaintiffs’ use of Defendants’ counsel’s argument as summary judgment
evidence.
* Plaintiffs’ Motion, 12-13.
D. Plaintiffs’ Summary Judgment claim for breach of contract fails because Defendants
have asserted the affirmative defense of fraud in the inducement, and the contract is
between OMTC and Plaintiffs Steven Webster and Dennis Woods.
The OMTC Defendants have asserted the affirmative defense of fraud in the inducement
to the Fuel Purchase Orders at issue in this lawsuit.” Specifically, Rogers would not have entered
into the Fuel Purchase Orders, but for Aaron Webster’s representation that Plaintiffs possessed the
requisite licenses to purchase large quantities of fuel for resale purposes.'° Fraud and fraud in the
inducement are affirmative defenses to contract actions. Texas Farmers Ins. v. Murphy, 996
S.W.2d 873, 879 (Tex. 1999); Reed v. Buck, 370 S.W.2d 867 (Tex.1963).
Defendant Rogers has also asserted the affirmative defense that he is not liable in his
individual capacity.'! Plaintiffs improperly claim that “Rogers and OMTC” breached the Fuel
Purchase Orders.!* However, Rogers was not a party to either of the Fuel Purchase Orders:!*
"en Mli
By: sit Manager,
and
OMT corporation.
| "Hennig Rogers, President
KK
° OMTC Defendants First Amended Answer, 1
Ex. A.
"Id. at 2.
" Plaintiffs’ Motion, 13-14.
'3 Exhibits B and C.
BUYER
Ponts bolt ;
By: its
Manager,
and
SELLER
OMTC, In as corporation.
By
Mis fers, President
As shown, directly above, the only Defendant party to the contract was OMTC. Thus, because
Defendant Rogers has asserted a viable affirmative defense, it is axiomatic that Plaintiffs’ breach
of contract summary judgment argument against Rogers fails because Plaintiffs have no summary
judgment evidence that a valid contract exists between Defendant Rogers and Plaintiffs. Myan
Mgmt. Group, L.L.C. v. Adam Sparks Family Revocable Tr., 292 $.W.3d 750, 754 (Tex. App.—
Dallas 2009, no pet.) (A material element of breach of contract is establishing that a valid contract
exists.). Plaintiffs have failed to meet their summary judgment burden for breach of contract, and
the OMTC Defendants are entitled to discover their affirmative defenses prior to a court rendering
summary judgment.
E Plaintiffs’ summary judgment claim for conversion fails because money not identified
as specific chattel cannot be converted, and because Plaintiffs do not provide
summary judgment evidence that the OMTC Defendants are “unlawfully” in
possession of the money, or that they are “refusing” to return it.
Conversion is the unauthorized and wrongful assumption and exercise of dominion and
control over the personal property of another to the exclusion of, or inconsistent with, the owner's
rights. Waisath v. Lack's Stores, Inc., 474 8.W.2d 444, 447 (Tex. 1971). With respect to money,
“[I]fa plaintiff alleges that the specific chattel converted was money . . . a plaintiff must also show
the money (1) was delivered to the defendant for safekeeping, (2) was intended to be kept
segregated, (3) was substantially in the form in which it is received or intact, and (4) was not the
subject of a title claim by the defendant.” Estate of Townes v. Townes, 867 S.W.2d 414, 419-20
9
(Tex. App—Houston [14th Dist.] 1993, writ denied); Edlund v. Bounds, 842 S.W.2d 719, 727
(Tex. App.—Dallas 1992, writ denied); Jones v. Hunt, 74 Tex. 657, 12 8.W. 832, 833 (Tex.1889).
In this instance, Plaintiffs provide no summary judgment evidence the money in this case
was delivered to Defendants for “safekeeping,” and indeed Plaintiffs allege the opposite—that
OMTC were to use the Funds to purchase fuel.'* Similarly, Plaintiffs provide no evidence that the
Funds were required to be segregated, nor do the Fuel Purchase Orders require segregation of
funds.'> See Phippen v. Deere & Co., 965 S.W.2d 713, 724 (Tex. App.—Houston [14" Dist.] no
pet.)(no conversion because the security agreement did not require segregation of funds.)
Additionally, the Dallas Court of Appeals states “[W]hen an indebtedness can be discharged by
payment of money generally, an action in conversion is inappropriate.” Eckert v. Centennial Sav.
Bank, 757 S.W.2d 392, 398 (Tex. App.—Dallas 1988, writ denied) (holding that there is no
conversion for a construction loan.) While it is unclear from Plaintiffs’ pleadings, affidavits, and
the Fuel Purchase Orders, it appears that Plaintiffs’ position is that they loaned money to OMTC
to purchase fuel, and they have not yet been repaid. Thus, the alleged indebtedness in this case
can be discharged by payment of money, necessarily making conversion an inappropriate cause of
action in this case.
Even if the above were not dispositive of the conversion summary judgment argument (it
is), Plaintiffs fail present sufficient summary judgment evidence to support two elements of
conversion. To establish a claim for conversion of personal property, a plaintiff must prove that:
(1) the defendant unlawfully and without authorization assumed and exercised dominion and
control over the property to the exclusion of, or inconsistent with, the plaintiff's rights as an owner
14 Plaintiffs’ Motion 4; see also Ex. 3 to Plaintiff's Motion, Affidavit of Steven Webster, {| 7; see also Ex. 4 to
Plaintiff's Motion, Affidavit of Dennis Woods, { 7.
'S See Exhibit B and C.
10
and (2) the defendant refused to return the property. Tex. Integrated Conveyor Sys., Inc. v.
Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 365-66 (Tex. App.—Dallas 2009, pet.
denied) (emphasis added). The only summary judgment evidence is that approximately 33% of
the indebtedness has been repaid, and OMTC is attempting to repay the remainder. There is no
evidence that the OMTC Defendants are “unlawfully” exercising dominion over the Funds, or that
they are “refusing” to return the Funds. Indeed, “[W]here the refusal is not absolute, but is
qualified by certain conditions which are reasonable and justifiable, and which are imposed in
good faith, and in recognition of the rights of plaintiff, it will not serve as a sufficient basis for an
action for conversion.” Khorshid, Inc. v. Christian, 257 S.W.3d 748, 759 (Tex. App.—Dallas
2008, no pet.) Jd. Whether a conversion defendant acted in good faith and upon reasonable
grounds under the circumstances is a question for the jury. /d. at 344. Thus, at this stage, where
no discovery has been conducted, a summary judgment for conversion cannot issue.
F. Plaintiffs’ money had and received summary judgment argument fails because money
had and received is an equitable remedy only available when there are no other
adequate legal remedies.
Money had money received is an equitable doctrine, that like all other equitable doctrines,
is available where there is no other adequate remedy at law. Edwards v. Mid-Continent Office
Distrib., 252 S.W.3d 833, 837 (Tex. App.—Dallas 2008, pet. denied.) (“Money had and received
is an equitable doctrine applied to prevent unjust enrichment”); Rogers v. Daniel Oil & Royalty
Co., 110 S.W.2d 891, 894 (1937) (“In cases where an adequate and complete remedy at law is
provided, our courts, though clothed with equitable jurisdiction, will not grant equitable relief.”)
In this case, Plaintiffs have pleaded the following at law causes of action: breach of contract, breach
of fiduciary duty, conversion, fraud, the Texas Deceptive Trade Practices Act, and the Texas Theft
Liability Act, and unless and until those causes of action are no longer viable the equitable remedy
11
of money had and received is not available to Plaintiffs, especially on summary judgment two
months after filing suit.
In this case, Plaintiffs incorporate the Fuel Purchase Orders, and sue for breach of contract
based on those Fuel Purchase Orders.'° The case law on the money had and received contemplates
that a money had and received claim is not viable where there is a “writing.” See Cooper Water
Sup. v. Elledge, 197 S.W.3d 826, 831 (Tex. App.—Fort Worth 2006), rev’d on other grounds, 240
S.W.3d 869 (Tex. 2007) (emphasis added). See also Amoco Prod. v. Smith, 946 S.W.2d 162, 164
(Tex. App.—El Paso 1997, no writ.). (“The implied contract action for money had and received is
a cause of action for debt not evidenced by a writing.”) In this case there is no “implied contract
action” as there are two actual contracts — the Fuel Purchase Orders which are at the core of the
dispute.
Additionally, even if Plaintiffs were to non-suit all of their at law causes of action, in order
to summarily succeed on a money had and money received claim, a “plaintiff must establish that
the defendant holds the money” in question. Edwards, 252 S.W.3d at 837; Best Buy Co. v. Barrera,
248 S.W.3d 160, at 162-63 (Tex. 2007). Plaintiffs’ do not provide any evidence that either of the
OMTC Defendants are “holding” the Funds at issue in this lawsuit, and indeed, all of Woods’
funds have been returned to him.'’ Indeed, the only “evidence” that Plaintiffs provide is that
Woods has been repaid in full, and that prior to the lawsuit, Rogers was in constant communication
with Plaintiffs about providing them the Funds.'® That by itself is not evidence that Rogers is
“holding” the Funds. It is the Plaintiffs’ burden to prove there is no genuine issue of material fact
‘6 Exhibits B and C.
‘TEx, A.
'8 Plaintiffs’ Motion, 9-10.
12
as to each of the elements of this cause of action, something that they do not accomplish with
respect to money had and received.
Vv. CONCLUSION
Plaintiffs’ premature Motion for Partial Summary Judgment fails because Plaintiffs have
failed to provide competent summary judgment evidence that would warrant a summary resolution
of this case two months after it has been filed. Additionally, as is their right under the Texas Rules
and the Texas Constitution, Defendants are engaged in the vigorous defenses of the claims asserted
against them, have asserted viable affirmative defenses as to breach of contract, conversion, and
money had and received, and they have timely sought robust discovery from Plaintiffs.
VI. PRAYER
WHEREFORE, PREMISES CONSIDERED, Defendants pray that Plaintiffs’ Motion for
Partial Summary Judgment be denied, or in the alternative, that it be continued, and that this Court
grant all other relief, either in law or in equity, to which Defendants may show themselves justly
entitled.
Respectfully submitted,
HENNEMAN RAU LLP
By: /s/ Bradley M. Kirklin
Bradley M. Kirklin
State Bar No. 24046222
George H. Rau III
State Bar No. 24037335
815 Walker Street, Suite 1440
Houston, Texas 77002
Telephone: 713-955-6030
Facsimile: 713-955-6141
Email: bkirklin@hennemanrau.com
Email: grau@hennemanrau.com
ATTORNEYS FOR DEFENDANTS
OMTC, INC. & DENNIS J. ROGERS
13
CERTIFICATE OF SERVICE
Thereby certify that a true and correct copy of the above document was served pursuant to
the Texas Rules of Civil Procedure, on October 2, 2020, upon the following:
Meghan Dawson McElvy Via E-Service
Margaret L. Wittenmyer
Baker Botts L.L.P.
One Shell Plaza
910 Louisiana
Houston, Texas 77002
Email: meghan.mcelvy@bakerbotts.com
Email: margaret.wittenmyer@bakerbotts.com
Corey Wehmeyer
Santoyo Wehmeyer P.C.
IBC Highway 281 North Centre Building
12400 San Pedro Avenue, Suite 300
San Antonio, TX 78216
Email: cwehmeyer@swenergylaw.com
Attorneys for Plaintiffs
/s/ Bradley M. Kirklin
14
CAUSE NO. DC-20-10214
STEVEN WEBSTER, AARON WEBSTER, § IN THE DISTRICT COURT OF
and DENNIS WOODS, §
§
Plaintiffs, §
v. § DALLAS COUNTY, TEXAS
DENNIS J. ROGERS, II and OMTC, INC., §
Defendants. § 191ST JUDICIAL DISTRICT
UNSWORN DECLARATON OF DENNIS J. ROGERS IT
I declare under the penalty of perjury the following:
1 My name is Dennis J. Rogers II. I am over the age of twenty-one (21) years, I have
never been convicted of a felony or a misdemeanor involving moral turpitude, and I am fully
competent to make this affidavit. The facts stated herein are within my personal knowledge and
are true and correct.
2. I attended New Mexico State University and the University of Texas at Dallas and
studied business. I am the President of OMTC, Inc. (“OMTC”), and I have held the title of
President since inception in 2018. Collectively, I refer to myself and OMTC herein as the “OMTC
Defendants.”
Grounds for Continuing Summary Judgment Hearing
3 The OMTC Defendants intend to vigorously defend the claims asserted by
Plaintiffs in this lawsuit. Specifically, | have instructed my counsel to pursue any defenses
available to the OMTC Defendants. To that end, I instructed my counsel to amend the OMTC
answer to assert any and all available affirmative defenses. On October 2, 2020, the OMTC
Defendants amended their answer to include these affirmative defenses.
EXHIBIT
A
4. [also instructed my counsel to propound written discovery to all three Plaintiffs,
including Requests for Disclosure, Interrogatories, Requests for Admission, and Requests for
Production. This written discovery was served on Plaintiffs on October 2, 2020, and seeks
information related to the affirmative defenses J have asserted in this case. I also instructed my
counsel to file a Rule 91a Motion to Dismiss three causes of action asserted against the OMTC
Defendants, and that Motion to Dismiss is scheduled to be heard on October 23, 2020.
3 Additionally, I instructed my counsel to request the deposition of Plaintiff, Aaron
Webster between November 9, 2020 and December 1, 2020, after my counsel has had an
opportunity to review Plaintiffs’ discovery responses. Further, as of the filing of this declaration,
Iam in the process of gathering documents, which my counsel has informed me are to be produced
on October 9, 2020. As of this filing my counsel has not reviewed all of the documents responsive
to Plaintiffs’ discovery requests. I am scheduled to be deposed in this case on October 15, 2020.
Finally, I have also instructed my attorney to investigate potential counterclaims the OMTC
Defendants may have against Plaintiffs.
6. I do not seek a continuance of the summary judgment hearing for undue delay, but
only so that justice may be done.
Facts supporting denial of Plaintiffs’ Motion for Partial Summary Judgment
7 OMTC is licensed wholesaler of fuel products in Texas. In and around early June
2020, I was introduced to Aaron Webster through an intermediary/broker, Patricia Waters
(“Waters”). Aaron Webster expressed an interested in purchasing large quantities of fuel from
OMTC, and he informed me that he intended to resell the same. Aaron Webster also informed me
that he, through his father, Steven Webster, had recently bought and sold large quantities of fuel
through Waters and others in the fuel wholesale business. Aaron Webster informed me that Steven
Webster and Dennis Woods (“Woods”) had the requisite licenses to purchase, for the purpose of
resale, large amounts fuel (“Licenses”), and that he had experience in the fuel wholesale
distribution business. J asked Aaron Webster to provide those Licenses, and he informed me that
he would do so through Waters. However, neither Aaron Webster, Steven Webster nor Woods
ever provided me Licenses.
8 I have never personally met Aaron Webster, Steven Webster, or Woods in person,
and I have only spoken to Steven Webster and Woods once or twice. I did not know who they
were until Waters introduced them to me.
9 In early June 2020, two individuals who identified themselves as Blaine McManus
(“McManus”) and Gary Samson (“Samson”) approached me and informed me that they were fuel
brokers for Vitol Inc. (“Vitol”). McManus and Samson informed me about a Vitol fuel sale to
occur on or about June 29, 2020. Based on Aaron Webster’s representation regarding possessing
the Licenses as well as his representations that he was experienced in the fuel wholesale
distribution business, on June 18, 2020, less than three weeks after ] was introduced to Aaron
Webster by Waters, OMTC, as Seller, entered into a Fuel Purchase Order with Woods, as Buyer,
wherein OMTC agreed to sell, and Woods agreed to purchase jet fuel. Also on June 18, 2020,
OMTC, as Seller, entered into a Fuel Purchase Order with Steven Webster, as Buyer, wherein
OMTC agreed to sell, and Steven Webster agreed to purchase diesel fuel.
10. On or about June 19, 2020, I provided Aaron Webster, Steven Webster, and Woods
OMTC’s bank account number with Chase Bank, Account No. xxx7879 (“Account No.
xxx7879”). Account No. xxx7879 is exclusively an OMTC business account; it is not a personal
account. On June 19, 2020 Woods wired $2,142,000.00 to Account No. xxx7879. That same day
Steven Webster wired $4,410,000.00 to Account No. xxx7879. Collectively, 1 refer to the
amounts Woods and Webster wired to OMTC as “the Funds.”
11. On or about June 24, 2020, believing that McManus and Samson were Vitol
representatives, I, in my capacity as President of OMTC, wired the Funds from Account No.
xxx7879 to an account that McManus and Samson informed me was a Vitol bank account. Soon
thereafter, I became concerned that McManus and Samson were not Vitol representatives, and I
immediately acted to recall the Funds on July 1, 2020. I remained in constant communication with
Aaron Webster regarding the Funds from July 1, 2020 through the time Plaintiffs engaged counsel,
and then continued to communicate with Plaintiffs’ counsel through the time Plaintiffs filed this
lawsuit. On or about August 6, 2020, OMTC returned $2,142,000.00 to Woods, and OMTC is
actively working to return the remainder of the Funds to Webster.
Dennis gers I]
10,02, 2O20
Date
FUEL PURCHASE ORDER
This purchase order (“Purchase Order”), is effective as of June 18", 2020 (the “Effective
Date’), is entered into by and between Steven A Webster, an individual (“Buyer”), and
OMTC, INC., a Texas Corporation (“Seller”). Each of Buyer and Seller is referred to herein
individually as a “Party” and collectively, as the “Parties.”
Seller agrees to sell and Buyer agrees to buy the product or products identified on Schedule
A to this Purchase order (the “Product”) subject to the terms and conditions of this Purchase Order.
1. Term. The Term of this Agreement (the “Term”), shall be from the Effective Date
through July 3, 2020 (the “Expiration Date”), After which a formal supply agreement will be
provide to Buyer along with an updated Schedule A for final approval.
2. Payment Terms. The Purchase Price shall be due in amount equal to the amount listed
on Schedule A attached here to, on or before June 19, 2020.
3. Option Period. The Option Period (“Option Period”) shall be from the Effective Date
of this purchase order through July 3, 2020, during which time either party has the irrevocable
right to terminate this Purchase Order without cause by providing either party with written or
electronic notice. Upon recent of written notice by either Party this purchase order will
immediately terminate and any and all funds received by Seller from Buyer will be immediately
due and payable to Buyer within one banking day. Specifically, if Buyer provides Seller notice,
Seller will immediately request the return of funds from Vitol and will provide evidence of such
to Buyer. Once Seller receives funds, Selier will remit funds to Buyer within one banking day. In
addition, Seller represents that Vitol has agreed to promptly remit funds received from Seller for
the account of Buyer if the Purchase Order terminates and Seller requests the return.
4. Default. The occurrence and continuance of one or more of the following events shall
constitute an event of default (“Event of Default”) of this Purchase Order:
4.1. The nonpayment of the payment terms.
4.2. The entry of a decree or order by a court having appropriate jurisdiction adjudging
Buyer bankrupt or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Buyer under the federal Bankruptcy
Act or any other applicable federal or state law, or appointing a receiver, liquidator, assignee or
trustee of Buyer, or any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order unstayed and in effect for a period
of sixty (60) consecutive days.
4.3. The institution by Buyer of proceedings to be adjudicated bankrupt or insolvent, or the
consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by
it of a petition or answer or consent seeking reorganization or relief under the federal Bankruptcy
Act or any other applicable federal or state law, or the consent by it to the filing of any such petition
EXHIBIT
C
or to the appointment of a receiver, liquidator, assignee or trustee of the Buyer, or of any substantial
part of its property, shall become subject to the jurisdiction of a federal bankruptcy court or similar
state court, or if Buyer shall make an assignment for the benefit of its Sellers, or if there is a
receivership, execution or other material judicial seizure, or if there is an admission in writing by
Buyer of its inability to pay its debts generally as they become due, or the taking of corporate
action by Buyer in furtherance of any such action.
4.4. Default in the obligation of Buyer for borrowed money or any event that results in
acceleration of the maturity of any material indebtedness of Buyer under any note, indenture,
contract, or agreement.
5. Representations and Covenants, The Buyer hereby represents, agrees and covenants
to the following:
5.1 The Buyer is authorized to enter into this Purchase Order and entry into this Purchase
Order and related security agreement does not violate the terms and conditions of any existing
contractual commitment.
6. Amendments _in Writing. Subject to applicable law, this Purchase Order may be
amended, modified, or supplemented only by a written agreement signed by the Seller and the
Buyer.
7. Choice of Law; Venue, This Purchase Order and all transactions hereunder and/or
evidenced hereby shall be governed by and construed under the laws of the State of Texas without
regard to the conflicts of law principles thereof and any action taken to enforce the terms of this
Purchase Order shal! be undertaken in Dallas County, Texas.
8. Transferability. The rights and obligations under this Purchase Order may not be
assigned or assumed except by express written consent of the other Party to this Purchase Order.
Any other attempt to assign rights or responsibilities under this Purchase Order shail be nuli and
void.
IN WITNESS WHEREOF, the Buyer has caused its duly authorized representative to
execute this Purchase Order as of the date first written above.
By: , its Manager,
and
gage
Dennis Rogers, President
CAUSE NO. DC-20-10214
STEVEN WEBSTER, AARON WEBSTER, § IN THE DISTRICT COURT OF
and DENNIS WOODS, §
Plaintiffs,
Vv. DALLAS COUNTY, TEXAS
DENNIS J. ROGERS, II and OMTC, INC.,
Defendants. § 191ST JUDICIAL DISTRICT
DEFENDANTS’ REQUEST FOR DISCLOSURES TO ALL PLAINTIFFS
TO: Steven Webster, Aaron Webster and Dennis Woods by and through his attorney of record,
Meghan Dawson McElvy, Baker Botts L.L.P., One Shell Plaza, 910 Louisiana, Houston,
Texas 77002.
Pursuant to Rule 194 of the Texas Rules of Civil Procedure, Defendants, Dennis J. Rogers,
Il and OMTC, Inc. hereby serve their Request for Disclosures to Plaintiffs Steven Webster, Aaron
Webster and Dennis Woods (collectively “Plaintiffs”). Under Ru
Preview
FILED 10/2/2020 11:27 PM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS Martin Reyes DEPUTY Martin Reyes CAUSE NO. DC-20-10214 STEVEN WEBSTER, AARON WEBSTER, § IN THE DISTRICT COURT OF and DENNIS WOODS, Plaintiffs, Vv. DALLAS COUNTY, TEXAS DENNIS J. ROGERS, II and OMTC, INC., Defendants. 191ST JUDICIAL DISTRICT DEFENDANTS OMTC, INC. AND DENNIS J. ROGERS IT’S RESPONSE IN OPPOSITION TO PLAINTIFFS STEVEN WEBSTER AND DENNIS WOODS’S MOTION FOR PARTIAL SUMMARY JUDGMENT AND IN THE ALTERNATIVE MOTION FOR CONTINUANCE HENNEMAN RAU LLP By: /s/ Bradley M. Kirklin Bradley M. Kirklin State Bar No. 24046222 George H. Rau III State Bar No. 24037335 815 Walker Street, Suite 1440 Houston, Texas 77002 Telephone: 713-955-6030 Facsimile: 713-955-6141 Email: bkirklin@hennemanrau.com Email: grau@hennemanrau.com ATTORNEYS FOR DEFENDANTS OMTC, INC. & DENNIS J. ROGERS TABLE OF CONTENTS I SUMMARY OF THE ARGUMENT IL. SUMMARY JUDGMENT EVIDENCE............. Til. SUMMARY JUDGMENT FACTS IV. LAW & ARGUMENT. A Plaintiffs’ Motion for Partial Summary Judgment is premature and should be denied or at a minimum continued until discovery can be conducted The Levinthal factors clearly weigh in favor of a denial or continuance of the summary judgment hearing because the case is barely two months old and because the OMTC Defendants are vigorously defending the case and diligently pursuing discovery. Argument of counsel at a TRO hearing (or any hearing) is not evidence and cannot be considered by the Court............ Plaintiffs’ Summary Judgment claim for breach of contract fails because Defendants have asserted the affirmative defense of fraud in the inducement, and the contract is between OMTC and Plaintiffs Steven Webster and Dennis Wooda.............. Plaintiffs’ summary judgment claim for conversion fails because money not identified as specific chattel cannot be converted, and because Plaintiffs do not provide summary judgment evidence that the OMTC Defendants are “unlawfully” in possession of the money, or that they are “refusing” to return it Plaintiffs’ money had and received summary judgment argument fails because money had and received is an equitable remedy only available when there are no other adequate legal remedies. ......... 11 V. CONCLUSION 13 VL PRAYER 13 TABLE OF AUTHORITIES Cases American Tobacco, Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex.1997). Amoco Prod. v. Smith, 946 S.W.2d 162, 164 (Tex. App.—El Paso 1997, no writ.).... 12 Best Buy Co. v. Barrera, 248 S.W.3d 160, at 162-63 (Tex. 2007).........0004 12 Chapa v. Garcia, 848 S.W.2d 667, 668 (Tex.1992). Collins v. County of El Paso, 954 S.W.2d 137, 145 (Tex. App—EI Paso 1997, pet. denied.) Cooper Water Sup. v. Elledge, 197 S.W.3d 826, 831 (Tex. App.—Fort Worth 2006), rev’d on other grounds, 240 S.W.3d 869 (Tex. 2007), 12 Daugherty v. Jacobs, 187 S.W.3d 607, 619 (Tex. App.—Houston [14th Dist.] 2006, no pet.) seeseeseeeeeeeeteneee 7 Dunn vy. Bank-Tec S., 134 S.W.3d 315, 328 (Tex. App.— Amarillo 2003, no pet.) .......eseesesesssseseeesesesesesneseenescseenesees 7 Eckert v. Centennial Sav. Bank, 757 S.W.2d 392, 398 (Tex. App.—Dallas 1988, writ denied)... 10 Edlund v. Bounds, 842 S.W.2d 719, 727 (Tex. App.—Dallas 1992, writ denied) 10 Edwards v. Mid-Continent Office Distrib., 252 S.W.3d 833, 837 (Tex. App.—Dallas 2008, pet. denied.) ........csessesessessseerereeteneetenes 11,12 Estate of Townes v. Townes, 867 S.W.2d 414, 419-20 (Tex. App.—Houston [14th Dist.] 1993, writ denied). 10 Jones v. Hunt, 74 Tex. 657, 12 S.W. 832, 833 (Tex.1889) . 10 Khorshid, Inc. v. Christian, 257 S.W.3d 748, 759 (Tex. App.— Dallas 2008, no pet.)......sceeseseeseseeseseseeseseeneacseereneeneesseeene 11 Levinthal v. Kelsey-Seybold Clinic, P.A. 902 S.W.2d 508 (Tex. App.—Houston [1 Dist.] 1994, no WYit.).......scecseesesseeseeeeeeeneerees passim ii McDuffie v. Blassingame, 883 S.W.2d 329, 336 (Tex. App.—Amarillo 1994, writ denied) Myan Mgmt. Group, L.L.C. v. Adam Sparks Family Revocable Tr., 292 S.W.3d 750, 754 (Tex. App.—Dallas 2009, no pet.)........sesessessssssesessesesesesesteneseseeneereneeeeee 9 Phippen v. Deere & Co., 965 S.W.2d 713, 724 (Tex. App.—Houston [14" Dist.] no pet.) see 10 Rogers v. Daniel Oil & Royalty Co. TNOISSW2d'89151894 (193 ))eeen passim Service Lloyds Ins. Co. v. Clark, 714 S.W.2d 437, 438 (Tex. App.—Austin 1986, no writ) Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 365-66 (Tex. App.—Dallas 2009, pet. denied).............. 11 Texas Farmers Ins. v. Murphy, 996 S.W.2d 873, 879 (Tex. 1999); Reed v. Buck, 370 S.W.2d 867 (Tex.1963) Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 447 (Tex. 1971)... Other Authorities TEX. CONST. ART. I, § 19 TEX. R. CIV. P. 166a(C) oe iii CAUSE NO. DC-20-10214 STEVEN WEBSTER, AARON WEBSTER, § IN THE DISTRICT COURT OF and DENNIS WOODS, Plaintiffs, Vv. DALLAS COUNTY, TEXAS DENNIS J. ROGERS, II and OMTC, INC., Defendants. 191ST JUDICIAL DISTRICT DEFENDANTS OMTC, INC. AND DENNIS J. ROGERS II’S RESPONSE IN OPPOSITION TO PLAINTIFFS STEVEN WEBSTER AND DENNIS WOODS’S MOTION FOR PARTIAL SUMMARY JUDGMENT AND IN THE ALTERNATIVE MOTION FOR CONTINUANCE Come now Defendants OMTC, Inc. (“OMTC”) and Dennis J. Rogers, II (“Rogers”) (collectively, “OMTC Defendants” or “Defendants”) and file this Response in Opposition to Plaintiffs Steven Webster and Dennis Woods’s (collectively, “Plaintiffs”) Motion for Partial Summary Judgment (“Plaintiffs’ Motion’), and in the alternative file a Motion for Continuance, and would show the Court as follows: I SUMMARY OF THE ARGUMENT On September 17, 2020, 48 days after filing this lawsuit, 27 days after Defendants answered the lawsuit, and before the OMTC Defendants’ preliminary Rule 91a Motion to Dismiss has been heard, Plaintiffs filed a Motion for Partial Summary Judgment on three of their causes of action: breach of contract, conversion, and money had and received. Not only is such a summary judgment motion premature, but Plaintiffs wholly fail to meet their burden of providing competent summary judgment evidence to support each material element of breach of contract, conversion, and money had and money received. Additionally, Plaintiffs’ Motion was filed before any discovery has been exchanged, including discovery into Defendants’ affirmative defenses, and before any depositions have occurred. Currently, Rogers, both in his individual capacity and as the corporate representative of Defendant OMTC, is scheduled to be deposed on October 15, 2020, and Defendants have requested the deposition of Plaintiff Aaron Webster in November 2020. Therefore, granting summary judgment at this nascent stage of the litigation would deprive Defendants of their due process rights protected by the Rules and the Texas Constitution.! As will be discussed herein, in Levinthal v. Kelsey-Seybold Clinic, P.A. 902 S.W.2d 508 (Tex. App.—Houston [1 Dist.] 1994, no writ.), the Houston Court of Appeals held that it is reversible error to grant a summary judgment in circumstances such as this. Finally, by virtue of the Agreed Temporary Injunction, Plaintiffs’ rights are secured and there should be no rush to judgment. Indeed, were the court to grant summary judgment in this instance it would be akin to granting a default judgment immediately after a defendant has duly appeared and answered. Therefore, Plaintiff's Motion for Partial Summary Judgment must be denied, or in the alternative, continued 90-120 days so that discovery may be conducted and justice may be done. Il. SUMMARY JUDGMENT EVIDENCE Exhibit A: Unsworn Declaration of Dennis J. Rogers, II (“Rogers Declaration”) Exhibit B: Fuel Purchase Order between OMTC and Dennis Woods Exhibit C: Fuel Purchase Order between OMTC and Steven Webster Exhibit D: Defendants’ Request for Disclosure, Interrogatories, Request for Admissions, and Request for Production ' “No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the due course of the law of the land.” TEX. CONST. ART. I, § 19. 2 Ill. SUMMARY JUDGMENT FACTS? OMTC is a licensed wholesaler of fuel products in Texas. In and around early June 2020, Rogers was introduced to Aaron Webster through an intermediary/broker, Patricia Waters (“Waters”). Aaron Webster expressed an interest in purchasing large quantities of fuel from OMTC for the purpose of reselling that fuel. Aaron Webster informed OMTC’s president, Rogers, that he through his father, Steven Webster, had previously bought and sold large quantities of fuel through Waters. Aaron Webster informed Rogers that Steven Webster and Dennis Woods (“Woods”) had the requisite licenses to purchase large amounts of both diesel and jet fuel (“Licenses”), and that he was experienced in the wholesale fuel distribution business. However, based on information and belief, neither Steven Webster nor Woods possessed the requisite Licenses necessary for the purchase and resale of fuel. Rogers has never met Aaron Webster, Steven Webster, or Dennis Woods in person, and he only spoke to Steven Webster and Woods once or twice. In early June 2020, two individuals who identified themselves to Rogers as Blaine McManus (“McManus”) and Gary Samson (“Samson”) approached Rogers, informed Rogers that they were fuel brokers for Vitol Inc. (“Vitol”), and they informed Rogers about a fuel sale to occur on or about June 29, 2020. Based on Aaron Webster’s representation regarding the Licenses and his experience in the fuel wholesale and distribution business, on June 18, 2020, less than three weeks after Rogers and Aaron Webster were introduced by Waters, OMTC, as Seller, entered into a Fuel Purchase Order with Woods, as Buyer, wherein OMTC agreed to sell, and Woods agreed to purchase jet fuel.? Also, on June 18, 2020, OMTC, as Seller, entered into a Fuel Purchase Order ? Ex. A-C, The Summary Judgment Facts Section is supported by Rogers’s Declaration as well as the Fuel Purchase Orders. 3 Exhibit B. with Steven Webster, as Buyer, wherein OMTC agreed to sell, and Steven Webster agreed to purchase diesel fuel.* On or about June 19, 2020, Rogers provided Aaron Webster, Steven Webster, and Woods OMTC’s bank account number with Chase Bank, Account No. xxx7879 (“Account No. xxx7879”). Account No. xxx7879 is exclusively an OMTC business account; it is not a Rogers personal account. On or about June 19, 2020, Woods wired $2,142,000.00 to Account No. xxx7879. That same day Steven Webster wired $4,410,000.00 to Account No. xxx7879. Collectively, the amounts Woods and Webster wired to OMTC are referred to as “the Funds.” On or about June 24, 2020, OMTC, believing that McManus and Samson were Vitol representatives, wired the Funds from Account No. xxx7879 to a bank account that McManus and Samson stated was a Vitol bank account. Soon thereafter, Rogers became concerned that McManus and Samson were not Vitol representatives, and on or about July 1, 2020, he immediately acted to recall the Funds. Rogers remained in constant communication with Aaron Webster regarding the Funds from July 1, 2020 through the time Plaintiffs’ engaged counsel, and then continued his communications with Plaintiffs’ counsel through the time Plaintiffs filed this lawsuit. On or about August 6, 2020, OMTC returned the $2,142,000 to Woods, and he is actively working to return the remainder of the Funds to Webster.° Iv. LAW & ARGUMENT A. Plaintiffs’ Motion for Partial Summary Judgment is premature and should be denied or at a minimum continued until discovery can be conducted. The purpose of summary judgment is not to deprive litigants of their right to a trial by jury or to try a case by affidavit and deposition testimony. Collins v. County of El Paso, 954 S.W.2d 4 Exhibit C. SEx. A. 137, 145 (Tex. App—EI Paso 1997, pet. denied.) The party moving for summary judgment, (in this case Plaintiffs), bear the burden of proving, by presenting the court with summary judgment evidence, that it is entitled to judgment as a matter of law because no fact issue exists. TEX. R. Civ. P. 166a(c). In considering the traditional grounds raised by the party moving for summary judgment, the Court is bound by certain principles: (1) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant must be taken as true; and (2) every reasonable inference must be indulged in favor of the non-movant and any doubts must be resolved in the non-movant’s favor. See American Tobacco, Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex.1997). When considering whether a trial court improperly granted a premature summary judgment, Texas appellate courts consider the following non-exclusive list of factors in deciding whether the trial court abused its discretion: (1) the length of time the case has been on file; (2) the materiality of the discovery sought by the party opposing summary judgment; and (3) whether due diligence was exercised in obtaining the discovery. Levinthal v. Kelsey-Seybold Clinic, P.A., 902 S.W.2d 508, 510 (Tex. App.—Houston [1st Dist.] 1994, no writ).° In Levinthal, the First Court of Appeals provides: This rule [Rule 166a(c)] clearly contemplates that the trial court will allow the parties a reasonable opportunity to conduct discovery before granting a summary judgment. The purpose of the discovery process is to allow parties to obtain the fullest knowledge of facts and issues before the disposition of their case. Chapa v. Garcia, 848 S.W.2d 667, 668 (Tex.1992). Discovery is favored, and the rules governing discovery are to be liberally construed. Service Lloyds Ins. Co. v. Clark, 714 S.W.2d 437, 438 (Tex. App.—Austin 1986, no writ). 6 See also, Verkin v. Southwest Ctr. One., Ltd, 784 S.W.2d 92, 94 (Tex. App—Houston [1* Dist.] 1990, writ denied; Eckman v. Centennial Sav. Bank, 757 S.W.2d 392, 395 (Tex. App.—Dallas 1988, writ denied); Cedillo v. Jefferson, 802 S.W.2d 866, 868 (Tex. App.—Houston [1* Dist.] 1991, writ denied.) 5 Levinthal, 902 S.W.2d at 512. B The Levinthal factors clearly weigh in favor of a denial or continuance of the summary judgment hearing because the case is barely two months old and because the OMTC Defendants are vigorously defending the case and diligently pursuing discovery. Plaintiffs filed suit on July 29, 2020. The OMTC Defendants answered on August 24, 2020. No meaningful discovery has occurred. The OMTC Defendants are scheduled to give their deposition on October 15, 2020, and the OMTC Defendants have sought the deposition of Plaintiff Aaron Webster in November 2020. On October 2, 2020, the OMTC Defendants amended their answer and asserted verified and affirmative defenses including: Rogers is not liable in his individual capacity, fraud in the inducement, complete performance as to Woods, offset, no actual injury or damage to Plaintiff Woods, and affirmative defenses as to Plaintiffs’ conversion and money had and received claims. Further, on October 2, 2020, the OMTC Defendants issued robust written discovery including Requests for Disclosures, Requests for Admissions, Interrogatories, and Requests for Production.” That discovery is due on Monday, November 2, 2020. Additionally, the OMTC Defendants are still gathering documents and intend to produce same on October 9, 2020. This case’s first trial setting is not until July 5, 2021. In Levinthal, the First Court of Appeals found that the district court abused its discretion where the district court granted a summary judgment against a plaintiff in favor of a defendant when that case had only been on file for three months, no discovery had occurred, and where the plaintiff had exercised due diligence in seeking material discovery. Levinthal, 902 S.W.2d at 510- 13. Here, it is Plaintiffs, seeking immediate summary judgment two months after filing suit when no meaningful discovery has occurred, and Defendants are diligently defending the case. 7 Ex. D. In Levinthal, the First Court of Appeals recognized that a trial court should give more deference to a defendant moving for summary judgment because “a trial court can presume that a plaintiff has investigated its own case prior to filing same.” Levinthal, 902 S.W.2d at 511. Even so, the First Court reversed the trial court’s granting of summary judgment stating, “[H]owever, this presumption does not deny a plaintiff the right to engage in necessary discovery before summary judgment is granted.” Jd. Necessarily then, the OMTC Defendants must be allowed to conduct discovery of this case. c. Argument of counsel at a TRO hearing (or any hearing) is not evidence and cannot be considered by the Court. In Plaintiffs’ Motion, as part of their “Undisputed Facts” section, Plaintiffs cite to Defendants’ counsel’s argument at the Temporary Restraining Order hearing to support their summary judgment arguments.’ Argument of counsel, however, is not evidence. See Daugherty v. Jacobs, 187 S.W.3d 607, 619 (Tex. App.—Houston [14th Dist.] 2006, no pet.) (“[U]nsworn statements by counsel are not evidence.”); Dunn v. Bank-Tec S., 134 S.W.3d 315, 328 (Tex. App.—Amarillo 2003, no pet.) (“The mere argument of counsel is not evidence.”); McDuffie v. Blassingame, 883 S.W.2d 329, 336 (Tex. App.—Amarillo 1994, writ denied) (“[S]tatements made at trial by Ronald's counsel that he would have dismissed Carol had she correctly answered his interrogatories is unsworn testimony and not proof of those facts.”) Therefore, the OMTC Defendants object to Plaintiffs’ use of Defendants’ counsel’s argument as summary judgment evidence. * Plaintiffs’ Motion, 12-13. D. Plaintiffs’ Summary Judgment claim for breach of contract fails because Defendants have asserted the affirmative defense of fraud in the inducement, and the contract is between OMTC and Plaintiffs Steven Webster and Dennis Woods. The OMTC Defendants have asserted the affirmative defense of fraud in the inducement to the Fuel Purchase Orders at issue in this lawsuit.” Specifically, Rogers would not have entered into the Fuel Purchase Orders, but for Aaron Webster’s representation that Plaintiffs possessed the requisite licenses to purchase large quantities of fuel for resale purposes.'° Fraud and fraud in the inducement are affirmative defenses to contract actions. Texas Farmers Ins. v. Murphy, 996 S.W.2d 873, 879 (Tex. 1999); Reed v. Buck, 370 S.W.2d 867 (Tex.1963). Defendant Rogers has also asserted the affirmative defense that he is not liable in his individual capacity.'! Plaintiffs improperly claim that “Rogers and OMTC” breached the Fuel Purchase Orders.!* However, Rogers was not a party to either of the Fuel Purchase Orders:!* "en Mli By: sit Manager, and OMT corporation. | "Hennig Rogers, President KK ° OMTC Defendants First Amended Answer, 1 Ex. A. "Id. at 2. " Plaintiffs’ Motion, 13-14. '3 Exhibits B and C. BUYER Ponts bolt ; By: its Manager, and SELLER OMTC, In as corporation. By Mis fers, President As shown, directly above, the only Defendant party to the contract was OMTC. Thus, because Defendant Rogers has asserted a viable affirmative defense, it is axiomatic that Plaintiffs’ breach of contract summary judgment argument against Rogers fails because Plaintiffs have no summary judgment evidence that a valid contract exists between Defendant Rogers and Plaintiffs. Myan Mgmt. Group, L.L.C. v. Adam Sparks Family Revocable Tr., 292 $.W.3d 750, 754 (Tex. App.— Dallas 2009, no pet.) (A material element of breach of contract is establishing that a valid contract exists.). Plaintiffs have failed to meet their summary judgment burden for breach of contract, and the OMTC Defendants are entitled to discover their affirmative defenses prior to a court rendering summary judgment. E Plaintiffs’ summary judgment claim for conversion fails because money not identified as specific chattel cannot be converted, and because Plaintiffs do not provide summary judgment evidence that the OMTC Defendants are “unlawfully” in possession of the money, or that they are “refusing” to return it. Conversion is the unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another to the exclusion of, or inconsistent with, the owner's rights. Waisath v. Lack's Stores, Inc., 474 8.W.2d 444, 447 (Tex. 1971). With respect to money, “[I]fa plaintiff alleges that the specific chattel converted was money . . . a plaintiff must also show the money (1) was delivered to the defendant for safekeeping, (2) was intended to be kept segregated, (3) was substantially in the form in which it is received or intact, and (4) was not the subject of a title claim by the defendant.” Estate of Townes v. Townes, 867 S.W.2d 414, 419-20 9 (Tex. App—Houston [14th Dist.] 1993, writ denied); Edlund v. Bounds, 842 S.W.2d 719, 727 (Tex. App.—Dallas 1992, writ denied); Jones v. Hunt, 74 Tex. 657, 12 8.W. 832, 833 (Tex.1889). In this instance, Plaintiffs provide no summary judgment evidence the money in this case was delivered to Defendants for “safekeeping,” and indeed Plaintiffs allege the opposite—that OMTC were to use the Funds to purchase fuel.'* Similarly, Plaintiffs provide no evidence that the Funds were required to be segregated, nor do the Fuel Purchase Orders require segregation of funds.'> See Phippen v. Deere & Co., 965 S.W.2d 713, 724 (Tex. App.—Houston [14" Dist.] no pet.)(no conversion because the security agreement did not require segregation of funds.) Additionally, the Dallas Court of Appeals states “[W]hen an indebtedness can be discharged by payment of money generally, an action in conversion is inappropriate.” Eckert v. Centennial Sav. Bank, 757 S.W.2d 392, 398 (Tex. App.—Dallas 1988, writ denied) (holding that there is no conversion for a construction loan.) While it is unclear from Plaintiffs’ pleadings, affidavits, and the Fuel Purchase Orders, it appears that Plaintiffs’ position is that they loaned money to OMTC to purchase fuel, and they have not yet been repaid. Thus, the alleged indebtedness in this case can be discharged by payment of money, necessarily making conversion an inappropriate cause of action in this case. Even if the above were not dispositive of the conversion summary judgment argument (it is), Plaintiffs fail present sufficient summary judgment evidence to support two elements of conversion. To establish a claim for conversion of personal property, a plaintiff must prove that: (1) the defendant unlawfully and without authorization assumed and exercised dominion and control over the property to the exclusion of, or inconsistent with, the plaintiff's rights as an owner 14 Plaintiffs’ Motion 4; see also Ex. 3 to Plaintiff's Motion, Affidavit of Steven Webster, {| 7; see also Ex. 4 to Plaintiff's Motion, Affidavit of Dennis Woods, { 7. 'S See Exhibit B and C. 10 and (2) the defendant refused to return the property. Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 365-66 (Tex. App.—Dallas 2009, pet. denied) (emphasis added). The only summary judgment evidence is that approximately 33% of the indebtedness has been repaid, and OMTC is attempting to repay the remainder. There is no evidence that the OMTC Defendants are “unlawfully” exercising dominion over the Funds, or that they are “refusing” to return the Funds. Indeed, “[W]here the refusal is not absolute, but is qualified by certain conditions which are reasonable and justifiable, and which are imposed in good faith, and in recognition of the rights of plaintiff, it will not serve as a sufficient basis for an action for conversion.” Khorshid, Inc. v. Christian, 257 S.W.3d 748, 759 (Tex. App.—Dallas 2008, no pet.) Jd. Whether a conversion defendant acted in good faith and upon reasonable grounds under the circumstances is a question for the jury. /d. at 344. Thus, at this stage, where no discovery has been conducted, a summary judgment for conversion cannot issue. F. Plaintiffs’ money had and received summary judgment argument fails because money had and received is an equitable remedy only available when there are no other adequate legal remedies. Money had money received is an equitable doctrine, that like all other equitable doctrines, is available where there is no other adequate remedy at law. Edwards v. Mid-Continent Office Distrib., 252 S.W.3d 833, 837 (Tex. App.—Dallas 2008, pet. denied.) (“Money had and received is an equitable doctrine applied to prevent unjust enrichment”); Rogers v. Daniel Oil & Royalty Co., 110 S.W.2d 891, 894 (1937) (“In cases where an adequate and complete remedy at law is provided, our courts, though clothed with equitable jurisdiction, will not grant equitable relief.”) In this case, Plaintiffs have pleaded the following at law causes of action: breach of contract, breach of fiduciary duty, conversion, fraud, the Texas Deceptive Trade Practices Act, and the Texas Theft Liability Act, and unless and until those causes of action are no longer viable the equitable remedy 11 of money had and received is not available to Plaintiffs, especially on summary judgment two months after filing suit. In this case, Plaintiffs incorporate the Fuel Purchase Orders, and sue for breach of contract based on those Fuel Purchase Orders.'° The case law on the money had and received contemplates that a money had and received claim is not viable where there is a “writing.” See Cooper Water Sup. v. Elledge, 197 S.W.3d 826, 831 (Tex. App.—Fort Worth 2006), rev’d on other grounds, 240 S.W.3d 869 (Tex. 2007) (emphasis added). See also Amoco Prod. v. Smith, 946 S.W.2d 162, 164 (Tex. App.—El Paso 1997, no writ.). (“The implied contract action for money had and received is a cause of action for debt not evidenced by a writing.”) In this case there is no “implied contract action” as there are two actual contracts — the Fuel Purchase Orders which are at the core of the dispute. Additionally, even if Plaintiffs were to non-suit all of their at law causes of action, in order to summarily succeed on a money had and money received claim, a “plaintiff must establish that the defendant holds the money” in question. Edwards, 252 S.W.3d at 837; Best Buy Co. v. Barrera, 248 S.W.3d 160, at 162-63 (Tex. 2007). Plaintiffs’ do not provide any evidence that either of the OMTC Defendants are “holding” the Funds at issue in this lawsuit, and indeed, all of Woods’ funds have been returned to him.'’ Indeed, the only “evidence” that Plaintiffs provide is that Woods has been repaid in full, and that prior to the lawsuit, Rogers was in constant communication with Plaintiffs about providing them the Funds.'® That by itself is not evidence that Rogers is “holding” the Funds. It is the Plaintiffs’ burden to prove there is no genuine issue of material fact ‘6 Exhibits B and C. ‘TEx, A. '8 Plaintiffs’ Motion, 9-10. 12 as to each of the elements of this cause of action, something that they do not accomplish with respect to money had and received. Vv. CONCLUSION Plaintiffs’ premature Motion for Partial Summary Judgment fails because Plaintiffs have failed to provide competent summary judgment evidence that would warrant a summary resolution of this case two months after it has been filed. Additionally, as is their right under the Texas Rules and the Texas Constitution, Defendants are engaged in the vigorous defenses of the claims asserted against them, have asserted viable affirmative defenses as to breach of contract, conversion, and money had and received, and they have timely sought robust discovery from Plaintiffs. VI. PRAYER WHEREFORE, PREMISES CONSIDERED, Defendants pray that Plaintiffs’ Motion for Partial Summary Judgment be denied, or in the alternative, that it be continued, and that this Court grant all other relief, either in law or in equity, to which Defendants may show themselves justly entitled. Respectfully submitted, HENNEMAN RAU LLP By: /s/ Bradley M. Kirklin Bradley M. Kirklin State Bar No. 24046222 George H. Rau III State Bar No. 24037335 815 Walker Street, Suite 1440 Houston, Texas 77002 Telephone: 713-955-6030 Facsimile: 713-955-6141 Email: bkirklin@hennemanrau.com Email: grau@hennemanrau.com ATTORNEYS FOR DEFENDANTS OMTC, INC. & DENNIS J. ROGERS 13 CERTIFICATE OF SERVICE Thereby certify that a true and correct copy of the above document was served pursuant to the Texas Rules of Civil Procedure, on October 2, 2020, upon the following: Meghan Dawson McElvy Via E-Service Margaret L. Wittenmyer Baker Botts L.L.P. One Shell Plaza 910 Louisiana Houston, Texas 77002 Email: meghan.mcelvy@bakerbotts.com Email: margaret.wittenmyer@bakerbotts.com Corey Wehmeyer Santoyo Wehmeyer P.C. IBC Highway 281 North Centre Building 12400 San Pedro Avenue, Suite 300 San Antonio, TX 78216 Email: cwehmeyer@swenergylaw.com Attorneys for Plaintiffs /s/ Bradley M. Kirklin 14 CAUSE NO. DC-20-10214 STEVEN WEBSTER, AARON WEBSTER, § IN THE DISTRICT COURT OF and DENNIS WOODS, § § Plaintiffs, § v. § DALLAS COUNTY, TEXAS DENNIS J. ROGERS, II and OMTC, INC., § Defendants. § 191ST JUDICIAL DISTRICT UNSWORN DECLARATON OF DENNIS J. ROGERS IT I declare under the penalty of perjury the following: 1 My name is Dennis J. Rogers II. I am over the age of twenty-one (21) years, I have never been convicted of a felony or a misdemeanor involving moral turpitude, and I am fully competent to make this affidavit. The facts stated herein are within my personal knowledge and are true and correct. 2. I attended New Mexico State University and the University of Texas at Dallas and studied business. I am the President of OMTC, Inc. (“OMTC”), and I have held the title of President since inception in 2018. Collectively, I refer to myself and OMTC herein as the “OMTC Defendants.” Grounds for Continuing Summary Judgment Hearing 3 The OMTC Defendants intend to vigorously defend the claims asserted by Plaintiffs in this lawsuit. Specifically, | have instructed my counsel to pursue any defenses available to the OMTC Defendants. To that end, I instructed my counsel to amend the OMTC answer to assert any and all available affirmative defenses. On October 2, 2020, the OMTC Defendants amended their answer to include these affirmative defenses. EXHIBIT A 4. [also instructed my counsel to propound written discovery to all three Plaintiffs, including Requests for Disclosure, Interrogatories, Requests for Admission, and Requests for Production. This written discovery was served on Plaintiffs on October 2, 2020, and seeks information related to the affirmative defenses J have asserted in this case. I also instructed my counsel to file a Rule 91a Motion to Dismiss three causes of action asserted against the OMTC Defendants, and that Motion to Dismiss is scheduled to be heard on October 23, 2020. 3 Additionally, I instructed my counsel to request the deposition of Plaintiff, Aaron Webster between November 9, 2020 and December 1, 2020, after my counsel has had an opportunity to review Plaintiffs’ discovery responses. Further, as of the filing of this declaration, Iam in the process of gathering documents, which my counsel has informed me are to be produced on October 9, 2020. As of this filing my counsel has not reviewed all of the documents responsive to Plaintiffs’ discovery requests. I am scheduled to be deposed in this case on October 15, 2020. Finally, I have also instructed my attorney to investigate potential counterclaims the OMTC Defendants may have against Plaintiffs. 6. I do not seek a continuance of the summary judgment hearing for undue delay, but only so that justice may be done. Facts supporting denial of Plaintiffs’ Motion for Partial Summary Judgment 7 OMTC is licensed wholesaler of fuel products in Texas. In and around early June 2020, I was introduced to Aaron Webster through an intermediary/broker, Patricia Waters (“Waters”). Aaron Webster expressed an interested in purchasing large quantities of fuel from OMTC, and he informed me that he intended to resell the same. Aaron Webster also informed me that he, through his father, Steven Webster, had recently bought and sold large quantities of fuel through Waters and others in the fuel wholesale business. Aaron Webster informed me that Steven Webster and Dennis Woods (“Woods”) had the requisite licenses to purchase, for the purpose of resale, large amounts fuel (“Licenses”), and that he had experience in the fuel wholesale distribution business. J asked Aaron Webster to provide those Licenses, and he informed me that he would do so through Waters. However, neither Aaron Webster, Steven Webster nor Woods ever provided me Licenses. 8 I have never personally met Aaron Webster, Steven Webster, or Woods in person, and I have only spoken to Steven Webster and Woods once or twice. I did not know who they were until Waters introduced them to me. 9 In early June 2020, two individuals who identified themselves as Blaine McManus (“McManus”) and Gary Samson (“Samson”) approached me and informed me that they were fuel brokers for Vitol Inc. (“Vitol”). McManus and Samson informed me about a Vitol fuel sale to occur on or about June 29, 2020. Based on Aaron Webster’s representation regarding possessing the Licenses as well as his representations that he was experienced in the fuel wholesale distribution business, on June 18, 2020, less than three weeks after ] was introduced to Aaron Webster by Waters, OMTC, as Seller, entered into a Fuel Purchase Order with Woods, as Buyer, wherein OMTC agreed to sell, and Woods agreed to purchase jet fuel. Also on June 18, 2020, OMTC, as Seller, entered into a Fuel Purchase Order with Steven Webster, as Buyer, wherein OMTC agreed to sell, and Steven Webster agreed to purchase diesel fuel. 10. On or about June 19, 2020, I provided Aaron Webster, Steven Webster, and Woods OMTC’s bank account number with Chase Bank, Account No. xxx7879 (“Account No. xxx7879”). Account No. xxx7879 is exclusively an OMTC business account; it is not a personal account. On June 19, 2020 Woods wired $2,142,000.00 to Account No. xxx7879. That same day Steven Webster wired $4,410,000.00 to Account No. xxx7879. Collectively, 1 refer to the amounts Woods and Webster wired to OMTC as “the Funds.” 11. On or about June 24, 2020, believing that McManus and Samson were Vitol representatives, I, in my capacity as President of OMTC, wired the Funds from Account No. xxx7879 to an account that McManus and Samson informed me was a Vitol bank account. Soon thereafter, I became concerned that McManus and Samson were not Vitol representatives, and I immediately acted to recall the Funds on July 1, 2020. I remained in constant communication with Aaron Webster regarding the Funds from July 1, 2020 through the time Plaintiffs engaged counsel, and then continued to communicate with Plaintiffs’ counsel through the time Plaintiffs filed this lawsuit. On or about August 6, 2020, OMTC returned $2,142,000.00 to Woods, and OMTC is actively working to return the remainder of the Funds to Webster. Dennis gers I] 10,02, 2O20 Date FUEL PURCHASE ORDER This purchase order (“Purchase Order”), is effective as of June 18", 2020 (the “Effective Date’), is entered into by and between Steven A Webster, an individual (“Buyer”), and OMTC, INC., a Texas Corporation (“Seller”). Each of Buyer and Seller is referred to herein individually as a “Party” and collectively, as the “Parties.” Seller agrees to sell and Buyer agrees to buy the product or products identified on Schedule A to this Purchase order (the “Product”) subject to the terms and conditions of this Purchase Order. 1. Term. The Term of this Agreement (the “Term”), shall be from the Effective Date through July 3, 2020 (the “Expiration Date”), After which a formal supply agreement will be provide to Buyer along with an updated Schedule A for final approval. 2. Payment Terms. The Purchase Price shall be due in amount equal to the amount listed on Schedule A attached here to, on or before June 19, 2020. 3. Option Period. The Option Period (“Option Period”) shall be from the Effective Date of this purchase order through July 3, 2020, during which time either party has the irrevocable right to terminate this Purchase Order without cause by providing either party with written or electronic notice. Upon recent of written notice by either Party this purchase order will immediately terminate and any and all funds received by Seller from Buyer will be immediately due and payable to Buyer within one banking day. Specifically, if Buyer provides Seller notice, Seller will immediately request the return of funds from Vitol and will provide evidence of such to Buyer. Once Seller receives funds, Selier will remit funds to Buyer within one banking day. In addition, Seller represents that Vitol has agreed to promptly remit funds received from Seller for the account of Buyer if the Purchase Order terminates and Seller requests the return. 4. Default. The occurrence and continuance of one or more of the following events shall constitute an event of default (“Event of Default”) of this Purchase Order: 4.1. The nonpayment of the payment terms. 4.2. The entry of a decree or order by a court having appropriate jurisdiction adjudging Buyer bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of Buyer under the federal Bankruptcy Act or any other applicable federal or state law, or appointing a receiver, liquidator, assignee or trustee of Buyer, or any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days. 4.3. The institution by Buyer of proceedings to be adjudicated bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the federal Bankruptcy Act or any other applicable federal or state law, or the consent by it to the filing of any such petition EXHIBIT C or to the appointment of a receiver, liquidator, assignee or trustee of the Buyer, or of any substantial part of its property, shall become subject to the jurisdiction of a federal bankruptcy court or similar state court, or if Buyer shall make an assignment for the benefit of its Sellers, or if there is a receivership, execution or other material judicial seizure, or if there is an admission in writing by Buyer of its inability to pay its debts generally as they become due, or the taking of corporate action by Buyer in furtherance of any such action. 4.4. Default in the obligation of Buyer for borrowed money or any event that results in acceleration of the maturity of any material indebtedness of Buyer under any note, indenture, contract, or agreement. 5. Representations and Covenants, The Buyer hereby represents, agrees and covenants to the following: 5.1 The Buyer is authorized to enter into this Purchase Order and entry into this Purchase Order and related security agreement does not violate the terms and conditions of any existing contractual commitment. 6. Amendments _in Writing. Subject to applicable law, this Purchase Order may be amended, modified, or supplemented only by a written agreement signed by the Seller and the Buyer. 7. Choice of Law; Venue, This Purchase Order and all transactions hereunder and/or evidenced hereby shall be governed by and construed under the laws of the State of Texas without regard to the conflicts of law principles thereof and any action taken to enforce the terms of this Purchase Order shal! be undertaken in Dallas County, Texas. 8. Transferability. The rights and obligations under this Purchase Order may not be assigned or assumed except by express written consent of the other Party to this Purchase Order. Any other attempt to assign rights or responsibilities under this Purchase Order shail be nuli and void. IN WITNESS WHEREOF, the Buyer has caused its duly authorized representative to execute this Purchase Order as of the date first written above. By: , its Manager, and gage Dennis Rogers, President CAUSE NO. DC-20-10214 STEVEN WEBSTER, AARON WEBSTER, § IN THE DISTRICT COURT OF and DENNIS WOODS, § Plaintiffs, Vv. DALLAS COUNTY, TEXAS DENNIS J. ROGERS, II and OMTC, INC., Defendants. § 191ST JUDICIAL DISTRICT DEFENDANTS’ REQUEST FOR DISCLOSURES TO ALL PLAINTIFFS TO: Steven Webster, Aaron Webster and Dennis Woods by and through his attorney of record, Meghan Dawson McElvy, Baker Botts L.L.P., One Shell Plaza, 910 Louisiana, Houston, Texas 77002. Pursuant to Rule 194 of the Texas Rules of Civil Procedure, Defendants, Dennis J. Rogers, Il and OMTC, Inc. hereby serve their Request for Disclosures to Plaintiffs Steven Webster, Aaron Webster and Dennis Woods (collectively “Plaintiffs”). Under Ru