Preview
FILED
DALLAS COUNTY
7/10/2015 6:50:56 PM
FELICIA PITRE
DISTRICT CLERK
CAUSE NO. DC-14-14145
NARINDER GREWAL, SNYP REAL § IN THE DISTRICT COURT
ESTATE DEVELOPMENT, LLC, §
SHASHI SHARMA, SHASHI & SITA §
SHARMA TRUST, SHASHI & SITA §
SHARMA INVESTMENTS, LLC §
PENSION PLAN, BRIJ BHAMBI, §
GREEN SEQUOIA LIMITED §
PARTNERSHIP, ARUN SOFTA, U.S. §
BUSINESS ASSOCIATES, INC., §
§ OF DALLAS COUNTY, TEXAS
Plaintiffs, §
§
v. §
§
ZAYA YOUNAN, YOUNAN §
PROPERTIES, INC., and YOUNAN §
INVESTMENT PROPERTIES, L.P., §
§
Defendants. § 298TH JUDICIAL DISTRICT
VPI THANKSGIVING TOWER FUND, § IN THE DISTRICT COURT
LLC; YPI ONE DALLAS CENTRE §
FUND, LLC; YPI ORANGE TOWER B §
NOTE FUND, LLC; YPI CENTRAL §
EXPRESSWAY HOLDING, L.P.; §
YOUNAN PROPERTIES, INC.; §
YOUNAN INVESTMENT §
PROPERTIES, L.P.; ZAYA YOUNAN; §
YPI ONE NORTH ARLINGTON §
FUND, LLC; YPI NORTH BELT §
PORTFOLIO, LLC; YPI 1010 LAMAR, §
LLC; YOUNAN TOWER FUND, LLC; §
YPI 4851 LBJ FUND, LP; and YPI §
PARK CENTRAL HOLDING, LP, §
§
Counter-Plaintiffs, §
§
v. § OF DALLAS COUNTY, TEXAS
§
NARINDER GREWAL, SNYP REAL §
ESTATE DEVELOPMENT §
COMPANY, SNYP REAL ESTATE §
DEVELOPMENT, LLC, BRIJ §
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 1
BHAMBI, GREEN SEQUOIA §
LIMITED PARTNERSHIP, SHASHI §
SHARMA, SHASHI & SITA SHARMA §
TRUST, SHASHI AND SITA SHARMA §
INVESTMENTS, LLC PENSION PLAN, §
SITA SHARMA, SHARMA AND PURI §
PENSION PLAN, ARUN SOFTA, and §
U.S. BUSINESS ASSOCIATES, INC., §
§
Counter-Defendants. § 298TH JUDICIAL DISTRICT
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH
Plaintiffs Nirander Grewal; SNYP Real Estate Development, LLC; Shashi Sharma;
Shashi & Sita Sharma Trust; Shashi and Sita Sharma Investments, LLC Pension Plan; Brij
Bhambi; Green Sequoia Limited Partnership; Arun Softa; and U.S. Business Associates, Inc.
respectfully submit this Combined Response to Defendants’ Motion to Quash Plaintiffs’ Notice
of Intent to Take the Oral and Videotaped Deposition of Quentin Thompson and Subpoena and
For Protection and Defendants’ Motion to Quash Notice of Intent to Serve Subpoena on Non-
Party The Graves Firm and Subpoena and for Protection (hereafter “Plaintiffs’ Response”),
showing as follows:
I.
INTRODUCTION
Plaintiffs have recently discovered evidence that Defendants defrauded investors,
including Plaintiffs, in at least one of The Partnerships 1 in this lawsuit. Specifically, Plaintiffs
have recently discovered that a similar lawsuit than the one before the Court was filed against
Defendant Zaya Younan (“Younan”), individually, and Defendant Younan Properties Inc.
(“YPI”), by YPI’s former Chief Financial Officer, Quentin Thompson (“Thompson”), who
1
The “Partnerships” refer collectively to YPI Thanksgiving Tower Fund, LLC (“Thanksgiving Tower”); YPI
Thanksgiving Tower Mezz Note Fund, LLC (“Thanksgiving Note”); One Dallas Centre fund, LLC (“One Dallas
Centre”); YPI Orange Tower B Note Fund, LLC (“Orange”); and YPI Central Expressway Holding, L.P.
(“Expressway”).
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 2
alleged, among other things, Younan defrauded investors, including Plaintiffs, by wrongfully
transferring partnership money to his personal accounts (hereafter the “2006 Lawsuit”). 2
Plaintiffs have also obtained Thompson’s sworn testimony in connection with the 2006
Lawsuit. 3
For obvious reasons, it’s critical Plaintiffs gain access to the discovery of evidence which
will implicate Defendants in their fraudulent scheme. Thus, on June 23, 2015, Plaintiffs
subpoenaed the deposition of Thompson for July 24, 2015 (hereafter “Thompson Subpoena”).
Likewise, on June 24, 2015, Plaintiffs gave their Notice of Intent to Subpoena Non-Party The
Graves Firm (hereafter “Graves Subpoena”), counsel for Thompson in the 2006 Lawsuit, for
documents in connection with that matter.
As has been the case from the outset of this lawsuit, Defendants are doing everything to
prevent Plaintiffs from accessing relevant information. 4 No surprise, Defendants moved to
quash both the Thompson and Graves Subpoena. However, the reasons provided by Defendants
for their respective motions are baseless and supported by a misapplication of the Texas Rules of
Civil Procedure. Moreover, Defendants seek “protection” from both the Thompson and Graves
Subpoena but fail to state exactly what they are seeking protection from. Notably, it’s
Defendants seeking protection, not the non-parties.
But there’s more. In addition to locating the above mentioned lawsuit and testimony,
Plaintiffs have closely examined the procedural history of the 2006 Lawsuit. The similarities to
the present suit are shocking. As one might expect, in that lawsuit, Younan and YPI did
everything to prevent Thompson from obtaining discovery. In fact, Defendants used nearly
2
A true and correct copy of the lawsuit styled Quentin Thompson v. Zaya S. Younan et al; Case Number BC
351150; In the Superior Court of the State of California, Los Angeles is attached as Exhibit “A-1.”
3
A true and correct copy of the Declaration of Quentin Thompson is attached hereto and incorporated by reference
as Exhibit “A-2.”
4
Notably, Defendants have not produced a single document.
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 3
identical methods and arguments that are being used again today. However, Younan’s tactics
didn’t work in the 2006 Lawsuit, for good reason, and they shouldn’t work here either. Plaintiffs
now urge the Court to deny both motions before Plaintiffs are prejudiced any further.
II.
EVIDENCE
Attached hereto as evidence and incorporated by reference are:
Exhibit Letter Description
A Affidavit of Ryan Steinbrunner
A-1 A copy of the lawsuit styled Quentin Thompson v. Zaya S. Younan et al; Case
Number BC 351150; In the Superior Court of the State of California, Los
Angeles
A-2 The Declaration of Quentin Thompson
A-3 Plaintiff’s Memorandum of Points and Authorities in Opposition to
Defendants’ Motion for a Protective Order from the 2006 Lawsuit
A-4 Defendants’ Notice of Motion and Motion for Protective Order Concerning
Plaintiff’s Deposition Subpoenas for Production of Business Records; And
Memorandum of Points and Authorities in Support Thereof” from the 2006
Lawsuit
A-5 Order on August 28, 2006, by the Honorable Judge Aurelio Munoz from the
2006 Lawsuit
A-6 The Subpoena to Quentin Thompson
A-7 Plaintiffs’ Notice of Intent to Serve Subpoena on Non-Party The Graves Firm
A-8 Defendants’ Motion to Quash Plaintiffs’ notice of intent to take the oral and
videotaped deposition of Quentin Thompson and Subpoena, and for Protection
A-9 Defendants’ Motion to Quash Notice of Intent to Serve Subpoena on Non-
Party the Graves Firm and Subpoena, and for Protection
A-10 Plaintiff’s Notice of Motion and Motion to Compel Further Responses to
Plaintiff’s First set of Request for Production in the 2006 Lawsuit
A-11 Defendants Notice of Motion and Motion to Seal Records in the 2006 Lawsuit
A-12 Order on November 27, 2006, by the Honorable Judge Aurelio Munoz from
the 2006 Lawsuit
A-13 Plaintiffs’ Motion to Compel Production of Documents
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 4
A-14 Plaintiffs’ Appeal and Request for De Novo Hearing
A-15 Plaintiff’s Status Conference Statement from the 2006 Lawsuit
A-16 February 3, 2015 letter from Ryan Steinbrunner to Defendants’ counsel
A-17 March 19, 2015 email correspondence from Ryan Steinbrunner to Jonathan
Childers
III.
BACKGROUND
1) The Thompson Lawsuit
In 2006, a similar lawsuit to the one before the Court was filed against Younan,
individually, as well as YPI, by YPI’s former Chief Financial Officer, Quentin Thompson
(“Thompson”), who alleged, among other things, Younan defrauded investors, including
Plaintiffs, by wrongfully transferring partnership money to his personal accounts (hereafter the
“2006 Lawsuit”). Exhibit A-1 at ¶¶ 16-54.
In sum, Thompson was both an investor and served as the Chief Financial Officer of YPI
from July 26, 2004 to February 8, 2006. Exhibit A-2 at ¶ 6. In the course of Thompson’s duties
as CFO, he would review records relating to the various partnerships Younan promoted, speak
with other Younan employees and investors, and talk with brokers and other individuals who did
business with Younan. Id. at ¶¶ 7-9. While performing his duties as CFO, Thompson saw
documents, including escrow documents, that suggested money was being improperly taken
from partnerships in which he had invested. Id. at ¶ 10. Specifically, Thompson saw escrow
documents that showed the purchase price of real estate being inflated to include “broker fees” or
“advisory fees” that were paid entirely by the partnership or limited liability company in which
he had invested. Id. ¶ 11. Importantly, one of these partnerships was Expressway, a critical
partnership in this current suit, of which, Plaintiffs collectively lost at least $260,955.00. Exhibit
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 5
A-1 at ¶ 33. The purchase and sale agreement for Expressway included a $400,000 fee paid to
Westridge Realty Investments, Incorporated, a California corporation located in Oak Park
California (hereafter “Westridge”). Id. at ¶ 36.
Thompson knew these fees were suspicious because they were all being paid to either
brokers, like Westridge, with whom Younan had a close relationship or employees of YPI.
Exhibit A-2 at ¶ 12. In the course of investigating these unusual fees, Thompson spoke with
three different individuals who informed him that the brokers who received these fees were then
paying most of the money to Younan personally. Id. at ¶ 13. For example, Westridge
transferred some or all of the $400,000 fee to Younan’s personal bank account. Exhibit A-1 at ¶
37. This was all being done at the instruction of Younan. Exhibit A-2 at ¶ 13. In other words,
these transfers amounted to the brokers taking money from the partnership and giving it back to
Younan, personally. Id. at ¶ 14. This post closing transfer from Westridge to Younan defrauded
investors of Expressway, including Plaintiffs, because they believed their money was being used
to pay necessary expenses of the deal. Exhibit A-1 at ¶ 38.
Moreover, in the course of his job as CFO, Thompson learned Younan had a practice of
sharing different versions of the same documents with different individuals. Exhibit A-2 at ¶ 19.
For example, Younan would give different parties to a real estate deal different copies of the
buyer’s closing statement and the sellers closing statement. Id. Moreover, Thompson also
alleged Younan personally committed patterns of tax evasions by having payments due to
Younan Properties Inc. made to Younan’s personal bank account. Exhibit A-1 at ¶ 56-57.
2) In the 2006 Lawsuit, Defendants filed nearly identical motions to quash Thompson’s
document subpoenas but were denied, for good reason, and they should be denied
here again for the same reasons.
In the 2006 Lawsuit, Thompson sought, among other things, the purchase and sale
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 6
records and payment records associated with each partnership property of which he was an
investor. 5 Exhibit A-3 at p. 1. Because Thompson alleged there were “Brokers” and “advisors”
involved in Younan’s scam, he sought these records from each of these institutions and
individuals. Id. Remember, Thompson alleged Younan had a practice of providing different
versions of the same documents with different individuals. Exhibit A-2 at ¶ 19. For example,
Younan would give parties to a real estate deal different copies of the buyer’s closing statement
and the sellers closing statement. Id. Thus, it was important for Thompson to obtain the records
from each of the individual entities to compare their respective numbers in order to expose
Younan’s scheme. Exhibit A-3 at p. 1.
No surprise, in the 2006 Lawsuit, Younan moved to quash these subpoenas. 6 Defendants
made three arguments to keep Thompson from obtaining these documents. Exhibit A-3 at p. 2.
First, Defendants argued the subpoenas represented an undue burden on the non-parties. Id.
Second, Defendants argued the requests were duplicative. Id. Third, the Defendants argued the
financial records were private and Thompson was barred from obtaining them. Id.
Importantly, the Honorable Judge Aurelio Munoz out of the Superior Court of California,
County of Los Angeles, denied Younan’s arguments entirely, stating:
“Basically, plaintiff is alleging that defendants cooked the books in such a
manner that the partnerships, in which plaintiff was an investor, ended up funding
kickbacks from other businesses with which Younan Properties did business.
Defendants’ protestations notwithstanding, it is not the non-parties who are
objecting, it is defendants who are objecting. While the material sought would
appear to be duplicative and even triplicative, it is the only way that the scheme,
if there was such a scheme, can be exposed. Only by comparing what the
selling prices reflected in the defendants’ books with what the records of the other
5
A true and correct copy of “Plaintiff’s Memorandum of Points and Authorities in Opposition to Defendants’
Motion for a Protective Order from the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit
“A-3.”
6
A true and correct copy of “Defendants’ Notice of Motion and Motion for Protective Order Concerning Plaintiff’s
Deposition Subpoenas for Production of Business Records; And Memorandum of Points and Authorities in Support
Thereof” from the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit “A-4.”
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 7
corporations indicate the prices were can it possibly be demonstrated that the
defendants were charging the partnerships one price, while actually paying a
different price. The difference, if there is one, will reflect the amount of
“slippage” that occurred in conducting the business. Because plaintiff was an
investor in the partnerships, he is entitled to see the tax returns of those
partnerships. Finally, the defendant’s bank records are necessary to trace the
kickbacks, if there were any.” 7
Exhibit A-5 (emphasis added).
3) Plaintiffs filed subpoenas in this present suit, seeking the relevant documents
obtained by Graves and testimony from Thompson.
Given the nature of Thompson’s allegations and the fact that Plaintiffs were also
investors in some of the same partnerships which Thompson alleges Younan used to defraud
investors, on June 23, 2015, Plaintiffs issued the Thompson Subpoena. 8 Likewise, on June 24,
2015, Plaintiffs issued the Graves Subpoena for documents in connection with that matter. 9 On
June 26, 2015, Defendants filed Defendants’ Motion to Quash Plaintiffs’ notice of intent to take
the oral and videotaped deposition of Quentin Thompson and Subpoena, and for protection
10
(hereafter “Defendants First Motion”). On June 29, 2015, Defendants filed Defendants’
Motion to Quash Notice of Intent to Serve Subpoena on Non-Party the Graves Firm and
Subpoena, and for Protection (hereafter “Defendants Second Motion”). 11
4) In the 2006 Lawsuit, Thompson was also forced to file a motion to compel
production of documents. This Motion was granted. Fast forward to the
present suit; Plaintiffs have also moved to compel the production of nearly
identical documents from Defendants.
7
A true and correct copy of the Order on August 28, 2006, by the Honorable Judge Aurelio Munoz from the 2006
Lawsuit is attached hereto and incorporated by reference as Exhibit “A-5.”
8
A true and correct copy of The Subpoena to Quentin Thompson is attached hereto and incorporated by reference as
Exhibit “A-6.”
9
A true and correct copy of Plaintiffs’ Notice of Intent to Serve Subpoena on Non-Party The Graves Firm is
attached hereto and incorporated by reference as Exhibit “A-7.”
10
A true and correct copy of Defendants’ Motion to Quash Plaintiffs’ notice of intent to take the oral and videotaped
deposition of Quentin Thompson and Subpoena, and for Protection is attached hereto and incorporated by reference
as Exhibit “A-8.”
11
A true and correct copy of Defendants’ Motion to Quash Notice of Intent to Serve Subpoena on Non-Party the
Graves Firm and Subpoena, and for Protection is attached hereto and incorporated by reference as Exhibit “A-9.”
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 8
In the 2006 Lawsuit, Thompson was forced to file a motion to compel Defendants’
banking records, tax records and financial records from Defendants. 12 In response, Defendants’
filed a motion to seal these records. 13
Again, Judge Aurelio Munoz held:
The motion to seal records is denied. This Court has already determined the
defendant’s right to privacy is outweighed by the necessity for the records to
be disclosed. Defendant has not shown any compelling reason for the records to
now be sealed…Plaintiff’s motion to compel the production of banking records,
tax records and financial records is granted to the extent the records have not
been produced…If there are more of these needless motions once the court
has ruled, the court will consider evidentiary sanctions. 14
Exhibit A-12 at p. 2 (emphasis added)
In the present suit, on March, 19, 2015, Plaintiffs also moved to compel the production of
nearly identical documents, including but not limited to:
• Any and all documents, including but not limited to, accounting records, financial
statements, bank statements, monthly statements, and quarterly statements for The
Partnerships at issue in this suit for the time period Plaintiffs were investors in said
Partnerships. Exhibit A-13 at p. 4. 15
• Any and all documents, including but not limited to, checks received, bank statements,
and deposit receipts evidencing contributions from Plaintiffs to Defendants for The
Partnerships in this suit. Id.
On June 19, the Court denied Plaintiffs’ Motion to Compel. Plaintiffs have since requested a de
novo hearing appealing this order. 16
5) In the 2006 Lawsuit Defendants flooded Thompson with hundreds of thousands of
12
A true and correct copy of “Plaintiff’s Notice of Motion and Motion to Compel Further Responses to Plaintiff’s
First set of Request for Production…” in the 2006 Lawsuit is attached hereto and incorporated by reference as
Exhibit A-10.”
13
A true and correct copy of “Defendants Notice of Motion and Motion to Seal Records…” in the 2006 Lawsuit is
attached hereto and incorporated by reference as Exhibit A-11.”
14
A true and correct copy of the Order on November 27, 2006, by the Honorable Judge Aurelio Munoz from the
2006 Lawsuit is attached hereto and incorporated by reference as Exhibit “A-12.”
15
A true and correct copy of Plaintiffs’ Motion to Compel Production of Documents is attached hereto and
incorporated by reference as Exhibit “A-13.”
16
A true and correct copy of Plaintiffs’ Appeal and Request for De Novo Hearing is attached hereto and
incorporated by reference as Exhibit “A-14.”
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 9
documents in paper form only.
After Judge Aurelio Munoz compelled the production of financial records maintained in
the ordinary course of business from Younan, Younan produced hundreds of thousands of
documents in paper form only. 17 Exhibit A-15.
These tactics should sound familiar. On February 3, 2015 Plaintiff sought to inspect the
books and records of The Partnerships, as they’re entitled to, which are in the possession of
Defendants.18 Exhibit A-16. As the Court knows by now, the inspection was an absolute mess.
Defendants placed several hundreds of thousands documents in a basement located in Woodland
Hills, California.19 Exhibit A-17. Defendants refuse to provide any sort of index to these
documents and won’t allow Plaintiffs to take any of these documents off the premises for copying
or scanning. Id. If Plaintiffs want actual access to these documents, the only option is to pay a third
party copier thousands of dollars to spend weeks, if not months, trying to copy and scan these
documents on portable scanners in the basement. Id. Again, it is not clear what, if any, of these
documents are actually relevant to this lawsuit or Plaintiffs’ discovery requests. Id. Plaintiffs
should not be left with such an inefficient and inequitable form of conducting discovery. Counsel
for Plaintiffs pointed out in great detail the issues with this inadequate means of discovery to
Defendants’ counsel. Id. Plaintiffs’ counsel has yet to receive a response.
IV.
ARGUMENT AND AUTHORITIES
A. Plaintiffs should be allowed to obtain Thompson’s file.
Plaintiffs are investors in some of the same partnerships which concerned Thompson’s
17
A true and correct copy of Plaintiff’s Status Conference Statement from the 2006 Lawsuit is attached hereto and
incorporated by reference as Exhibit “A-15.”
18
See a true and correct copy of the February 3, 2015 letter from Ryan Steinbrunner to Defendants’ counsel attached
hereto and incorporated by reference as Exhibit “A-16.”
19
See a true and correct copy of the March 19, 2015 email correspondence from Ryan Steinbrunner to Jonathan
Childers attached hereto and incorporated by reference as Exhibit “A-17.”
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 10
accusations of fraud. As the Court can see, Plaintiffs have two options: 1) be forced to issue
subpoenas to the same non-parties as Thompson did in 2006, battle nearly identical baseless
discovery motions, and hope that these entities still have the same business records that they did
in 2006 or 2) obtain these relevant documents from Thompson’s counsel in 2006, The Graves
Firm (“Graves”), and obtain Thompson’s testimony, via deposition, as it pertains to the relevant
partnerships.
We already know Defendants will stop at nothing to prevent this from happening. Like
they did in 2006, Defendants are the ones who are objecting to Plaintiffs’ Subpoenas, not the
non-parties. Defendants’ have provided no colorable reason as to why they would be burdened
by non-parties providing access to documents which Plaintiffs are entitled. The only harm this
will do is to Defendants’ case by proving Defendants’ fraud. Plaintiffs now urge the Court to
prevent any further injustice to Plaintiffs and to deny Defendants’ Motions to Quash.
B. Plaintiffs’ Subpoenas are valid.
1) Plaintiffs complied with Rule 201.1 and therefore the Thompson subpoena is
valid. Defendants First Motion also fails because it does not identify an
alternative time for the deposition.
A party may take a deposition on oral examination or written questions of any person or
entity located in another state or a foreign country for use in proceedings in this State. Tex. R.
Civ. P. 201.1(a). The Deposition may be taken by: (1) notice; (2) letter rogatory, letter of
request, or other such device; agreement of the parties; or (4) court order. Id. (emphasis added).
This rule clearly permits a party to issue the subpoena by one of several methods, including by
notice.
Here, Plaintiffs issued the subpoena by notice in accordance with the Texas Rules of
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 11
Civil Procedure. 20 Exhibit A-10. Defendants’ First Motion incorrectly states “A party who seek
a deposition of a nonparty in a foreign state for use in a Texas proceeding must obtain a letter
rogatory or commission to conduct said deposition.” Defendants’ First Motion at p. 5.
However, Defendants have blatantly misstated the rule. Rule 201.1 makes no indication a party
“must” obtain a letter rogatory or commission. Instead, a party may issue the subpoena using
that particular method or any other method described in the rule.
Moreover, Defendants’ First Motion must identify a reasonable time…with which the
party…will comply. Tex. R. Civ. P. 192.6(a); Grass v. Golden, 153 S.W.3d 659, 662
(Tex.App.—Tyler 2004, orig. proceeding). However, Defendants’ First Motion fails to do so
and must be denied as a matter of law.
For these reasons, Defendants’ First Motion should be denied.
2) Plaintiffs complied with Rule 205 when issuing the Graves Subpoena.
Defendants’ Second Motion also blatantly misstates the Texas Rules of Civil Procedure.
A party may compel discovery from a nonparty—that is, a person who is not a party or subject to
a party’s control…by serving a subpoena compelling…a request for production of documents
and tangible things under this rule. Tex. R. Civ. P. 205.1(d). A notice to produce documents or
tangible things under Rule 205.3 must be served at least 10 days before the subpoena compelling
production is served. Tex. R. Civ. P. 205.2. A party may compel production of documents and
tangible things from a nonparty by serving—a reasonable time before the response is due but no
later than 30 days before the end of any applicable discovery period—the notice required in rule
205.2 and a subpoena compelling production or inspection of documents or tangible things. Tex.
R. Civ. P. 205.3. Notably, nowhere in rule 205 does it require a party issuing a document
20
A true and correct copy of Plaintiffs’ subpoena of Quentin Thompson is attached hereto and incorporated by
reference as Exhibit A-_.
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 12
subpoena to also issue a letter rogatory. Plaintiffs’ subpoena complies with the applicable rules
and therefore Defendants’ motion should be denied.
Moreover, Defendants make much ado in regard to non-party Graves being forced to
produce documents in a county more than 150 miles from where the person resides or is served.
See Tex. R. Civ. P. 176. If necessary, Plaintiffs are more than willing to retrieve the documents
from non-party Graves personally to avoid any burdens the subpoena might cause.
V.
CONCLUSION
Defendants’ will stop at nothing to keep Plaintiffs’ from obtaining discovery that exposes
their fraud. They’ve tried these tactics before, but they didn’t work and there’s no reason to
allow them work today. It’s imperative Defendants’ Motions to Quash be denied to prevent any
further injustice.
VI.
PRAYER
WHEREFORE, Plaintiffs respectfully request the Court to deny Defendants’ Motion to
Quash Plaintiffs’ Notice of Intent to Take the Oral and Videotaped Deposition of Quentin
Thompson and Subpoena and For Protection and Defendants’ Motion to Quash Notice of Intent
to Serve Subpoena on Non-Party The Graves Firm and Subpoena and for Protection; and for any
further relief, at law or in equity, to which Plaintiffs may be justly entitled.
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 13
Respectfully submitted,
FEE, SMITH, SHARP & VITULLO, L.L.P.
________________________________
Anthony L. Vitullo
State Bar No. 20595500
Ryan T. Steinbrunner
State Bar No. 24093201
Lance L. Livingston
State Bar No. 24068269
Three Galleria Tower
13155 Noel Road, Suite 1000
Dallas, Texas 75240
(972) 934-9100
(972) 934-9200 [Fax]
and
John L. Malesovas
The Malesovas Law Firm
Texas State Bar No. 12857300
816 Congress Ave.
Suite 1265
Austin, TX 78701
Telephone: (512) 708-1777
Telecopier: (512) 708-1779
john@malesovas.com
ATTORNEYS FOR PLAINTIFFS
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 14
CERTIFICATE OF SERVICE
I hereby certify that on July 10, 2015, a true and correct copy of the foregoing was
forwarded to the undersigned by either certified mail, email transmission, or facsimile
transmission:
Jonathan R. Childers
Michael K. Hurst
Michael T.E. Kalis
Cindy Blea
Gruber, Hurst, Johansen, Hail, Shank, LLP
1445 Ross Avenue, Suite 2500
Dallas, TX 75202-2711
214-855-6808 Facsimile
jchilders@ghjhlaw.com
mhurst@ghjhlaw.com
mkalis@ghjhlaw.com
cblea@ghjhlaw.com
Attorneys for Defendants
_________________________________
PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 15
/t%1
l GRAVES & A SSOCIATES
ALLEN GRAVES (SB# ~04580) FILED
LOS ANGELES SUPERIOR COURT
2 790 E. Colorado Blvd., 9 ' Floor
Pasadena, CA 91101
3 Telephone: (626) 240-0575 APR 2 1 2006
FacsJmile: (626) 737-7013 JOHN A. CLARKE,
4
Attorney for Plaintiff SY__~~~~~~---
5 Quentin Thompson
6
7
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 LOS ANGELES COUNTY
10 BC351150
11 Quentin Thompson
12 Plaintiff, COMPLAINT FOR:
13 vs. 1. Representative Claim for Violation of
Business and Professions Code §17200
14 ZayaS. Yow1an; an individual and et. seq.
Younan Properties, Inc.; and DOES 1 2. Individual Claim fol' Wrongful ·
15 through 100, inclusive,
Discharge in Violation of Public Policy;
16 Defendant. 3. Individual Claim for Retaliation in
Violation of Labor Code §1102.5(c);
17 4. Individual Claim for Breach of
18 Contract; and
5. Individual Claim for Failure to Pay
19 Wages.
20 DEMAND FOR JURY TRIAL
21
22
23
24
0 25
4
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028
b
COMPLAINT AND DEMAND FOR JURY TRIAL
EXHIBIT A-1
1 Plaintiff alleges as follows:
2
3 INTRODUCTION
4 1. Plaintiff Quentin
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FILED DALLAS COUNTY 7/10/2015 6:50:56 PM FELICIA PITRE DISTRICT CLERK CAUSE NO. DC-14-14145 NARINDER GREWAL, SNYP REAL § IN THE DISTRICT COURT ESTATE DEVELOPMENT, LLC, § SHASHI SHARMA, SHASHI & SITA § SHARMA TRUST, SHASHI & SITA § SHARMA INVESTMENTS, LLC § PENSION PLAN, BRIJ BHAMBI, § GREEN SEQUOIA LIMITED § PARTNERSHIP, ARUN SOFTA, U.S. § BUSINESS ASSOCIATES, INC., § § OF DALLAS COUNTY, TEXAS Plaintiffs, § § v. § § ZAYA YOUNAN, YOUNAN § PROPERTIES, INC., and YOUNAN § INVESTMENT PROPERTIES, L.P., § § Defendants. § 298TH JUDICIAL DISTRICT VPI THANKSGIVING TOWER FUND, § IN THE DISTRICT COURT LLC; YPI ONE DALLAS CENTRE § FUND, LLC; YPI ORANGE TOWER B § NOTE FUND, LLC; YPI CENTRAL § EXPRESSWAY HOLDING, L.P.; § YOUNAN PROPERTIES, INC.; § YOUNAN INVESTMENT § PROPERTIES, L.P.; ZAYA YOUNAN; § YPI ONE NORTH ARLINGTON § FUND, LLC; YPI NORTH BELT § PORTFOLIO, LLC; YPI 1010 LAMAR, § LLC; YOUNAN TOWER FUND, LLC; § YPI 4851 LBJ FUND, LP; and YPI § PARK CENTRAL HOLDING, LP, § § Counter-Plaintiffs, § § v. § OF DALLAS COUNTY, TEXAS § NARINDER GREWAL, SNYP REAL § ESTATE DEVELOPMENT § COMPANY, SNYP REAL ESTATE § DEVELOPMENT, LLC, BRIJ § PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 1 BHAMBI, GREEN SEQUOIA § LIMITED PARTNERSHIP, SHASHI § SHARMA, SHASHI & SITA SHARMA § TRUST, SHASHI AND SITA SHARMA § INVESTMENTS, LLC PENSION PLAN, § SITA SHARMA, SHARMA AND PURI § PENSION PLAN, ARUN SOFTA, and § U.S. BUSINESS ASSOCIATES, INC., § § Counter-Defendants. § 298TH JUDICIAL DISTRICT PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Plaintiffs Nirander Grewal; SNYP Real Estate Development, LLC; Shashi Sharma; Shashi & Sita Sharma Trust; Shashi and Sita Sharma Investments, LLC Pension Plan; Brij Bhambi; Green Sequoia Limited Partnership; Arun Softa; and U.S. Business Associates, Inc. respectfully submit this Combined Response to Defendants’ Motion to Quash Plaintiffs’ Notice of Intent to Take the Oral and Videotaped Deposition of Quentin Thompson and Subpoena and For Protection and Defendants’ Motion to Quash Notice of Intent to Serve Subpoena on Non- Party The Graves Firm and Subpoena and for Protection (hereafter “Plaintiffs’ Response”), showing as follows: I. INTRODUCTION Plaintiffs have recently discovered evidence that Defendants defrauded investors, including Plaintiffs, in at least one of The Partnerships 1 in this lawsuit. Specifically, Plaintiffs have recently discovered that a similar lawsuit than the one before the Court was filed against Defendant Zaya Younan (“Younan”), individually, and Defendant Younan Properties Inc. (“YPI”), by YPI’s former Chief Financial Officer, Quentin Thompson (“Thompson”), who 1 The “Partnerships” refer collectively to YPI Thanksgiving Tower Fund, LLC (“Thanksgiving Tower”); YPI Thanksgiving Tower Mezz Note Fund, LLC (“Thanksgiving Note”); One Dallas Centre fund, LLC (“One Dallas Centre”); YPI Orange Tower B Note Fund, LLC (“Orange”); and YPI Central Expressway Holding, L.P. (“Expressway”). PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 2 alleged, among other things, Younan defrauded investors, including Plaintiffs, by wrongfully transferring partnership money to his personal accounts (hereafter the “2006 Lawsuit”). 2 Plaintiffs have also obtained Thompson’s sworn testimony in connection with the 2006 Lawsuit. 3 For obvious reasons, it’s critical Plaintiffs gain access to the discovery of evidence which will implicate Defendants in their fraudulent scheme. Thus, on June 23, 2015, Plaintiffs subpoenaed the deposition of Thompson for July 24, 2015 (hereafter “Thompson Subpoena”). Likewise, on June 24, 2015, Plaintiffs gave their Notice of Intent to Subpoena Non-Party The Graves Firm (hereafter “Graves Subpoena”), counsel for Thompson in the 2006 Lawsuit, for documents in connection with that matter. As has been the case from the outset of this lawsuit, Defendants are doing everything to prevent Plaintiffs from accessing relevant information. 4 No surprise, Defendants moved to quash both the Thompson and Graves Subpoena. However, the reasons provided by Defendants for their respective motions are baseless and supported by a misapplication of the Texas Rules of Civil Procedure. Moreover, Defendants seek “protection” from both the Thompson and Graves Subpoena but fail to state exactly what they are seeking protection from. Notably, it’s Defendants seeking protection, not the non-parties. But there’s more. In addition to locating the above mentioned lawsuit and testimony, Plaintiffs have closely examined the procedural history of the 2006 Lawsuit. The similarities to the present suit are shocking. As one might expect, in that lawsuit, Younan and YPI did everything to prevent Thompson from obtaining discovery. In fact, Defendants used nearly 2 A true and correct copy of the lawsuit styled Quentin Thompson v. Zaya S. Younan et al; Case Number BC 351150; In the Superior Court of the State of California, Los Angeles is attached as Exhibit “A-1.” 3 A true and correct copy of the Declaration of Quentin Thompson is attached hereto and incorporated by reference as Exhibit “A-2.” 4 Notably, Defendants have not produced a single document. PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 3 identical methods and arguments that are being used again today. However, Younan’s tactics didn’t work in the 2006 Lawsuit, for good reason, and they shouldn’t work here either. Plaintiffs now urge the Court to deny both motions before Plaintiffs are prejudiced any further. II. EVIDENCE Attached hereto as evidence and incorporated by reference are: Exhibit Letter Description A Affidavit of Ryan Steinbrunner A-1 A copy of the lawsuit styled Quentin Thompson v. Zaya S. Younan et al; Case Number BC 351150; In the Superior Court of the State of California, Los Angeles A-2 The Declaration of Quentin Thompson A-3 Plaintiff’s Memorandum of Points and Authorities in Opposition to Defendants’ Motion for a Protective Order from the 2006 Lawsuit A-4 Defendants’ Notice of Motion and Motion for Protective Order Concerning Plaintiff’s Deposition Subpoenas for Production of Business Records; And Memorandum of Points and Authorities in Support Thereof” from the 2006 Lawsuit A-5 Order on August 28, 2006, by the Honorable Judge Aurelio Munoz from the 2006 Lawsuit A-6 The Subpoena to Quentin Thompson A-7 Plaintiffs’ Notice of Intent to Serve Subpoena on Non-Party The Graves Firm A-8 Defendants’ Motion to Quash Plaintiffs’ notice of intent to take the oral and videotaped deposition of Quentin Thompson and Subpoena, and for Protection A-9 Defendants’ Motion to Quash Notice of Intent to Serve Subpoena on Non- Party the Graves Firm and Subpoena, and for Protection A-10 Plaintiff’s Notice of Motion and Motion to Compel Further Responses to Plaintiff’s First set of Request for Production in the 2006 Lawsuit A-11 Defendants Notice of Motion and Motion to Seal Records in the 2006 Lawsuit A-12 Order on November 27, 2006, by the Honorable Judge Aurelio Munoz from the 2006 Lawsuit A-13 Plaintiffs’ Motion to Compel Production of Documents PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 4 A-14 Plaintiffs’ Appeal and Request for De Novo Hearing A-15 Plaintiff’s Status Conference Statement from the 2006 Lawsuit A-16 February 3, 2015 letter from Ryan Steinbrunner to Defendants’ counsel A-17 March 19, 2015 email correspondence from Ryan Steinbrunner to Jonathan Childers III. BACKGROUND 1) The Thompson Lawsuit In 2006, a similar lawsuit to the one before the Court was filed against Younan, individually, as well as YPI, by YPI’s former Chief Financial Officer, Quentin Thompson (“Thompson”), who alleged, among other things, Younan defrauded investors, including Plaintiffs, by wrongfully transferring partnership money to his personal accounts (hereafter the “2006 Lawsuit”). Exhibit A-1 at ¶¶ 16-54. In sum, Thompson was both an investor and served as the Chief Financial Officer of YPI from July 26, 2004 to February 8, 2006. Exhibit A-2 at ¶ 6. In the course of Thompson’s duties as CFO, he would review records relating to the various partnerships Younan promoted, speak with other Younan employees and investors, and talk with brokers and other individuals who did business with Younan. Id. at ¶¶ 7-9. While performing his duties as CFO, Thompson saw documents, including escrow documents, that suggested money was being improperly taken from partnerships in which he had invested. Id. at ¶ 10. Specifically, Thompson saw escrow documents that showed the purchase price of real estate being inflated to include “broker fees” or “advisory fees” that were paid entirely by the partnership or limited liability company in which he had invested. Id. ¶ 11. Importantly, one of these partnerships was Expressway, a critical partnership in this current suit, of which, Plaintiffs collectively lost at least $260,955.00. Exhibit PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 5 A-1 at ¶ 33. The purchase and sale agreement for Expressway included a $400,000 fee paid to Westridge Realty Investments, Incorporated, a California corporation located in Oak Park California (hereafter “Westridge”). Id. at ¶ 36. Thompson knew these fees were suspicious because they were all being paid to either brokers, like Westridge, with whom Younan had a close relationship or employees of YPI. Exhibit A-2 at ¶ 12. In the course of investigating these unusual fees, Thompson spoke with three different individuals who informed him that the brokers who received these fees were then paying most of the money to Younan personally. Id. at ¶ 13. For example, Westridge transferred some or all of the $400,000 fee to Younan’s personal bank account. Exhibit A-1 at ¶ 37. This was all being done at the instruction of Younan. Exhibit A-2 at ¶ 13. In other words, these transfers amounted to the brokers taking money from the partnership and giving it back to Younan, personally. Id. at ¶ 14. This post closing transfer from Westridge to Younan defrauded investors of Expressway, including Plaintiffs, because they believed their money was being used to pay necessary expenses of the deal. Exhibit A-1 at ¶ 38. Moreover, in the course of his job as CFO, Thompson learned Younan had a practice of sharing different versions of the same documents with different individuals. Exhibit A-2 at ¶ 19. For example, Younan would give different parties to a real estate deal different copies of the buyer’s closing statement and the sellers closing statement. Id. Moreover, Thompson also alleged Younan personally committed patterns of tax evasions by having payments due to Younan Properties Inc. made to Younan’s personal bank account. Exhibit A-1 at ¶ 56-57. 2) In the 2006 Lawsuit, Defendants filed nearly identical motions to quash Thompson’s document subpoenas but were denied, for good reason, and they should be denied here again for the same reasons. In the 2006 Lawsuit, Thompson sought, among other things, the purchase and sale PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 6 records and payment records associated with each partnership property of which he was an investor. 5 Exhibit A-3 at p. 1. Because Thompson alleged there were “Brokers” and “advisors” involved in Younan’s scam, he sought these records from each of these institutions and individuals. Id. Remember, Thompson alleged Younan had a practice of providing different versions of the same documents with different individuals. Exhibit A-2 at ¶ 19. For example, Younan would give parties to a real estate deal different copies of the buyer’s closing statement and the sellers closing statement. Id. Thus, it was important for Thompson to obtain the records from each of the individual entities to compare their respective numbers in order to expose Younan’s scheme. Exhibit A-3 at p. 1. No surprise, in the 2006 Lawsuit, Younan moved to quash these subpoenas. 6 Defendants made three arguments to keep Thompson from obtaining these documents. Exhibit A-3 at p. 2. First, Defendants argued the subpoenas represented an undue burden on the non-parties. Id. Second, Defendants argued the requests were duplicative. Id. Third, the Defendants argued the financial records were private and Thompson was barred from obtaining them. Id. Importantly, the Honorable Judge Aurelio Munoz out of the Superior Court of California, County of Los Angeles, denied Younan’s arguments entirely, stating: “Basically, plaintiff is alleging that defendants cooked the books in such a manner that the partnerships, in which plaintiff was an investor, ended up funding kickbacks from other businesses with which Younan Properties did business. Defendants’ protestations notwithstanding, it is not the non-parties who are objecting, it is defendants who are objecting. While the material sought would appear to be duplicative and even triplicative, it is the only way that the scheme, if there was such a scheme, can be exposed. Only by comparing what the selling prices reflected in the defendants’ books with what the records of the other 5 A true and correct copy of “Plaintiff’s Memorandum of Points and Authorities in Opposition to Defendants’ Motion for a Protective Order from the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit “A-3.” 6 A true and correct copy of “Defendants’ Notice of Motion and Motion for Protective Order Concerning Plaintiff’s Deposition Subpoenas for Production of Business Records; And Memorandum of Points and Authorities in Support Thereof” from the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit “A-4.” PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 7 corporations indicate the prices were can it possibly be demonstrated that the defendants were charging the partnerships one price, while actually paying a different price. The difference, if there is one, will reflect the amount of “slippage” that occurred in conducting the business. Because plaintiff was an investor in the partnerships, he is entitled to see the tax returns of those partnerships. Finally, the defendant’s bank records are necessary to trace the kickbacks, if there were any.” 7 Exhibit A-5 (emphasis added). 3) Plaintiffs filed subpoenas in this present suit, seeking the relevant documents obtained by Graves and testimony from Thompson. Given the nature of Thompson’s allegations and the fact that Plaintiffs were also investors in some of the same partnerships which Thompson alleges Younan used to defraud investors, on June 23, 2015, Plaintiffs issued the Thompson Subpoena. 8 Likewise, on June 24, 2015, Plaintiffs issued the Graves Subpoena for documents in connection with that matter. 9 On June 26, 2015, Defendants filed Defendants’ Motion to Quash Plaintiffs’ notice of intent to take the oral and videotaped deposition of Quentin Thompson and Subpoena, and for protection 10 (hereafter “Defendants First Motion”). On June 29, 2015, Defendants filed Defendants’ Motion to Quash Notice of Intent to Serve Subpoena on Non-Party the Graves Firm and Subpoena, and for Protection (hereafter “Defendants Second Motion”). 11 4) In the 2006 Lawsuit, Thompson was also forced to file a motion to compel production of documents. This Motion was granted. Fast forward to the present suit; Plaintiffs have also moved to compel the production of nearly identical documents from Defendants. 7 A true and correct copy of the Order on August 28, 2006, by the Honorable Judge Aurelio Munoz from the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit “A-5.” 8 A true and correct copy of The Subpoena to Quentin Thompson is attached hereto and incorporated by reference as Exhibit “A-6.” 9 A true and correct copy of Plaintiffs’ Notice of Intent to Serve Subpoena on Non-Party The Graves Firm is attached hereto and incorporated by reference as Exhibit “A-7.” 10 A true and correct copy of Defendants’ Motion to Quash Plaintiffs’ notice of intent to take the oral and videotaped deposition of Quentin Thompson and Subpoena, and for Protection is attached hereto and incorporated by reference as Exhibit “A-8.” 11 A true and correct copy of Defendants’ Motion to Quash Notice of Intent to Serve Subpoena on Non-Party the Graves Firm and Subpoena, and for Protection is attached hereto and incorporated by reference as Exhibit “A-9.” PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 8 In the 2006 Lawsuit, Thompson was forced to file a motion to compel Defendants’ banking records, tax records and financial records from Defendants. 12 In response, Defendants’ filed a motion to seal these records. 13 Again, Judge Aurelio Munoz held: The motion to seal records is denied. This Court has already determined the defendant’s right to privacy is outweighed by the necessity for the records to be disclosed. Defendant has not shown any compelling reason for the records to now be sealed…Plaintiff’s motion to compel the production of banking records, tax records and financial records is granted to the extent the records have not been produced…If there are more of these needless motions once the court has ruled, the court will consider evidentiary sanctions. 14 Exhibit A-12 at p. 2 (emphasis added) In the present suit, on March, 19, 2015, Plaintiffs also moved to compel the production of nearly identical documents, including but not limited to: • Any and all documents, including but not limited to, accounting records, financial statements, bank statements, monthly statements, and quarterly statements for The Partnerships at issue in this suit for the time period Plaintiffs were investors in said Partnerships. Exhibit A-13 at p. 4. 15 • Any and all documents, including but not limited to, checks received, bank statements, and deposit receipts evidencing contributions from Plaintiffs to Defendants for The Partnerships in this suit. Id. On June 19, the Court denied Plaintiffs’ Motion to Compel. Plaintiffs have since requested a de novo hearing appealing this order. 16 5) In the 2006 Lawsuit Defendants flooded Thompson with hundreds of thousands of 12 A true and correct copy of “Plaintiff’s Notice of Motion and Motion to Compel Further Responses to Plaintiff’s First set of Request for Production…” in the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit A-10.” 13 A true and correct copy of “Defendants Notice of Motion and Motion to Seal Records…” in the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit A-11.” 14 A true and correct copy of the Order on November 27, 2006, by the Honorable Judge Aurelio Munoz from the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit “A-12.” 15 A true and correct copy of Plaintiffs’ Motion to Compel Production of Documents is attached hereto and incorporated by reference as Exhibit “A-13.” 16 A true and correct copy of Plaintiffs’ Appeal and Request for De Novo Hearing is attached hereto and incorporated by reference as Exhibit “A-14.” PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 9 documents in paper form only. After Judge Aurelio Munoz compelled the production of financial records maintained in the ordinary course of business from Younan, Younan produced hundreds of thousands of documents in paper form only. 17 Exhibit A-15. These tactics should sound familiar. On February 3, 2015 Plaintiff sought to inspect the books and records of The Partnerships, as they’re entitled to, which are in the possession of Defendants.18 Exhibit A-16. As the Court knows by now, the inspection was an absolute mess. Defendants placed several hundreds of thousands documents in a basement located in Woodland Hills, California.19 Exhibit A-17. Defendants refuse to provide any sort of index to these documents and won’t allow Plaintiffs to take any of these documents off the premises for copying or scanning. Id. If Plaintiffs want actual access to these documents, the only option is to pay a third party copier thousands of dollars to spend weeks, if not months, trying to copy and scan these documents on portable scanners in the basement. Id. Again, it is not clear what, if any, of these documents are actually relevant to this lawsuit or Plaintiffs’ discovery requests. Id. Plaintiffs should not be left with such an inefficient and inequitable form of conducting discovery. Counsel for Plaintiffs pointed out in great detail the issues with this inadequate means of discovery to Defendants’ counsel. Id. Plaintiffs’ counsel has yet to receive a response. IV. ARGUMENT AND AUTHORITIES A. Plaintiffs should be allowed to obtain Thompson’s file. Plaintiffs are investors in some of the same partnerships which concerned Thompson’s 17 A true and correct copy of Plaintiff’s Status Conference Statement from the 2006 Lawsuit is attached hereto and incorporated by reference as Exhibit “A-15.” 18 See a true and correct copy of the February 3, 2015 letter from Ryan Steinbrunner to Defendants’ counsel attached hereto and incorporated by reference as Exhibit “A-16.” 19 See a true and correct copy of the March 19, 2015 email correspondence from Ryan Steinbrunner to Jonathan Childers attached hereto and incorporated by reference as Exhibit “A-17.” PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 10 accusations of fraud. As the Court can see, Plaintiffs have two options: 1) be forced to issue subpoenas to the same non-parties as Thompson did in 2006, battle nearly identical baseless discovery motions, and hope that these entities still have the same business records that they did in 2006 or 2) obtain these relevant documents from Thompson’s counsel in 2006, The Graves Firm (“Graves”), and obtain Thompson’s testimony, via deposition, as it pertains to the relevant partnerships. We already know Defendants will stop at nothing to prevent this from happening. Like they did in 2006, Defendants are the ones who are objecting to Plaintiffs’ Subpoenas, not the non-parties. Defendants’ have provided no colorable reason as to why they would be burdened by non-parties providing access to documents which Plaintiffs are entitled. The only harm this will do is to Defendants’ case by proving Defendants’ fraud. Plaintiffs now urge the Court to prevent any further injustice to Plaintiffs and to deny Defendants’ Motions to Quash. B. Plaintiffs’ Subpoenas are valid. 1) Plaintiffs complied with Rule 201.1 and therefore the Thompson subpoena is valid. Defendants First Motion also fails because it does not identify an alternative time for the deposition. A party may take a deposition on oral examination or written questions of any person or entity located in another state or a foreign country for use in proceedings in this State. Tex. R. Civ. P. 201.1(a). The Deposition may be taken by: (1) notice; (2) letter rogatory, letter of request, or other such device; agreement of the parties; or (4) court order. Id. (emphasis added). This rule clearly permits a party to issue the subpoena by one of several methods, including by notice. Here, Plaintiffs issued the subpoena by notice in accordance with the Texas Rules of PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 11 Civil Procedure. 20 Exhibit A-10. Defendants’ First Motion incorrectly states “A party who seek a deposition of a nonparty in a foreign state for use in a Texas proceeding must obtain a letter rogatory or commission to conduct said deposition.” Defendants’ First Motion at p. 5. However, Defendants have blatantly misstated the rule. Rule 201.1 makes no indication a party “must” obtain a letter rogatory or commission. Instead, a party may issue the subpoena using that particular method or any other method described in the rule. Moreover, Defendants’ First Motion must identify a reasonable time…with which the party…will comply. Tex. R. Civ. P. 192.6(a); Grass v. Golden, 153 S.W.3d 659, 662 (Tex.App.—Tyler 2004, orig. proceeding). However, Defendants’ First Motion fails to do so and must be denied as a matter of law. For these reasons, Defendants’ First Motion should be denied. 2) Plaintiffs complied with Rule 205 when issuing the Graves Subpoena. Defendants’ Second Motion also blatantly misstates the Texas Rules of Civil Procedure. A party may compel discovery from a nonparty—that is, a person who is not a party or subject to a party’s control…by serving a subpoena compelling…a request for production of documents and tangible things under this rule. Tex. R. Civ. P. 205.1(d). A notice to produce documents or tangible things under Rule 205.3 must be served at least 10 days before the subpoena compelling production is served. Tex. R. Civ. P. 205.2. A party may compel production of documents and tangible things from a nonparty by serving—a reasonable time before the response is due but no later than 30 days before the end of any applicable discovery period—the notice required in rule 205.2 and a subpoena compelling production or inspection of documents or tangible things. Tex. R. Civ. P. 205.3. Notably, nowhere in rule 205 does it require a party issuing a document 20 A true and correct copy of Plaintiffs’ subpoena of Quentin Thompson is attached hereto and incorporated by reference as Exhibit A-_. PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 12 subpoena to also issue a letter rogatory. Plaintiffs’ subpoena complies with the applicable rules and therefore Defendants’ motion should be denied. Moreover, Defendants make much ado in regard to non-party Graves being forced to produce documents in a county more than 150 miles from where the person resides or is served. See Tex. R. Civ. P. 176. If necessary, Plaintiffs are more than willing to retrieve the documents from non-party Graves personally to avoid any burdens the subpoena might cause. V. CONCLUSION Defendants’ will stop at nothing to keep Plaintiffs’ from obtaining discovery that exposes their fraud. They’ve tried these tactics before, but they didn’t work and there’s no reason to allow them work today. It’s imperative Defendants’ Motions to Quash be denied to prevent any further injustice. VI. PRAYER WHEREFORE, Plaintiffs respectfully request the Court to deny Defendants’ Motion to Quash Plaintiffs’ Notice of Intent to Take the Oral and Videotaped Deposition of Quentin Thompson and Subpoena and For Protection and Defendants’ Motion to Quash Notice of Intent to Serve Subpoena on Non-Party The Graves Firm and Subpoena and for Protection; and for any further relief, at law or in equity, to which Plaintiffs may be justly entitled. PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 13 Respectfully submitted, FEE, SMITH, SHARP & VITULLO, L.L.P. ________________________________ Anthony L. Vitullo State Bar No. 20595500 Ryan T. Steinbrunner State Bar No. 24093201 Lance L. Livingston State Bar No. 24068269 Three Galleria Tower 13155 Noel Road, Suite 1000 Dallas, Texas 75240 (972) 934-9100 (972) 934-9200 [Fax] and John L. Malesovas The Malesovas Law Firm Texas State Bar No. 12857300 816 Congress Ave. Suite 1265 Austin, TX 78701 Telephone: (512) 708-1777 Telecopier: (512) 708-1779 john@malesovas.com ATTORNEYS FOR PLAINTIFFS PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 14 CERTIFICATE OF SERVICE I hereby certify that on July 10, 2015, a true and correct copy of the foregoing was forwarded to the undersigned by either certified mail, email transmission, or facsimile transmission: Jonathan R. Childers Michael K. Hurst Michael T.E. Kalis Cindy Blea Gruber, Hurst, Johansen, Hail, Shank, LLP 1445 Ross Avenue, Suite 2500 Dallas, TX 75202-2711 214-855-6808 Facsimile jchilders@ghjhlaw.com mhurst@ghjhlaw.com mkalis@ghjhlaw.com cblea@ghjhlaw.com Attorneys for Defendants _________________________________ PLAINTIFFS’ COMBINED RESPONSE TO DEFENDANTS’ MOTIONS TO QUASH Page 15 /t%1 l GRAVES & A SSOCIATES ALLEN GRAVES (SB# ~04580) FILED LOS ANGELES SUPERIOR COURT 2 790 E. Colorado Blvd., 9 ' Floor Pasadena, CA 91101 3 Telephone: (626) 240-0575 APR 2 1 2006 FacsJmile: (626) 737-7013 JOHN A. CLARKE, 4 Attorney for Plaintiff SY__~~~~~~--- 5 Quentin Thompson 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 LOS ANGELES COUNTY 10 BC351150 11 Quentin Thompson 12 Plaintiff, COMPLAINT FOR: 13 vs. 1. Representative Claim for Violation of Business and Professions Code §17200 14 ZayaS. Yow1an; an individual and et. seq. Younan Properties, Inc.; and DOES 1 2. Individual Claim fol' Wrongful · 15 through 100, inclusive, Discharge in Violation of Public Policy; 16 Defendant. 3. Individual Claim for Retaliation in Violation of Labor Code §1102.5(c); 17 4. Individual Claim for Breach of 18 Contract; and 5. Individual Claim for Failure to Pay 19 Wages. 20 DEMAND FOR JURY TRIAL 21 22 23 24 0 25 4 j26 ?!27 ) 028 b COMPLAINT AND DEMAND FOR JURY TRIAL EXHIBIT A-1 1 Plaintiff alleges as follows: 2 3 INTRODUCTION 4 1. Plaintiff Quentin