Ajredin \"Danny\" Deari v. Jane Doe

ACCEPTED
05-15-01019-CV
FIFTH COURT OF APPEALS
DALLAS, TEXAS
12/4/2015 12:04:49 PM
LISA MATZ
CLERK
NO. 05-15-01019-CV
IN THE COURT OF APPEALS FILED IN
5th COURT OF APPEALS
FOR THE FIFTH DISTRICT OF TEXAS DALLAS, TEXAS
AT DALLAS 12/4/2015 12:04:49 PM
LISA MATZ
Clerk
AJREDIN “DANNY” DEARI,
Appellants,
v.
JANE DOE,
Appellee.
On Appeal from the 193rd Judicial District Court
of Dallas County, Texas
Cause No. DC-13-04564
SUPPLEMENTAL APPENDIX IN SUPPORT OF CENTURY’S REPLIES TO THE
TRUSTEE’S AND JANE DOE’S RESPONSES TO MOTIONS TO INTERVENE
AND FOR EXTENSION OF TIME TO FILE NOTICE OF APPEAL
Volume 2 of 2 (Bates Nos. 732-1260)
Charles T. Frazier, Jr.
State Bar No. 07403100
cfrazier@adjtlaw.com
Roger D. Townsend
State Bar No. 20167600
Dana Livingston
State Bar No. 12437420
Alexander Dubose Jefferson &
Townsend LLP
4925 Greenville Ave., Ste. 510
Dallas, Texas 75206-4087
(214) 369-2358
(214) 369-2359 Fax
Attorneys for Intervenor
Century Surety Company
SUPPLEMENTAL APPENDIX IN SUPPORT OF CENTURY’S REPLIES TO THE
TRUSTEE’S AND JANE DOE’S RESPONSES TO MOTIONS TO INTERVENE
AND FOR EXTENSION OF TIME TO FILE NOTICE OF APPEAL
Century Surety Company (“Century”) hereby files this Supplemental
Appendix in Support of Its Replies to the Trustee’s and Jane Doe’s Responses to
Motions to Intervene and for Extension of Time to File Notice of Appeal.
Supp.
Ex. Date Document App.
Page(s)
Dec. 3, 2015 Supplemental Affidavit of James W. 0001
Bowen
1 Nov. 23, 2015 Deposition of Scott Seidel in In re 0005
Pastazios Pizza, Inc., Case No. 14-34324-
hdh11, filed in the Bankruptcy Court for
the Northern District of Texas, including
referenced exhibits
2 Nov. 3, 2015 Transcript of Hearing of [119] Motion for 0732
Leave – Trustee’s Expedited Motion to
Clarify Trust Agreement in In re Pastazios
Pizza, Inc., Case No. 14-34324-hdh11, filed
in the Bankruptcy Court for the Northern
District of Texas
3 Nov. 19, 2015 Order on Trustee’s Motion to Clarify [150] 0855
in In re Pastazios Pizza, Inc., Case No. 14-
34324-hdh11, filed in the Bankruptcy Court
for the Northern District of Texas
4 Aug. 25, 2015 Jane Doe’s Unopposed Motion to Intervene 0859
[50] filed in Century Surety Company v.
Pastazios Pizza, Inc. Creditor Trust et al.,
Case No. 3:13-cv-02553-P, in the Northern
District of Texas, Dallas Division
SUPPLEMENTAL APPENDIX IN SUPPORT OF CENTURY’S REPLIES TO THE TRUSTEE’S AND JANE DOE’S
RESPONSES TO MOTIONS TO INTERVENE AND FOR EXTENSION OF TIME TO FILE NOTICE OF APPEAL Page 1
5 Oct. 31, 2015 Pastazios Pizza Inc. Creditor Trust’s 0870
Amended Counterclaims [64] filed in
Century Surety Company v. Pastazios
Pizza, Inc. Creditor Trust et al., Case No.
3:13-cv-02553-P, in the Northern District
of Texas, Dallas Division
6 Nov. 11, 2015 ECF Docket for In re Danny Deari, Case 1129
No. 14-34323-hdh13, filed in the
Bankruptcy Court for the Northern District
of Texas
7 Nov. 24, 2015 Transcript of Hearing of [145] Expedited 1141
Motion to Enforce Confirmed Plan in In re
Pastazios Pizza, Inc., Case No. 14-34324-
hdh11, filed in the Bankruptcy Court for
the Northern District of Texas
8 Nov. 2, 2015 Trustee’s Reply in Support of Motion to 1250
Clarify Trust Agreement [133] in In re
Pastazios Pizza, Inc., Case No. 14-34324-
hdh11, filed in the Bankruptcy Court for
the Northern District of Texas
9 Nov. 23, 2015 Order Denying Century Surety Company’s 1258
Motion for Continuance [171] in In re
Pastazios Pizza, Inc., Case No. 14-34324-
hdh11, filed in the Bankruptcy Court for
the Northern District of Texas
SUPPLEMENTAL APPENDIX IN SUPPORT OF CENTURY’S REPLIES TO THE TRUSTEE’S AND JANE DOE’S
RESPONSES TO MOTIONS TO INTERVENE AND FOR EXTENSION OF TIME TO FILE NOTICE OF APPEAL Page 2
Exhibit 2
SUPP APP 0732
1
1 IN THE UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS (DALLAS)
2
3
) Case No. 14-34324-HDD-11
4 In re ) Dallas, Texas
)
5 PASTAZIOS PIZZA, INC., )
) November 3, 2015
6 Debtor. ) 9:20 AM
)
7 _______________________________)
8 TRANSCRIPT OF HEARING
OF [119] MOTION FOR LEAVE - TRUSTEE'S
9 EXPEDITED MOTION TO CLARIFY TRUST AGREEMENT
BEFORE THE HONORABLE HARLIN D. HALE,
10 UNITED STATES BANKRUPTCY JUDGE
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20 Transcription Services: eScribers
700 West 192nd Street
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PROCEEDINGS RECORDED BY ELECTRONIC SOUND RECORDING.
24
TRANSCRIPT PRODUCED BY TRANSCRIPTION SERVICE.
25 APPEARANCES:
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SUPP APP 0733
2
1
For the Debtor: JOYCE W. LINDAUER, ESQ.
2 JOYCE LINDAUER LAW OFFICE
8140 Walnut Hill Lane
3 Suite 301
Dallas, TX 75231
4
For the Trustee: DAVOR RUKAVINA, ESQ.
5 THOMAS BERGHMAN, ESQ.
MUNSCH, HARDT, KOPF & HARR
6 500 North Akard Street
Suite 3800
7 Dallas, TX 75201
8
For Jane Doe: LAURA M. FONTAINE, ESQ.
9 MICHAEL GRUBER, ESQ.
GRUBER HURST ELROD JOHANSEN
10 HAIL SHANK LLP
1445 Ross Avenue
11 Suite 2500
Dallas, TX 75202
12
13 For Century Surety GREGORY HESSE, ESQ.
Company: KEVIN W. BROOKS, ESQ.
14 HUNTON & WILLIAMS LLP
1445 Ross Avenue
15 Suite 3700
Dallas, TX 75202
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SUPP APP 0734
Colloquy 3
1 THE COURT: Pastazios Pizza. Mr. Rukavina, are you
2 in favor of debtors keeping yachts?
3 MR. RUKAVINA: I am in favor of renting yachts from
4 debtors so long as they are well stocked with provisions. And
5 you know what kind I mean.
6 Your Honor, good morning. Davor Rukavina and Thomas
7 Berghman here for Scott Seidel. Mr. Seidel is also present.
8 THE COURT: Welcome.
9 MR. HESSE: Good morning, Your Honor. Excuse me,
10 good morning, Your Honor. Greg Hesse and Kevin Brooks on
11 behalf of Century Surety Company.
12 THE COURT: Welcome.
13 MS. FONTAINE: Thank you, Your Honor. Laura Fontaine
14 for creditor Jane Doe. With me today in the courtroom is Mike
15 Gruber of Gruber Hurst Elrod Johansen Hail Shank.
16 THE COURT: Welcome.
17 MS. LINDAUER: Your Honor, Joyce Lindauer, counsel
18 for the debtor in the underlying bankruptcy case.
19 THE COURT: Welcome.
20 I know we have a standing argument, but I'd go ahead
21 and -- let's go ahead and proceed through the evidence subject
22 to that. We're not waiving the --
23 MR. HESSE: Your Honor, before we get started, I'd
24 like to invoke the rule of witness preclusion. The -- I think
25 really the two parties that are here, really, the trustee and
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SUPP APP 0735
Colloquy 4
1 Century Surety Company. The trustee filed a witness list that
2 had Scott Seidel, Joyce Lindauer and Trey Crawford. I'd
3 actually ask that Ms. Lindauer and Mr. Crawford be excluded.
4 THE COURT: Who is Crawford now?
5 MR. CRAWFORD: Me, Your Honor.
6 THE COURT: And whom is he?
7 MR. GRUBER: He's my partner, Your Honor. Mike
8 Gruber. He's my partner in private case with the underlying
9 state court case.
10 THE COURT: Um-hum. All right. That's overruled,
11 these are all parties-in-interest.
12 You may proceed.
13 MR. RUKAVINA: Your Honor, may I approach with a
14 couple of binders?
15 THE COURT: You may.
16 MR. HESSE: Your Honor, may I approach as well?
17 THE COURT: You may.
18 MR. HESSE: With the binders?
19 THE COURT: Yeah, you do the same. Right up here,
20 thank you.
21 MR. RUKAVINA: Your Honor, the last time we were here
22 we didn't really get a chance to give you kind of an update
23 where we are, largely because of Century's oral motion to
24 continue. We do thank you for your hearing today. But I do
25 think it's time to give Your Honor some of the background,
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SUPP APP 0736
Colloquy 5
1 more for context than anything.
2 We do not intend today to try some of these issues
3 that Century raised this Friday in an amended objection to our
4 motion seeking very targeted relief. But because Century has
5 raised those, and because they are of relevance with respect
6 to what's going on before Judge Solis, it merits some
7 discussion at least.
8 So it's been some time I think since the Court has
9 been involved with this case. But if we go back, on April the
10 2nd of this year, the Court confirmed the debtor's plan.
11 The debtor's plan clearly created a creditor trust.
12 The plan had attached to it this trust document which, of
13 course, as Your Honor mentioned last time, had certain blanks
14 in it. Why those blanks were blanks at the time of
15 confirmation, we as the trustee, of course, do not know.
16 What followed were several weeks of the debtor trying
17 to find the 50,000-dollar seed money required by the
18 confirmation order to effectuate the plan. And I don't
19 know -- Mr. Seidel might remember more in detail, I don't
20 remember exactly when that money came in, but it was quite
21 some time later. The debtor had a difficult time finding the
22 50,000 dollars.
23 Consequently, on May 22nd of this year, the debtor
24 signed this trust document which had the blanks in it.
25 THE COURT: They signed it with the blanks still?
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SUPP APP 0737
Colloquy 6
1 MR. RUKAVINA: Yes. The debtor then sent -- Ms.
2 Lindauer sent that document to Mr. Seidel. Mr. Seidel signed
3 that document. At that time, both Mr. Seidel and I were
4 discussing with Ms. Lindauer and with Mr. Erler, who
5 represented Ms. Doe respectively, as to these blanks.
6 Ms. Lindauer will explain to Your Honor that it was
7 her understanding that the trustee would fill in those blanks.
8 That was not the trustee's understanding, this was a contract
9 predating the trustee. The trustee did not believe that he
10 could just fill in whatever he wanted to.
11 And with my communications with Mr. Erler, I'd
12 understood that there was a fully -- I'll just call it fully
13 executed, fully filled-in document that was out there, but it
14 was not provided to me.
15 And, finally, really it wasn't until October that Mr.
16 Erler said whoops, this was not signed. In other words, the
17 full filled-in document did exist, but it was never signed.
18 So we have the signed document with blanks, we have
19 an unsigned document, apparently with all the blanks filled
20 in.
21 Let's go back now. So the trustee becomes the
22 trustee on or about May 22nd of this year. The confirmation
23 order and the plan provide for a trustee to retain insurance
24 counsel, that would be Munsch Hardt. There's a blank for how
25 much we're entitled to be paid, another blank that hasn't been
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SUPP APP 0738
Colloquy 7
1 filled in. And the trust document and the plan provide for
2 this trust advisory board, which was subsequently modified
3 pursuant to your confirmation order to have one person on
4 there. But that person, again, is a blank.
5 Well, we have trial in the Jane Doe state court
6 coming up in early July. We have before Judge Solis, once the
7 stay lifted, proceedings to take care of there as well. So
8 what does the trustee do? Well, on June 8th of this year, I
9 personally appeared in front of the state court. Mr. Crawford
10 was there. Ms. Doe, the ninety-nine percent beneficiary, knew
11 that Mr. Seidel had hired Munsch Hardt as the insurance
12 counsel. No problems with that, no objections, no nothing.
13 Everyone wanted insurance counsel
14 On June 12th of this year, we filed -- I filed a
15 motion to substitute in in the federal action before Judge
16 Solis to substitute in for Pastazios Pizza, because the trust
17 now owned these assets. We conferred with Mr. Shults for
18 Century. Mr. Shults said no opposition to the motion to
19 substitute. Judge Solis granted the motion. So by June 12th,
20 if not a few days earlier, Century knew that Munsch Hardt was
21 insurance counsel. No objection, no problem, no issue.
22 Back in state court we announced to the state court
23 that we had hired the law firm of Chen Dotson, the trustee
24 had, to defend the trust against Ms. Doe's tort claims. No
25 objections, no issue, no nothing.
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SUPP APP 0739
Colloquy 8
1 Technically, according to the language of the trust
2 document, Mr. Seidel was supposed to confer with this trust
3 advisory board for the retention of Chen Dotson, but, again,
4 there was no advisory board. And our communications to that
5 effect, frankly, were circular. Well, I think Ms. Lindauer
6 has it, I think Mr. Erler has it, we're working on it, but we
7 had to hire counsel because we had trial coming up. Everyone
8 knew it, the beneficiary knew it. No objections, no problems.
9 Trial was held over the course of two or three days,
10 it was a bench trial. And ultimately the state court entered
11 a judgment, and the numbers -- I always get confused with the
12 numbers, because there's a number against Mr. Deari, there's a
13 number against Pastazios, but it's in the neighborhood of
14 twenty million dollars, as against Pastazios.
15 We have multiple weeks of meetings and communications
16 with Century thereafter regarding what to do with this
17 judgment. We sent a Stowers demand beforehand. Ultimately,
18 we agree, at Century's invitation, to a mediation on October
19 8th. We participate with Ms. Doe at this mediation. The
20 mediation does not conclude until October the 20th. Two days
21 later we filed this motion.
22 The reason why that is of some relevance is because
23 we had hoped that all of these things would be cleaned up at a
24 mediation if there was a settlement, which unfortunately was
25 not reached. And I say that to address Century's argument of
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SUPP APP 0740
Colloquy 9
1 delay.
2 The trustee did not delay, certainly not
3 intentionally. And I represent to you that it was only a
4 couple of weeks before we filed this motion that finally it
5 became clear from Mr. Erler that, wait, this document had not
6 been formally signed.
7 Now, underpinning all of this are certain arguments
8 that Century has raised both here and in front of Judge Solis,
9 that we take exceptionally seriously, and that we will do
10 something about in the procedurally appropriate posture.
11 Your Honor may recall that Century filed a notice of
12 appearance in the bankruptcy case. Century was served with
13 the disclosure statement and the plan. Century did not file
14 an objection to the plan. Century's lawyers stood right here
15 before you at the confirmation, and when asked by Your Honor
16 whether Century had any comments he basically said well, I'm
17 not a bankruptcy lawyer, I don't really have any, I'm here to
18 answer questions.
19 There is absolutely zero question of due process, and
20 there is absolutely zero question of 11 U.S.C. 1141 that this
21 plan is binding on Century.
22 Century now, months later, is making arguments that
23 the transfer of the insurance policy to the trust was invalid.
24 Century is now, months later, when the trustee has refused to
25 do its bidding, arguing that somehow the plan is a sham, that
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SUPP APP 0741
Colloquy 10
1 it's an irreconcilable conflict of interest, that Mr. Seidel
2 is somehow colluding with everyone basically as a master trick
3 against Century. Century is collaterally attacking Your
4 Honor's final binding nonappealable order. And, again, I say
5 we will do something about it.
6 But Century's really biggest defense is even more
7 shocking, because Century's biggest defense is the
8 disparagement of two judges.
9 First, they despair Judge Ginsberg by basically
10 saying that he rubberstamped collusive and -- they don't use
11 the word "false," but basically pre-engineered findings of
12 fact and conclusions of law. That somehow the trustee lost
13 the case intentionally, that somehow Judge Ginsberg looked the
14 other way, and somehow there's a miscarriage of justice, where
15 Judge Ginsberg somehow awarded twenty million dollars based on
16 collusion, even though Mr. Deari admitted to having sexual
17 relations with the eighteen-year-old girl, even though he
18 admitted to serving her alcohol, even though he admitted to
19 taking her to a hotel, even though he admitted to after the
20 act going to have a cigar and a nice meal, and even though he
21 admitted then going back to the hotel to claim his underwear,
22 that is Century's version of a collusive state court judge.
23 They also disparage you, because Your Honor entered,
24 apparently, a sham plan, a plan that voids the policy. Again,
25 collusive, somehow all engineered to enrich the trustee. I
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SUPP APP 0742
Colloquy 11
1 wish, again, not to try those issues today. Those issues are
2 not before Your Honor. Judge Solis will decide whether they
3 will go before Your Honor or him. Judge Solis has not granted
4 Century leave to amend their complaint, he has, instead,
5 ordered expedited briefing. And although we have agreed to
6 Century amending its complaint before Judge Solis, we will
7 take these issues up with Judge Solis, because we believe that
8 they're highly contentious, not to mention, utterly with
9 basis -- utterly without basis in fact.
10 Where does that leave us today? It leaves us now
11 that settlement discussions have ended, mediation has ended
12 with, basically, a war, a litigation war, which means that
13 things have to be cleaned up. This trust document exists for
14 the benefit of Ms. Doe and other beneficiaries. Mr. Seidel
15 was not there when this trust document was negotiated. Mr.
16 Seidel finds himself on a situation where he has no really
17 resort other than seeking clarification or guidance from this
18 Court.
19 So Mr. Seidel has phrased the issue one of two ways.
20 Just like with many plans, Judge, please compel the parties to
21 do what they should have done. That means designate who is on
22 the trust advisory board, fill in the blank for Munsch Hardt,
23 fill in the blank for fees, I need to know that if the fees
24 are going to be 10,000 dollars for this, I'm not going to go
25 forward. Or, alternatively, Judge, because this trust
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SUPP APP 0743
Colloquy 12
1 advisory board has not been effectuated for months, the
2 provisions of that have been waived by Ms. Doe, for whose
3 benefit the trust was created.
4 Your Honor will also hear from Mr. Berghman, my
5 associate, that he spoke to the second largest unsecured
6 creditor, Sam Johnson's law firm, 42,000 dollars. Mr. Johnson
7 also wishes that the trust advisory board go away as having
8 been waived.
9 Century is the only one contesting this. And Century
10 is contesting this not because they have a legitimate interest
11 in the governance of the plan or the trust document, but
12 because this is as shot, a free shot, bite of the apple, for
13 somehow gaining leverage in the district court action.
14 I was going to suggest to Your Honor one of three
15 ways of proceeding today.
16 First, I was going to suggest that Your Honor take up
17 the standing issue. It sounds like Your Honor's going to
18 carry that issue, and I'm certainly not going to disagree with
19 Your Honor's decision.
20 The second way is to just take up the facts as they
21 are on the record. They're matters of public record, they're
22 in front of Your Honor. There are blanks. All of the parties
23 assigned that are parties to this trust agreement are here,
24 and they're saying this was a mistake, we don't know why this
25 wasn't filled in, but it's time to clean this up, get rid of
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SUPP APP 0744
Colloquy 13
1 the trust advisory board, designate Munsch Hardt as counsel.
2 What more is there to discuss? Everyone that has an interest
3 in this trust is in agreement that this is what should be
4 done.
5 The third way is if we're going to have an actual
6 evidentiary hearing. Now, if Your Honor is going to take up
7 any of these collateral issues that Century has raised, then I
8 must seek a continuance, because I have a right to depose Mr.
9 Shults, who is here, now objecting to the plan. I have a
10 right to depose Century, asking what is your prejudice, what
11 is your interest in this trust. So I don't think we can have
12 a full and fair evidentiary hearing today. And that's exactly
13 what Century wants.
14 Put Mr. Seidel on the stand on what are otherwise
15 narrow issues, and try to take free testimony for subsequent
16 use before Judge Solis. Really, I have nothing to say or no
17 evidence other than what I've said. There's no smoking gun,
18 there's obviously a mistake, and the Court has to do something
19 about it.
20 Is the Court going to order the U.S. Marshals to
21 bring Ms. Doe down here and sit on a trust advisory board? Is
22 the Court going to conclude that Mr. Seidel can't have a
23 lawyer? Is the Court going to conclude that the whole plan is
24 a sham and convert the case? The Court doesn't have many
25 options I think that are palatable. But the Court's
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SUPP APP 0745
Colloquy 14
1 intervention is not necessarily required if all of the parties
2 that are subject to distrust are in agreement as to what
3 should be done. Thank you.
4 THE COURT: Thank you. Mr. Hesse, before you go let
5 me just see if any of these other parties, so you can address
6 all of them at one time.
7 MS. FONTAINE: Your Honor, Laura Fontaine for
8 creditor Jane Doe.
9 We disagree with a couple of the trustee's recitation
10 of the factual points, but we agree to the relief he seeks.
11 Our position is that at the time of plan confirmation
12 Jane Doe's claim was scheduled as disputed. And the
13 beneficiaries of the trust under the plan were the holders of
14 allowed class 4 claims.
15 Your Honor previously lifted the stay to allow her
16 claim to be tried in state court. The state court trial
17 didn't occur till July. So we were in a bit of a quandary as
18 of the effective date. We'd negotiated this trust, but we
19 haven't been able to resolve our claim either with the debtor,
20 and thereafter we weren't able to resolve our claim with the
21 trustee. The trustee disputed our claim, hired counsel to
22 oppose it.
23 So we weren't a beneficiary of the trust at the time
24 that the trust needed to be executed. We didn't want to run
25 afoul of the other allowed claims in the trust, potentially
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SUPP APP 0746
Colloquy 15
1 prejudice the rights of the other class 4 members. So we
2 decided not to take up our role on the trust advisory board.
3 When our claim was subsequently allowed after we
4 obtained judgment in state court, we decided to intervene in
5 the federal court litigation before Judge Solis directly. At
6 that point, there's no longer a need for us to serve on the
7 trust advisory board, that we could protect our own interests.
8 So there are other members of class 4 that could
9 potentially be appointed to the trust advisory board. We
10 don't want to be at this point. I don't think you're going to
11 have much luck convincing one of the credit card companies, or
12 Sam Johnson, he might have a conflict because he represented
13 the debtor's principal individually at one point. So I don't
14 think there's anybody who wants to be on the board.
15 So we don't disagree that the relief that the trustee
16 seeks, but we think that we got here in a different way. I
17 don't think we waived our right until recently. I don't think
18 we could have been on the trust advisor board. But at this
19 point I think that the trust advisory board no longer has
20 purpose or a willing participant.
21 THE COURT: Thank you.
22 MS. LINDAUER: Your Honor, let me tell you what I
23 recall about confirmation. The plan was confirmed, and then
24 we spent the next couple of months working with Mr. Deari to
25 get the 50,000 dollars.
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SUPP APP 0747
Colloquy 16
1 When the plan was confirmed Mr. Deari had made
2 arrangements to borrow 50,000 dollars. He had an agreement
3 with a gentleman to loan him -- him personally the money. And
4 then shortly after confirmation that person said, well, I
5 really want to look at different terms. So we ended up with
6 just a huge mess with finally arranged the 50,000 dollars,
7 finally got the money over to Mr. Seidel. But that was the
8 focus of probably the two months following confirmation was
9 working through those issues.
10 As far as the creditor trust goes, I did talk to Mr.
11 Seidel, I think I talked with his counsel. And Mr. Deari did
12 sign off on the trust agreement, Mr. Seidel signed off on the
13 trust agreement. As far as the blanks are concerned, my
14 understanding was that the trustee would fill in the blanks
15 because the confirmation order actually addressed a number of
16 the blanks and said what needed to be in those blanks. For
17 example, the trustee being Mr. Seidel. Mr. Seidel could
18 choose his own attorney, so we wouldn't have filled that in.
19 We might have been told who it was and could have filled it
20 in. But, in essence, the trust document, the one the Court
21 has, had all the material terms.
22 THE COURT: What about the trust board?
23 MS. LINDAUER: I'm sorry?
24 THE COURT: What did it have for the board in
25 that blank?
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SUPP APP 0748
Colloquy 17
1 MS. LINDAUER: Well, if you remember, the
2 confirmation order changed the board to one member. My
3 understanding leaving confirmation was that Ms. Doe would be
4 the member on the advisory board because she held the largest
5 claim. Whether it had been allowed or not wasn't really the
6 issue. We knew she had a significant claim, much larger than
7 any other creditors. And so my thought was was her or her
8 counsel would be the participant on the board. So that was my
9 understanding leaving. None of the other creditors had
10 this -- on confirmation, none of the other creditors had
11 really participated in this case to any extent. So Ms. Doe
12 and her counsel were the primary persons that would benefit
13 from the trust, and also the primary persons that were
14 involved in helping establish the trust in the first instance.
15 So my understanding was that she would be the member
16 of the board, and so that was --
17 THE COURT: Was that the one that Erler -- the one
18 that's filled out, that's what it runs?
19 MS. LINDAUER: I don't know if the one -- I don't
20 know if I've seen the one that was filled out, if that's what
21 it provides or not. The one I saw was the one that we had
22 attached originally to the plan, it had some blanks in it.
23 But --
24 THE COURT: Ms. Fontaine was shaking her head yes, is
25 that right? Or --
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SUPP APP 0749
Colloquy 18
1 MS. LINDAUER: Is that right?
2 THE COURT: No.
3 MS. FONTAINE: We never filled in the trust ad -- we
4 filled in Munsch Hardt, but we never filled in the trust --
5 MS. LINDAUER: Trust advisory board.
6 MS. FONTAINE: -- advisory board.
7 MS. LINDAUER: Yeah.
8 THE COURT: Okay.
9 MS. FONTAINE: That's the uncertainty about the
10 allowance of the claim.
11 THE COURT: Okay.
12 MS. LINDAUER: My understanding -- well, and
13 honestly, the -- the way the trust was created we provided a
14 form over to Mr. Erler and his firm. They gave us comments.
15 We went back and forth on the form of the trust -- the primary
16 form of the trust really was a collaboration between
17 both forms, but primarily their form. And so my understanding
18 was that when Mr. Seidel got appointed we're kind of done. I
19 mean the trustee would take over, he would run the creditor
20 trust and he would be responsible for hiring counsel. And the
21 debtor went off and is running his pizza business.
22 And if you remember, the way the plan set up, we
23 split the unsecureds into two groups. There were the smaller
24 unsecureds which the debtor was responsible for paying. There
25 were the larger unsecureds that went into the trust.
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SUPP APP 0750
Colloquy 19
1 So our focus was making sure that Mr. Deari paid the
2 smaller unsecured creditors. We gave him a pay plan for that.
3 He's been making those payments. And then the larger
4 creditors went into the trust to be paid out of the trust.
5 So, really, once the plan was approved we kind of, maybe right
6 or wrong, kind of viewed the trustee as sort of the one
7 responsible for all this. I didn't know who he was going to
8 retain as counsel at the time of confirmation. I think that
9 was determined very quickly thereafter. So we just didn't
10 have that information.
11 When this all started to blow up over the last few
12 days, and I started reading the papers, I was really surprised
13 that this would be really an issue, because two things.
14 The trust itself says if there's any concerns about
15 the trust, subject to bankruptcy court's jurisdiction, the
16 bankruptcy court shall retain jurisdiction over the creditor
17 trust, the trust estate, the trustee, the members of the trust
18 advisory board. So it just seemed to me like if there were
19 any issues, you could take care of those problems. But I also
20 thought the things they were complaining about, frankly, were
21 more ministerial than material. The actual terms of the trust
22 were very straightforward, which is the trust was established
23 to hold claims for the benefit of a group of creditors. That
24 was the whole concept. And Mr. Seidel was appointed as
25 trustee.
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SUPP APP 0751
Colloquy 20
1 And we knew he would be trustee at confirmation
2 because we filled him in in the confirmation order. So as far
3 as what happened with the advisory committee, I really don't
4 know anything about that, other than my understanding was that
5 Mr. Erler's client would be the member of the advisory
6 committee. So that was my understanding of what happened
7 post-confirmation. But like I said, our focus was primarily
8 on trying to get the 50,000 dollars and making sure the other
9 unsecured creditors got paid.
10 THE COURT: Thank you.
11 MS. LINDAUER: So, thanks.
12 THE COURT: Mr. Hesse?
13 MR. HESSE: Good morning, Your Honor. Greg Hesse on
14 behalf of Century Surety.
15 As was mentioned last week, we were brought in kind
16 of late to the game. So I understand that there was no
17 objection made by Century to the confirmation of the plan. I
18 understand that. I understand that they were not scheduled as
19 a creditor. I understand they were not schedule, or they did
20 not file a proof of claim.
21 However, under the terms of the plan, the debtor
22 transferred to this creditor's trust not only claims against
23 Century, but also the Century insurance policy. They assigned
24 that actual policy, itself. As such, that would provide
25 Century with an interest in the plan of reorganization.
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SUPP APP 0752
Colloquy 21
1 And, quite frankly, listening to the dialogue that's
2 been going on here, I'm a little bit befuddled, because I,
3 quite candidly, Your Honor, could make the argument now that
4 we have discovered what's going on here, that the trust was
5 never actually formed, because there is a suggest -- there's
6 some very significant concerns as to what the terms of the
7 document are. You can't even have the parties over here agree
8 upon what the terms of the document are.
9 The debtor thought that Jane Doe was going to be the
10 sole member of the trust advisory board. Jane Doe's counsel
11 denies that that was going to be the case. Everybody kind of
12 forgot about it. The document -- they thought there was
13 a -- they fully filled out a document somewhere, and nobody's
14 ever seen it. I'm not really sure that we actually have a
15 trust that has been formed, which raises some fairly
16 significant questions in and of itself.
17 And I actually, quite candidly, believe that the
18 trust was properly formed up until the time that the trustee
19 filed his motion asking for this Court to, quite candidly I
20 believe, modify the terms of the plan.
21 So let's -- the quest -- what people are suggesting
22 that you do here is to just ignore the trust advisory board
23 and hope it goes away. But I think the Court needs to
24 understand what that means. And I think I would like to,
25 first of all, make reference to what the trustee had asked for
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SUPP APP 0753
Colloquy 22
1 in their motion to clarify. They either -- the way I read it
2 was they want the Court to appoint a person, or to appoint a
3 person appointed, or to declare -- and I'm quoting here,
4 "declare all provisions of the plan, the confirmation order,
5 and the trust agreement related to the trust advisory board,
6 or any permission or approval from the same to be void." They
7 want you to declare all provisions of the plan, the
8 confirmation order, and the trust agreement relating to the
9 trust advisory board to be void. What does that mean, Your
10 Honor?
11 I have a -- I have provided a copy of a -- of my
12 exhibit book, so if you -- if you want to follow along, with
13 Exhibit number 2, which is a copy of the plan of
14 reorganization.
15 Section 7.01 provides in the last sentence, "That
16 except as otherwise provided here, set forth herein, the
17 trustee and the creditor trust shall be subject to the
18 oversight by the trust advisory board, as provided in the
19 creditor trust agreement." So a term of -- what is a fairly
20 material term of the plan, which is the governance of the
21 trust, is going to be gutted by the proposal from the trustee,
22 because there's no longer going to be a trust advisory board
23 overseeing the creditor trust and the trustee.
24 From Century's perspective, that was kind of an
25 important term, because that means that there's someone
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SUPP APP 0754
Colloquy 23
1 keeping track of the trustee to make sure that he is doing
2 what he is supposed to be doing.
3 With regards to the actual terms of the trust
4 agreement, I'll go through a few of the terms, once again in
5 Exhibit 2 attached as Exhibit 1 to the plan, or Exhibit A to
6 the plan. I'll get you to the -- actually the document
7 filing, page -- at the top, Your Honor.
8 THE COURT: Okay.
9 MR. HESSE: Page 30. It talks about the
10 administrative powers of the trustee. Section 4.2(b)(iii),
11 "With prior approval of the trust advisory board -- the
12 trustee may exercise the power with the prior approval of the
13 trust advisor board, to enter into, perform and exercise
14 rights under contracts belonging to the creditor trust."
15 Remember, Your Honor, there was the assignment of the
16 insurance policy with Century into the creditor trust, that
17 would provide protection for Century, because it would be
18 dealing with our contract.
19 4.2(b)(v), "With the prior approval of the trust
20 advisory board the trustee can employ attorneys."
21 Moving over to page 31, 4.2(b)(x), I'm going to
22 invert it, "With the prior approval of the trust advisory
23 board, the trustee can compromise, adjust, or settle, or
24 abandon causes of action." Once again, this relates to
25 Century.
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SUPP APP 0755
Colloquy 24
1 And, interestingly, Your Honor, it was mentioned in
2 the trustee's response, they didn't file this motion until
3 after there was the mediation with Century. Based upon the
4 document that they now rely upon, they didn't have authority
5 to enter into the mediation and to try to settle the claim
6 with Century. They wasted a significant amount of our time
7 going into this mediation because they did not have authority.
8 (xi) also provides "With the consultation of the
9 advisory board, they will compromise, adjust, settle or
10 abandon any avoidance actions."
11 Over on the next page, page 32, "With prior approval
12 of the trust advisory board, they can sue in connection with
13 matters."
14 (xviii) "With prior approval of the trust advisory
15 board, they can borrow money."
16 (xix) "With prior approval of trust advisory board,
17 they can use net causes of action to pay expenses."
18 So those are all fairly significant provisions that
19 require trust advisory board approval.
20 And I'd also like to direct Your Honor's attention
21 to -- bear with me for just a moment. There is a provision in
22 the trust agreement that provides for the ability to amend the
23 trust agreement. They chose not to amend the trust agreement.
24 And probably one of the reasons that they chose not to amend
25 the trust agreement is over here in Section 10.1 starting with
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SUPP APP 0756
Colloquy 25
1 the fifth line from the top. It says that "The trustee is not
2 entitled to amend or modify Sections 4.2(x) and 4.2(xi)."
3 And, again, going back to (x) that is "The trust advisory
4 board has to be consulted and has to approve any settlement of
5 any claims or causes of action." Once again, relating to
6 Century.
7 So this all has -- Century has an interest in what's
8 going on in the trust advisory board, because its contract was
9 assigned to the trust advisory board. And, secondly, that it
10 was -- these doc -- the way that the governance is done with
11 regards to the claim against trust -- Century, provides that
12 the trust advisor board will be consulted.
13 And then I'll also point out to you one fairly
14 significant, just wholesale gutting of the document, is in
15 page 37 of the -- of the plan as it was filed, page 17 of the
16 trust agreement. Starting with Section 6, "The establishment
17 of the trust advisory board in all related matters."
18 And then there's one final point that I would make,
19 Your Honor, is that dealing with the removal of a trustee in
20 Section 8.8(b), "The trustee may be removed by the order of
21 the bankruptcy court, but only upon motion of the trust
22 advisory board with less than a unanimous vote, or upon
23 unanimous vote of the trust advisory board."
24 So to completely eliminate all references to the
25 trust advisory board, you basically have an -- the trustee not
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SUPP APP 0757
Colloquy 26
1 being able to be under the oversight of anyone, and being able
2 to do as he sees.
3 So this a material change to the trust -- trust
4 agreement, which was incorporated by reference into the plan
5 of reorganization, which plan was sent to creditors and
6 parties-of-interest, which creditors and parties-of-interest
7 relied upon in whatever decisions they ultimately made.
8 So, quite candidly, Your Honor, this is a significant
9 modification to the plan of reorganization. And I cited in
10 our objection a fairly lengthy quote from Judge Sharp in the
11 U.S. Brass case, in which he noted that any -- you can file a
12 motion, and you can set it up as trying to describe it as an
13 interpretation of the plan, or kind of a -- an interpretation
14 of a trust agreement, but if it results in material changes to
15 a confirmed -- a substantially confirmed plan, he didn't
16 have -- you don't have authority to modify those provisions.
17 Which then raises the question has the plan been
18 substantially consummated? I'll note, Your Honor, that the
19 debtor did file an application for -- an application to enter
20 a final decree and close the case in which the debtor
21 represented that the plan has been substantially consummated.
22 If the plan, in fact, has been substantially consummated,
23 there's no authority under Section 1127 to modify it, even
24 indirectly by merely seeking to waive these provisions. That
25 ends up being effectively a material modification.
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SUPP APP 0758
Colloquy 27
1 So we would ask that -- I mean, just based upon what
2 they're seeking to do, we'd ask the Court to deny it.
3 This is not a problem that Century caused. We
4 thought that we were dealing with someone who has been
5 properly appointed and has authority to act as they did. The
6 fact that the trustee represented that the trust had been
7 appointed -- the trustee had been appointed, that he had
8 hired -- properly hired counsel in order to try to intervene
9 into the -- litigate the coverage action in federal district
10 court, was based upon the understanding of what was going to
11 happen, and it was consistent with what they were saying. It
12 was only until they filed this motion that real questions
13 arise as to, number one, whether the trustee has, in fact,
14 been formed? Based upon this discussion, I'm not sure that it
15 has. And, secondly, whether the trust -- whether they have
16 authority under Section 1127 to modify these terms anyway.
17 These provisions, in part, provide some protection to
18 Century, it provides -- these protections relate to the
19 ability to settle claims. It provides some form of oversight
20 on the trustee in his actions, that I think that it's
21 important.
22 I think I explained in our response the concerns that
23 have arisen -- as time has gone on as to the inherent --
24 potentially inherent conflict that has arisen as a result of
25 this particular plan and trust agreement. The trustee has
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SUPP APP 0759
Colloquy 28
1 been given the sole right to object to the claim of Jane Doe.
2 His compensation is based upon the percentage of recovery that
3 can be given from the trust assets, which primarily consist of
4 the claim against Century. The value of the claim against
5 Century directly correlates to the value of the claim -- or
6 the amount of claim that Jane Doe has against the trust.
7 It -- clearly, if Jane Doe's claim is twenty million
8 dollars, and that results in twenty million in proceeds to the
9 trust, the trustee gets a million dollars.
10 If Jane Doe's claim is zero, the trust gets zero.
11 The trustee's compensation is zero. It is directly
12 correlated.
13 And so there is -- there is a potential conflict of
14 interest that exists under this plan and this trust agreement
15 that is -- that is ameliorated in part by having the trust
16 advisory board there to make -- overseeing what is going on.
17 I don't know ultimately what happened in the state
18 court, we'll find out. That's a subject of issues in other
19 courts. All I'm saying is under this document there is a
20 concern. Was it raised at the time of confirmation, no. It
21 became -- but it became more apparent as time has gone on.
22 And, especially now it becomes more apparent when the trustee
23 is seeking to -- and the parties-in-interest here, the debtor
24 and Jane Doe, are asking that the Court eliminate the trust
25 advisory board, the one check over the trustee's actions.
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SUPP APP 0760
Colloquy 29
1 So in our view, Your Honor, you should deny the
2 motion as a material modification of the plan. This is not a
3 mess that we caused, it's a mess that they caused. And
4 if -- and, quite candidly, if they didn't actually effectuate
5 the formation of the trust, maybe there's a material
6 modification to the plan that raises questions as to whether
7 this case should be dismissed or converted. Thank you, Your
8 Honor.
9 THE COURT: Thank you, Mr. Hesse.
10 MR. RUKAVINA: Your Honor, I think Mr. Gruber wants
11 to address the Court.
12 THE COURT: Okay.
13 MR. GRUBER: Your Honor, I just want to address,
14 especially that last comment, that "not the mess that they
15 made."
16 Your Honor, my client, Ms. Doe, as an eighteen-year-
17 old girl put up with four years of depositions questioning
18 her -- everything about her, three-day very adversarial trial.
19 We can play you depo clips where they go into everything about
20 whether she was really raped, whether she wanted it, whether
21 she wanted the herpes that she still has.
22 They initially, four years ago, indicated that their
23 problem was coverage here. And then once they hired counsel,
24 they pulled that counsel. And my client had four years of
25 this because they wouldn't respond to the first demand for
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SUPP APP 0761
Colloquy 30
1 payment, or the next three they didn't respond to us at all.
2 The bankruptcy is because --
3 MR. HESSE: Your Honor, I'm going to --
4 MR. GRUBER: -- they couldn't pay the attorney's
5 fees.
6 MR. HESSE: Your Honor, I'm going to object to the
7 relevance to this, to the matter at hand.
8 THE COURT: Overruled.
9 MR. GRUBER: Okay. The reason we're here in
10 bankruptcy court is because they quit paying counsel, and that
11 is what led to this bankruptcy. Your Honor, they showed no
12 interest in this case at all, except for showing up, sending a
13 lawyer, never to defend their insured, but they did send a
14 lawyer to the bankruptcy hearing where this plan was approved.
15 But aside from that, Your Honor, they didn't even answer our
16 letters begging them to keep our client from having to go
17 through what she had to go through.
18 I'm a little emotional, because this is a young lady
19 who I was there when they brought her home from the hospital,
20 a friend of our family, played with my kids when she was
21 young. And continually -- they continue to pull things like
22 this. It's the most ridiculous pleading that they've just
23 filed in Judge Solis' court. Judge, for them to say they're
24 not responsible what has happened to my client, and what has
25 happened in this instance, is ridiculous. Thank you.
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SUPP APP 0762
Colloquy 31
1 THE COURT: Thank you. Mr. Rukavina, I hear you on
2 your motion for a continuance, but I'm overruling that.
3 Why don't you call your first witness?
4 MR. RUKAVINA: Why don't I get some easy stuff out of
5 the way first, Your Honor. I move to admit Exhibits A through
6 H.
7 MR. HESSE: Your Honor, we will not stipulate to the
8 admissibility of Exhibit 8, Your Honor threw that one out.
9 MR. RUKAVINA: Which one? Exhibit --
10 MR. HESSE: That's the trust agreement. The
11 executed -- the purportedly executed --
12 MR. RUKAVINA: I just didn't hear you, Exhibit A?
13 MR. HESSE: 8.
14 MR. RUKAVINA: 8. I don't have -- I have A through
15 H.
16 MR. HESSE: I'm sorry, I was looking at mine.
17 THE COURT: And yours, you just have A through F, is
18 that right, Mr. Rukavina, because the others --
19 MR. RUKAVINA: I have A through H, Your Honor, in the
20 binder. G and H were not on my witness and exhibit list --
21 THE COURT: Oh, I see.
22 MR. RUKAVINA: -- because they were just filed by
23 Century on Friday evening.
24 THE COURT: Oh, okay, right.
25 MR. HESSE: C, Exhibit C, Your Honor threw that one
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SUPP APP 0763
Colloquy 32
1 out.
2 THE COURT: Do you object to C?
3 MR. HESSE: I -- at this point I'm not going to
4 stipulate to its admissibility.
5 THE COURT: Okay. A, B, and then D through H are
6 admitted.
7 (Trustee's Exhibits A, B, D-H were hereby received into
8 evidence, as of this date.)
9 MR. RUKAVINA: Your Honor, I'd like to briefly
10 proffer the testimony of Thomas Berghman.
11 MR. HESSE: Your Honor, I'm going to object.
12 THE COURT: All right. Mr. Berghman, please come
13 over here.
14 Mr. Berghman, you're an attorney licensed to practice
15 in the State of Texas, is that right?
16 MR. BERGHMAN: I am, Your Honor.
17 THE COURT: You may take the witness stand without
18 the administration of the oath.
19 MR. HESSE: Your Honor, also, Mr. Berghman was not
20 listed on the witness list.
21 MR. RUKAVINA: Your Honor, I was -- shall I get my
22 cell phone?
23 THE COURT: Sure.
24 MR. HESSE: I don't believe --
25 MR. RUKAVINA: Wasn't I listed on it?
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SUPP APP 0764
Colloquy 33
1 MR. HESSE: You listed Mr. --
2 MR. RUKAVINA: Your Honor, a lot of this is in
3 response to what they filed Friday -- Friday afternoon.
4 THE COURT: Sustain the objection.
5 MR. RUKAVINA: Your Honor, I'll call Joyce Lindauer.
6 MR. BERGHMAN: She just went to the -- I'll call her,
7 just a second.
8 MR. HESSE: I will object to Ms. Lindauer being
9 called as a witness. She is an attorney that's been acting as
10 an attorney. Under the Texas Disciplinary Rules an attorney
11 cannot act as a witness on material facts. So we would object
12 to Ms. Lindauer being called.
13 THE COURT: Overruled.
14 (Pause)
15 THE COURT: Now we've lost everybody?
16 MR. RUKAVINA: Your Honor, I apologize. It would
17 have been fun to put my associate on the stand though.
18 THE COURT: We're going backwards. I'd like to see
19 Mr. Berghman up there.
20 MR. RUKAVINA: We'll conduct the examination in
21 Flemish.
22 MR. RUKAVINA: You want me to run out and yell at
23 them?
24 THE COURT: We need a witness in.
25 (Pause)
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SUPP APP 0765
Colloquy 34
1 MR. HESSE: Your Honor, I will also reurge my request
2 to invoke the rule.
3 THE COURT: Okay. I'm overruling it.
4 MS. LINDAUER: I'm sorry, Your Honor. I went to go
5 move my car. I didn't get very far, but it's all right.
6 MR. RUKAVINA: I've called you as a witness.
7 MS. LINDAUER: I know, that's what I heard. You want
8 to swear me in or --
9 THE COURT: No, just I'm going to state on the record
10 you're a lawyer licensed to practice in the State of Texas, is
11 that right?
12 MS. LINDAUER: Yes, sir.
13 THE COURT: You may take the witness without the
14 administration of the oath.
15 MS. LINDAUER: Thank you, Your Honor.
16 DIRECT EXAMINATION
17 BY MR. RUKAVINA:
18 Q. Ms. Lindauer, for the record, please state your name and
19 Your role in this bankruptcy case?
20 A. Yeah, my name is Joyce Lindauer. And I was approved as
21 attorney for the debtor Pastazios Pizza, Inc.
22 Q. Are you familiar with the plan that was confirmed in this
23 case, and the accompanying trust agreement?
24 A. I am.
25 Q. How so?
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SUPP APP 0766
Joyce Lindauer - Direct 35
1 A. I drafted the plan with the involvement of a number of
2 the creditors in the case, primarily Jane Doe's counsel, Mr.
3 Erler, Ms. Fontaine originally. Early on in the case there
4 was a big move to convert the case to Chapter 7 or appoint a
5 trustee. We were able to work out an agreement with them to
6 do a plan instead that included a creditor trust.
7 Q. And was that creditor trust negotiated by you with
8 anyone?
9 A. Yes.
10 Q. And who was it negotiated by you with?
11 A. It was negotiated with me, with Laura Fontaine and Jeff
12 Erler, primarily. Our prior counsel, Mr. Johnson, I believe,
13 who had been handling the litigation for Pastazios, and also
14 Danny Deari, had a little bit of input also in the case and
15 how things would be handled in the case.
16 Q. What was the purpose during those negotiations of having
17 a trust advisory board?
18 A. A trust advisory board was really not discussed per se.
19 It wasn't really -- I mean, it was a concept, but it wasn't
20 really a material term that was discussed.
21 Q. For whose benefit was the trust agreement negotiated?
22 A. For the benefit of the creditors who would have claims
23 that would have been greater than the claims that were allowed
24 in the -- what we called an administrative convenience class.
25 We had a 5,000-dollar limit on adminis -- on claims. So it
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SUPP APP 0767
Joyce Lindauer - Direct 36
1 was for the creditors who had claims greater than 5,000
2 dollars.
3 MR. RUKAVINA: May I approach the witness, Your
4 Honor?
5 THE COURT: You may.
6 MS. LINDAUER: Thank you.
7 Q. Would you please turn to Exhibit C.
8 A. I've got that.
9 Q. I'll ask you if you recognize that document, and then
10 flip to the signature page please?
11 A. Yeah, this is a copy of the creditor trust agreement that
12 was included as part of the plan that was filed in the
13 Pastazios Pizza case.
14 Q. And did Mr. Deari sign this and then you e-mail to Mr.
15 Seidel?
16 A. I did.
17 Q. Mr. Seidel then signed it and e-mailed it to you?
18 A. Correct.
19 MR. RUKAVINA: Your Honor, I'd move to admit Exhibit
20 Cow.
21 MR. HESSE: Your Honor, may I take Ms. Lindauer on
22 voir dire?
23 MR. RUKAVINA: What's the point?
24 THE COURT: You may. You may.
25 VOIR DIRE EXAMINATION
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SUPP APP 0768
Joyce Lindauer - Voir Dire 37
1 BY MR. HESSE:
2 Q. Ms. Lindauer, were you present in the room when Mr. Deari
3 signed the agreement?
4 A. Yeah, I believe he signed it at our office. He signed --
5 Q. No, were you in the room with him?
6 A. Yes.
7 Q. You were in the room?
8 A. Yeah.
9 Q. Okay. So you witnessed him actually signing the
10 agreement?
11 A. Yeah, he stopped by our office to sign it.
12 Q. And when you put it in front of -- when he signed this
13 page, what was put in front of him?
14 A. The entire trust agreement.
15 Q. The entire trust agreement. The -- I'll note at
16 the -- I'll note at the top --
17 A. Um-hum.
18 Q. -- above the signature, it says, "Signature page
19 follows"?
20 A. Right.
21 Q. Now, could you please turn to Trustee's Exhibit A, the
22 last page?
23 A. Got it.
24 Q. Can you compare the two pages?
25 A. Yes.
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SUPP APP 0769
Joyce Lindauer - Voir Dire 38
1 Q. Now, the page that was attached to the plan does not
2 state at the top of the signature page, "Signature page
3 follows," correct?
4 A. Correct.
5 Q. And also the -- page 29 of Exhibit C --
6 A. Right.
7 Q. -- does not have at the top of it the court's filing
8 stamp, correct?
9 A. Correct.
10 Q. Whereas on page 29 of the trust agreement attached
11 to -- as Exhibit A, there is at the top the court's filing
12 stamp, correct?
13 A. Correct.
14 Q. Okay. And were you in the room when Mr. Seidel signed
15 the document?
16 A. No.
17 Q. And what did you e-mail to Mr. Seidel?
18 A. The signature page.
19 Q. Just the signature page?
20 A. Just the signature page.
21 Q. Okay.
22 MR. HESSE: I have no further questions on voir dire.
23 Thank you, Your Honor.
24 THE COURT: All right.
25 MR. HESSE: We would object to the admissibility at
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SUPP APP 0770
Joyce Lindauer - Voir Dire 39
1 this time.
2 THE COURT: On what basis?
3 MR. HESSE: The -- it does not appear to be an
4 accurate -- it doesn't appear to be -- let me -- let's
5 wait until Mr. Seidel -- I'd object at this point in time, she
6 didn't see Mr. Seidel sign the document. At this point, we'd
7 wait to have an opportunity to talk with Mr. Seidel about what
8 he signed as well. I'd ask for a temporary not be admitted
9 because she did not witness Mr. Seidel signing the document.
10 THE COURT: Well, I'll carry the objection, but the
11 witness will be examined on this document, right.
12 MR. HESSE: Okay, thank you, Your Honor.
13 THE COURT: So you can examine her about the trust
14 document.
15 MR. RUKAVINA: Yes.
16 BY MR. RUKAVINA:
17 Q. Ms. Lindauer, before we look at this document, you were,
18 again, lead debtor's counsel in this case, correct?
19 A. Correct.
20 Q. Did Century participate, appear, and do anything in this
21 bankruptcy case?
22 A. Not that I recall.
23 Q. Was Century ever intended to be a beneficiary of this
24 plan or the trust agreement?
25 A. No.
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SUPP APP 0771
Joyce Lindauer - Direct 40
1 Q. Did Century ever try to negotiate anything about this
2 trust agreement or plan with you?
3 A. No.
4 Q. Do you recall whether Century's attorney appeared at the
5 confirmation?
6 A. You mention that they did; I don't recall. They may
7 have. I think they attended. That may be the only hearing
8 they actually attended.
9 Q. But had they attended the hearing and tried to negotiate
10 something with you, or clarify something, would you have
11 remembered that?
12 A. Oh, yeah, absolutely.
13 Q. Okay. Now, if we go over this trust agreement, not to
14 burden the Court's time --
15 A. Sure.
16 Q. -- you'll agree with me that there are certain blanks in
17 this agreement?
18 A. Absolutely.
19 Q. Explain to me, or to the Court, rather, how it is that on
20 May 22nd, 2015 Mr. Deari signed this and it was sent to Mr.
21 Seidel with blanks in it?
22 A. Well, I think what happened with the trust agreement was
23 that shortly following confirmation, the primary focus,
24 because Mr. Seidel and I were on the phone a lot, was trying
25 to get the 50,000 dollars that he needed as sort of the seed
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SUPP APP 0772
Joyce Lindauer - Direct 41
1 money for the plan and then the trust. The trust
2 agreement -- the confirmation order had adjusted some of the
3 terms of the trust agreement. For example, it appointed Mr.
4 Seidel as the trustee.
5 Q. So that --
6 A. Yeah.
7 Q. -- blank was filled in by the judge, basically?
8 A. Yeah, by the confirmation order.
9 Q. Yeah.
10 A. It also addressed that the trustee could hire counsel.
11 It also addressed that the advisory board would be one member
12 as opposed to multiple members. What happened was then I know
13 Mr. Seidel called me at some point and said we don't have a
14 signed trust agreement, we need the trust agreement signed.
15 And I said okay, let me get a hold of Mr. Deari. The reason
16 that Mr. Hesse, I think is having problems with the
17 pagination, Your Honor, is I'm pretty certain what we did was
18 just printed out -- because we had it in Word, printed out a
19 copy of the trust agreement. Mr. Deari came by, signed the
20 trust agreement, and then we faxed or e-mail over the
21 signature page to Mr. Seidel. Or, and I'm not remembering
22 exactly, we may have already had Mr. Seidel's signature, but
23 that --
24 Q. In any event, go back to, please --
25 A. Sure.
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SUPP APP 0773
Joyce Lindauer - Direct 42
1 Q. -- why there are still blanks in this document?
2 A. Okay. So there's still blanks in the document because,
3 honestly, after the agreement was signed by Mr. Deari and Mr.
4 Seidel, I just assumed that Mr. Seidel, as the trustee of the
5 trust, would fill in the missing blanks, because at that point
6 I viewed him as the responsible person, because he was the
7 trustee of the trust. And the way I understand trusts work,
8 the trustee is the responsible person. And so I just assumed
9 the blanks would all be filled in. I'm not even sure I knew
10 who his insurance counsel was until I think you may have
11 contacted me at some point.
12 Q. Did Mr. Seidel ever represent to you, or tell you that he
13 would fill in those blanks?
14 A. No. I don't think we ever talked about.
15 Q. Thank you.
16 MR. RUKAVINA: I'll pass the witness, Your Honor.
17 THE COURT: Mr. Hesse?
18 CROSS-EXAMINATION
19 BY MR. HESSE:
20 Q. A couple of follow-up questions, Ms. Lindauer.
21 A. Sure.
22 Q. Let me make sure that I understand. What happened when
23 you and -- with Mr. Deari is that you printed out the -- a
24 Word document for him to sign?
25 A. Correct.
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SUPP APP 0774
Joyce Lindauer - Cross 43
1 Q. Is that document -- do you know where that document is?
2 A. I'm sure it's still on my computer.
3 Q. Well, no, I mean, the executed agreement?
4 A. Oh, it's probably in our file, I would think.
5 Q. Okay. Now -- so the agreement that Mr. Deari signed did
6 not have at the top of it the court's filing stamp?
7 A. No, because I didn't go and pull the one that was
8 attached to the plan. We would have just printed one off of
9 the computer.
10 Q. So what is presented as Exhibit C is not a true and
11 correct copy of the document that Mr. Deari signed?
12 A. I have no reason to believe that it isn't.
13 Q. But it doesn't -- but this document that's being
14 presented as Exhibit 6 -- or C, I'm sorry, has the court's
15 filing stamp, whereas you said that he signed a document that
16 did not have the Court's filing stamp?
17 A. Apparently, that's true, yes.
18 Q. Okay. So this is -- the document that is presented is
19 not the document he signed? It's not a copy of the document
20 he signed?
21 A. If the document that he signed did not have this little
22 header writing across the top, then you would be correct. But
23 I have no reason to believe the one with the header is any
24 different than the one that he would have signed.
25 Q. But you don't know for sure, do you?
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SUPP APP 0775
Joyce Lindauer - Cross 44
1 A. No, because I didn't sit and compare them.
2 Q. Okay, thank you. And you sent to Mr. Seidel solely the
3 signature page, correct?
4 A. That's what I recall.
5 Q. Okay.
6 A. Now, he may have a different recollection. That's what I
7 recall.
8 Q. Okay. And it was your understanding that -- and the
9 document --
10 MR. HESSE: Let me rephrase the question, Your Honor.
11 Q. And the document that Mr. Deari signed had the blanks in
12 it, correct?
13 A. I believe so.
14 Q. And it was your understanding that the rest of the
15 agreement would be filled in by Mr. Seidel?
16 A. Correct.
17 Q. So Mr. Deari didn't sign a completed document, correct?
18 A. He signed a document with blanks in it, we did not fill
19 in those blanks.
20 Q. Okay. All right. So he did not sign the completed
21 document?
22 A. He -- well, that's -- he signed what you have right here
23 as the creditor trust agreement.
24 Q. Which was not -- which it was your understanding was not
25 to be the final agreement?
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SUPP APP 0776
Joyce Lindauer - Cross 45
1 A. No, that was the final agreement.
2 Q. But there were -- but the trustee was going to complete
3 the agreement, correct?
4 A. Right. Just fill in the blanks. Those were ministerial,
5 those were just fill in names of his counsel, fill in -- I
6 think there's a notice provision that needed to be filled in,
7 those types of things. But the material terms were all here.
8 Q. Okay. And it was Mr. Deari's understanding that there
9 would be a trust committee, a trust advisory board?
10 A. You know, I don't know, Mr. Deari's a pretty simple guy,
11 I'm not sure he had any understanding of how that would work.
12 Yeah.
13 Q. Let me rephrase the question.
14 A. Sure.
15 Q. It was your understanding that there would be a trust
16 advisory board appointed, correct?
17 A. Right. But it was my understanding that it would be a
18 one-member board. And I believe Ms. Doe was going to be the
19 member.
20 Q. No, I understand.
21 A. Okay.
22 Q. So -- no, I understand --
23 A. Right.
24 Q. -- that under the confirmation order it was modified.
25 A. Right.
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SUPP APP 0777
Joyce Lindauer - Cross 46
1 Q. And I'm not trying to change anything --
2 A. Sure.
3 Q. -- from the confirmation order.
4 A. Sure.
5 Q. But you had no reason to believe that the trust advisory
6 board would not occur --
7 A. No.
8 Q. -- or be appointed?
9 A. No.
10 Q. Okay. Gainfully, the debtor doesn't have a dog in that
11 particular fight, does it?
12 A. The debtor has no dog in any of this fight. Mr. Deari
13 was able to keep his pizza restaurant. These were claims that
14 belonged to the creditors. Whether there's a trust or not,
15 somebody's got to pursue the claims for the benefit of those
16 creditors, that was the concept.
17 Q. Sure.
18 A. Okay.
19 Q. And was the primary claim -- the primary asset of the
20 trust was the claim that was being asserted against Century
21 and Century insurance policy, correct?
22 A. Correct.
23 Q. And the three creditors are primarily Ms. Doe, and then
24 two trade vendors?
25 A. It's either two or three trade vendors --
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SUPP APP 0778
Joyce Lindauer - Cross 47
1 Q. Okay.
2 A. -- I'm not sure. But, yeah, that's correct.
3 Q. But those are fairly small?
4 A. Correct.
5 MR. HESSE: I have no further questions, Your Honor.
6 THE COURT: Thank you. Mr. Rukavina?
7 MR. RUKAVINA: Just one follow-up, Ms. Lindauer.
8 THE WITNESS: Sure.
9 REDIRECT EXAMINATION
10 BY MR. RUKAVINA:
11 Q. Just so I understand, so you agreed to the trust advisory
12 board in your own mind being Ms. Doe because that would
13 benefit Ms. Doe?
14 A. Right. And the other --
15 Q. And that Ms. --
16 A. -- other creditors too, honestly.
17 Q. And if Ms. Doe waives that benefit do you see any
18 resulting prejudice to the debtor or anyone else?
19 A. No, not really. I think Mr. Seidel's an excellent
20 trustee. I don't think he needs -- I think he can do this job
21 without an advisory board, frankly.
22 Q. Thank you.
23 MR. RUKAVINA: Thank you, Your Honor.
24 THE COURT: Any other questions of Ms. Lindauer?
25 You may step down, Ms. Lindauer.
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SUPP APP 0779
Joyce Lindauer - Redirect 48
1 MS. LINDAUER: Thank you, Your Honor.
2 THE COURT: How you like that witness box?
3 MS. LINDAUER: I hate it. I hate being a witness.
4 MR. RUKAVINA: I was down there not too long ago, if
5 I recall.
6 THE COURT: I think I made a finding you were
7 credible too.
8 MR. RUKAVINA: You made a finding I was credible,
9 thank you.
10 I'll call Trey Crawford please.
11 I would have rather had a finding of good-looking,
12 but I'll take credible.
13 THE COURT: Mr. Crawford, for the record, you're a
14 lawyer licensed to practice in the State of Texas, is that
15 correct?
16 MR. CRAWFORD: Yes, Your Honor. And just for the
17 record, my legal name is Tom Crawford III.
18 THE COURT: Okay. You may be seated.
19 MR. RUKAVINA: But I'm going to call you Trey, just
20 because that's how I know you, is that okay?
21 MR. CRAWFORD: My entire life I've been called Trey,
22 so yes, sir.
23 DIRECT EXAMINATION
24 BY MR. RUKAVINA:
25 Q. And just, quickly, you're a lawyer and you represented
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SUPP APP 0780
Tom Crawford III - Direct 49
1 Ms. Doe in the state court lawsuit?
2 A. Yes, sir.
3 Q. Okay. And when did you start representing Ms. Doe?
4 A. I believe in early 2013.
5 Q. And did the case get tried?
6 A. It did get tried to a verdict.
7 Q. Were you there personally?
8 A. Yes, I was lead trial counsel.
9 Q. On or about June 8th, 2015, did I appear in the state
10 court on a scheduling matter with you?
11 A. You did.
12 Q. Okay. Was Mr. Seidel there?
13 A. I believe he was there.
14 Q. Okay. Did you have an understanding that I had been
15 retained by Mr. Seidel together with my firm as insurance
16 counsel?
17 A. Yes.
18 Q. Did you or Ms. Doe have any objection to that?
19 A. No.
20 Q. Have you ever voiced any objection to Mr. Seidel
21 retaining my firm as insurance counsel?
22 A. No.
23 Q. At that hearing did I inform the state court that Mr.
24 Seidel had retained replacement trial counsel?
25 A. Yes, you did.
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SUPP APP 0781
Tom Crawford III - Direct 50
1 Q. And who was their trial counsel, do you recall?
2 A. Chen Dotson.
3 Q. Did Ms. Doe know that Chen Dotson would be, and was and
4 did try the lawsuit on behalf of the trust?
5 A. We knew as soon as they were appointed and moved to make
6 an appearance in the state court case.
7 Q. Did you or Ms. Doe have -- voice any objection to the
8 trustee retaining Chen Dotson?
9 A. Not at all.
10 Q. Okay. What was the result of trial?
11 A. We got a twenty million-dollar verdict jointly and
12 severably against PPI and Deari. And the state court judge
13 actually said it's most egregious set of facts he's seen since
14 he's been a judge.
15 Q. The brief facts I gave to the judge during my opening,
16 you were here for those, did I generally tell the judge the
17 truth about the evidence that was adduced?
18 A. Absolutely.
19 Q. Okay. Did Ms. Doe offer to settle her claims before
20 trial?
21 MR. HESSE: Your Honor --
22 A. We tri --
23 MR. HESSE: -- objection for 40(h) settlement
24 negotiations.
25 MR. RUKAVINA: It's not 40(h) if it's the basis of a
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SUPP APP 0782
Tom Crawford III - Direct 51
1 cause of action, which in this case is Stowers. We're not
2 going to go into what was necessarily discussed, and it's not
3 being used --
4 MR. HESSE: But it's not relevant to this trial.
5 THE COURT: Overruled on that question. Don't go
6 into settlement discussions.
7 MR. RUKAVINA: Thank you.
8 Q. Did Ms. Doe offer to settle before trial?
9 A. We begged to settle before trial so she wouldn't have to
10 go through the two and a half years that she went through.
11 Q. And I think we all know as the attorneys what the Stowers
12 doctrine is. Was it pursuant to the Stowers doctrine that Ms.
13 Doe made her offer?
14 A. Absolutely.
15 MR. HESSE: Your Honor, objection, that's a legal
16 issue. And it's a matter subject to -- it's not a matter
17 that's relevant to this case.
18 MR. RUKAVINA: I'll ask it this way, Your Honor.
19 THE COURT: Sustained to relevance.
20 Q. Did Ms. Doe offer to settle within policy limits?
21 A. Absolutely.
22 Q. And was that offer accepted?
23 A. It was not even responded to.
24 Q. Okay. Now, you understand that Ms. Doe -- or do you
25 understand that Ms. Doe was intended at the time of
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SUPP APP 0783
Tom Crawford III - Direct 52
1 confirmation in this bankruptcy case, to sit on this trust
2 advisory board?
3 A. Can you repeat the question?
4 Q. Pardon me. Do you understand that at the time of
5 confirmation, or do you have any understanding that at the
6 time of confirmation here in this bankruptcy case, Ms. Doe was
7 apparently intended to sit on the trust advisory board?
8 A. I honestly don't know that. Mr. Erler and Ms. Fontaine
9 probably would know better than I would.
10 Q. Okay. Does Ms. Doe today want to sit on the trust
11 advisory board?
12 A. Frankly, I don't think it's necessary. I mean, the
13 trustee's got fiduciary duties. As long as they're following
14 the fiduciary duties, I don't -- I really don't see a point in
15 doing that.
16 Q. Okay. Without going into discussions you've had with
17 your client, I take it that you have -- that Ms. Doe has made
18 an informed decision on that point?
19 A. Absolutely.
20 Q. Do you believe that Ms. Doe has been prejudiced by the
21 trustee retaining insurance counsel, retaining Chen Dotson and
22 not seeking approval from a trust advisory board?
23 A. Not a bit.
24 Q. Okay.
25 MR. RUKAVINA: Your Honor, I pass the witness. Thank
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SUPP APP 0784
Tom Crawford III - Direct 53
1 you.
2 THE COURT: Mr. Hesse? Oh, Ms. Fontaine, first.
3 MR. HESSE: Your Honor, I'm going to raise the same
4 objection. They're members of the same firm that there's an
5 ethical issue with a lawyer acting as a witness, and -- on a
6 relevant matter, and having -- acting as counsel in the same
7 matter.
8 THE COURT: Overruled.
9 MS. FONTAINE: I'll be real quick, Your Honor.
10 CROSS-EXAMINATION
11 BY MS. FONTAINE:
12 Q. Mr. Crawford, who has been primarily responsible as
13 counsel for communications with Century Insurance Company?
14 A. At which firm?
15 Q. At our firm.
16 A. Most likely me.
17 Q. Have you ever had any communications with Century
18 Insurance Company about the membership of the trust advisory
19 board?
20 A. No. I don't --
21 Q. Did --
22 A. I've never talked to them about that.
23 Q. Did it come up at state court trial who was a member of
24 the trust advisory board?
25 A. Not that I recall.
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SUPP APP 0785
Tom Crawford III - Cross 54
1 Q. Have you had multiple communications with -- related to
2 settlement of this lawsuit?
3 A. Yeah, their lawyer called me saying that you have the
4 attention from the highest people in the company, we really
5 want to sit down and mediate --
6 MR. HESSE: Objection, Your Honor, we're getting into
7 settlement discussions.
8 THE COURT: Sustained.
9 Q. At any point in time have they informed you that they
10 relied upon the trust agreement?
11 A. No. In fact, I read the transcript where they asserted
12 no objection to the trust agreement.
13 MR. HESSE: Objection, Your Honor, hearsay.
14 A. It's --
15 THE COURT: Overruled.
16 MS. FONTAINE: Thank you, Your Honor. No further
17 questions.
18 THE COURT: Mr. Hesse?
19 CROSS-EXAMINATION
20 BY MR. HESSE:
21 Q. Mr. Crawford, isn't it true that Century is disputing
22 that is -- it has coverage of the claim that is asserted by
23 Ms. Doe against Pastazios?
24 A. I really can't figure out what Century's position is, it
25 changed.
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SUPP APP 0786
Tom Crawford III - Cross 55
1 Q. Well, Mr. Crawford, isn't that one of the things that's
2 in the state court -- excuse me, Federal District Court
3 complaint?
4 A. Which complaint are you referring to?
5 Q. Any one, pick a complaint?
6 A. Can you repeat the question of what you're asking?
7 Q. Isn't Century disputing coverage?
8 A. They are now, yes.
9 Q. They are disputing coverage. And that they don't owe a
10 liability for this -- for this particular cause of action that
11 your client is asserting?
12 A. I wholeheartedly disagree with that.
13 Q. You may disagree, but aren't they -- but Century's
14 disputing that it has coverage?
15 A. It is now.
16 MR. HESSE: I have no further comments, Your Honor.
17 THE COURT: Mr. Rukavina?
18 REDIRECT EXAMINATION
19 BY MR. RUKAVINA:
20 Q. Just so that it's in the record, Mr. Crawford, are you on
21 ECF in the Federal District Court action for Judge Solis?
22 A. I am.
23 Q. You get the pleadings in there?
24 A. Yes.
25 Q. On or about June 12th of this year, did I file a motion
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SUPP APP 0787
Tom Crawford III - Redirect 56
1 to substitute in?
2 A. You did.
3 Q. And would, pursuant to ECF, Century have received a copy?
4 A. They would.
5 Q. So as of June 12th you have reason to believe that
6 Century knew that the trustee had hired Munsch Hardt?
7 A. There'd be no question. I remember getting the ECF.
8 Q. Also, by the way, and without going into details, were
9 you party to any communications this summer after trial --
10 MR. HESSE: Your Honor, this is going beyond the
11 scope of cross.
12 MR. RUKAVINA: It's okay. I'll withdraw the
13 question. Thank you.
14 THE COURT: You may step down, Mr. Crawford.
15 THE WITNESS: Thank you, Judge.
16 THE COURT: You may call your next witness.
17 MR. RUKAVINA: Your Honor, I'll call the trustee.
18 THE COURT: Mr. Seidel? Mr. Seidel, since you're
19 testifying as capacity of trustee, I'm going to swear you in.
20 No offense though, okay?
21 MR. SEIDEL: None taken.
22 (Witness sworn)
23 THE COURT: You may be seated.
24 DIRECT EXAMINATION
25 BY MR. RUKAVINA:
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SUPP APP 0788
Scott Seidel - Direct 57
1 Q. And for the record, sir, you are the trustee in this
2 post-confirmation trust?
3 A. Yes.
4 Q. Would you please turn to Exhibit C? There's two binders.
5 Now, do you recognize this document?
6 A. Yes, sir.
7 Q. And if you'll turn to the last page, the signature page?
8 Did you -- is that your signature, did you sign this document?
9 A. Yes, sir.
10 Q. And you signed it -- did you sign it after Mr. Deari had
11 signed it?
12 A. Yes, sir.
13 Q. So the issues with the pagination or whatever, is that
14 how the document came to you?
15 A. Yes, sir.
16 Q. And did the whole document come to you, or just the
17 signature page?
18 A. It came to me in two parts from what I recall.
19 Q. Okay. What two parts, sir?
20 A. First part was the creditor trust agreement that has the
21 stamp of the court on top. And the second e-mail had the
22 signature line for Mr. -- the signature page of Mr. Deari.
23 Q. And who sent you this, where did it come from?
24 A. Ms. Lindauer.
25 Q. How long have you been a lawyer, sir?
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SUPP APP 0789
Scott Seidel - Direct 58
1 A. Longer than I'd like to admit, twenty-five, thirty years.
2 Q. How long have you been a trustee?
3 A. Same amount of time, basically.
4 Q. And how many sales contracts, 9019s would you, ballpark,
5 you've signed in your twenty-five --
6 A. Thousands.
7 Q. Is there anything unusual about a signature page being
8 separate from the contract?
9 A. No.
10 Q. Is that what's done frequently?
11 A. Yes.
12 Q. Okay. Now when you got this document explain to the
13 Judge what the state of the trust was? In other words, plan
14 is confirmed on April 2nd --
15 A. Right.
16 Q. -- you get this document May 22nd?
17 A. Right.
18 Q. What was going on with respect to you being the trustee
19 of the trust?
20 A. Well, there was some discussion about me being the
21 trustee of the trust. And then there was supposed to be
22 50,000-dollar seed money to hire lawyers to defend the cause
23 of action. And the 50,000 dollars wasn't there. And so we
24 fought, and we fought, and we had phone calls, and we had more
25 phone calls, and we had more correspondence. And the 50,000
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SUPP APP 0790
Scott Seidel - Direct 59
1 dollars wasn't there. And so we continued to fight. And we
2 had state litigation proceeding. We had lawyers involved.
3 Q. Let me stop you just there. When was the state court
4 going to go to trial? Early July?
5 A. Early July is my recollection.
6 Q. Were you there with me on July 8th -- I'm sorry, on June
7 8th, 2015 before Judge Ginsberg?
8 A. Yes, I was.
9 Q. Did we inform the judge that we might have to seek a
10 continuance?
11 A. I did.
12 Q. What did he say?
13 A. He was not to receptive to any type of continuance.
14 Q. Do you recall who Sam Johnson was?
15 A. Yes, he was the prior lawyer in the case.
16 Q. And without going into anything that's privileged, did
17 you have multiple communications with Mr. Johnson about him
18 representing the trust?
19 A. I did.
20 Q. Was an agreement reached?
21 A. No.
22 Q. Was it a financial reason?
23 A. It was a financial reason, basically.
24 Q. So at that time with trial coming up, and the judge
25 saying there's not going to be a continuance, what were you
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SUPP APP 0791
Scott Seidel - Direct 60
1 doing with respect to that state court trial and getting
2 counsel?
3 A. I was busily trying to get the state court counsel on
4 board, and also trying to get the 50,000 dollars, so that we
5 have some money.
6 Q. But that was my point, you couldn't get counsel without
7 that 50,000?
8 A. No. No one was volunteering to go step into this.
9 Q. Did you in any way hide from Ms. Doe, or Mr. Deari, or
10 anyone that you were getting trial counsel to defend the
11 trust?
12 A. Absolutely not.
13 Q. Without the 50,000 dollars would this plan have been
14 effectuated?
15 A. No.
16 Q. In other words that was the more pressing issue?
17 A. That was the issue.
18 Q. Okay. At some point you retained the state court trial
19 counsel that Mr. Crawford testified was Chen Dotson, is that
20 correct?
21 A. Yes.
22 Q. Okay. And they did defend the trust at the --
23 A. They did.
24 Q. And they lost?
25 A. They lost.
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SUPP APP 0792
Scott Seidel - Direct 61
1 Q. We lost?
2 A. We lost.
3 Q. What would have happened if you had not retained anyone
4 to defend the trust because there's no trust advisory board
5 for you to call -- well, first of all, was there a trust
6 advisory board for you to call to say hey, I want to hire Chen
7 Dotson?
8 A. Never.
9 Q. What would have happened if you had just raised your hand
10 and said well, I ain't going to hire no one?
11 A. We'd have had a catastrophe. That was a -- they were
12 steamrolling towards proceeding. There wasn't going to be a
13 continuance; we had to get someone in. If there was no one
14 in, we would have been defaulted.
15 Q. Okay. Now, as far as the retention of Munsch Hardt, you
16 have retained Munsch Hardt as your "insurance counsel," is
17 that correct?
18 A. Correct.
19 Q. Was this ever hidden from anyone?
20 A. Never. It was told to everyone, anybody who was involved
21 or asked questions about this case.
22 Q. Okay. Now, the summer's progressing, was there a time
23 when we mediated with Century?
24 A. Yes.
25 Q. And was that about October 8?
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SUPP APP 0793
Scott Seidel - Direct 62
1 A. Yes.
2 Q. And did the mediation last some time thereafter, without
3 going into any details?
4 A. Yes.
5 Q. And was it about October 20th that the mediation
6 basically failed?
7 A. My recollection.
8 Q. Now, in that time, so after you hired Chen Dotson, after
9 you hired me, are you having communications with anyone
10 regarding the blanks in the trustee agreement?
11 A. I think maybe with you, that would be it.
12 Q. Without going into details, did you ask me to
13 investigate?
14 A. Yes.
15 Q. And did I report back to you without telling the Court
16 what I said?
17 A. Yes.
18 Q. Okay. And after all that is when we filed this motion?
19 A. Yes.
20 Q. I guess the question is going to be why did we not file
21 this motion much sooner?
22 A. Well, we were trying to see what -- how the mediation
23 went which would obviate all of this.
24 Q. Did you have an understanding that there was a fully
25 executed agreement that just hadn't been provided to you yet?
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SUPP APP 0794
Scott Seidel - Direct 63
1 A. That was my understanding that there was one with the
2 firm, your firm filled in.
3 Q. Has the trust in your mind been properly effectuated?
4 A. Yeah.
5 Q. The issues we're here on don't concern the existence of
6 the trust, they concern the existence of what you can do
7 without or with approval, isn't that correct?
8 A. Correct.
9 Q. Okay. Is the -- is Century in any way, shape or form a
10 beneficiary of this trust to your belief or knowledge?
11 A. Not to my knowledge.
12 Q. Has -- since you've been involved in this case, has
13 Century always been an adversary to us?
14 A. Yes.
15 Q. Have we been engaged in active litigation with Century?
16 A. Yes.
17 Q. Can you think of any reason, being a trustee for twenty-
18 five years, having had thousands of cases, why your litigation
19 adversary would in any way, shape or form have any say on the
20 internal governance of your trust?
21 A. No.
22 MR. RUKAVINA: Thank you, Your Honor. I'll pass the
23 witness.
24 THE COURT: Ms. Fontaine?
25 CROSS-EXAMINATION
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SUPP APP 0795
Scott Seidel - Cross 64
1 BY MS. FONTAINE:
2 Q. Mr. Seidel, when you were appointed trustee in the
3 confirmation order, what was your understanding as to the
4 status of Jane Doe's claim?
5 A. That it's being litigated.
6 Q. As trustee you're responsible for objecting to proofs of
7 claims, are you not?
8 A. Yes.
9 Q. Prior to the state court trial did Ms. Doe offer to
10 compromise and allow her claim?
11 A. I'm trying to remember. I stand to be refreshed on that.
12 Q. Did she ever send you a demand letter prior to trial of
13 the state court litigation?
14 A. I'm sure she did.
15 Q. Did you decide to compromise and allow her claim prior to
16 trial?
17 A. No, we litigated that claim down in trial.
18 Q. Did you ever represent to anybody that Jane Doe was on
19 the trust advisory board?
20 A. I don't believe so, no.
21 Q. Did you ever tell Century, in particular, that Jane Doe
22 was on the trust advisor board?
23 A. I never talked to Century.
24 Q. Have you ever represented to anyone that anybody's on the
25 trust advisory board?
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SUPP APP 0796
Scott Seidel - Cross 65
1 A. No.
2 MS. FONTAINE: No further questions, Your Honor.
3 THE COURT: Thank you. Mr. Hesse?
4 CROSS-EXAMINATION
5 BY MR. HESSE:
6 Q. Mr. Seidel --
7 A. Yes, sir.
8 Q. -- when were you first contacted to become the trustee?
9 A. My memory is not what it was, but I'm going to say April,
10 I believe. Maybe March, April, does that make sense?
11 Q. Let me -- bear with me for just one moment.
12 MR. HESSE: I'll ask the Court to take judicial
13 notice of Century's Exhibit 4, which is a copy of the order
14 confirming the plan.
15 THE WITNESS: Yes, sir.
16 MR. HESSE: It's that one. And it says that it --
17 Q. I was going to ask if this might help reflect your --
18 A. Sure.
19 Q. -- or refresh your recollection. It's Exhibit 4.
20 A. 4. Okay.
21 Q. And does the fact that it was signed on April 2 refresh
22 your recollection as to when you were first contacted?
23 A. Yes, sir, it would have been around that time frame.
24 Q. Okay. Maybe March -- maybe late March? Obviously
25 sometime before April 2?
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SUPP APP 0797
Scott Seidel - Cross 66
1 A. That's my recollection.
2 Q. Okay. And prior to agreeing to become the liquidating
3 trustee or -- excuse me, the creditor trustee, did you review
4 the debtor's plan of reorganization?
5 A. Took a look at it.
6 Q. So you did review it?
7 A. I took a look.
8 Q. Did you review the trust agreement?
9 A. I took a look at it.
10 Q. Okay. And when you say you took a look at it, what does
11 that mean?
12 A. I didn't full out read the doc -- I saw the document.
13 Q. And was there anything about the plan or trust agreement
14 that seemed unusual to you?
15 A. I don't swim in that water a whole lot, so it's all a
16 little unusual to me. I'm not an 11 guy.
17 Q. Fair enough. And then if we can -- I was going to ask
18 you if you paid particular attention, I will ask you to look
19 at the Trustee's Exhibit A, which is the other book, since
20 it's already been admitted. Paragraph Section 7.01.
21 THE COURT: In A?
22 MR. HESSE: Yes, Trustee's Exhibit A.
23 THE COURT: All right.
24 A. 7.01, creation of creditor trust and appointment of the
25 trustee.
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SUPP APP 0798
Scott Seidel - Cross 67
1 Q. Yes. And the last sentence there specifically states
2 that the trustee and the creditor trust will be subject to the
3 oversight of a trust advisory board, is that -- do you have a
4 recollection of seeing that at the time?
5 A. I see it.
6 Q. Actually, at the time of -- let's say in early -- late
7 March, early April, when you looked at the trust -- the plan
8 and the trust agreement?
9 A. Yes, it's there.
10 Q. Okay. Does that seem like an unusual provision?
11 A. Like I said, I'm not -- I don't come into the Chapter 11
12 post-confirmation world that often --
13 Q. Okay.
14 A. -- so I'm not sure. I apologize, I'm just not.
15 Q. Now you said that you reviewed -- let me go back. So you
16 reviewed it to that point in time, just looked at it. Did
17 you -- when did you -- when was the next time you have a
18 recollection of looking at the trust agreement?
19 A. It would have been April, May, I would guess.
20 Q. Okay. And if you could turn to paragraph -- or excuse
21 me, Exhibit C in the trustee's book. And this is the
22 creditor's trust agreement, and if you could turn it over to
23 the last page.
24 A. Yes, sir.
25 Q. Is that your sig -- you said that was your signature,
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SUPP APP 0799
Scott Seidel - Cross 68
1 correct?
2 A. Yes, sir.
3 Q. And when did you sign that document?
4 A. It would have been when I received the e-mail from Ms.
5 Lindauer, I would have thought right when it's dated, May
6 22nd.
7 Q. Is that your handwriting that dates it?
8 A. No, sir, that's not my handwriting.
9 Q. Okay. But it sounds about right that you would have
10 signed it on May 22?
11 A. That sounds about right, yes, sir.
12 Q. Okay. And prior to -- and you said that you got the
13 document -- that you got two documents with that e-mail, is
14 that -- is my understanding correct?
15 A. You know, sir, it's been a while since I've looked at
16 this, but my recollection is that I got two e-mails from Ms.
17 Lindauer.
18 Q. Okay.
19 A. One was, as I indicated before, the trust agreement. And
20 then the second was the signature page.
21 Q. And did you review the trust agreement before signing it?
22 A. Yes, sir, I looked at it.
23 Q. Okay. So when you signed the trust agreement you knew
24 that there were the blanks that were in the trust agreement,
25 correct?
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SUPP APP 0800
Scott Seidel - Cross 69
1 A. Yes.
2 Q. And you also were aware at that time that there were
3 several provisions in the trust agreement that required
4 approval of a trust advisory board, correct?
5 A. I see that, yes.
6 Q. And do you remember the -- and so, for example, in
7 Section 4.2 of the trust advisory -- excuse me, the trust
8 agreement, 4.2(b) --
9 A. Hold on one second, 4.2(b).
10 Q. There are the provisions that deal with -- that with
11 prior approval of the trust advisory board you can enter into
12 -- under contracts, that's (iii)?
13 A. Would you mind pointing me to where you're talking about?
14 MR. RUKAVINA: I don't see a 4.2.
15 Q. 4.2 --
16 A. Yes, sir.
17 Q. -- (b) --
18 A. Yes, sir.
19 Q. -- (iii).
20 A. Okay. I see that now. It says with the prior approval
21 of the trust advisory board.
22 Q. Let's go to trust advisory board 4.
23 MR. RUKAVINA: I might have coffee (ph.) in their
24 material.
25 MR. HESSE: Well, yeah, you are missing a page.
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SUPP APP 0801
Scott Seidel - Cross 70
1 MR. RUKAVINA: Okay.
2 Q. It's 4.2(b)(iii), that's one of the sections that
3 requires prior approval of the trust advisory board, correct?
4 A. That's what it says, yes, sir.
5 Q. And there's (v) below that that provides that with prior
6 approval of the trust advisory board, that you can employ
7 attorneys, accountants, et cetera?
8 A. That's what it says, yes, sir.
9 Q. And turning over to the next page, (x), that you may
10 compromise, adjust, settle, or abandon any causes of action
11 with the prior approval of the advisory board, correct?
12 A. That's what it says, yes sir.
13 Q. And those causes of actions would have included the
14 claims against Century, correct?
15 A. Yes.
16 Q. And then under (xi), slightly different language, but
17 dealing with avoidance actions, you can compromise, adjust or
18 settle but with consultation of the advisory board, correct?
19 A. That's what it says, yes, sir.
20 Q. So there were sev -- so you knew that all those
21 provisions existed at the time that you signed this document,
22 correct?
23 A. I'm --
24 Q. Pardon me?
25 A. They were there, they were there.
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SUPP APP 0802
Scott Seidel - Cross 71
1 Q. Okay. And then I'm going to ask you to turn over to
2 Section 10.1
3 A. Yep. Is there a page number?
4 Q. It's page 24 of the trust agreement, or if you're look --
5 A. Okay.
6 Q. And I'll point you to the -- and this provides that --
7 A. 10.1, I see it.
8 Q. 10.1, this provides a mechanism for the trustee to be
9 able to amend and -- amend the trust agreement, correct?
10 A. Yes, apparently.
11 Q. You want to take a look at it and read it?
12 A. I'm catching up to you, go ahead.
13 Q. On the fifth line from the bottom it states "Provided
14 further that the trustee shall not be entitled to amend or
15 modify certain sections, including 4.2(x) and 4.2(xi),"
16 correct?
17 A. I believe you've read it correctly, yes.
18 Q. And if we go back to 4.2(x) and (xi), page 11 --
19 A. Yes, sir.
20 Q. -- those two sections specifically incorporate oversight
21 by a trust advisory board, correct?
22 A. It says what it says, yes, sir.
23 Q. And so those are two sections that cannot be amended,
24 correct?
25 A. That may be.
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SUPP APP 0803
Scott Seidel - Cross 72
1 Q. Now, with regard to your motion today, you're asking the
2 Court to basically read out all sections of the trust
3 agreement that relate to the trust advisory board, correct?
4 A. That's one alternative, yes.
5 Q. Okay. Wouldn't you consider that to be a material
6 modification of this agreement?
7 A. No.
8 MR. RUKAVINA: Your Honor, object, it's a legal
9 conclusion.
10 THE COURT: Overruled.
11 Q. You don't think that would be a material modification?
12 A. No, sir.
13 Q. Now, with regards to -- excuse me, Section 4.2(x) --
14 A. I'm sorry, could you give me the page again?
15 Q. It's 11, page 11 of the --
16 A. Yes, sir.
17 Q. That -- now you knew that you would need to have trust
18 advisory board authority before you could settle with Century,
19 correct?
20 MR. RUKAVINA: Your Honor, I will object to that to
21 the extent that it would have to be answered by invading the
22 attorney-client privilege and our work product. He is
23 my -- although he's a lawyer, he's my client in this instance.
24 THE COURT: Don't go into conversations with your
25 lawyer, but answer the question if you can.
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SUPP APP 0804
Scott Seidel - Cross 73
1 THE WITNESS: Okay.
2 A. Do you mind repeating the question?
3 Q. Pursuant to the terms of Section 4.2 -- excuse me,
4 4.2(b)(x), you understood -- you know that you need to have
5 trust advisory board approval to enter into any settlement
6 with Century?
7 MR. RUKAVINA: I would just, again, Your Honor,
8 advise the witness to answer like you said, only to the extent
9 he can without invading our privilege.
10 A. Yeah, I visited with counsel about that, and we came to a
11 conclusion.
12 Q. Well, what conclusion did you and counsel come to?
13 MR. RUKAVINA: And, Your Honor, that is the core of
14 my work product and attorney-client privilege.
15 MR. HESSE: He opened the door, Your Honor.
16 THE COURT: If you could answer the question without
17 invading your attorney-client privilege, which I take it to
18 note that you know what that is, you may answer the question.
19 THE WITNESS: I don't believe I can, Your Honor.
20 THE COURT: Sustained. It's sustained, the attorney-
21 client privilege objection.
22 Q. So you went into mediation with Century knowing full well
23 that you did not have authority to settle the cause of action?
24 MR. RUKAVINA: Objection, Your Honor, that misstates
25 the prior answer. And, again, he cannot answer that question
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SUPP APP 0805
Scott Seidel - Cross 74
1 without invading the privilege.
2 THE COURT: I think you can get that information if
3 you restate the question.
4 Q. Is it your understanding, Mr. Seidel, that you cannot
5 settle with Century without approval of the trust advisory
6 board?
7 MR. RUKAVINA: Same question as before, Your Honor.
8 THE COURT: Overruled on that one.
9 A. We believed if we could have gotten to a settlement
10 mediation, that could have been done, a settlement could have
11 gotten done.
12 Q. Who is "we"?
13 A. My counsel and I. Wholeheartedly.
14 Q. How did you think -- in light of the language in the
15 trust agreement how could you have gotten that done?
16 A. That's with discussion with my lawyer.
17 Q. So based upon the terms of the trust agreement though,
18 you would have to have Cent -- you'd have to have trust
19 advisory board approval to settle with Century?
20 MR. RUKAVINA: Your Honor, that's a legal conclusion
21 THE COURT: Overruled. Overruled. He may testify as
22 to his understanding of the trust document.
23 A. I'm sorry, could you repeat your question?
24 Q. Based on your understanding of the trust agreement, you
25 could not settle with Century without trust advisory board
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SUPP APP 0806
Scott Seidel - Cross 75
1 approval?
2 A. My understanding was we could have got a settlement done.
3 Q. Under the terms of the agreement?
4 A. My understanding is we could have gotten it done, yes.
5 Q. Under the terms of the agreement?
6 A. My understanding.
7 Q. Okay. You were here when Ms. Lindauer testified that it
8 was her understanding that Jane Doe was going to be the member
9 of the trust advisory board, is that correct?
10 A. Yes.
11 Q. And was it your understanding that Jane Doe was going to
12 be the member of the trust advisory board?
13 A. It would make sense to me.
14 Q. Who did you understand to be the -- that was going to be
15 the member of the trust advisory board?
16 A. I would have thought it would have been Ms. Doe, but I
17 don't know.
18 Q. Did Ms. Doe ever act like she was the member of the trust
19 advisory board?
20 A. I don't know what act like member of the trust advisory
21 board would be, but, no, not that I recall.
22 Q. Did her counsel ever act in a manner that would be
23 consistent with being on the trust -- a member of the trust
24 advisory board?
25 A. I don't know.
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SUPP APP 0807
Scott Seidel - Cross 76
1 Q. Have you ever taken direction from Ms. Doe or her
2 counsel?
3 A. I have not taken direction from them.
4 Q. Now, Mr. --
5 A. I've sought their input, just as I've sought your
6 client's input.
7 Q. What kind of input did you seek?
8 MR. RUKAVINA: Your Honor, that goes far beyond the
9 relevance of this motion.
10 THE COURT: Overruled.
11 A. I'm sorry?
12 Q. What input did you seek?
13 A. When we were at the mediation all day, we listened to
14 what everybody had to say.
15 Q. Okay. And what was her input?
16 MR. RUKAVINA: Your Honor, that's a mediation
17 privilege now. He just said it was at a mediation, and we
18 know that there are strict rules in Texas on mediation.
19 MR. HESSE: Withdraw the question, Your Honor.
20 THE COURT: Okay.
21 Q. Now, Mr. Seidel, isn't it true that you'll receive five
22 percent of any recovery that the trust obtains from causes of
23 action?
24 A. I think -- I think that term is net, after attorney's
25 fees are paid. But, yes, I would receive a percentage of the
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SUPP APP 0808
Scott Seidel - Cross 77
1 recovery.
2 Q. And that would include a percentage of the -- I'll try to
3 use the proper term, net recoveries from Century, correct?
4 A. I think that's correct, yes, sir.
5 Q. So if the net proceeds that the trust collects from
6 Century is twenty million dollars, your piece would be a
7 million dollars, correct?
8 A. In the way it's written, yes.
9 Q. And, on the other hand, if the trust receives zero
10 dollars from Century, your compensation would be zero dollars,
11 correct?
12 A. Yes, sir.
13 Q. Now, isn't it true that the size of the claim the trust
14 is asserting against Century depends upon the amount of the
15 claim that Jane Doe has against the trust?
16 A. Okay, you have to repeat that one, you went really fast
17 for me.
18 Q. Isn't it true that the size of the claim, or the amount
19 that is being asserted against Century by the trust depends
20 upon the amount of the claim that Jane Doe has against the
21 trust?
22 A. Yeah, that would make sense.
23 Q. Once again, if Jane Doe has a claim of twenty million
24 dollars against the trust, and the trust receives -- or let me
25 rephrase that. If Jane Doe has a claim in excess of twenty
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SUPP APP 0809
Scott Seidel - Cross 78
1 million dollars --
2 A. Okay.
3 Q. -- and the trust will assert a claim of in excess of
4 twenty million dollars against Century, correct?
5 A. Yes, sir.
6 Q. On the other hand, if the claim of Jane doe is zero
7 against the trust, the trust will not have a claim against
8 Century, correct?
9 MR. RUKAVINA: Your Honor, I just want to make sure
10 he does -- I'm going to object to a legal conclusion. I mean,
11 again, he's not a lawyer, and what the legal ramifications of
12 Jane Doe having zero claim against Century may be, he's not
13 ready to answer. For example, there is the duty to defend.
14 It is different from the duty to indemnify. So, again, I
15 would just lodge an objection to the legal conclusion nature
16 of these questions.
17 THE COURT: Witness may give his understanding if he
18 has one.
19 A. Okay, I'm sorry, can you repeat again?
20 Q. So if Jane Doe has a claim of zero dollars against the
21 trust, the trust will not have a claim against Century, is
22 that correct?
23 A. I'm not sure. I -- I just don't know. It seems like
24 they would not, but there may be other things.
25 Q. Okay. So --
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SUPP APP 0810
Scott Seidel - Cross 79
1 A. Attorney's fees, et cetera, I don't know.
2 Q. And this is the way that the plan and the trust agreement
3 is written, that's how the economics work?
4 A. Like a Chapter 7 case, in my mind.
5 Q. Okay. Now, you as the trustee, is the sole party with
6 the authority to object to Jane Doe's claim, correct?
7 A. I think that's right.
8 Q. Okay. So Century couldn't object to her claim?
9 A. I don't know what Century can do.
10 Q. Well, let's --
11 A. I don't know.
12 Q. If you were the sole -- do you have -- are you the sole
13 person that could --
14 A. I'm the only one that can object to claims.
15 Q. You're the only -- so you're the only person that can
16 object to claims. And I think you testified before that upon
17 confirmation of the plan -- well, let me -- let me step back.
18 Upon -- when did you actually become -- do you understand that
19 your role as trustee began?
20 A. I would -- I would say April, May 2015.
21 Q. Would it have been the day that the plan had been
22 confirmed, or the day that the trust agreement was signed?
23 A. And your question was when I became --
24 Q. When did you assume the role as trustee?
25 A. One of those two days, probably the -- probably the
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SUPP APP 0811
Scott Seidel - Cross 80
1 latter, but I'm not positive.
2 Q. Okay. So you would have assumed the responsibility as
3 trustee on May 22? And at that time did you take control of
4 the litigation asserted by Jane Doe against the trust?
5 A. Yeah. I mean, we tried to defend that litigation.
6 Q. And you hired counsel to defend?
7 A. Yes, sir.
8 Q. Now you were also present at the trial, correct?
9 A. Not for every minute of it. It went on for three days,
10 but I was there.
11 Q. You were there at various times?
12 A. Yes, sir.
13 Q. Did you direct the defense of Jane Doe's claims?
14 MR. RUKAVINA: Your Honor, I object on the grounds of
15 relevance. This has nothing to do with the relief we're
16 seeking. And, moreover, this is an attempt to collaterally
17 obtain discovery in a hot moving piece of litigation in front
18 of Judge Solis. This is an attempt by counsel to get free
19 discovery.
20 THE COURT: Relevance, Mr. Hesse?
21 MR. HESSE: I'll withdraw the question, Your Honor.
22 THE COURT: Okay.
23 Q. Now, isn't it true that at the conclusion of the state
24 court hearing your lawyer advised Century of valid appeal
25 points?
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SUPP APP 0812
Scott Seidel - Cross 81
1 MR. RUKAVINA: Objection, Your Honor. Again, that is
2 outside of anything to do with relevance here. It's subject
3 to litigation. It is also the best evidence rule.
4 THE COURT: Sustained on relevance.
5 MR. HESSE: I beg your pardon, Your Honor?
6 THE COURT: Sustained on relevance.
7 MR. HESSE: Okay.
8 Q. I'll just ask though, you made the decision not to appeal
9 the Jane Doe --
10 MR. RUKAVINA: Your Honor, objection to relevance.
11 Again, this is something that is not present here, but is in
12 front of Judge Solis.
13 THE COURT: You may answer that question, everybody
14 knows the answer to that question. You may answer the
15 question.
16 A. Correct. On visiting with counsel, we came up with a
17 decision on that.
18 Q. After visiting with counsel?
19 A. Yes, sir.
20 Q. Okay. Now, if you -- as I understand from your response,
21 the preferred relief that you're seeking is to eliminate the
22 provisions relating to a trust advisory board, is that
23 correct?
24 A. That is an option, yes, sir.
25 Q. Well, is that the prim --
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SUPP APP 0813
Scott Seidel - Cross 82
1 A. It would be great.
2 Q. -- preferred relief?
3 A. Sure.
4 Q. That would be the preferred relief. And so that would
5 eliminate the trust advisory board's oversight of your actions
6 as trustee, correct?
7 A. Yes.
8 Q. And that would amend Section 7.01 of the plan, correct?
9 A. I -- if you say so, I don't have the plan number in front
10 of me, I believe you.
11 Q. We'll look at Exhibit A --
12 A. Yep.
13 Q. -- page 13, Section 7.01, last sentence.
14 A. It would change that sentence, yes.
15 Q. And it would also eliminate the process under which you
16 would be removed as trustee, correct?
17 A. I assume so. But if anybody wants to remove me, they
18 could file papers and have at it.
19 Q. Well, let's look at Section 8.8 of the trust agreement?
20 A. Okay.
21 Q. It's Exhibit A, it's the docketed page 42?
22 A. 8.8(a), I have it, resignation.
23 Q. Well, 8.8(b).
24 A. (b), removal.
25 Q. And it provides that the trustee may be removed (1)
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SUPP APP 0814
Scott Seidel - Cross 83
1 either by order of the bankruptcy court upon motion of the
2 trust advisory board with less than unanimous vote, or upon
3 unanimous vote of the trust advisory board?
4 A. Yes, sir.
5 Q. So if there's an elimination of the trust advisory board,
6 there is no mechanism to remove you as trustee, correct?
7 A. No, I don't agree with that. I think anybody can file
8 papers to remove me anytime they want.
9 Q. Okay. One of the blanks that's in the
10 trust advisory -- or excuse me, the trust agreement, is the
11 compensation to Munsch Hardt?
12 A. Yes.
13 Q. Has there ever been an agreement reached as to Munsch
14 Hardt's compensation for being insurance counsel?
15 A. They're just billing hourly.
16 Q. So they're just billing hourly. Is that authorized by
17 the trust agreement?
18 A. I'm trying to remember how they're billing, to be quite
19 honest, counsel.
20 (Pause)
21 Q. Section 9.2.
22 A. Yes, sir.
23 Q. So that -- you don't know what that blank is, filled in
24 is?
25 A. No.
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SUPP APP 0815
Scott Seidel - Cross 84
1 Q. And just to be clear, going back to page 23, Section
2 9.1(a), the blank relating to Munsch -- or relating to
3 insurance litigation counsel, that's never been filled in
4 either, has it?
5 A. It's not filled in. Always been Munsch Hardt since day
6 one.
7 Q. I beg your pardon?
8 A. I said Munsch Hardt has been involved since day one,
9 that's not -- that's not filled in.
10 MR. HESSE: I have no further questions, Your Honor.
11 THE COURT: Thank you. Mr. Rukavina?
12 MR. RUKAVINA: Your Honor, I was a little bit
13 confused by your ruling before on my Exhibit C. To the extent
14 it has not been admitted, I would ask that it be admitted.
15 THE COURT: Response?
16 MR. HESSE: I believe they've authenticated it, Your
17 Honor.
18 THE COURT: C's admitted. I just carried his
19 objection so Mr. --
20 (Trust agreement was hereby received into evidence as
21 Trustee's Exhibit C, as of this date.)
22 MR. HESSE: Thank you, Your Honor.
23 THE COURT: -- Seidel could testify that he had
24 signed it.
25 MR. RUKAVINA: Thank you, Your Honor.
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SUPP APP 0816
Scott Seidel - Redirect 85
1 REDIRECT EXAMINATION
2 BY MR. RUKAVINA:
3 Q. Mr. Seidel, and we have to be careful, because it
4 concerns mediation so let's not going into details. Was Ms.
5 Doe present?
6 A. Absolutely.
7 Q. Was her counsel present?
8 A. Absolutely.
9 Q. Did we meet with her and her counsel?
10 A. Sure.
11 Q. And you said that at least other people thought that Ms.
12 Doe should have been on this trust advisory board, right?
13 A. Yes.
14 Q. So logically did you believe in good faith that if there
15 was an agreement reached, all the necessary parties were
16 there, and it could have been taken care of right then and
17 there?
18 A. Yes, sir.
19 Q. In fact, without -- now, be careful, without saying
20 anything about what was said, in fact, did Ms. Doe and you
21 have the same answer to the mediator on his mediator proposal?
22 A. Yes.
23 Q. Okay. So to the extent that any kind of conferring with
24 Ms. Doe would have been necessary, do you believe in good
25 faith that you satisfied that?
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SUPP APP 0817
Scott Seidel - Redirect 86
1 A. Yes.
2 Q. I want you to go, like Mr. Hess did, to page 10 of the
3 creditor trust agreement, that's Exhibit C. I want you to go
4 to Section 4.2, please. 4.2(b), you'll recall Mr. Hesse took
5 you through this?
6 A. Yes, sir.
7 Q. I'm going to try to burn through this and not to try the
8 Court's patience.
9 A. Yes, sir.
10 Q. (b)(1) doesn't speak about a trust advisory board?
11 A. Correct.
12 Q. (b)(2) doesn't speak about a trust advisory board?
13 A. Correct.
14 Q. (3) does "With the prior approval of the trust advisory
15 board to enter into, perform and exercise rights under
16 contracts binding upon the creditor trust." Have you, sir,
17 entered into, performed, or exercised rights under any
18 contract binding upon the creditor trust?
19 A. Not to my knowledge.
20 Q. Okay. (4) doesn't speak about the advisory board, does
21 it?
22 A. No, sir.
23 Q. (5), it does speak about the advisory board. It says
24 "With the prior approval of the trust advisory board" and then
25 we read "except insofar as such duties and powers arise from,
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SUPP APP 0818
Scott Seidel - Redirect 87
1 relate to, or are in connection with the causes of action to
2 employ attorneys," et cetera, et cetera. You employed Chen
3 Dotson, correct?
4 A. Correct.
5 Q. And do you believe that that arose from, related to, or
6 was in connection with the causes of action?
7 A. I do.
8 Q. Do you believe that you needed approval from the trust
9 advisory board to retain Chen Dotson?
10 A. No.
11 Q. Was there a trust advisory board to seek the approval
12 from for anything?
13 A. There was never one.
14 Q. Are you responsible for that?
15 A. No, I'm not responsible for that.
16 Q. Let's go on. (6), nothing about trust advisory board?
17 A. Correct.
18 Q. (7), nothing about trust advisory board.
19 A. Right.
20 Q. (8), nothing.
21 A. Correct.
22 Q. (9). (10), "To compromise, adjust, settle or abandon any
23 cause of action," blah, blah, blah, "with the prior approval
24 of the trust advisory board." Have you compromised, adjusted,
25 settled, or abandoned any cause of action?
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SUPP APP 0819
Scott Seidel - Redirect 88
1 A. No.
2 Q. (11), "To compromise, adjust, settle, or abandon any
3 avoidance action in consultation with the trust advisory
4 board." Have you compromised, adjusted, settled or abandoned
5 any avoidance action?
6 A. I have not, sir.
7 Q. Were there any avoidance actions in this case?
8 A. No, sir.
9 Q. the judge could read it for himself, but (12), (13) and
10 (14) don't speak to trust advisory board. (15), "With the
11 prior approval of the trust advisory board, to sue in
12 connection with any matter arising from or related to the plan
13 or disagreement," blah, blah, blah. Have you sued in
14 connection with any matter arising from or related to the plan
15 or this agreement?
16 A. No.
17 Q. Okay. Let's look at (16), that's an interesting one.
18 "To represent the interests of the beneficiaries with respect
19 to any matters relating to the plan, disagreement, or creditor
20 trust, affecting the rights of such beneficiaries." You see
21 that, sir?
22 A. I see that.
23 Q. Is that what you're doing today?
24 A. That is what we've been doing, yes.
25 Q. Have you been doing that since you got into this case?
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SUPP APP 0820
Scott Seidel - Redirect 89
1 A. That's what we've been doing since I got in this case.
2 Q. (17), no trust advisory board. (18), "With the prior
3 approval of a trust advisory board to borrow money." Have you
4 borrowed money?
5 A. I have not borrowed money
6 Q. (19), "With the prior approval of a trust advisory board
7 to use that cause of action." Have you used that cause of
8 action?
9 A. No.
10 Q. And (20) is also interesting. "To do and perform all
11 such acts, execute and deliver all such deeds, bills of sale,"
12 et cetera, et cetera, "as it may deem reasonably necessary or
13 advisable to carry out the purposes of the creditor trust."
14 What's your answer on that one, sir, have you been doing that?
15 A. I've been doing that.
16 Q. And to the best of your recollection, when was the 50,000
17 dollars from Mr. Deari obtained?
18 A. You know, I can tell you the exact date if you'd asked me
19 it last night, I could look at the bank account. I don't
20 know. It was -- it took a lot of doing. And I can find out
21 the answer.
22 Q. Would you say late May or early June?
23 A. That makes sense.
24 Q. Okay. So it was before we hired Chen Dotson?
25 A. Yes.
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SUPP APP 0821
Scott Seidel - Recross 90
1 Q. Thank you.
2 MR. RUKAVINA: I'll pass the witness, Your Honor.
3 THE COURT: Anything further, Mr. Hesse? No. Ms.
4 Fontaine, sorry? Mr. Rukavina's so tall I can't see you.
5 MS. FONTAINE: I cower behind him when necessary.
6 RECROSS-EXAMINATION
7 BY MS. FONTAINE:
8 Q. Mr. Seidel --
9 A. Yes, ma'am.
10 Q. -- briefly for the record. What's your primary
11 occupation?
12 A. I'm an attorney and bankruptcy trustee.
13 Q. Generally most days are you a fiduciary to somebody?
14 A. Yes, every day.
15 Q. Are you capable of exercising your fiduciary duties?
16 A. I am.
17 Q. If the Court eliminates the trust advisory board, will
18 you continue to exercise your fiduciary duties to the trust?
19 A. Absolutely.
20 Q. If you have some question over how you could best
21 exercise your fiduciary duties, will you seek clarification
22 from the bankruptcy court?
23 A. Yes, with notice to everyone.
24 Q. Is that something that you typically do?
25 A. That's what I always do, try to do.
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SUPP APP 0822
Scott Seidel - Recross 91
1 MS. FONTAINE: Thank you, Your Honor.
2 THE COURT: Thank you. Mr. Hesse, any other
3 questions to the trustee?
4 MR. HESSE: No, I think he's had enough.
5 THE COURT: You may step down, Mr. Seidel, thank you.
6 THE WITNESS: Thank you, Your Honor.
7 MR. RUKAVINA: Your Honor, we have no further
8 evidence.
9 THE COURT: All right. Mr. Hesse, you have anything?
10 MR. HESSE: No, we have no further evidence.
11 THE COURT: Okay. Why don't we take a five-minute
12 break. How about ten minutes per side for closing.
13 MR. HESSE: That'd be -- everybody on that side of
14 the room ten minutes?
15 THE COURT: You get equal to whatever the other side,
16 so yeah.
17 MR. HESSE: Whatever they get, fair enough.
18 THE COURT: Okay. Ten -- would ten be enough, Mr.
19 Rukavina?
20 MR. RUKAVINA: Oh, much less than that for me. I'm
21 not going to be long winded today.
22 THE COURT: Say then ten.
23 MR. HESSE: Okay.
24 THE COURT: If they take twelve, you get twelve,
25 though, Mr. Hesse.
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SUPP APP 0823
Scott Seidel - Recross 92
1 All right. We'll be in recess for about five
2 minutes.
3 THE CLERK: All rise.
4 (Recess from 11:04 a.m. until 11:15 p.m.)
5 THE CLERK: All rise.
6 THE COURT: Good morning again. Please be seated.
7 Thank you.
8 Please be seated, thank you.
9 Mr. Rukavina you get to go first and last. And try
10 to keep it around ten if you would.
11 MR. RUKAVINA: I will, Your Honor, thank you.
12 Let me just point out that I hope that the irony of
13 this hearing and of Century's position is not lost on the
14 Court.
15 The irony is as follows:
16 If Century is to be believed, they relied on the
17 plan, they relied on the trust agreement, they relied on a
18 trust advisory board.
19 If Century is to be believed, the person that should
20 have been on that trust advisory board was Ms. Doe.
21 If Century is to be believed, Ms. Doe would have
22 basically had a serious input on how this litigation would
23 have gone forward.
24 If Century is to be believed, Ms. Doe, their
25 adversary, would have been somehow acting for their benefit.
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SUPP APP 0824
Colloquy 93
1 That's ludicrous.
2 It is ludicrous for them to argue any kind of
3 reliance, any kind of prejudice, any kind of standing, any
4 kind of interest in how the trust is internally governed or
5 administered. And I dare say, and I will say it, that the
6 reason why they want Ms. Doe to be on this board today is
7 exactly so they could go to Judge Solis and say collusion,
8 collusion.
9 It's actually quite ironic that for reasons that no
10 one really intended or knows why, Ms. Doe never sat on this
11 board. Ms. Doe never guided, commanded in any way, shape or
12 form, the trustee's decision making. But now they want to
13 force Ms. Doe under threat of your writ to sit on this board,
14 to make decisions maybe, so they can go to Judge Solis and say
15 hah, hah, hah, look at that collusion that Judge Hale approved
16 of and then commanded her to take a part of.
17 Your Honor, this is fundamentally in my humble
18 opinion a matter of equity. Both the rule of law and the rule
19 of equity knows a situation where there is an impossibility of
20 contractual performance. Part of the reason why equity
21 developed is because parties have contracted to do things that
22 became impossible. The coronation of the king, I forget which
23 one, suddenly he dies, there's no coronation, why did I rent
24 the house right on the parade path.
25 Equity comes to help people when they are in an
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SUPP APP 0825
Colloquy 94
1 impossible position like the trustee is here. Who is the
2 trustee to seek input from when there's no one on this board,
3 and no one wants to sit on this board? Who is the trustee to
4 go to to hire Chen Dotson if you need her to when the state
5 court judge says "we're going to trial"? Is the trustee not
6 to hire Munsch Hardt when everyone knows that he needs counsel
7 to prosecute this claim for everyone's benefit?
8 Because the matter is rooted in equity I suggest,
9 Your Honor, that the Court look at it according to the rules
10 of equity.
11 One, is there fault? I'm not saying that there's
12 fault. Mr. Deari had many more important things to think
13 about than some blanks in the document. Ms. Doe had many more
14 important things to think about than some blanks in the
15 document. They're going to proceeding on the trial of their
16 lives, one that would make or break probably both of their
17 lives in one way or another. So I don't think there's fault.
18 But if there is fault it's certainly not the
19 trustee's. The trustee signed the agreement with the
20 understanding that the blanks were being filled in, or that it
21 had been done. The trustee took action to protect the assets
22 of this estate. His first and foremost duty.
23 Because the action is rooted in equity he also looked
24 at prejudice, is there prejudice? Has Century been in any
25 way, shape or form prejudiced by Munsch Hardt being retained,
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SUPP APP 0826
Colloquy 95
1 by Chen Dotson being retained, by there not being a member on
2 the trust advisory board? And the prejudice is intimate with
3 the standing as well. They have no standing, they have no
4 prejudice. How will they possibly be prejudiced if Your Honor
5 grants us relief today? There is no prejudice to them. Where
6 is the prejudice? The prejudice is on the trustee. Is the
7 trustee going to go forward when the name of his counsel is
8 blank, when how much is counsel can be paid is a blank, when
9 his decisions before are questioned as to having been done
10 appropriately? Where is the prejudice here? The prejudice is
11 against the same people for whose benefit this plan is
12 designed.
13 So if you look at the maxims of equity, Your Honor,
14 and you look at the principles of impossibility of
15 performance, or frustration of purpose, or just waiver, the
16 people that matter here have said and are saying we don't need
17 no trust advisory board, we didn't need none, we want it gone.
18 And the only reason why we've come to you is because this is a
19 plan, and because Mr. Seidel is not about to fill in blanks on
20 his own in the sneak of night, or to sit down with other
21 people and post-date or pre-date documents, and fill them in,
22 which maybe he could have and maybe he should have. Not
23 expecting that Century, a stranger to this, would be forced to
24 confess at an evidentiary hearing on something that clearly
25 needs fixing.
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SUPP APP 0827
Colloquy 96
1 And this is not a plan modification. Many times it
2 happens that a plan says there's going to be a rights
3 offering, or the debtor will deliver a financial document, or
4 the debtor will raise funding through some issuance of debt,
5 and it does not happen. And the question then is what to do
6 about it? Is it a material term? Has it been waived? Are
7 the beneficiaries of the plan agreeable to its waiving, or are
8 they going to move to convert the case for post-confirmation
9 default? Which no creditor here is doing. This is, Your
10 Honor, not a plan modification, it is merely the enforcement
11 of a plan by requiring the parties that told you they would do
12 this, to do it. Or, far more equitably, listening to them now
13 and saying this was never needed and it's not needed now.
14 THE COURT: Let me ask you a question, and don't
15 infer from the question you're winning or losing. But in the
16 compensation blank what goes there?
17 MR. RUKAVINA: Your Honor, I do not know. But if I
18 look back at your confirmation order, which is my Exhibit B --
19 THE COURT: Yeah, I looked at that.
20 MR. RUKAVINA: -- it says, "The trustee shall
21 identify and retain counsel." What goes there,
22 frankly -- okay, let me give you a human answer, Judge.
23 THE COURT: Okay.
24 MR. RUKAVINA: We now have a nineteen point-something
25 million-dollar creditor, we've got a 40,000 dollar creditor,
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SUPP APP 0828
Colloquy 97
1 and we got two tiny creditors. What goes in there is what Ms.
2 Doe is comfortable providing for. And then I will make the
3 decision for my firm whether we're comfortable proceeding on
4 that. So if Ms. Doe, who is my 99.9 percent beneficiary says
5 Davor, do it hourly, I'll say okay. If Ms. Doe says you can
6 get 25,000 dollars and that's it, well, then I'll say good
7 day, ma'am, go somewhere else. So, frankly, what goes there
8 is whatever the parties want to put in there. It's not a 327,
9 or a 330 matter.
10 THE COURT: Okay, thank you. Let's hear from anyone
11 else. Mr. Hesse, this goes -- this ups your time. All right.
12 MS. FONTAINE: Thank you, Your Honor. This has been
13 a really grueling four years for my client. She had her
14 deposition taken twice. She's now fought in three different
15 courts the bankruptcy cases, because as Your Honor's aware
16 there's a Chapter 13 still being fought. We're hotly
17 contested. We came to a consensual plan, but she still
18 couldn't get her claim approved. That leaves her in a
19 delicate personal position as of the effective date of this
20 plan.
21 She didn't take up the seat on the trust advisory
22 board, because she didn't have an allowed claim, and she
23 wasn't a beneficiary of the trust. She didn't want to do
24 anything in connection with the trust that might prejudice
25 some other beneficiary's rights, that they might come after
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SUPP APP 0829
Colloquy 98
1 her. She didn't want to do anything that was going to
2 prejudice Century's rights, so she just stayed out of it.
3 At this point, Your Honor, I think that you could
4 appoint -- order her appointed, I think you could order
5 somebody else appointed. You could order -- you could find
6 that Scott Seidel, a Chapter 7 trustee that you're very
7 familiar with, would probably exercise his fiduciary duties
8 okay, without oversight by Jane Doe, the rape victim. Because
9 that's what Century's really demanding.
10 They're saying no, no, no, we demand that you put the
11 rape victim in charge of the trust, so that we will be better
12 off somehow. I suppose that they think that they would be
13 better off because it would be easier for them to make a
14 collusion argument in Judge Solis' court. I don't think it's
15 appropriate for Your Honor to order her to collude with the
16 trustee, I think that ship may have sailed.
17 THE COURT: I don't think I'll order her to collude
18 with the trustee.
19 MS. FONTAINE: Yeah. But I think that we -- the
20 point of Your Honor's order should be to allow everybody to
21 proceed as they have thus far, with nobody up till now asking
22 who's on the TAB, who's supervising Scott Seidel, who is Scott
23 Seidel going to take orders from. Scott Seidel knows how to
24 be a fiduciary and I think we should trust him to go ahead and
25 do that from here on out as he's been doing thus far.
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SUPP APP 0830
Colloquy 99
1 THE COURT: Thank you, Ms. Fontaine.
2 MS. FONTAINE: Thank you, Your Honor.
3 THE COURT: Mr. Hesse?
4 MR. HESSE: Good afternoon, Your Honor. Well, it's
5 still good morning, I'm sorry.
6 THE COURT: This was a twenty- or thirty-minute
7 hearing, as I recall.
8 MR. HESSE: Indeed. First of all, I want to make one
9 point; I want to clarify one thing. Century has never
10 suggested anyone should be on the trust advisory board.
11 Notwithstanding what the two previous speakers had indicated,
12 Century has never said that they pick -- Ms. Doe should be on
13 the board -- the trust advisory board, that anyone in
14 particular should be on the trust advisory board. I just want
15 to make it clear we never said that.
16 Century thought, like many other people apparently,
17 that there was a wholly formed trust advisory board pursuant
18 to the terms of a confirmed plan with a -- which incorporated
19 by reference the trust agreement. It was only when the
20 trustee filed his motion, which incidentally was after the
21 mediation that he didn't have authority to participate in,
22 only after he filed his motion asking you to amend the plan
23 and the trust agreement to eliminate the trust advisory board,
24 that we became aware that it wasn't appointed.
25 And I think that one of the opening statement -- one
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SUPP APP 0831
Colloquy 100
1 of the comments that was made in opening statement really kind
2 of highlights really what's going on here. There is
3 litigation going on in the federal district court, but it was
4 noted that means the trustee has to clean things up now since
5 he's going to be in federal district court, because there's a
6 problem here. This is a problem that was of the making of, I
7 don't know whom, but it wasn't -- the particular problems with
8 the trust and the trust advisory board wasn't Century.
9 Was it the trustee, who signed the trust agreement
10 without having the material terms in it, and after he should
11 have read it and realized he had to have authority from the
12 trust advisory board to do certain things? Maybe he should
13 have dealt with it earlier. Was it the responsibility of the
14 debtor under their proposed plan to make sure that the holes
15 were filled in the trust? Probably should have done it.
16 I guess we found out today the negotiations were done
17 by Ms. Doe's counsel in the context of that plan. Maybe they
18 should have made sure that all -- that everything was done.
19 But it only became apparent to us in the last week or two that
20 there's a problem here.
21 Now, I'll also reemphasize, like I did on opening,
22 the evidence that has been presented here raises an
23 interesting question as to whether there was a meeting of the
24 minds, and we actually do have a trust agreement.
25 Ms. Lindauer had her client sign a document with
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SUPP APP 0832
Colloquy 101
1 blanks in it, figuring that Scott Seidel would fill in the
2 blanks, identify I guess the trust advisory board, identify
3 his law firm, because she didn't know who the law firm was.
4 Fill in the blank with the amount that would be paid to the
5 trustee's law firm, because she didn't do it, because she
6 thought it was his responsibility. Mr. Seidel didn't fill in
7 the blanks because he didn't think it was his responsibility.
8 And they're the two signatories to it. I think there's a
9 question as to whether there's a meeting of minds. And going
10 one step further, Mr. Seidel has testified, or it's been
11 represented by Mr. Seidel, he thought there was a fully -- a
12 fully completed document somewhere, that he just didn't have.
13 I don't know if there's a meeting of minds. It's a real, real
14 question, and a real, real concern that maybe they don't
15 have -- that they have not properly formed the trust.
16 Now, as we've indicated in our objection, confirmed
17 plans of reorganization are binding agreements on the parties,
18 they're binding on the trustee too. They're binding on the
19 debtor. They're not just binding on us. And we're not the
20 ones here asking you to modify the plan to accommodate what
21 should have been done. But it's also binding on the debtor
22 and the trustee.
23 And as Judge Sharp indicated in the U.S. Brass case,
24 that once you have a substantially consummated plan, which the
25 debtor represents has occurred, you can't modify, you can't
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SUPP APP 0833
Colloquy 102
1 amend a plan, 1127 does not allow for it. And the reason you
2 don't amend the plan, as Judge Sharp noted, and I think it's a
3 pretty good point, is that there's an intent to have finality,
4 because the debtor creates a disclosure statement, he
5 circulates a -- they circulate the plan, they attach
6 documents. And parties rely upon those, they vote for it,
7 they rely on it to object to it, they rely on it not to object
8 to it if they choose. And so to now come out seven months
9 later, and to completely change the terms of the plan, is not
10 allowed under the Bankruptcy Code, nor applicable case law.
11 Now, admittedly, Century's not a creditor, and we're
12 not a beneficiary under the trust, but there are provisions of
13 that trust agreement that affect Century. The trustee went
14 into mediation without settlement, without authority to settle
15 the agreement -- settle the causes of action, based upon the
16 plain language of the agreement. Had we known that, we may
17 not have wasted our time going to a mediation. I don't know,
18 I wasn't involved at that point in time. But that's something
19 that Century should be able to rely upon, is his authority.
20 And so this is not the time to change the governance
21 of the agreement. This is not the time to change it. We're
22 well past the ability to do it. I mean, even if there was
23 fraud, you can only revoke confirmations 180 days after the
24 order is confirmed. I mean, we're well past the applicable
25 deadlines. But for them to come in and try to change it so
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SUPP APP 0834
Colloquy 103
1 that they can have things cleaned up for the federal district
2 court litigation, smacks us as a tad bit unfair.
3 What happened to Ms. Doe was horrific. I don't think
4 anybody denies that. But just because it was horrific,
5 doesn't mean it's covered by the insurance policy we have with
6 Pastazios. Pastazios has denied coverage, and that's the
7 question. Is it covered?
8 But to change the rules and to change the governance
9 of this thing at this point in time so that they can clean
10 things up going into trial smacks of gamesmanship. And,
11 consequently, just based upon clear reading of 1127, the
12 courts that have interpreted changes to plan documents as
13 effectively being a change -- a modification of a plan, whole
14 host of case law, we'd ask the Court to deny the motion
15 to -- that has been filed by the trustee.
16 THE COURT: Thank you, Mr. Hesse. Mr. Rukavina, you
17 get to go last.
18 MR. RUKAVINA: Your Honor, three brief points.
19 One, I cannot wait for discovery because what
20 happened is that Mr. Shults for Century called Mr. Crawford
21 for Jane Doe and they arranged the mediation. We were brought
22 in later, after the fact kicking and screaming. So for
23 Century to suggest that they relied on anything is just flat
24 false.
25 Point two, you heard that there was no meeting of the
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SUPP APP 0835
Colloquy 104
1 minds. And you heard that these are material blanks. I'm not
2 suggesting that Your Honor is perfect, or anyone is perfect.
3 But you've been a judge for a long time, you're a good judge,
4 you were a good lawyer, I don't think you would have confirmed
5 the plan if you thought that there were material omissions or
6 a failure of the meeting of the minds. I think it's like
7 other -- many other plans, where there are things left that
8 are going to be filled in later that are not material, that
9 are ministerial.
10 And point three, just so that we're very clear here,
11 Mr. Seidel has not violated any provision of this trust
12 agreement. I went through step-by-step, he never borrowed
13 money, never entered into contracts.
14 The only thing he did was he hired Chen Dotson, which
15 you saw there was a bracket that said except you can hire
16 lawyers like that without trust approval. What the blank on
17 Munsch Hardt and the blank on Munsch Hardt's fees, the trustee
18 didn't violate anything, he did not violate anything, he did
19 not breach anything. If anyone loses here it's me, I go back
20 to the firm and say whoops. And that's it.
21 THE COURT: Thank you.
22 This is rather messy, and I know you're in litigation
23 upstairs, or downstairs, I'm not sure where Judge Solis is,
24 we'll try to get you a ruling in the next few days. I'll
25 probably just set up a CourtCall, and ask Mr. Rukavina to give
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SUPP APP 0836
Colloquy 105
1 notice to everyone so you can participate by CourtCall.
2 Thank you.
3 MR. RUKAVINA: Thank you, Your Honor.
4 THE COURT: We'll be in recess.
5 MR. HESSE: Thank you, Your Honor.
6 THE CLERK: All rise.
7 (Whereupon these proceedings were concluded at 11:34 AM)
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SUPP APP 0837
106
1
2 I N D E X
3
VOIR
4 WITNESSES: DIRECT CROSS REDIRECT RECROSS DIRE
5 Joyce Lindauer 34 42 47 36
6 Tom Crawford III 48 53 55
7 Scott Seidel 56 63 84 89
8
9
10 EXHIBITS: DESCRIPTION I.D. EVID
11 Trustee:
12 A, B, D-H 32
13 C Trust agreement 84
14
15
16 RULINGS: PAGE LINE
17 Motion by trustee for continuance denied 30 17
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SUPP APP 0838
107
1
2 C E R T I F I C A T I O N
3
4 I, Esther Accardi, the court approved transcriber, do
5 hereby certify the foregoing is a true and correct transcript
6 from the official electronic sound recording of the
7 proceedings in the above-entitled matter.
8
9
10 November 9, 2015
11 ______________________________ _________________
12 ESTHER ACCARDI DATE
13 AAERT Certified Electronic Transcriber CET**D 485
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SUPP APP 0839
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
23 (1) 35:25 9:19,20;40:12,18; 32:18;34:14
1 84:1 50,000 (12) 50:18;51:14,21;52:19; administrative (2)
24 (1) 5:22;15:25;16:2,6; 60:12;85:6,8;90:19 23:10;35:24
1 (2) 71:4 20:8;40:25;58:23,25; accepted (1) admissibility (3)
23:5;82:25 25,000 (1) 60:4,7,13;89:16 51:22 31:8;32:4;38:25
10 (2) 97:6 50,000-dollar (2) accommodate (1) admit (3)
86:2;87:22 29 (2) 5:17;58:22 101:20 31:5;36:19;58:1
10,000 (1) 38:5,10 accompanying (1) admitted (11)
11:24 2nd (2) 6 34:23 10:16,18,18,19,21;
10.1 (4) 5:10;58:14 according (2) 32:6;39:8;66:20;84:14,
24:25;71:2,7,8 6 (3) 8:1;94:9 14,18
11 (7) 3 25:16;43:14;87:16 account (1) admittedly (1)
9:20;66:16;67:11; 89:19 102:11
71:18;72:15,15;88:2 3 (1) 7 accountants (1) adversarial (1)
11:04 (1) 86:14 70:7 29:18
92:4 30 (1) 7 (4) accurate (1) adversary (3)
11:15 (1) 23:9 35:4;79:4;87:18;98:6 39:4 63:13,19;92:25
92:4 31 (1) 7.01 (5) across (1) advisable (1)
11:34 (1) 23:21 22:15;66:20,24;82:8, 43:22 89:13
105:7 32 (1) 13 act (6) advise (1)
1127 (4) 24:11 10:20;27:5;33:11; 73:8
26:23;27:16;102:1; 327 (1) 8 75:18,20,22 advised (1)
103:11 97:8 acting (4) 80:24
1141 (1) 330 (1) 8 (5) 33:9;53:5,6;92:25 advisor (4)
9:20 97:9 31:8,13,14;61:25; action (24) 15:18;23:13;25:12;
12 (1) 37 (1) 87:20 7:15;12:13;23:24; 64:22
88:9 25:15 8.8 (1) 24:17;25:5;27:9;51:1; advisory (120)
12th (4) 82:19 55:10,21;58:23;70:10; 7:2;8:3,4;11:22;12:1,
7:14,19;55:25;56:5 4 8.8a (1) 73:23;76:23;87:1,6,23, 7;13:1,21;15:2,7,9,19;
13 (3) 82:22 25;88:3,5;89:7,8;94:21, 17:4;18:5,6;19:18;20:3,
82:13;88:9;97:16 4 (8) 8.8b (2) 23;102:15 5;21:10,22;22:5,9,18,22;
14 (1) 14:14;15:1,8;65:13, 25:20;82:23 actions (7) 23:11,20,22;24:9,12,14,
88:10 19,20;69:22;86:20 8th (5) 24:10;27:20;28:25; 16,19;25:3,8,9,17,22,23,
15 (1) 4.2 (5) 7:8;8:19;49:9;59:6,7 70:13,17;82:5;88:7 25;28:16,25;35:17,18;
88:10 69:7,14,15;73:3;86:4 active (1) 41:11;45:9,16;46:5;
16 (1) 4.2b (3) 9 63:15 47:11,21;52:2,7,11,22;
88:17 69:8,9;86:4 acts (1) 53:18,24;61:4,6;64:19,
17 (2) 4.2biii (2) 9 (1) 89:11 25;67:3;69:4,7,11,21,22;
25:15;89:2 23:10;70:2 87:22 actual (4) 70:3,6,11,18;71:21;72:3,
18 (1) 4.2bv (1) 9.1a (1) 13:5;19:21;20:24;23:3 18;73:5;74:5,19,25;75:9,
89:2 23:19 84:2 actually (14) 12,15,19,20,24;81:22;
180 (1) 4.2bx (2) 9.2 (1) 4:3;16:15;21:5,14,17; 82:5;83:2,3,5,10;85:12;
102:23 23:21;73:4 83:21 23:6;29:4;37:9;40:8; 86:10,12,14,20,23,24;
19 (1) 4.2x (4) 9019s (1) 50:13;67:6;79:18;93:9; 87:9,11,16,18,24;88:3,
89:6 25:2;71:15,18;72:13 58:4 100:24 10,11;89:2,3,6;90:17;
4.2xi (2) 99.9 (1) ad (1) 92:18,20;95:2,17;97:21;
2 25:2;71:15 97:4 18:3 99:10,13,14,17,23;
40,000 (1) address (4) 100:8,12;101:2
2 (4) 96:25 A 8:25;14:5;29:11,13 affect (1)
22:13;23:5;65:21,25 40h (2) addressed (3) 102:13
20 (1) 50:23,25 abandon (5) 16:15;41:10,11 affecting (1)
89:10 42 (1) 23:24;24:10;70:10; adduced (1) 88:20
2013 (1) 82:21 87:22;88:2 50:17 afoul (1)
49:4 42,000 (1) abandoned (2) adjust (6) 14:25
2015 (4) 12:6 87:25;88:4 23:23;24:9;70:10,17; afternoon (2)
40:20;49:9;59:7;79:20 ability (3) 87:22;88:2 33:3;99:4
20th (2) 5 24:22;27:19;102:22 adjusted (3) again (20)
8:20;62:5 able (8) 41:2;87:24;88:4 7:4;8:3;10:4,24;11:1;
22 (2) 5 (1) 14:19,20;26:1,1;35:5; adminis (1) 23:4,24;25:3,5;39:18;
68:10;80:3 86:23 46:13;71:9;102:19 35:25 72:14;73:7,25;77:23;
22nd (5) 5,000 (1) above (1) administered (1) 78:11,14,19;81:1,11;
5:23;6:22;40:20; 36:1 37:18 93:5 92:6
58:16;68:6 5,000-dollar (1) absolutely (12) administration (2) against (27)
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SUPP APP 0840
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
7:24;8:12,13,14;10:3; ameliorated (1) 19:5;30:14;34:20; attorney (8) bear (2)
20:22;25:11;28:4,4,6; 28:15 93:15;97:18 16:18;32:14;33:9,10, 24:21;65:11
46:20;50:12;54:23; amend (12) April (9) 10;34:21;40:4;90:12 became (7)
70:14;77:14,15,19,20, 11:4;24:22,23,24; 5:9;58:14;65:9,10,21, attorney- (1) 9:5;28:21,21;79:23;
24;78:4,7,7,12,20,21; 25:2;71:9,9,14;82:8; 25;67:7,19;79:20 73:20 93:22;99:24;100:19
80:4;95:11 99:22;102:1,2 argue (1) attorney-client (3) become (3)
ago (2) amended (2) 93:2 72:22;73:14,17 65:8;66:2;79:18
29:22;48:4 5:3;71:23 arguing (1) attorneys (4) becomes (2)
agree (5) amending (1) 9:25 23:20;51:11;70:7;87:2 6:21;28:22
8:18;14:10;21:7; 11:6 argument (4) attorney's (3) beforehand (1)
40:16;83:7 amount (7) 3:20;8:25;21:3;98:14 30:4;76:24;79:1 8:17
agreeable (1) 24:6;28:6;58:3;77:14, arguments (2) authenticated (1) befuddled (1)
96:7 18,20;101:4 9:7,22 84:16 21:2
agreed (2) announced (1) arise (2) authority (13) beg (2)
11:5;47:11 7:22 27:13;86:25 24:4,7;26:16,23;27:5, 81:5;84:7
agreeing (1) answered (1) arisen (2) 16;72:18;73:23;79:6; began (1)
66:2 72:21 27:23,24 99:21;100:11;102:14,19 79:19
agreement (95) apologize (2) arising (2) authorized (1) begged (1)
12:23;13:3;14:2;16:2, 33:16;67:14 88:12,14 83:16 51:9
12,13;22:5,8,19;23:4; apparent (3) arose (1) avoidance (5) begging (1)
24:22,23,23,25;25:16; 28:21,22;100:19 87:5 24:10;70:17;88:3,5,7 30:16
26:4,14;27:25;28:14; apparently (6) around (2) awarded (1) behalf (3)
31:10;34:23;35:5,21; 6:19;10:24;43:17; 65:23;92:10 10:15 3:11;20:14;50:4
36:11;37:3,10,14,15; 52:7;71:10;99:16 arranged (2) aware (3) behind (1)
38:10;39:24;40:2,13,17, appeal (2) 16:6;103:21 69:2;97:15;99:24 90:5
22;41:2,3,14,14,19,20; 80:24;81:8 arrangements (1) away (2) belief (1)
42:3;43:3,5;44:15,23,25; appear (4) 16:2 12:7;21:23 63:10
45:1,3;54:10,12;57:20; 39:3,4,20;49:9 aside (1) belonged (1)
59:20;62:10,25;66:8,13; appearance (2) 30:15 B 46:14
67:8,18,22;68:19,21,23, 9:12;50:6 assert (1) belonging (1)
24;69:3,8;71:4,9;72:3,6; appeared (2) 78:3 b1 (1) 23:14
74:15,17,24;75:3,5;79:2, 7:9;40:4 asserted (5) 86:10 below (1)
22;82:19;83:10,13,17; apple (1) 46:20;54:11,22;77:19; b2 (1) 70:5
84:20;85:15;86:3;88:15; 12:12 80:4 86:12 bench (1)
92:17;94:19;99:19,23; applicable (2) asserting (2) back (14) 8:10
100:9,24;102:13,15,16, 102:10,24 55:11;77:14 5:9;6:21;7:22;10:21; beneficiaries (5)
21;104:12 application (2) asset (1) 18:15;25:3;41:24;62:15; 11:14;14:13;88:18,20;
agreements (1) 26:19,19 46:19 67:15;71:18;79:17;84:1; 96:7
101:17 appoint (4) assets (3) 96:18;104:19 beneficiary (8)
ahead (4) 22:2,2;35:4;98:4 7:17;28:3;94:21 background (1) 7:10;8:8;14:23;39:23;
3:20,21;71:12;98:24 appointed (15) assigned (3) 4:25 63:10;97:4,23;102:12
ain't (1) 15:9;18:18;19:24; 12:23;20:23;25:9 backwards (1) beneficiary's (1)
61:10 22:3;27:5,7,7;41:3; assignment (1) 33:18 97:25
alcohol (1) 45:16;46:8;50:5;64:2; 23:15 ballpark (1) benefit (12)
10:18 98:4,5;99:24 associate (2) 58:4 11:14;12:3;17:12;
allow (5) appointment (1) 12:5;33:17 bank (1) 19:23;35:21,22;46:15;
14:15;64:10,15;98:20; 66:24 assume (2) 89:19 47:13,17;92:25;94:7;
102:1 approach (3) 79:24;82:17 bankruptcy (19) 95:11
allowance (1) 4:13,16;36:3 assumed (3) 3:18;9:12,17;19:15, Berghman (9)
18:10 appropriate (2) 42:4,8;80:2 16;25:21;30:2,10,11,14; 3:7;12:4;32:10,12,14,
allowed (7) 9:10;98:15 attach (1) 34:19;39:21;52:1,6; 16,19;33:6,19
14:14,25;15:3;17:5; appropriately (1) 102:5 83:1;90:12,22;97:15; best (3)
35:23;97:22;102:10 95:10 attached (6) 102:10 81:3;89:16;90:20
along (1) approval (30) 5:12;17:22;23:5;38:1, based (10) better (3)
22:12 22:6;23:11,12,19,22; 10;43:8 10:15;24:3;27:1,10, 52:9;98:11,13
alternative (1) 24:11,14,16,19;52:22; attacking (1) 14;28:2;74:17,24; beyond (2)
72:4 63:7;69:4,11,20;70:3,6, 10:3 102:15;103:11 56:10;76:8
alternatively (1) 11;73:5;74:5,19;75:1; attempt (2) basically (12) bidding (1)
11:25 86:14,24;87:8,11,23; 80:16,18 9:16;10:2,9,11;11:12; 9:25
although (2) 88:11;89:3,6;104:16 attended (3) 25:25;41:7;58:3;59:23; big (1)
11:5;72:23 approve (1) 40:7,8,9 62:6;72:2;92:22 35:4
always (4) 25:4 attention (3) basis (4) biggest (2)
8:11;63:13;84:5;90:25 approved (5) 24:20;54:4;66:18 11:9,9;39:2;50:25 10:6,7
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SUPP APP 0841
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
billing (3) 16:2;24:15;89:3 97:5;102:23;103:1,9; 79:8,9;80:24;92:16,19, 7:24;14:14,25;19:23;
83:15,16,18 borrowed (3) 104:15;105:1 21,24;94:24;95:23;99:9, 20:22;25:5;27:19;35:22,
bills (1) 89:4,5;104:12 candidly (5) 12,16;100:8;102:13,19; 23,25;36:1;46:13,15;
89:11 both (5) 21:3,17,19;26:8;29:4 103:20,23 50:19;64:7;70:14;79:14,
binder (1) 6:3;9:8;18:17;93:18; capable (1) Century's (16) 16;80:13
31:20 94:16 90:15 4:23;8:18,25;9:14; clarification (2)
binders (3) bottom (1) capacity (1) 10:6,7,22;22:24;40:4; 11:17;90:21
4:14,18;57:4 71:13 56:19 54:24;55:13;65:13; clarify (3)
binding (9) box (1) car (1) 92:13;98:2,9;102:11 22:1;40:10;99:9
9:21;10:4;86:16,18; 48:2 34:5 certain (6) class (4)
101:17,18,18,19,21 bracket (1) card (1) 5:13;9:7;40:16;41:17; 14:14;15:1,8;35:24
bit (6) 104:15 15:11 71:15;100:12 clean (3)
14:17;21:2;35:14; Brass (2) care (3) certainly (3) 12:25;100:4;103:9
52:23;84:12;103:2 26:11;101:23 7:7;19:19;85:16 9:2;12:18;94:18 cleaned (3)
bite (1) breach (1) careful (2) cetera (6) 8:23;11:13;103:1
12:12 104:19 85:3,19 70:7;79:1;87:2,2; clear (5)
blah (6) break (2) carried (1) 89:12,12 9:5;84:1;99:15;
87:23,23,23;88:13,13, 91:12;94:16 84:18 chance (1) 103:11;104:10
13 brief (2) carry (3) 4:22 clearly (3)
blank (15) 50:15;103:18 12:18;39:10;89:13 change (10) 5:11;28:7;95:24
6:24,25;7:4;11:22,23; briefing (1) case (40) 26:3;46:1;82:14; CLERK (3)
16:25;41:7;83:23;84:2; 11:5 3:18;4:8,9;5:9;9:12; 102:9,20,21,25;103:8,8, 92:3,5;105:6
95:8,8;96:16;101:4; briefly (2) 10:13;13:24;17:11; 13 client (11)
104:16,17 32:9;90:10 21:11;26:11,20;29:7; changed (2) 20:5;29:16,24;30:16,
blanks (37) bring (1) 30:12;34:19,23;35:2,3,4, 17:2;54:25 24;52:17;55:11;72:23;
5:13,14,14,24,25;6:5, 13:21 14,15;36:13;39:18,21; changes (2) 73:21;97:13;100:25
7,18,19;12:22;16:13,14, Brooks (1) 49:5;50:6;51:1,17;52:1, 26:14;103:12 client's (1)
16,16;17:22;40:16,21; 3:10 6;59:15;61:21;63:12; Chapter (5) 76:6
42:1,2,5,9,13;44:11,18, brought (3) 79:4;88:7,25;89:1;96:8; 35:4;67:11;79:4; clips (1)
19;45:4;62:10;68:24; 20:15;30:19;103:21 101:23;102:10;103:14 97:16;98:6 29:19
83:9;94:13,14,20;95:19; burden (1) cases (2) charge (1) close (1)
101:1,2,7;104:1 40:14 63:18;97:15 98:11 26:20
blow (1) burn (1) catastrophe (1) check (1) closing (1)
19:11 86:7 61:11 28:25 91:12
board (133) busily (1) catching (1) Chen (15) Code (1)
7:2;8:3,4;11:22;12:1, 60:3 71:12 7:23;8:3;50:2,3,8; 102:10
7;13:1,21;15:2,7,9,14, business (1) cause (8) 52:21;60:19;61:6;62:8; coffee (1)
18,19;16:22,24;17:2,4,8, 18:21 51:1;55:10;58:22; 87:2,9;89:24;94:4;95:1; 69:23
16;18:5,6;19:18;21:10, 73:23;87:23,25;89:7,7 104:14 collaboration (1)
22;22:5,9,18,22;23:11, C caused (3) choose (2) 18:16
13,20,23;24:9,12,15,16, 27:3;29:3,3 16:18;102:8 collateral (1)
19;25:4,8,9,12,17,22,23, call (10) causes (9) chose (2) 13:7
25;28:16,25;35:17,18; 6:12;31:3;33:5,6; 23:24;24:17;25:5; 24:23,24 collaterally (2)
41:11;45:9,16,18;46:6; 48:10,19;56:16,17;61:5, 70:10,13;76:22;87:1,6; cigar (1) 10:3;80:16
47:12,21;52:2,7,11,22; 6 102:15 10:20 collects (1)
53:19,24;60:4;61:4,6; called (8) cell (1) circular (1) 77:5
64:19,22,25;67:3;69:4, 33:9,12;34:6;35:24; 32:22 8:5 collude (2)
11,21,22;70:3,6,11,18; 41:13;48:21;54:3; Cent (1) circulate (1) 98:15,17
71:21;72:3,18;73:5; 103:20 74:18 102:5 colluding (1)
74:6,19,25;75:9,12,15, calls (2) Century (92) circulates (1) 10:2
19,21,24;81:22;83:2,3,5; 58:24,25 3:11;4:1;5:3,4;7:18, 102:5 collusion (5)
85:12;86:10,12,15,20, came (7) 20;8:16;9:8,11,12,13,16, cited (1) 10:16;93:7,8,15;98:14
23,24;87:9,11,16,18,24; 5:20;41:19;57:14,18; 21,22,24;10:3,3;11:4,6; 26:9 collusive (3)
88:4,10,11;89:2,3,6; 73:10;81:16;97:17 12:9,9;13:7,10,13;20:14, claim (44) 10:10,22,25
90:17;92:18,20;93:6,11, can (41) 17,23,23,25;23:16,17, 10:21;14:12,16,19,20, comfortable (2)
13;94:2,3;95:2,17; 13:11;14:5;23:20,23; 25;24:3,6;25:6,7,11; 21;15:3;17:5,6;18:10; 97:2,3
97:22;99:10,13,13,14, 24:12,15,17;26:11,12; 27:3,18;28:4,5;31:23; 20:20;24:5;25:11;28:1, coming (3)
17,23;100:8,12;101:2 28:3;29:19;37:24;39:13; 39:20,23;40:1;46:20,21; 4,4,5,6,7,10;46:19,20; 7:6;8:7;59:24
board's (1) 47:20;52:3;55:6;63:6, 53:13,17;54:21;55:7; 54:22;64:4,10,15,17; commanded (2)
82:5 17;66:17;69:11;70:6,17; 56:3,6;61:23;63:9,13,15; 77:13,15,18,20,23,25; 93:11,16
book (3) 72:25;73:9,19;74:2; 64:21,23;70:14;72:18; 78:3,6,7,12,20,21;79:6, comment (1)
22:12;66:19;67:21 78:19;79:9,14,15;83:7; 73:6,22;74:5,19,25;77:3, 8;94:7;97:18,22 29:14
borrow (3) 89:18,20;93:14;95:8; 6,10,14,19;78:4,8,12,21; claims (19) comments (4)
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SUPP APP 0842
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
9:16;18:14;55:16; confirmation (32) contracted (1) 27:2,10;28:18,24;29:9, 17:7,9,10;19:2,4,23;
100:1 5:15,18;6:22;7:3;9:15; 93:21 11,12;30:8,10,23;31:1, 20:9;26:5,6;35:2,22;
committee (3) 14:11;15:23;16:4,8,15; contracts (5) 17,21,24;32:2,5,12,17, 36:1;46:14,16,23;47:16;
20:3,6;45:9 17:2,3,10;19:8;20:1,2, 23:14;58:4;69:12; 23;33:4,13,15,18,24; 97:1
communications (9) 17;22:4,8;28:20;40:5, 86:16;104:13 34:3,9,13;36:5,24;38:24; creditor's (2)
6:11;8:4,15;53:13,17; 23;41:2,8;45:24;46:3; contractual (1) 39:2,10,13;40:19;42:17; 20:22;67:22
54:1;56:9;59:17;62:9 52:1,5,6;64:3;79:17; 93:20 47:6,24;48:2,6,13,18; cross (1)
companies (1) 96:18 control (1) 49:1,10,23;50:6,12;51:5, 56:11
15:11 confirmations (1) 80:3 19;53:2,8,23;54:8,15,18; CROSS-EXAMINATION (5)
Company (5) 102:23 convenience (1) 55:2,2,17,21;56:14,16, 42:18;53:10;54:19;
3:11;4:1;53:13,18; confirmed (12) 35:24 18,23;57:21;59:3;60:1,3, 63:25;65:4
54:4 5:10;15:23;16:1; conversations (1) 18;62:15;63:24;64:9,13; C's (1)
compare (2) 26:15,15;34:22;58:14; 72:24 65:3,12;66:21,23;72:2, 84:18
37:24;44:1 79:22;99:18;101:16; convert (3) 10,24;73:16,20;74:2,8,
compel (1) 102:24;104:4 13:24;35:4;96:8 21;76:10,20;78:17; D
11:20 confirming (1) converted (1) 80:20,22,24;81:4,6,13;
compensation (6) 65:14 29:7 83:1;84:11,15,18,23; Danny (1)
28:2,11;77:10;83:11, conflict (4) convincing (1) 90:3,17,22;91:2,5,9,11, 35:14
14;96:16 10:1;15:12;27:24; 15:11 15,18,22,24;92:6,14; dare (1)
complaining (1) 28:13 copy (8) 94:5,9;96:14,19,23; 93:5
19:20 confused (2) 22:11,13;36:11;41:19; 97:10;98:14,17;99:1,3,6; date (5)
complaint (5) 8:11;84:13 43:11,19;56:3;65:13 100:3,5;103:2,14,16; 14:18;32:8;84:21;
11:4,6;55:3,4,5 connection (6) core (1) 104:21;105:4 89:18;97:19
complete (1) 24:12;87:1,6;88:12, 73:13 CourtCall (2) dated (1)
45:2 14;97:24 coronation (2) 104:25;105:1 68:5
completed (3) consensual (1) 93:22,23 courtroom (1) dates (1)
44:17,20;101:12 97:17 correctly (1) 3:14 68:7
completely (2) Consequently (2) 71:17 courts (3) Davor (2)
25:24;102:9 5:23;103:11 correlated (1) 28:19;97:15;103:12 3:6;97:5
compromise (8) consider (1) 28:12 Court's (9) day (7)
23:23;24:9;64:10,15; 72:5 correlates (1) 13:25;19:15;38:7,11; 76:13;79:21,22;84:5,
70:10,17;87:22;88:2 consist (1) 28:5 40:14;43:6,14,16;86:8 8;90:14;97:7
compromised (2) 28:3 correspondence (1) coverage (7) days (9)
87:24;88:4 consistent (2) 58:25 27:9;29:23;54:22; 7:20;8:9,20;19:12;
computer (2) 27:11;75:23 counsel (57) 55:7,9,14;103:6 79:25;80:9;90:13;
43:2,9 consultation (3) 3:17;6:24;7:12,13,21; covered (2) 102:23;104:24
concept (3) 24:8;70:18;88:3 8:7;13:1;14:21;16:11; 103:5,7 deadlines (1)
19:24;35:19;46:16 consulted (2) 17:8,12;18:20;19:8; cower (1) 102:25
concern (4) 25:4,12 21:10;27:8;29:23,24; 90:5 deal (1)
28:20;63:5,6;101:14 consummated (4) 30:10;35:2,12;39:18; Crawford (17) 69:10
concerned (1) 26:18,21,22;101:24 41:10;42:10;45:5;49:8, 4:2,3,4,5;7:9;48:10,13, dealing (4)
16:13 contacted (3) 16,21,24;50:1;52:21; 16,17,21;53:12;54:21; 23:18;25:19;27:4;
concerns (4) 42:11;65:8,22 53:6,13;60:2,3,6,10,19; 55:1,20;56:14;60:19; 70:17
19:14;21:6;27:22;85:4 contentious (1) 61:16;73:10,12;74:13; 103:20 dealt (1)
conclude (3) 11:8 75:22;76:2;80:6,18; created (3) 100:13
8:20;13:22,23 contested (1) 81:16,18;83:14,19;84:3; 5:11;12:3;18:13 Deari (25)
concluded (1) 97:17 85:7,9;94:6;95:7,8; creates (1) 8:12;10:16;15:24;
105:7 contesting (2) 96:21;100:17 102:4 16:1,11;19:1;35:14;
conclusion (7) 12:9,10 couple (5) creation (1) 36:14;37:2;40:20;41:15,
72:9;73:11,12;74:20; context (2) 4:14;9:4;14:9;15:24; 66:24 19;42:3,23;43:5,11;
78:10,15;80:23 5:1;100:17 42:20 credible (3) 44:11,17;46:12;50:12;
conclusions (1) continually (1) course (3) 48:7,8,12 57:10,22;60:9;89:17;
10:12 30:21 5:13,15;8:9 credit (1) 94:12
conduct (1) continuance (6) COURT (178) 15:11 Deari's (2)
33:20 13:8;31:2;59:10,13, 3:1,8,12,16,19;4:4,6,9, creditor (30) 45:8,10
confer (1) 25;61:13 10,15,17,19;5:8,10,25; 3:14;5:11;12:6;14:8; debt (1)
8:2 continue (3) 7:5,9,22,22;8:10;10:22; 16:10;18:19;19:16; 96:4
conferred (1) 4:24;30:21;90:18 11:18;12:13;13:18,20, 20:19;22:17,19,23; debtor (24)
7:17 continued (1) 22,23,24;14:4,16,16; 23:14,16;35:6,7;36:11; 3:18;5:16,21,23;6:1;
conferring (1) 59:1 15:4,5,21;16:20,22,24; 44:23;57:20;66:3,24; 14:19;18:21,24;20:21;
85:23 contract (5) 17:17,24;18:2,8,11; 67:2;86:3,16,18;88:19; 21:9;26:19,20;28:23;
confess (1) 6:8;23:18;25:8;58:8; 19:16;20:10,12;21:19, 89:13;96:9,25,25;102:11 34:21;46:10,12;47:18;
95:24 86:18 23;22:2;23:8;25:21; creditors (17) 96:3,4;100:14;101:19,
Min-U-Script® eScribers, LLC | (973) 406-2250 (4) committee - debtor
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SUPP APP 0843
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
21,25;102:4 11:21;13:1 14:12,21 74:10,11,15;75:2,4; 25:24;28:24;81:21;
debtors (2) designed (1) disputing (4) 94:21;95:9;100:15,16, 82:5,15;99:23
3:2,4 95:12 54:21;55:7,9,14 18;101:21 eliminates (1)
debtor's (5) despair (1) district (7) door (1) 90:17
5:10,11;15:13;39:18; 10:9 12:13;27:9;55:2,21; 73:15 elimination (1)
66:4 detail (1) 100:3,5;103:1 Dotson (15) 83:5
decide (2) 5:19 distrust (1) 7:23;8:3;50:2,3,8; Elrod (1)
11:2;64:15 details (4) 14:2 52:21;60:19;61:7;62:8; 3:15
decided (2) 56:8;62:3,12;85:4 doc (2) 87:3,9;89:24;94:4;95:1; else (4)
15:2,4 determined (1) 25:10;66:12 104:14 47:18;97:7,11;98:5
decision (6) 19:9 docketed (1) down (8) e-mail (6)
12:19;52:18;81:8,17; developed (1) 82:21 13:21;47:25;48:4; 36:14;38:17;41:20;
93:12;97:3 93:21 doctrine (2) 54:5;56:14;64:17;91:5; 57:21;68:4,13
decisions (3) D-H (1) 51:12,12 95:20 e-mailed (1)
26:7;93:14;95:9 32:7 document (63) downstairs (1) 36:17
declare (3) dialogue (1) 5:12,24;6:2,3,13,17, 104:23 e-mails (1)
22:3,4,7 21:1 18,19;7:1;8:2;9:5;11:13, drafted (1) 68:16
decree (1) dies (1) 15;12:11;16:20;21:7,8, 35:1 emotional (1)
26:20 93:23 12,13;23:6;24:4;25:14; due (1) 30:18
deeds (1) different (7) 28:19;36:9;38:15;39:6, 9:19 employ (3)
89:11 15:16;16:5;43:24; 9,11,14,17;42:1,2,24; during (2) 23:20;70:6;87:2
deem (1) 44:6;70:16;78:14;97:14 43:1,1,11,13,15,18,19, 35:16;50:15 employed (1)
89:12 difficult (1) 19,21;44:9,11,17,18,21; duties (7) 87:2
default (1) 5:21 57:5,8,14,16;58:12,16; 52:13,14;86:25;90:15, ended (3)
96:9 dire (3) 66:12;68:3,13;70:21; 18,21;98:7 11:11,11;16:5
defaulted (1) 36:22,25;38:22 74:22;94:13,15;96:3; duty (3) ends (1)
61:14 direct (5) 100:25;101:12 78:13,14;94:22 26:25
defend (9) 24:20;34:16;48:23; documents (4) enforcement (1)
7:24;30:13;58:22; 56:24;80:13 68:13;95:21;102:6; E 96:10
60:10,22;61:4;78:13; direction (2) 103:12 engaged (1)
80:5,6 76:1,3 Doe (74) earlier (2) 63:15
defense (3) directly (3) 3:14;6:5;7:5,10;8:19; 7:20;100:13 engineered (1)
10:6,7;80:13 15:5;28:5,11 11:14;12:2;13:21;14:8; early (8) 10:25
delay (2) disagree (5) 17:3,11;21:9;28:1,6,24; 7:6;35:3;49:4;59:4,5; enough (4)
9:1,2 12:18;14:9;15:15; 29:16;45:18;46:23; 67:6,7;89:22 66:17;91:4,17,18
delicate (1) 55:12,13 47:12,13,17;49:1,3,18; easier (1) enrich (1)
97:19 disagreement (2) 50:3,7,19;51:8,13,20,24, 98:13 10:25
deliver (2) 88:13,19 25;52:6,10,17,20;54:23; easy (1) enter (6)
89:11;96:3 Disciplinary (1) 60:9;64:9,18,21;75:8,11, 31:4 23:13;24:5;26:19;
demand (4) 33:10 16,18;76:1;77:15,20,23, ECF (3) 69:11;73:5;86:15
8:17;29:25;64:12; disclosure (2) 25;78:6,12,20;80:4; 55:21;56:3,7 entered (4)
98:10 9:13;102:4 81:9;85:5,12,20,24; economics (1) 8:10;10:23;86:17;
demanding (1) discovered (1) 92:20,21,24;93:6,10,11, 79:3 104:13
98:9 21:4 13;94:13;97:2,4,5;98:8; effect (1) entire (3)
denied (1) discovery (3) 99:12;103:3,21 8:5 37:14,15;48:21
103:6 80:17,19;103:19 Doe's (10) effective (2) entitled (3)
denies (2) discuss (1) 7:24;14:12;21:10; 14:18;97:19 6:25;25:2;71:14
21:11;103:4 13:2 28:7,10;35:2;64:4;79:6; effectively (2) equal (1)
deny (3) discussed (3) 80:13;100:17 26:25;103:13 91:15
27:2;29:1;103:14 35:18,20;51:2 dog (2) effectuate (2) equitably (1)
depends (2) discussing (1) 46:10,12 5:18;29:4 96:12
77:14,19 6:4 dollar (1) effectuated (3) equity (8)
depo (1) discussion (4) 96:25 12:1;60:14;63:3 93:18,19,20,25;94:8,
29:19 5:7;27:14;58:20;74:16 dollars (27) egregious (1) 10,23;95:13
depose (2) discussions (4) 5:22;8:14;10:15; 50:13 Erler (10)
13:8,10 11:11;51:6;52:16;54:7 11:24;12:6;15:25;16:2, eighteen-year- (1) 6:4,11,16;8:6;9:5;
deposition (1) dismissed (1) 6;20:8;28:8,9;36:2; 29:16 17:17;18:14;35:3,12;
97:14 29:7 40:25;58:23;59:1;60:4, eighteen-year-old (1) 52:8
depositions (1) disparage (1) 13;77:6,7,10,10,24;78:1, 10:17 Erler's (1)
29:17 10:23 4,20;89:17;97:6 either (5) 20:5
describe (1) disparagement (1) done (17) 14:19;22:1;46:25; especially (2)
26:12 10:8 11:21;13:4;14:3; 83:1;84:4 28:22;29:14
designate (2) disputed (2) 18:18;25:10;58:10; eliminate (6) essence (1)
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SUPP APP 0844
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
16:20 69:7;72:13;73:3;83:10 faith (2) 104:8 95:23
establish (1) execute (1) 85:14,25 filled-in (2) foremost (1)
17:14 89:11 false (2) 6:13,17 94:22
established (1) executed (6) 10:11;103:24 final (5) forget (1)
19:22 6:13;14:24;31:11,11; familiar (2) 10:4;25:18;26:20; 93:22
establishment (1) 43:3;62:25 34:22;98:7 44:25;45:1 forgot (1)
25:16 exercise (6) family (1) finality (1) 21:12
estate (2) 23:12,13;86:15;90:18, 30:20 102:3 form (9)
19:17;94:22 21;98:7 far (9) finally (4) 18:14,15,16,17;27:19;
et (6) exercised (1) 16:10,13;20:2;34:5; 6:15;9:4;16:6,7 63:9,19;93:12;94:25
70:7;79:1;87:2,2; 86:17 61:15;76:8;96:12;98:21, financial (3) formally (1)
89:12,12 exercising (1) 25 59:22,23;96:3 9:6
ethical (1) 90:15 fast (1) find (4) formation (1)
53:5 exhibit (29) 77:16 5:17;28:18;89:20;98:5 29:5
even (12) 22:12,13;23:5,5,5; fault (4) finding (4) formed (6)
10:6,16,17,18,19,20; 31:8,9,12,20,25;36:7,19; 94:11,12,17,18 5:21;48:6,8,11 21:5,15,18;27:14;
21:7;26:23;30:15;42:9; 37:21;38:5,11;43:10,14; favor (2) findings (1) 99:17;101:15
51:23;102:22 57:4;65:13,19;66:19,22; 3:2,3 10:11 forms (1)
evening (1) 67:21;82:11,21;84:13, faxed (1) finds (1) 18:17
31:23 21;86:3;96:18 41:20 11:16 forth (2)
event (1) Exhibits (2) federal (8) firm (15) 18:15;22:16
41:24 31:5;32:7 7:15;15:5;27:9;55:2, 7:23;12:6;18:14; forward (3)
Everybody (6) exist (1) 21;100:3,5;103:1 49:15,21;53:4,14,15; 11:25;92:23;95:7
21:11;33:15;76:14; 6:17 fees (6) 63:2,2;97:3;101:3,3,5; fought (4)
81:13;91:13;98:20 existed (1) 11:23,23;30:5;76:25; 104:20 58:24,24;97:14,16
Everyone (8) 70:21 79:1;104:17 First (15) found (1)
7:13;8:7;10:2;13:2; existence (2) few (4) 10:9;12:16;17:14; 100:16
61:20;90:23;94:6;105:1 63:5,6 7:20;19:11;23:4; 21:25;29:25;31:3,5; four (4)
everyone's (1) exists (2) 104:24 53:2;57:20;61:5;65:8, 29:17,22,24;97:13
94:7 11:13;28:14 fiduciary (8) 22;92:9;94:22;99:8 frame (1)
evidence (9) expecting (1) 52:13,14;90:13,15,18, five (3) 65:23
3:21;13:17;32:8; 95:23 21;98:7,24 63:18;76:21;92:1 frankly (7)
50:17;81:3;84:20;91:8, expedited (1) fifth (2) five-minute (1) 8:5;19:20;21:1;47:21;
10;100:22 11:5 25:1;71:13 91:11 52:12;96:22;97:7
evidentiary (3) expenses (1) fight (3) fixing (1) fraud (1)
13:6,12;95:24 24:17 46:11,12;59:1 95:25 102:23
exact (1) explain (3) figure (1) flat (1) free (3)
89:18 6:6;40:19;58:12 54:24 103:23 12:12;13:15;80:18
exactly (4) explained (1) figuring (1) Flemish (1) frequently (1)
5:20;13:12;41:22;93:7 27:22 101:1 33:21 58:10
examination (8) extent (5) file (10) flip (1) Friday (4)
33:20;34:16;36:25; 17:11;72:21;73:8; 9:13;20:20;24:2; 36:10 5:3;31:23;33:3,3
47:9;48:23;55:18;56:24; 84:13;85:23 26:11,19;43:4;55:25; focus (4) friend (1)
85:1 62:20;82:18;83:7 16:8;19:1;20:7;40:23 30:20
examine (1) F filed (17) follow (1) front (8)
39:13 4:1;7:14,14;8:21;9:4, 22:12 7:9;9:8;12:22;37:12,
examined (1) fact (10) 11;21:19;25:15;27:12; followed (1) 13;80:17;81:12;82:9
39:11 10:12;11:9;26:22; 30:23;31:22;33:3;36:12; 5:16 frustration (1)
example (4) 27:6,13;54:11;65:21; 62:18;99:20,22;103:15 following (3) 95:15
16:17;41:3;69:6;78:13 85:19,20;103:22 filing (6) 16:8;40:23;52:13 full (4)
excellent (1) facts (4) 23:7;38:7,11;43:6,15, follows (3) 6:17;13:12;66:12;
47:19 12:20;33:11;50:13,15 16 37:19;38:3;92:15 73:22
except (4) factual (1) fill (16) follow-up (2) fully (7)
22:16;30:12;86:25; 14:10 6:7,10;11:22,23; 42:20;47:7 6:12,12,13;21:13;
104:15 failed (1) 16:14;42:5,13;44:18; Fontaine (26) 62:24;101:11,12
exceptionally (1) 62:6 45:4,5,5;95:19,21;101:1, 3:13,13;14:7,7;17:24; fun (1)
9:9 failure (1) 4,6 18:3,6,9;35:3,11;52:8; 33:17
excess (2) 104:6 filled (24) 53:2,9,11;54:16;63:24; fundamentally (1)
77:25;78:3 fair (3) 6:19;7:1;12:25;16:18, 64:1;65:2;90:4,5,7;91:1; 93:17
excluded (1) 13:12;66:17;91:17 19;17:18,20;18:3,4,4; 97:12;98:19;99:1,2 funding (1)
4:3 fairly (6) 20:2;21:13;41:7;42:9; force (1) 96:4
Excuse (8) 21:15;22:19;24:18; 44:15;45:6;63:2;83:23; 93:13 further (11)
3:9;55:2;66:3;67:20; 25:13;26:10;47:3 84:3,5,9;94:20;100:15; forced (1) 38:22;47:5;54:16;
Min-U-Script® eScribers, LLC | (973) 406-2250 (6) establish - further
operations@escribers.net | www.escribers.net
SUPP APP 0845
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
55:16;65:2;71:14;84:10; 62:20;67:19;100:16; 54:13 honest (1) identify (3)
90:3;91:7,10;101:10 101:2 held (2) 83:19 96:21;101:2,2
guidance (1) 8:9;17:4 honestly (4) ignore (1)
G 11:17 help (2) 18:13;42:3;47:16;52:8 21:22
guided (1) 65:17;93:25 Honor (130) III (3)
Gainfully (1) 93:11 helping (1) 3:6,9,10,13,17,23;4:5, 48:17;69:12,19
46:10 gun (1) 17:14 7,13,16,21,25;5:13;6:6; important (4)
gaining (1) 13:17 hereby (2) 9:11,15;10:23;11:2,3; 22:25;27:21;94:12,14
12:13 gutted (1) 32:7;84:20 12:4,14,16,22;13:6;14:7, impossibility (2)
game (1) 22:21 herein (1) 15;15:22;20:13;21:3; 93:19;95:14
20:16 gutting (1) 22:16 22:10;23:7,15;24:1; impossible (2)
gamesmanship (1) 25:14 herpes (1) 25:19;26:8,18;29:1,8,10, 93:22;94:1
103:10 guy (2) 29:21 13,16;30:3,6,11,15;31:5, Inc (1)
gave (3) 45:10;66:16 Hess (1) 7,8,19,25;32:9,11,16,19, 34:21
18:14;19:2;50:15 86:2 21;33:2,5,16;34:1,4,15; incidentally (1)
generally (2) H HESSE (79) 36:4,19,21;38:23;39:12; 99:20
50:16;90:13 3:9,10,23;4:16,18; 41:17;42:16;44:10;47:5, include (1)
gentleman (1) hah (3) 14:4;20:12,13,13;23:9; 23;48:1,16;50:21;51:15, 77:2
16:3 93:15,15,15 29:9;30:3,6;31:7,10,13, 18;52:25;53:3,9;54:6,13, included (3)
gets (2) Hail (1) 16,25;32:3,11,19,24; 16;55:16;56:10,17; 35:6;36:12;70:13
28:9,10 3:15 33:1,8;34:1;36:21;37:1; 63:22;65:2;72:8,20; including (1)
Ginsberg (4) Hale (1) 38:22,25;39:3,12;41:16; 73:7,13,15,19,24;74:7, 71:15
10:9,13,15;59:7 93:15 42:17,19;44:10;47:5; 20;76:8,16,19;78:9; incorporate (1)
girl (2) half (1) 50:21,23;51:4,15;53:2,3; 80:14,21;81:1,5,10; 71:20
10:17;29:17 51:10 54:6,13,18,20;55:16; 84:10,12,17,22,25;90:2; incorporated (2)
given (2) hand (4) 56:10;65:3,5,12,16; 91:1,6,7;92:11;93:17; 26:4;99:18
28:1,3 30:7;61:9;77:9;78:6 66:22;69:25;73:15; 94:9;95:4,13;96:10,17; Indeed (1)
goes (8) handled (1) 76:19;80:20,21;81:5,7; 97:12;98:3,15;99:2,4; 99:8
16:10;21:23;76:8; 35:15 84:10,16,22;86:4;90:3; 103:18;104:2;105:3,5 indemnify (1)
96:16,21;97:1,7,11 handling (1) 91:2,4,9,10,13,17,23,25; Honor's (6) 78:14
good (13) 35:13 97:11;99:3,4,8;103:16; 10:4;12:17,19;24:20; indicated (5)
3:6,9,10;20:13;85:14, handwriting (2) 105:5 97:15;98:20 29:22;68:19;99:11;
24;92:6;97:6;99:4,5; 68:7,8 hey (1) hope (2) 101:16,23
102:3;104:3,4 happen (2) 61:6 21:23;92:12 indirectly (1)
good-looking (1) 27:11;96:5 hidden (1) hoped (1) 26:24
48:11 happened (12) 61:19 8:23 individually (1)
governance (6) 20:3,6;28:17;30:24, hide (1) horrific (2) 15:13
12:11;22:20;25:10; 25;40:22;41:12;42:22; 60:9 103:3,4 infer (1)
63:20;102:20;103:8 61:3,9;103:3,20 highest (1) hospital (1) 96:15
governed (1) happens (1) 54:4 30:19 inform (2)
93:4 96:2 highlights (1) host (1) 49:23;59:9
granted (2) Hardt (15) 100:2 103:14 information (2)
7:19;11:3 6:24;7:11,20;11:22; highly (1) hot (1) 19:10;74:2
grants (1) 13:1;18:4;56:6;61:15, 11:8 80:17 informed (2)
95:5 16;83:11;84:5,8;94:6, himself (2) hotel (2) 52:18;54:9
great (1) 25;104:17 11:16;88:9 10:19,21 inherent (2)
82:1 Hardt's (2) hire (8) hotly (1) 27:23,24
greater (2) 83:14;104:17 8:7;41:10;58:22;61:6, 97:16 initially (1)
35:23;36:1 hate (2) 10;94:4,6;104:15 hourly (3) 29:22
Greg (2) 48:3,3 hired (12) 83:15,16;97:5 input (8)
3:10;20:13 head (1) 7:11,23;14:21;27:8,8; house (1) 35:14;76:5,6,7,12,15;
grounds (1) 17:24 29:23;56:6;62:8,9;80:6; 93:24 92:22;94:2
80:14 header (2) 89:24;104:14 huge (1) insofar (1)
group (1) 43:22,23 hiring (1) 16:6 86:25
19:23 hear (4) 18:20 human (1) instance (3)
groups (1) 12:4;31:1,12;97:10 hold (3) 96:22 17:14;30:25;72:23
18:23 heard (3) 19:23;41:15;69:9 humble (1) instead (2)
Gruber (8) 34:7;103:25;104:1 holders (1) 93:17 11:4;35:6
3:15,15;4:7,8;29:10, hearing (11) 14:13 Hurst (1) insurance (18)
13;30:4,9 4:24;13:6,12;30:14; holes (1) 3:15 6:23;7:11,13,21;9:23;
grueling (1) 40:7,9;49:23;80:24; 100:14 20:23;23:16;42:10;
97:13 92:13;95:24;99:7 home (1) I 46:21;49:15,21;52:21;
guess (4) hearsay (1) 30:19 53:13,18;61:16;83:14;
Min-U-Script® eScribers, LLC | (973) 406-2250 (7) Gainfully - insurance
operations@escribers.net | www.escribers.net
SUPP APP 0846
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
84:3;103:5 ironic (1) 19:15,16 80:1 Lindauer (41)
insured (1) 93:9 justice (1) Laura (3) 3:17,17;4:2,3;6:2,4,6;
30:13 irony (2) 10:14 3:13;14:7;35:11 8:5;15:22;16:23;17:1,
intend (1) 92:12,15 law (9) 19;18:1,5,7,12;20:11;
5:2 irreconcilable (1) K 7:23;10:12;12:6; 33:5,8,12;34:4,7,12,15,
intended (4) 10:1 93:18;101:3,3,5;102:10; 18,20;36:6,21;37:2;
39:23;51:25;52:7; issuance (1) keep (3) 103:14 39:17;42:20;47:7,24,25;
93:10 96:4 30:16;46:13;92:10 lawsuit (3) 48:1,3;57:24;68:5,17;
intent (1) issue (11) keeping (2) 49:1;50:4;54:2 75:7;100:25
102:3 7:21,25;11:19;12:17, 3:2;23:1 lawyer (17) line (3)
intentionally (2) 18;17:6;19:13;51:16; Kevin (1) 9:17;13:23;30:13,14; 25:1;57:22;71:13
9:3;10:13 53:5;60:16,17 3:10 34:10;48:14,25;53:5; liquidating (1)
interest (9) issues (11) kicking (1) 54:3;57:25;59:15;72:23, 66:2
10:1;12:10;13:2,11; 5:2;11:1,1,7;13:7,15; 103:22 25;74:16;78:11;80:24; list (3)
20:25;25:7;28:14;30:12; 16:9;19:19;28:18;57:13; kids (1) 104:4 4:1;31:20;32:20
93:4 63:5 30:20 lawyers (4) listed (3)
interesting (3) kind (16) 9:14;58:22;59:2; 32:20,25;33:1
88:17;89:10;100:23 J 3:5;4:22;18:18;19:5,6; 104:16 listened (1)
interestingly (1) 20:15;21:11;22:24; lead (2) 76:13
24:1 Jane (30) 26:13;76:7;85:23;93:2, 39:18;49:8 listening (2)
interests (2) 3:14;7:5;14:8,12;21:9, 3,3,4;100:1 least (2) 21:1;96:12
15:7;88:18 10;28:1,6,7,10,24;35:2; king (1) 5:7;85:11 litigate (1)
internal (1) 64:4,18,21;75:8,11; 93:22 leave (2) 27:9
63:20 77:15,20,23,25;78:6,12, knew (12) 11:4,10 litigated (2)
internally (1) 20;79:6;80:4,13;81:9; 7:10,20;8:8,8;17:6; leaves (2) 64:5,17
93:4 98:8;103:21 20:1;42:9;50:5;56:6; 11:10;97:18 litigation (16)
interpretation (2) Jeff (1) 68:23;70:20;72:17 leaving (2) 11:12;15:5;35:13;
26:13,13 35:11 knowing (1) 17:3,9 59:2;63:15,18;64:13;
interpreted (1) job (1) 73:22 led (1) 80:4,5,17;81:3;84:3;
103:12 47:20 knowledge (3) 30:11 92:22;100:3;103:2;
intervene (2) Johansen (1) 63:10,11;86:19 left (1) 104:22
15:4;27:8 3:15 known (1) 104:7 little (6)
intervention (1) Johnson (5) 102:16 legal (7) 21:2;30:18;35:14;
14:1 12:6;15:12;35:12; knows (5) 48:17;51:15;72:8; 43:21;66:16;84:12
intimate (1) 59:14,17 81:14;93:10,19;94:6; 74:20;78:10,11,15 lives (2)
95:2 Johnson's (1) 98:23 legitimate (1) 94:16,17
into (33) 12:6 12:10 loan (1)
18:23,25;19:4;23:13, jointly (1) L lengthy (1) 16:3
16;24:5,7;26:4;27:9; 50:11 26:10 lodge (1)
29:19;32:7;51:2,6; Joyce (4) lady (1) less (3) 78:15
52:16;54:6;56:8;59:16; 3:17;4:2;33:5;34:20 30:18 25:22;83:2;91:20 logically (1)
60:8;62:3,12;67:11; Judge (45) language (4) letter (1) 85:14
69:11;72:24;73:5,22; 5:6;7:6,15,19;9:8; 8:1;70:16;74:14; 64:12 long (7)
84:20;85:4;86:15,17; 10:9,13,15,22;11:2,3,6,7, 102:16 letters (1) 3:4;48:4;52:13;57:25;
88:25;102:14;103:10; 20,25;13:16;15:5;26:10; largely (1) 30:16 58:2;91:21;104:3
104:13 30:23,23;41:7;50:12,14, 4:23 leverage (1) longer (4)
invading (4) 15,16;55:21;56:15; larger (3) 12:13 15:6,19;22:22;58:1
72:21;73:9,17;74:1 58:13;59:7,9,24;80:18; 17:6;18:25;19:3 liability (1) look (18)
invalid (1) 81:12;88:9;93:7,14,15; largest (2) 55:10 16:5;39:17;66:5,7,9,
9:23 94:5;96:22;98:14; 12:5;17:4 licensed (3) 10,18;71:4,11;82:11,19;
invert (1) 101:23;102:2;104:3,3,23 last (16) 32:14;34:10;48:14 88:17;89:19;93:15;94:9;
23:22 judges (1) 4:21;5:13;19:11; life (1) 95:13,14;96:18
investigate (1) 10:8 20:15;22:15;29:14; 48:21 looked (7)
62:13 judgment (3) 37:22;57:7;62:2;67:1, lifted (2) 10:13;67:7,16;68:15,
invitation (1) 8:11,17;15:4 23;82:13;89:19;92:9; 7:7;14:15 22;94:23;96:19
8:18 judicial (1) 100:19;103:17 light (1) looking (2)
invoke (2) 65:12 late (4) 74:14 31:16;67:18
3:24;34:2 July (5) 20:16;65:24;67:6; likely (1) loses (1)
involved (7) 7:6;14:17;59:4,5,6 89:22 53:16 104:19
5:9;17:14;59:2;61:20; June (8) later (7) limit (1) losing (1)
63:12;84:8;102:18 7:8,14,19;49:9;55:25; 5:21;8:21;9:22,24; 35:25 96:15
involvement (1) 56:5;59:6;89:22 102:9;103:22;104:8 limits (1) lost (7)
35:1 jurisdiction (2) latter (1) 51:20 10:12;33:15;60:24,25;
Min-U-Script® eScribers, LLC | (973) 406-2250 (8) insured - lost
operations@escribers.net | www.escribers.net
SUPP APP 0847
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
61:1,2;92:13 10:20 50:11;96:25 moved (1) ninety-nine (1)
lot (4) mean (13) mind (5) 50:5 7:10
33:2;40:24;66:15; 3:5;18:19;22:9;27:1; 47:12;63:3;69:13; Moving (2) nobody (1)
89:20 35:19;43:3;52:12;66:11; 73:2;79:4 23:21;80:17 98:21
luck (1) 78:10;80:5;102:22,24; minds (5) much (6) nobody's (1)
15:11 103:5 100:24;101:9,13; 6:25;15:11;17:6; 21:13
ludicrous (2) means (5) 104:1,6 62:21;91:20;95:8 nonappealable (1)
93:1,2 11:12,21;21:24;22:25; mine (1) multiple (4) 10:4
100:4 31:16 8:15;41:12;54:1;59:17 None (4)
M mechanism (2) ministerial (3) Munsch (18) 17:9,10;56:21;95:17
71:8;83:6 19:21;45:4;104:9 6:24;7:11,20;11:22; nor (1)
ma'am (2) mediate (1) minute (1) 13:1;18:4;56:6;61:15, 102:10
90:9;97:7 54:5 80:9 16;83:11,13;84:2,5,8; note (4)
makes (1) mediated (1) minutes (3) 94:6,25;104:17,17 26:18;37:15,16;73:18
89:23 61:23 91:12,14;92:2 must (1) noted (3)
making (6) mediation (22) miscarriage (1) 13:8 26:11;100:4;102:2
9:22;19:1,3;20:8; 8:18,19,20,24;11:11; 10:14 notice (5)
93:12;100:6 24:3,5,7;62:2,5,22; missing (2) N 9:11;45:6;65:13;
manner (1) 73:22;74:10;76:13,16, 42:5;69:25 90:23;105:1
75:22 17,18;85:4;99:21; misstates (1) name (4) Notwithstanding (1)
many (8) 102:14,17;103:21 73:24 34:18,20;48:17;95:7 99:11
11:20;13:24;58:4; mediator (2) mistake (2) names (1) number (8)
94:12,13;96:1;99:16; 85:21,21 12:24;13:18 45:5 8:12,13;16:15;22:13;
104:7 meet (1) modification (9) narrow (1) 27:13;35:1;71:3;82:9
March (4) 85:9 26:9,25;29:2,6;72:6, 13:15 numbers (2)
65:10,24,24;67:7 meeting (5) 11;96:1,10;103:13 nature (1) 8:11,12
Marshals (1) 100:23;101:9,13; modified (2) 78:15
13:20 103:25;104:6 7:2;45:24 necessarily (2) O
master (1) meetings (1) modify (8) 14:1;51:2
10:2 8:15 21:20;25:2;26:16,23; necessary (5) oath (2)
material (19) member (15) 27:16;71:15;101:20,25 52:12;85:15,24;89:12; 32:18;34:14
16:21;19:21;22:20; 17:2,4,15;20:5;21:10; moment (2) 90:5 object (18)
26:3,14,25;29:2,5;33:11; 41:11;45:19;53:23;75:8, 24:21;65:11 need (9) 28:1;30:6;32:2,11;
35:20;45:7;69:24;72:5, 12,15,18,20,23;95:1 money (12) 11:23;15:6;33:24; 33:8,11;38:25;39:5;
11;96:6;100:10;104:1,5, members (5) 5:17,20;16:3,7;24:15; 41:14;72:17;73:4;94:4; 72:8,20;78:10;79:6,8,14,
8 15:1,8;19:17;41:12; 41:1;58:22;60:5;89:3,4, 95:16,17 16;80:14;102:7,7
matter (12) 53:4 5;104:13 needed (7) objecting (2)
30:7;49:10;51:16,16; membership (1) months (6) 14:24;16:16;40:25; 13:9;64:6
53:6,7;88:12,14;93:18; 53:18 9:22,24;12:1;15:24; 45:6;87:8;96:13,13 objection (23)
94:8;95:16;97:9 memory (1) 16:8;102:8 needs (4) 5:3;7:21;9:14;20:17;
matters (4) 65:9 more (13) 21:23;47:20;94:6; 26:10;33:4;39:10;49:18,
12:21;24:13;25:17; mention (2) 5:1,19;10:6;13:2; 95:25 20;50:7,23;51:15;53:4;
88:19 11:8;40:6 19:21;28:21,22;58:24, negotiate (2) 54:6,12,13;73:21,24;
maxims (1) mentioned (3) 25;60:16;94:12,13; 40:1,9 78:15;81:1,10;84:19;
95:13 5:13;20:15;24:1 96:12 negotiated (6) 101:16
may (50) merely (2) moreover (1) 11:15;14:18;35:7,10, objections (3)
4:12,13,15,16,17;5:23; 26:24;96:10 80:16 11,21 7:12,25;8:8
6:22;9:11;23:12;25:20; merits (1) morning (6) negotiations (3) obtain (1)
32:17;34:13;36:3,5,21, 5:6 3:6,9,10;20:13;92:6; 35:16;50:24;100:16 80:17
24,24;40:6,7,20;41:22; mess (4) 99:5 neighborhood (1) obtained (2)
42:10;44:6;47:25;48:18; 16:6;29:3,3,14 most (4) 8:13 15:4;89:17
55:13;56:14,16,23; messy (1) 30:22;50:13;53:16; net (4) obtains (1)
58:16;67:19;68:5,10; 104:22 90:13 24:17;76:24;77:3,5 76:22
70:9;71:25;73:18;74:21; might (8) motion (24) next (7) obviate (1)
78:12,17,24;79:20;80:3; 5:19;15:12;16:19; 4:23;5:4;7:15,18,19; 15:24;24:11;30:1; 62:23
81:13,14;82:25;89:12, 59:9;65:17;69:23;97:24, 8:21;9:4;21:19;22:1; 56:16;67:17;70:9; obviously (2)
22;91:5;98:16;102:16 25 24:2;25:21;26:12;27:12; 104:24 13:18;65:24
maybe (12) Mike (2) 29:2;31:2;55:25;62:18, nice (1) occupation (1)
19:5;29:5;62:11; 3:14;4:7 21;72:1;76:9;83:1; 10:20 90:11
65:10,24,24;93:14; million (10) 99:20,22;103:14 night (2) occur (2)
95:22,22;100:12,17; 8:14;10:15;28:7,8,9; move (5) 89:19;95:20 14:17;46:6
101:14 77:6,7,23;78:1,4 31:5;34:5;35:4;36:19; nineteen (1) occurred (1)
meal (1) million-dollar (2) 96:8 96:24 101:25
Min-U-Script® eScribers, LLC | (973) 406-2250 (9) lot - occurred
operations@escribers.net | www.escribers.net
SUPP APP 0848
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
October (5) 81:24 19,20;41:21;44:3;57:7,7, 86:8 23:5,6;25:15;26:4,5,9,
6:15;8:18,20;61:25; options (1) 17,22;58:7;67:23;68:20; Pause (3) 13,15,17,21,22;27:25;
62:5 13:25 69:25;70:9;71:3,4,18; 33:14,25;83:20 28:14;29:2,6;30:14;
off (6) oral (1) 72:14,15;82:13,21;84:1;pay (3) 34:22;35:1,6;36:12;
16:12,12;18:21;43:8; 4:23 86:2 19:2;24:17;30:4 38:1;39:24;40:2;41:1;
98:12,13 order (27) pages (1) paying (2) 43:8;58:13;60:13;65:14;
offense (1) 5:18;6:23;7:3;10:4; 37:24 18:24;30:10 66:4,13;67:7;79:2,17,21;
56:20 13:20;16:15;17:2;20:2; pagination (2) payment (1) 82:8,9;88:12,14,19;
offer (6) 22:4,8;25:20;27:8;41:2, 41:17;57:13 30:1 92:17;95:11,19;96:1,2,7,
50:19;51:8,13,20,22; 8;45:24;46:3;64:3; paid (8) payments (1) 10,11;97:17,20;99:18,
64:9 65:13;83:1;96:18;98:4, 6:25;19:1,4;20:9; 19:3 22;100:14,17;101:20,24;
offering (1) 4,5,15,17,20;102:24 66:18;76:25;95:8;101:4 people (8) 102:1,2,5,9;103:12,13;
96:3 ordered (1) palatable (1) 21:21;54:4;85:11; 104:5
office (2) 11:5 13:25 93:25;95:11,16,21;99:16 plans (3)
37:4,11 orders (1) papers (3) per (2) 11:20;101:17;104:7
often (1) 98:23 19:12;82:18;83:8 35:18;91:12 play (1)
67:12 originally (2) parade (1) percent (3) 29:19
old (1) 17:22;35:3 93:24 7:10;76:22;97:4 played (1)
29:17 others (1) Paragraph (2) percentage (3) 30:20
omissions (1) 31:18 66:20;67:20 28:2;76:25;77:2 pleading (1)
104:5 otherwise (2) Pardon (4) perfect (2) 30:22
once (8) 13:14;22:16 52:4;70:24;81:5;84:7 104:2,2 pleadings (1)
7:6;19:5;23:4,24;25:5; out (25) part (6) perform (3) 55:23
29:23;77:23;101:24 6:13;17:18,20;19:4; 27:17;28:15;36:12; 23:13;86:15;89:10 please (12)
one (66) 21:13;25:13;28:18;31:4, 57:20;93:16,20 performance (2) 11:20;32:12;34:18;
7:3;11:19;12:9,14; 8;32:1;33:22;35:5; participant (2) 93:20;95:15 36:7,10;37:21;41:24;
14:6;15:11,13;16:20; 41:18,18;42:23;54:24; 15:20;17:8 performed (1) 48:10;57:4;86:4;92:6,8
17:2,17,17,19,20,21,21; 66:12;72:2;89:13,20; participate (4) 86:17 pm (1)
19:6;24:24;25:13,18; 92:12;98:2,25;100:16; 8:19;39:20;99:21; permission (1) 92:4
27:13;28:25;31:8,9,25; 102:8 105:1 22:6 point (29)
41:11;43:7,8,23,24;47:7; outside (1) participated (1) person (10) 15:6,10,13,19;25:13,
55:1,5;60:8;61:10,13; 81:2 17:11 7:3,4;16:4;22:2,3; 18;32:3;36:23;39:5,6;
63:1;65:11,16;68:19; over (18) particular (7) 42:6,8;79:13,15;92:19 41:13;42:5,11;52:14,18;
69:9;70:2;72:4;74:8; 8:9;16:7;18:14,19; 27:25;46:11;55:10; personal (1) 54:9;60:6,18;67:16;
77:16;78:18;79:14,25; 19:11,16;21:7;23:21; 64:21;66:18;99:14; 97:19 71:6;92:12;98:3,20;
83:9;84:6,8;87:13; 24:11,25;28:25;32:13; 100:7 personally (3) 99:9;102:3,18;103:9,25;
88:17;89:14;93:10,23; 40:13;41:20;67:22;70:9; parties (13) 7:9;16:3;49:7 104:10
94:2,3,11,16,17;99:8,9, 71:1;90:20 3:25;11:20;12:22,23; persons (2) pointing (1)
25,25;101:10;103:19 overruled (11) 14:1,5;21:7;85:15; 17:12,13 69:13
one-member (1) 4:10;30:8;33:13;51:5; 93:21;96:11;97:8; perspective (1) points (3)
45:18 53:8;54:15;72:10;74:8, 101:17;102:6 22:24 14:10;80:25;103:18
ones (1) 21,21;76:10 parties-in-interest (2) ph (1) point-something (1)
101:20 overruling (2) 4:11;28:23 69:23 96:24
only (16) 31:2;34:3 parties-of-interest (2) phone (4) policy (8)
9:3;12:9;20:22;25:21; overseeing (2) 26:6,6 32:22;40:24;58:24,25 9:23;10:24;20:23,24;
27:12;40:7;73:8;79:14, 22:23;28:16 partner (2) phrased (1) 23:16;46:21;51:20;
15,15;95:18;99:19,22; oversight (7) 4:7,8 11:19 103:5
100:19;102:23;104:14 22:18;26:1;27:19; parts (2) pick (2) position (5)
opened (1) 67:3;71:20;82:5;98:8 57:18,19 55:5;99:12 14:11;54:24;92:13;
73:15 owe (1) party (2) piece (2) 94:1;97:19
opening (4) 55:9 56:9;79:5 77:6;80:17 positive (1)
50:15;99:25;100:1,21 own (4) pass (4) Pizza (6) 80:1
opinion (1) 15:7;16:18;47:12; 42:16;52:25;63:22; 3:1;7:16;18:21;34:21; possibly (1)
93:18 95:20 90:2 36:13;46:13 95:4
opportunity (1) owned (1) past (2) plain (1) post-confirmation (4)
39:7 7:17 102:22,24 102:16 20:7;57:2;67:12;96:8
oppose (1) Pastazios (10) plan (93) post-date (1)
14:22 P 3:1;7:16;8:13,14; 5:10,11,12,18;6:23; 95:21
opposed (1) 34:21;35:13;36:13; 7:1;9:13,14,21,25;10:24, posture (1)
41:12 page (39) 54:23;103:6,6 24;12:11;13:9,23;14:11, 9:10
opposition (1) 23:7,9,21;24:11,11; path (1) 13;15:23;16:1;17:22; potential (1)
7:18 25:15,15;36:10;37:13, 93:24 18:22;19:2,5;20:17,21, 28:13
option (1) 18,22;38:1,2,2,5,10,18, patience (1) 25;21:20;22:4,7,13,20; potentially (3)
Min-U-Script® eScribers, LLC | (973) 406-2250 (10) October - potentially
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SUPP APP 0849
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
14:25;15:9;27:24 74:1;76:17 providing (1) 98:8,11 89:16
power (1) privileged (1) 97:2 raped (1) record (9)
23:12 59:16 provision (4) 29:20 12:21,21;34:9,18;
powers (2) probably (10) 24:21;45:6;67:10; rather (3) 48:13,17;55:20;57:1;
23:10;86:25 16:8;24:24;43:4;52:9; 104:11 40:19;48:11;104:22 90:10
PPI (1) 79:25,25;94:16;98:7; provisions (13) reached (4) recoveries (1)
50:12 100:15;104:25 3:4;12:2;22:4,7;24:18; 8:25;59:20;83:13; 77:3
practice (3) problem (6) 26:16,24;27:17;69:3,10; 85:15 recovery (3)
32:14;34:10;48:14 7:21;27:3;29:23; 70:21;81:22;102:12 read (9) 28:2;76:22;77:1
preclusion (1) 100:6,6,20 public (1) 22:1;54:11;66:12; RECROSS-EXAMINATION (1)
3:24 problems (5) 12:21 71:11,17;72:2;86:25; 90:6
pre-date (1) 7:12;8:8;19:19;41:16; pull (2) 88:9;100:11 REDIRECT (3)
95:21 100:7 30:21;43:7 reading (2) 47:9;55:18;85:1
predating (1) procedurally (1) pulled (1) 19:12;103:11 reemphasize (1)
6:9 9:10 29:24 ready (1) 100:21
pre-engineered (1) proceed (3) purportedly (1) 78:13 reference (3)
10:11 3:21;4:12;98:21 31:11 real (6) 21:25;26:4;99:19
preferred (3) proceeding (5) purpose (3) 27:12;53:9;101:13,13, references (1)
81:21;82:2,4 12:15;59:2;61:12; 15:20;35:16;95:15 14,14 25:24
prejudice (15) 94:15;97:3 purposes (1) realized (1) referring (1)
13:10;15:1;47:18; proceedings (2) 89:13 100:11 55:4
93:3;94:24,24;95:2,4,5, 7:7;105:7 pursuant (5) really (31) reflect (1)
6,6,10,10;97:24;98:2 proceeds (2) 7:3;51:12;56:3;73:3; 3:25,25;4:22;6:15; 65:17
prejudiced (3) 28:8;77:5 99:17 9:17;10:6;11:16;13:16; refresh (2)
52:20;94:25;95:4 process (2) pursue (1) 16:5;17:5,11;18:16; 65:19,21
present (6) 9:19;82:15 46:15 19:5,12,13;20:3;21:14; refreshed (1)
3:7;37:2;80:8;81:11; product (2) Put (7) 29:20;35:18,19,20; 64:11
85:5,7 72:22;73:14 13:14;29:17;33:17; 47:19;52:14;54:4,24; refused (1)
presented (4) proffer (1) 37:12,13;97:8;98:10 77:16;93:10;97:13;98:9; 9:24
43:10,14,18;100:22 32:10 100:1,2 regard (1)
pressing (1) progressing (1) Q reason (14) 72:1
60:16 61:22 8:22;30:9;41:15; regarding (2)
pretty (3) proof (1) quandary (1) 43:12,23;46:5;56:5; 8:16;62:10
41:17;45:10;102:3 20:20 14:17 59:22,23;63:17;93:6,20; regards (3)
previous (1) proofs (1) quest (1) 95:18;102:1 23:3;25:11;72:13
99:11 64:6 21:21 reasonably (1) relate (3)
previously (1) proper (1) quick (1) 89:12 27:18;72:3;87:1
14:15 77:3 53:9 reasons (2) related (6)
prim (1) properly (5) quickly (2) 24:24;93:9 22:5;25:17;54:1;87:5;
81:25 21:18;27:5,8;63:3; 19:9;48:25 recall (15) 88:12,14
primarily (7) 101:15 quit (1) 9:11;15:23;39:22; relates (1)
18:17;20:7;28:3;35:2, proposal (2) 30:10 40:4,6;44:4,7;48:5;50:1; 23:24
12;46:23;53:12 22:21;85:21 quite (9) 53:25;57:18;59:14; relating (6)
primary (7) proposed (1) 5:20;21:1,3,17,19; 75:21;86:4;99:7 22:8;25:5;81:22;84:2,
17:12,13;18:15;40:23; 100:14 26:8;29:4;83:18;93:9 receive (2) 2;88:19
46:19,19;90:10 prosecute (1) quote (1) 76:21,25 relations (1)
principal (1) 94:7 26:10 received (4) 10:17
15:13 protect (2) quoting (1) 32:7;56:3;68:4;84:20 relevance (11)
principles (1) 15:7;94:21 22:3 receives (2) 5:5;8:22;30:7;51:19;
95:14 protection (2) 77:9,24 76:9;80:15,20;81:2,4,6,
printed (4) 23:17;27:17 R recently (1) 10
41:18,18;42:23;43:8 protections (1) 15:17 relevant (3)
prior (26) 27:18 raise (2) receptive (1) 51:4,17;53:6
23:11,12,19,22;24:11, provide (5) 53:3;96:4 59:13 reliance (1)
14,16;35:12;59:15;64:9, 6:23;7:1;20:24;23:17; raised (6) recess (3) 93:3
12,15;66:2;68:12;69:11, 27:17 5:3,5;9:8;13:7;28:20; 92:1,4;105:4 relied (6)
20;70:3,5,11;73:25; provided (7) 61:9 recitation (1) 26:7;54:10;92:16,17,
86:14,24;87:23;88:11; 6:14;18:13;22:11,16, raises (4) 14:9 17;103:23
89:2,6 18;62:25;71:13 21:15;26:17;29:6; recognize (2) relief (8)
private (1) provides (11) 100:22 36:9;57:5 5:4;14:10;15:15;
4:8 17:21;22:15;24:8,22; ramifications (1) recollection (10) 80:15;81:21;82:2,4;95:5
privilege (7) 25:11;27:18,19;70:5; 78:11 44:6;59:5;62:7;65:19, rely (5)
72:22;73:9,14,17,21; 71:6,8;82:25 rape (2) 22;66:1;67:4,18;68:16; 24:4;102:6,7,7,19
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SUPP APP 0850
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
remember (9) responded (1) 37:2,5,7;38:14;91:14 20:19 76:21;84:23;85:3;90:8;
5:19,20;17:1;18:22; 51:23 rooted (2) scheduled (2) 91:5;95:19;98:6,22,23,
23:15;56:7;64:11;69:6; response (5) 94:8,23 14:12;20:18 23;101:1,6,10,11;104:11
83:18 24:2;27:22;33:3; rubberstamped (1) scheduling (1) Seidel's (2)
remembered (1) 81:20;84:15 10:10 49:10 41:22;47:19
40:11 responsibility (4) Rukavina (82) scope (1) send (2)
remembering (1) 80:2;100:13;101:6,7 3:1,3,6;4:13,21;6:1; 56:11 30:13;64:12
41:21 responsible (10) 29:10;31:1,4,9,12,14,18, Scott (7) sending (1)
removal (2) 18:20,24;19:7;30:24; 19,22;32:9,21,25;33:2,5, 3:7;4:2;98:6,22,22,23; 30:12
25:19;82:24 42:6,8;53:12;64:6; 16,20,22;34:6,17;36:3, 101:1 sense (4)
remove (3) 87:14,15 19,23;39:15,16;42:16; screaming (1) 65:10;75:13;77:22;
82:17;83:6,8 rest (1) 47:6,7,10,23;48:4,8,19, 103:22 89:23
removed (3) 44:14 24;50:25;51:7,18;52:25; se (1) sent (7)
25:20;82:16,25 restate (1) 55:17,19;56:12,17,25; 35:18 6:1,2;8:17;26:5;40:20;
rent (1) 74:3 63:22;69:14,23;70:1; seat (1) 44:2;57:23
93:23 restaurant (1) 72:8,20;73:7,13,24;74:7, 97:21 sentence (4)
renting (1) 46:13 20;76:8,16;78:9;80:14; seated (4) 22:15;67:1;82:13,14
3:3 result (2) 81:1,10;84:11,12,25; 48:18;56:23;92:6,8 separate (1)
reorganization (6) 27:24;50:10 85:2;90:2;91:7,19,20; second (6) 58:8
20:25;22:14;26:5,9; resulting (1) 92:9,11;96:17,20,24; 12:5,20;33:7;57:21; serious (1)
66:4;101:17 47:18 103:16,18;104:25;105:3 68:20;69:9 92:22
repeat (5) results (2) Rukavina's (1) secondly (2) seriously (1)
52:3;55:6;74:23; 26:14;28:8 90:4 25:9;27:15 9:9
77:16;78:19 retain (5) rule (5) Section (18) serve (1)
repeating (1) 6:23;19:8,16;87:9; 3:24;34:2;81:3;93:18, 22:15;23:10;24:25; 15:6
73:2 96:21 18 25:16,20;26:23;27:16; served (1)
rephrase (3) retained (7) Rules (4) 66:20;69:7;71:2;72:13; 9:12
44:10;45:13;77:25 49:15,24;60:18;61:3, 33:10;76:18;94:9; 73:3;82:8,13,19;83:21; serving (1)
replacement (1) 16;94:25;95:1 103:8 84:1;86:4 10:18
49:24 retaining (4) ruling (2) Sections (6) set (5)
report (1) 49:21;50:8;52:21,21 84:13;104:24 25:2;70:2;71:15,20, 18:22;22:16;26:12;
62:15 retention (2) run (3) 23;72:2 50:13;104:25
represent (4) 8:3;61:15 14:24;18:19;33:22 seed (3) settle (19)
9:3;42:12;64:18;88:18 reurge (1) running (1) 5:17;40:25;58:22 23:23;24:5,9;27:19;
represented (7) 34:1 18:21 seeing (1) 50:19;51:8,9,20;70:10,
6:5;15:12;26:21;27:6; review (4) runs (1) 67:4 18;72:18;73:23;74:5,19,
48:25;64:24;101:11 66:3,6,8;68:21 17:18 seek (7) 25;87:22;88:2;102:14,
representing (2) reviewed (2) 13:8;59:9;76:7,12; 15
49:3;59:18 67:15,16 S 87:11;90:21;94:2 settled (2)
represents (1) revoke (1) seeking (8) 87:25;88:4
101:25 102:23 sailed (1) 5:4;11:17;26:24;27:2; settlement (12)
request (1) rid (1) 98:16 28:23;52:22;80:16; 8:24;11:11;25:4;
34:1 12:25 sale (1) 81:21 50:23;51:6;54:2,7;73:5;
require (1) ridiculous (2) 89:11 seeks (2) 74:9,10;75:2;102:14
24:19 30:22,25 sales (1) 14:10;15:16 sev (1)
required (3) right (41) 58:4 seem (1) 70:20
5:17;14:1;69:3 4:10,19;9:14;13:8,10; Sam (3) 67:10 seven (1)
requires (1) 15:17;17:25;18:1;19:5; 12:6;15:12;59:14 seemed (2) 102:8
70:3 28:1;31:18,24;32:12,15; same (9) 19:18;66:14 severably (1)
requiring (1) 34:5,11;37:20;38:6,24; 4:19;22:6;53:3,4,6; seems (1) 50:12
96:11 39:11;44:20,22;45:4,17, 58:3;74:7;85:21;95:11 78:23 several (2)
resignation (1) 23,25;47:14;58:15,17; sat (1) sees (1) 5:16;69:3
82:22 66:23;68:5,9,11;79:7; 93:10 26:2 sexual (1)
resolve (2) 85:12,16;87:19;91:9; satisfied (1) Seidel (65) 10:16
14:19,20 92:1;93:24;97:11 85:25 3:7,7;4:2;5:19;6:2,2,3; shaking (1)
resort (1) rights (8) saw (3) 7:11;8:2;10:1;11:14,16, 17:24
11:17 15:1;23:14;86:15,17; 17:21;66:12;104:15 19;13:14,22;16:7,11,12, shall (5)
respect (4) 88:20;96:2;97:25;98:2 saying (11) 17,17;18:18;19:24; 19:16;22:17;32:21;
5:5;58:18;60:1;88:18 rise (3) 10:10;12:24;27:11; 36:15,17;38:14,17;39:5, 71:14;96:20
respectively (1) 92:3,5;105:6 28:19;54:3;59:25;85:19; 6,7,9;40:21,24;41:4,13, sham (3)
6:5 role (4) 94:11;95:16;96:13; 21;42:4,4,12;44:2,15; 9:25;10:24;13:24
respond (2) 15:2;34:19;79:19,24 98:10 49:12,15,20,24;56:18, Shank (1)
29:25;30:1 room (5) schedule (1) 18,21;64:2;65:6;74:4; 3:15
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SUPP APP 0851
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
shape (4) smaller (2) 3:20;12:17;93:3;95:3, subsequently (2) 64:23
63:9,19;93:11;94:25 18:23;19:2 3 7:2;15:3 talking (1)
Sharp (3) smoking (1) start (1) substantially (5) 69:13
26:10;101:23;102:2 13:17 49:3 26:15,18,21,22;101:24 talks (1)
ship (1) sneak (1) started (3) substitute (4) 23:9
98:16 95:20 3:23;19:11,12 7:15,16,19;56:1 tall (1)
shocking (1) sole (5) starting (2) suddenly (1) 90:4
10:7 21:10;28:1;79:5,12,12 24:25;25:16 93:23 targeted (1)
shortly (2) solely (1) state (34) sue (2) 5:4
16:4;40:23 44:2 4:9;7:5,9,22,22;8:10; 24:12;88:11 Technically (1)
shot (2) Solis (17) 10:22;14:16,16;15:4; sued (1) 8:1
12:12,12 5:6;7:6,16,19;9:8; 28:17;32:15;34:9,10,18; 88:13 telling (1)
showed (1) 11:2,3,6,7;13:16;15:5; 38:2;48:14;49:1,9,23; suggest (5) 62:15
30:11 55:21;80:18;81:12;93:7, 50:6,12;53:23;55:2; 12:14,16;21:5;94:8; temporary (1)
showing (1) 14;104:23 58:13;59:2,3;60:1,3,18; 103:23 39:8
30:12 Solis' (2) 64:9,13;80:23;94:4 suggested (1) ten (6)
Shults (4) 30:23;98:14 statement (4) 99:10 91:12,14,18,18,22;
7:17,18;13:9;103:20 somebody (2) 9:13;99:25;100:1; suggesting (2) 92:10
side (3) 90:13;98:5 102:4 21:21;104:2 term (7)
91:12,13,15 somebody's (1) states (2) summer (1) 22:19,20,25;35:20;
sig (1) 46:15 67:1;71:13 56:9 76:24;77:3;96:6
67:25 somehow (10) status (1) summer's (1) terms (19)
sign (11) 9:25;10:2,12,13,14,15, 64:4 61:22 16:5,21;19:21;20:21;
16:12;36:14;37:11; 25;12:13;92:25;98:12 stay (2) supervising (1) 21:6,8,20;23:3,4;27:16;
39:6;42:24;44:17,20; someone (3) 7:7;14:15 98:22 41:3;45:7;73:3;74:17;
57:8,10;68:3;100:25 22:25;27:4;61:13 stayed (1) suppose (1) 75:3,5;99:18;100:10;
signatories (1) sometime (1) 98:2 98:12 102:9
101:8 65:25 steamrolling (1) supposed (3) testified (4)
signature (19) somewhere (3) 61:12 8:2;23:2;58:21 60:19;75:7;79:16;
36:10;37:18,18;38:2, 21:13;97:7;101:12 step (6) sure (30) 101:10
2,18,19,20;41:21,22; soon (1) 47:25;56:14;60:8; 19:1;20:8;21:14;23:1; testify (2)
44:3;57:7,8,17,22,22; 50:5 79:17;91:5;101:10 27:14;32:23;40:15; 74:21;84:23
58:7;67:25;68:20 sooner (1) step-by-step (1) 41:25;42:9,21,22;43:2, testifying (1)
signed (41) 62:21 104:12 25;45:11,14;46:2,4,17; 56:19
5:24,25;6:2,16,17,18; sorry (11) still (8) 47:2,8;64:14;65:18; testimony (2)
9:6;16:12;36:17;37:3,4, 16:23;31:16;34:4; 5:25;29:21;42:1,2; 67:14;78:9,23;82:3; 13:15;32:10
4,12;38:14;39:8;40:20; 43:14;59:6;72:14;74:23; 43:2;97:16,17;99:5 85:10;100:14,18;104:23 Texas (5)
41:14,14,19;42:3;43:5, 76:11;78:19;90:4;99:5 stipulate (2) Surety (3) 32:15;33:10;34:10;
11,15,19,20,21,24;44:11, sort (2) 31:7;32:4 3:11;4:1;20:14 48:14;76:18
18,22;57:10,11;58:5; 19:6;40:25 stocked (1) surprised (1) thanks (1)
65:21;68:10,23;70:21; sought (2) 3:4 19:12 20:11
79:22;84:24;94:19; 76:5,5 stood (1) Sustain (1) That'd (1)
100:9 sounds (3) 9:14 33:4 91:13
significant (7) 12:17;68:9,11 stop (1) Sustained (6) thereafter (4)
17:6;21:6,16;24:6,18; speak (5) 59:3 51:19;54:8;73:20,20; 8:16;14:20;19:9;62:2
25:14;26:8 86:10,12,20,23;88:10 stopped (1) 81:4,6 There'd (1)
signing (3) speakers (1) 37:11 swear (2) 56:7
37:9;39:9;68:21 99:11 Stowers (4) 34:8;56:19 third (1)
simple (1) specifically (2) 8:17;51:1,11,12 swim (1) 13:5
45:10 67:1;71:20 straightforward (1) 66:15 thirty (1)
sit (9) spent (1) 19:22 sworn (1) 58:1
13:21;44:1;52:1,7,10; 15:24 stranger (1) 56:22 thirty-minute (1)
54:5;93:13;94:3;95:20 split (1) 95:23 99:6
situation (2) 18:23 strict (1) T Thomas (2)
11:16;93:19 spoke (1) 76:18 3:6;32:10
size (2) 12:5 stuff (1) TAB (1) though (10)
77:13,18 stamp (6) 31:4 98:22 10:16,17,18,19,20;
slightly (1) 38:8,12;43:6,15,16; subject (8) tad (1) 33:17;56:20;74:17;81:8;
70:16 57:21 3:21;14:2;19:15; 103:2 91:25
smacks (2) stand (4) 22:17;28:18;51:16;67:2; talk (2) thought (12)
103:2,10 13:14;32:17;33:17; 81:2 16:10;39:7 17:7;19:20;21:9,12;
small (1) 64:11 subsequent (1) talked (4) 27:4;68:5;75:16;85:11;
47:3 standing (5) 13:15 16:11;42:14;53:22; 99:16;101:6,11;104:5
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SUPP APP 0852
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
Thousands (2) 10:2 27:6,7,13,20,25;28:9,22; 77:3;89:7
58:6;63:18 tried (5) 35:5;41:4,10;42:4,7,8; U used (2)
threat (1) 14:16;40:9;49:5,6; 45:2;47:20;50:8;52:21; 51:3;89:7
93:13 80:5 56:6,17,19;57:1;58:2,18, ultimately (4) utterly (2)
three (9) true (7) 21;62:10;63:17;64:2,6; 8:10,17;26:7;28:17 11:8,9
8:9;12:14;30:1;46:23, 43:10,17;54:21;76:21; 65:8;66:3,3,25;67:2; Um-hum (2)
25;80:9;97:14;103:18; 77:13,18;80:23 71:8,14;79:5,19,24;80:3; 4:10;37:17 V
104:10 trust (294) 82:6,16,25;83:6;90:12; unanimous (4)
three-day (1) 5:11,12,24;7:1,2,16, 91:3;94:1,2,3,5,19,21; 25:22,23;83:2,3 valid (1)
29:18 24;8:1,2;9:23;11:13,15, 95:6,7;96:20;98:6,16,18; uncertainty (1) 80:24
threw (2) 22,25;12:3,7,11,23;13:1, 99:20;100:4,9;101:18, 18:9 value (2)
31:8,25 3,11,21;14:13,18,23,24, 22;102:13;103:15; under (21) 28:4,5
thus (2) 25;15:2,7,9,18,19;16:10, 104:17 14:13;20:21;23:14; various (1)
98:21,25 12,13,20,22;17:13,14; trustee's (15) 26:1,23;27:16;28:14,19; 80:11
till (2) 18:3,4,5,13,15,16,20,25; 6:8;14:9;24:2;28:11, 33:10;45:24;69:12; vendors (2)
14:17;98:21 19:4,4,14,15,17,17,17, 25;32:7;37:21;52:13; 70:16;75:3,5;82:15; 46:24,25
times (2) 21,22;20:22;21:4,10,15, 66:19,22;67:21;84:21; 86:15,17;93:13;100:14; verdict (2)
80:11;96:1 18,22;22:5,5,8,9,17,18, 93:12;94:19;101:5 102:10,12 49:6;50:11
tiny (1) 19,21,22,23;23:3,11,13, trusts (1) underlying (2) version (1)
97:1 14,16,19,22;24:12,14,16, 42:7 3:18;4:8 10:22
today (14) 19,22,23,23,25;25:3,8,9, truth (1) underpinning (1) victim (2)
3:14;4:24;5:2;11:1,10; 11,12,16,17,21,23,25; 50:17 9:7 98:8,11
12:15;13:12;52:10;72:1; 26:3,3,14;27:6,15,25; try (14) understood (2) view (1)
88:23;91:21;93:6;95:5; 28:3,6,9,10,14,15,24; 5:2;11:1;13:15;24:5; 6:12;73:4 29:1
100:16 29:5;31:10;34:23;35:6, 27:8;40:1;50:4;77:2; underwear (1) viewed (2)
together (1) 7,17,18,21;36:11;37:14, 86:7,7;90:25;92:9; 10:21 19:6;42:6
49:15 15;38:10;39:13,24;40:2, 102:25;104:24 unfair (1) violate (2)
told (3) 13,22;41:1,1,3,14,14,19, trying (10) 103:2 104:18,18
16:19;61:20;96:11 20;42:5,7;44:23;45:9,9, 5:16;20:8;26:12; unfortunately (1) violated (1)
Tom (1) 15;46:5,14,20;47:11; 40:24;46:1;60:3,4; 8:24 104:11
48:17 50:4;52:1,7,10,22;53:18, 62:22;64:11;83:18 unsecured (3) visited (1)
Took (7) 24;54:10,12;57:2,20; turn (7) 12:5;19:2;20:9 73:10
66:5,7,9,10;86:4; 58:13,19,21;59:18; 36:7;37:21;57:4,7; unsecureds (3) visiting (2)
89:20;94:21 60:11,22;61:4,4,5;63:3, 67:20,22;71:1 18:23,24,25 81:16,18
top (9) 6,10,20;64:19,22,25; turning (1) unsigned (1) voice (1)
23:7;25:1;37:16;38:2, 66:8,13,24;67:2,3,7,8,18, 70:9 6:19 50:7
7,11;43:6,22;57:21 22;68:19,21,23,24;69:3, twelve (2) unusual (4) voiced (1)
tort (1) 4,7,7,11,21,22;70:3,6; 91:24,24 58:7;66:14,16;67:10 49:20
7:24 71:4,9,21;72:2,3,17; twenty (9) up (30) void (2)
towards (1) 73:5;74:5,15,17,18,22, 8:14;10:15;28:7,8; 4:19;7:6;8:7,23;11:7, 22:6,9
61:12 24,25;75:9,12,15,18,20, 50:11;77:6,23,25;78:4 13;12:16,20,25;13:6; voids (1)
track (1) 23,23;76:22;77:5,9,13, twenty- (2) 15:2;16:5;18:22;19:11; 10:24
23:1 15,19,21,24,24;78:3,7,7, 63:17;99:6 21:18;26:12,25;29:17; voir (3)
trade (2) 21,21;79:2,22;80:4; twenty-five (2) 30:12;33:19;53:23; 36:22,25;38:22
46:24,25 81:22;82:5,19;83:2,3,5, 58:1,5 59:24;71:12;81:16; volunteering (1)
transcript (1) 10,10,17;84:20;85:12; twice (1) 97:21;98:21;100:4; 60:8
54:11 86:3,10,12,14,16,18,24; 97:14 103:1,10;104:25 vote (5)
transfer (1) 87:8,11,16,18,24;88:3, two (25) update (1) 25:22,23;83:2,3;102:6
9:23 10,11,20;89:2,3,6,13; 3:25;8:9,20;10:8; 4:22
transferred (1) 90:17,18;92:17,18,20; 11:19;16:8;18:23;19:13; upon (24) W
20:22 93:4;95:2,17;97:21,23, 37:24;46:24,25;51:10; 21:8;24:3,4;25:21,22;
Trey (4) 24;98:11,24;99:10,13, 57:4,18,19;68:13,16; 26:7;27:1,10,14;28:2; wait (4)
4:2;48:10,19,21 14,17,19,23,23;100:8,8, 71:20,23;79:25;97:1; 54:10;74:17;77:14,20; 9:5;39:5,7;103:19
tri (1) 9,12,15,24;101:2,15; 99:11;100:19;101:8; 79:16,18;83:1,2;86:16, waive (1)
50:22 102:12,13;104:11,16 103:25 18;102:6,15,19;103:11 26:24
trial (29) trustee (104) type (1) ups (1) waived (4)
7:5;8:7,9,10;14:16; 3:25;4:1;5:15;6:7,9,9, 59:13 97:11 12:2,8;15:17;96:6
29:18;49:8,24;50:1,10, 21,22,23;7:8,23;9:2,24; types (1) upstairs (1) waiver (1)
20;51:4,8,9;53:23;56:9; 10:12,25;14:21,21; 45:7 104:23 95:15
59:4,24;60:1,10,18;64:9, 15:15;16:14,17;18:19; typically (1) USC (1) waives (1)
12,16,17;80:8;94:5,15; 19:6,17,25;20:1;21:18, 90:24 9:20 47:17
103:10 25;22:17,21,23;23:1,10, use (5) waiving (2)
trick (1) 12,20,23;25:1,19,20,25; 10:10;13:16;24:17; 3:22;96:7
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SUPP APP 0853
PASTAZIOS PIZZA, INC.
Case No. 14-34324-HDH-11 November 3, 2015
wants (5) 11:9;32:17;34:13;
13:13;15:14;29:10; 47:21;52:16;56:8;59:16; Z
82:17;94:3 60:6,13;62:2,12,15;63:7;
war (2) 73:9,16;74:1,5,25;85:19, zero (10)
11:12,12 19;98:8;100:10;102:14, 9:19,20;28:10,10,11;
wasted (2) 14;104:16 77:9,10;78:6,12,20
24:6;102:17 witness (31)
water (1) 3:24;4:1;31:3,20;
66:15 32:17,20;33:9,11,24;
way (20) 34:6,13;36:3;39:9,11;
10:14;12:20;13:5; 42:16;47:8;48:2,3;
15:16;18:13,22;22:1; 52:25;53:5;56:15,16,22;
25:10;31:5;42:7;51:18; 63:23;65:15;73:1,8,19;
56:8;60:9;63:9,19;77:8; 78:17;90:2;91:6
79:2;93:11;94:17,25 witnessed (1)
ways (2) 37:9
11:19;12:15 word (3)
week (2) 10:11;41:18;42:24
20:15;100:19 words (3)
weeks (3) 6:16;58:13;60:16
5:16;8:15;9:4 work (6)
Welcome (4) 35:5;42:7;45:11;
3:8,12,16,19 72:22;73:14;79:3
weren't (2) working (3)
14:20,23 8:6;15:24;16:9
what's (8) world (1)
5:6;21:4;25:7;36:23; 67:12
58:10;89:14;90:10; writ (1)
100:2 93:13
Whereas (2) writing (1)
38:10;43:15 43:22
Whereupon (1) written (2)
105:7 77:8;79:3
whole (5) wrong (1)
13:23;19:24;57:16; 19:6
66:15;103:13
wholeheartedly (2) X
55:12;74:13
wholesale (1) xi (3)
25:14 24:8;70:16;71:18
wholly (1) xix (1)
99:17 24:16
whoops (2) xviii (1)
6:16;104:20 24:14
who's (2)
98:22,22 Y
whose (3)
12:2;35:21;95:11 yachts (2)
willing (1) 3:2,3
15:20 year (6)
winded (1) 5:10,23;6:22;7:8,14;
91:21 55:25
winning (1) years (7)
96:15 29:17,22,24;51:10;
wish (1) 58:1;63:18;97:13
11:1 yell (1)
wishes (1) 33:22
12:7 Yep (2)
withdraw (3) 71:3;82:12
56:12;76:19;80:21 young (2)
within (1) 30:18,21
51:20
without (25)
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SUPP APP 0854
Exhibit 3
SUPP APP 0855
Case 14-34324-hdh11 Doc 150 Filed 11/19/15 Entered 11/19/15 14:23:03 Page 1 of 3
U.S. BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
ENTERED
TAWANA C. MARSHALL, CLERK
THE DATE OF ENTRY IS
ON THE COURT'S DOCKET
The following constitutes the ruling of the court and has the force and effect therein described.
Signed November 19, 2015
United States Bankruptcy Judge
______________________________________________________________________
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
In re: §
§ CASE NO. 14-34324-hdh-11
PASTAZIOS PIZZA, INC. §
§ (Chapter 1)
Debtor. §
§
ORDER ON TRUSTEE’S MOTION TO CLARIFY
CAME ON FOR HEARING on the 3rd day of November, 2015 the Trustee’s Expedited
Motion to Clarify Trust Agreement (the “Motion”), filed on October 22, 2015 by Scott M. Seidel,
Trustee (the “Trustee”), the trustee of the Pastazios Pizza, Inc. Creditors Trust (the “Trust”),
whereby the Trustee seeks clarification of certain issues arising under the First Amended Plan of
Reorganization Dated February 11, 2015, (the “Plan”), the Order Confirming Debtor’s First
Amended Plan of Reorganization Dated February 11, 2015 (the “Confirmation Order”), and under
the Creditor Trust Agreement for the Pastazios Pizza, Inc. Creditors Trust (the “Trust
Agreement”). By the Motion, the Trustee sought clarification of three terms of the Trust
Agreement; specifically three blanks in the Trust Agreement at the time of confirmation:
ORDER ON TRUSTEE’S MOTION TO CLARIFY—Page 1
SUPP APP 0856
Case 14-34324-hdh11 Doc 150 Filed 11/19/15 Entered 11/19/15 14:23:03 Page 2 of 3
(i) the identification of the Trust Advisory Board; (ii) the identification of the insurance counsel;
and (iii) compensation available to insurance counsel.
Century Surety Company (“Century”) objected to the Motion. The Trustee objected to
Century participating in the hearing for lack of standing. At the hearing, the Court carried the
issue of Century’s standing and proceeded to consider the evidence and Century’s arguments as
though Century had standing to contest the Motion. The Court took the Motion under advisement
and issued its oral findings of fact and conclusions of law on November 10, 2015, which the Court
incorporates into this Order.
Therefore, finding that the Court has jurisdiction over this matter, that all creditors and
parties-in-interest had due and sufficient notice of the Motion, and based on the evidence at said
hearing, the arguments of counsel, and the Court’s findings of fact and conclusions of law as set
forth on the record on November 10, 2015, it is hereby:
ORDERED that Century’s objection to the Motion is OVERRULED for Century’s lack of
standing; it is further
ORDERED that the Motion is GRANTED IN PART to the extent provided for herein, and
is denied to the extent not provided for herein; it is further
ORDERED that, insofar as the single member “Trust Advisory Board” (as defined in the
Trust Agreement) has not been identified to-date, the Trustee may appoint a member to the Trust
Advisory Board pursuant to section 6.4(d) of the Trust Agreement; it is further
ORDERED that the Court hereby denies the Trustee’s request that the Court determine that
the provisions of the Plan and the Trust Agreement relating to the Trust Advisory Board have been
waived and that the Trust Advisory Board no longer exists; it is further
ORDER ON TRUSTEE’S MOTION TO CLARIFY—Page 2
SUPP APP 0857
Case 14-34324-hdh11 Doc 150 Filed 11/19/15 Entered 11/19/15 14:23:03 Page 3 of 3
ORDERED that, pursuant to the Plan, the Confirmation Order, and the terms of the Trust
Agreement, the Trustee has selected Munsch Hardt Kopf & Harr, P.C. (“Munsch Hardt”) to act as
the Trust’s “Insurance Counsel”; it is further
ORDERED that the Court denies the Trustee’s request for the Court to fill in the blank in
Section 9.2 of the Trust Agreement to determine the compensation of the Trust’s Insurance
Counsel, but pursuant to section 10.1 of the Trust Agreement, the blank in section 9.2 of the Trust
Agreement may be filled in by the Trustee and the Trust Advisory Board promptly after naming
the member of the Trust Advisory Board; it is further
ORDERED that the Court reserves jurisdiction concerning this matter and all other matters
concerning the Plan and the Trust that the Court has jurisdiction over, to the maximum extent
possible, and that nothing in this Order shall prevent the Trustee or any other appropriate party
from seeking additional or further clarification or relief as may be appropriate; and it is further
ORDERED that to the extent any relief requested in the Motion is not expressly granted in
this Order, it is denied.
### END OF ORDER ###
ORDER ON TRUSTEE’S MOTION TO CLARIFY—Page 3
SUPP APP 0858
Exhibit 4
SUPP APP 0859
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 1 of 10 PageID 1849
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CENTURY SURETY COMPANY §
§
Plaintiff/Counter Defendant, §
§
v. § CIVIL ACTION NO. 3:13-cv-2553
§
PASTAZIOS PIZZA, INC. §
CREDITOR TRUST; §
AJREDIN “DANNY” DEARI; and §
POST PROPERTIES, INC. §
§ JURY TRIAL DEMANDED
Defendants. §
JANE DOE’S UNOPPOSED MOTION TO INTERVENE
TO THE HONORABLE UNITED STATES DISTRICT JUDGE:
Jane Doe1 (“Doe”) moves this Court to intervene as a right and be included as a necessary
party in the above cause pursuant to FED. R. CIV. P. 24(a)(2). In the alternative, Doe seeks
permissive intervention pursuant to FED. R. CIV. P. 24(b)(1)(B) (“Unopposed Motion”). The
grounds for this motion to intervene are as follows and counsel for the other parties are
unopposed to the relief sought:
I.
INTRODUCTION AND THE UNDERLYING LITIGATION
Doe is a necessary party to this action as a result of obtaining a Final Judgment on July
25, 2015 in an underlying lawsuit directly related to this declaratory judgment action and
Defendant Pastazios Pizza Inc. Creditor Trust’s counterclaims against its insurer for breach of
contract, bad faith insurance practices, and violations of the Texas Deceptive Trade Practices
Act. As such, this Unopposed Motion to intervene should be granted.
1
Due to the extremely personal and sensitive nature of the Underlying Litigation as defined herein, Doe is
proceeding under the pseudonym of “Jane Doe.”
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 1
SUPP APP 0860
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 2 of 10 PageID 1850
On April 24, 2013, Doe filed a lawsuit against Pastazios Pizza, Inc. (“Pastazios”) and
Adjredin Deari (“Deari”), amongst other parties, in the 193rd Judicial District Court, Dallas
County, Texas, Cause No. DC-13-04564 alleging causes of action against Pastazios for
negligence, premises liability, false imprisonment, and dram shop (“Underlying Litigation”).
After properly Stowerizing Defendant Pastazios and its insurance carrier in May of 2011,
Plaintiff Century Surety Company (“Century”)2, Century initially recognized there was coverage
for Doe’s claims against Pastazios in the Underlying Litigation but two months later inexplicably
denied coverage, denied Pastazios a defense, and brought this declaratory judgment action
seeking a determination that there is no insurance coverage for the causes of action asserted by
Doe against Pastazios in the Underlying Litigation.
The Underlying Litigation was then fully litigated for the next two years and the
Underlying Litigation was tried to the bench on July 7, 2015. On July 25, 2015, after a fully
adversarial three day trial in which all parties were represented by counsel, Honorable Carl
Ginsberg entered a final judgment on the evidence in Doe’s favor in the amount of
$21,911,141.42 against Defendants Pastazios and Deari, jointly and severally (“Final
Judgment”).3 On August 7, 2015, Honorable Carl Ginsberg entered Findings of Fact and
Conclusions of Law in support of the Final Judgment.4
The Final Judgment, as well as the Findings of Fact and Conclusions of Law make clear
that Doe’s claims in the Underlying Litigation are covered under the liability insurance policy
issued by Century that forms the basis of the claims and counterclaims made in this case. Doe
2
It is also worth noting that Doe stowerized Pastazios and its insurance carrier Century on three additional occasions
as the Underlying Litigation progressed and even invited Century to participate in the mediation of the Underlying
Litigation. Century refused to participate and ignored the last Stower’s demand Doe sent shortly before trial.
3
The Final Judgment is attached as Exhibit A (APP001-APP003) and is incorporated by reference for all purposes.
4
The August 7, 2015 Findings of Fact and Conclusions of Law are attached as Exhibit B (APP004-APP019) and
are incorporated by reference for all purposes.
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 2
SUPP APP 0861
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 3 of 10 PageID 1851
now seeks to intervene in this declaratory judgment action to protect her direct rights against
Century for breach of contract; defend her rights and interests as a judgment creditor; and to
protect and pursue her legal rights as the 99% beneficiary of any and all proceeds awarded in
connection with Defendant Pastazios Pizza Inc. Creditor Trust’s counterclaims against Century
for breach of contract, bad faith insurance practices, and deceptive trade practices.5
Through this Unopposed Motion Doe hereby seeks to join in Defendant Pastazios Pizza,
Inc. Creditor Trust’s pleadings in defense of Century’s declaratory judgment action, as well as
join in Defendant Pastazios Pizza, Inc. Creditor Trust’s counterclaims against Century.
Doe is a necessary party, has the most significant stake in the outcome of this matter, and
has a legal right to intervene in this action at this time. After conferring with all counsel of
record, none of the other parties are opposed to Doe’s intervention.
II.
ARGUMENTS AND AUTHORITIES
A. DOE IS ENTITLED TO INTERVENE AS A MATTER OF RIGHT.
Federal Rule of Civil Procedure 24(a) provides that the court must grant a timely motion
to intervene if the movant “claims an interest relating to the property or transaction that is the
subject of the action, and is so situated that disposing of the action may as a practical matter
impair or impede the movant’s ability to protect its interest, unless existing parties adequately
represent that interest.” FED. R. CIV. P. 24(a)(2). As the language of the rule directs,
“intervention of right must be measured by a practical rather than technical yardstick,” and the
5
Pastazios filed for Chapter 11 bankruptcy protection on September 2, 2014, mainly as a result of Century’s breach
of its obligation to defend Pastazios against Doe’s claims in the Underlying Litigation. See In re Pastazios Pizza,
Inc., United States Bankruptcy Court for the Northern District of Texas, Dallas Division, Cause No. 14-34324.
Pursuant to Pastazios First Amended Plan of Reorganization in the bankruptcy, Pastazios’ claims and causes of
action against Century in this action, as well as all of Pastazios’ interests in the liability insurance policy issued by
Century (including the Stowers claim) were assigned to the Pastazios Pizza, Inc. Creditor Trust who has now
substituted in as a party for Pastazios. Due to the size of the Final Judgment Doe obtained against Pastazios, Doe is
the 99% beneficiary of any and all proceeds of the Creditor’s Trust, including all of the proceeds awarded against
Century in this litigation.
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 3
SUPP APP 0862
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 4 of 10 PageID 1852
analysis “is a flexible one, which focuses on the particular facts and circumstances surrounding
each application.” Edwards v. City of Houston, 78 F.3d 983, 999 (5th Cir. 1996) (internal
quotation marks and citations omitted). In general, intervention should be allowed when “no one
would be hurt and great justice can be attained.” Sierra Club v. Espy, 18 F.3d 1202, 1205 (5th
Cir. 1994) (internal quotation marks and citations omitted).
In deciding a motion to intervene as of right, courts focus on the following four factors:
(1) whether the motion to intervene is timely; (2) whether the intervener asserts an interest
related to the property or transaction that forms the basis of the controversy into which she seeks
to intervene; (3) whether the disposition of that case may impair or impede the potential
intervener's ability to protect her legal interests; and (4) whether the existing parties adequately
represent the intervener's interest. Saldano v. Roach, 363 F.3d 545, 551 (5th Cir. 2004). Each of
these considerations support Doe’s right to intervene.
1. Doe’s Motion for Intervention is Timely.
The Fifth Circuit has identified four factors to be considered in determining whether a
motion to intervene as of right is timely: (1) the length of time between the movant’s learning of
her interest and the petition to intervene, (2) the extent of prejudice to existing parties from
allowing the intervention, (3) the extent of prejudice to the movant if not allowed to intervene,
and (4) any unusual circumstances. In re Lease Oil Antitrust Litig., 570 F.3d 244, 247-48 (5th
Cir. 2009). Each of these factors support the conclusion that Doe’s Unopposed Motion to
intervene is timely.
First, this Motion to intervene is being filed less than one month after Final Judgment was
entered in Doe’s favor in the Underlying Litigation. Doe could not have moved to intervene
prior to the Final Judgment being entered because, as a third-party beneficiary to the insurance
policy, she did not have standing until she had a monetary judgment against Defendant Pastazios.
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 4
SUPP APP 0863
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 5 of 10 PageID 1853
See State Farm Mut. Ins. Co. of Tex. v. Ollis, 768 S.W.2d 722, 723 (Tex. 1989) (per curiam) (“a
party injured by the insured is a third party beneficiary of a liability insurance policy, ... [but] he
cannot enforce the policy directly against the insurer until it has been established, by judgment or
agreement, that the insured has a legal obligation to pay damages to the injured party.”); In re
Essex Ins. Co., 450 S.W.3d 524, 527-28 (Tex. 2014). Once Doe obtained the Final Judgment in
the Underlying Litigation, her interests in this action became ripe, and Doe timely moved to
intervene. Any attempted intervention before the Final Judgment was entered would have been
premature and a waste of judicial resources. See id.; see also Sierra Club, 18 F.3d at 1206.
Second, none of the existing parties to this action are prejudiced by the timing of Doe’s
intervention. See Lease Oil, 570 F.3d at 248; see also Sierra Club, 18 F.3d at 1206 (“prejudice
must be measured by the delay in seeking intervention, not the inconvenience to the existing
parties of allowing the intervenor to participate in the litigation.”). There is no prejudice to the
existing parties because dispositive motions have not yet been heard and no additional discovery
or delay should take place if Doe is rightfully permitted to intervene.
Third, Doe will suffer incredible prejudice if she is denied her right to intervention. If
Doe is denied intervention and Century succeeds in avoiding or excluding coverage under the
policy it issued to Pastazios, Doe is unlikely to recover any of the money damages awarded to
her in the Final Judgment. The Fifth Circuit has found prejudice under such circumstances.
Gaines v. Dixie Carriers, Inc., 434 F.2d 52, 54 (5th Cir.1970); see also United States v. Eastern
Transmission Corp., 923 F.2d 410 (5th Cir.1991). Doe has the highest stake in the outcome of
the claims and counterclaims asserted in this action and a legal right to protect those interests by
directly participating in this case. Failure to grant intervention would relegate Doe’s status to
sitting on the sidelines while other parties litigate their own interests which will necessarily
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 5
SUPP APP 0864
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 6 of 10 PageID 1854
impact Doe’s interests. Finally, there are no “unusual circumstances” which suggest that this
Unopposed Motion is untimely. Upon the Final Judgment being entered, Doe promptly moved to
intervene without delay or prejudice to the existing parties. As such, Doe’s intervention is timely
and should be granted.
2. Doe Has a Significant Legally Protectable Interest in the Subject of this
Litigation.
A party seeking to intervene in an existing lawsuit must demonstrate a direct, substantial
and legally protectable interest in the litigation. In re Lease Oil, 570 F.3d at 250-51; Ross, 426
F.3d at 757. The interest asserted must “be one that the substantive law recognizes as belonging
to or being owned by the applicant.” Edwards, 78 F.3d at 1004.
Doe now has a direct breach of contract claim against Century, Doe is a judgment
creditor of Pastazios, and is also the 99% beneficiary of any and all proceeds awarded against
Century for Defendant Pastazios Pizza, Inc. Creditor Trust’s counterclaims against Century for
breach of contract, bad faith insurance practices, and violations of the Texas Deceptive Trade
Practices Act.
Under Texas law, once an injured party obtains a judgment against an insured and the
insured has a legal obligation to pay damages to the injured party, the injured party can enforce
the insurance policy directly against the insurer. Ollis, 768 S.W.2d at 723 (citing Murray, 437
S.W.2d at 265); see also Rotella v. Mid-Continent Cas. Co., 2008 WL 5272787, at *3 (N.D. Tex.
Dec. 17, 2008) (“a third party who has obtained a judgment against an insured is an intended
third party beneficiary of the insurance contract and is entitled to enforce the contract.”); Certain
Underwriters at Lloyds, London v. Four J's Cmty. Living Ctr., Inc., 2011 WL 6026689, at *1
(S.D. Tex. Dec. 2, 2011); Puente v. Chicago Ins. Co., 2010 WL 3463253, at *4 (S.D. Tex. Sept.
3, 2010). Doe now has the legal right to recover the damages awarded in the Final Judgment in
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 6
SUPP APP 0865
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 7 of 10 PageID 1855
the Underlying Litigation from Century directly through this action. Thus, Doe has a significant
threat of economic injury from the outcome of this action, giving her the requisite interest under
Rule 24(a). Symetra Life Ins. Co. v. Rapid Settlements Ltd., 2006 WL 2382250, at *4 (S.D. Tex.
Aug. 16, 2006). Because Doe has a direct, substantial, and legally protectable interest in this
action, she has the legal right to intervene.
For the avoidance of doubt, Doe is not at this time seeking to recover directly against
Century, instead relying on her right to be paid as a creditor of the Pastazios Pizza, Inc. Creditor
Trust. Doe reserves her right to seek additional relief, including direct relief against Century, by
separate motion or complaint.
3. An Adverse Decision Would Impair Doe’s Interests.
Rule 24(a) requires that an applicant for intervention of right be “so situated that
disposing of the action may as a practical matter impair or impede the movant’s ability to protect
its interest.” FED. R. CIV. P. 24(a). The Fifth Circuit has consistently held that if a court’s ruling
may adversely impact an intervenor’s interest, the third requirement is satisfied. Edwards, 78
F.3d at 1004–05; Espy, 18 F.3d at 1207; Ceres Gulf v. Cooper, 957 F.2d 1199, 1204 (5th Cir.
1992). Rule 24(a) does not require that the intervenor’s interests be legally impaired; it is enough
that the applicant’s ability to protect its interests may be impaired as a practical matter. One
Beacon Ins. Co. v. T. Wade Welch & Associates, 2012 WL 1231750, at *5 (S.D. Tex. 2012).
If Doe is denied her right to intervene, Doe would be denied the right to protect her
legally recognized interests and/or forced to file a separate lawsuit against Century for breach of
contract. Without the ability to legally protect her own interests, Doe would effectively be denied
of her due process rights and would be relegated to having to sit back and watch as other parties
control the outcome of her legally protected interests. Precluding Doe from intervening in this
case will severely impair and impact her legal interests. Thus, this Motion should be granted.
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 7
SUPP APP 0866
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 8 of 10 PageID 1856
4. Doe’s Interests May Not Be Adequately Represented by Defendants.
Doe satisfies the final element for intervention because Defendants may not adequately
represent her interests depending on the future conduct of this litigation and any negotiations
related thereto. “The requirement of the Rule is satisfied if the applicant shows that
representation of his [or her] interest ‘may be’ inadequate; and the burden of making that
showing should be treated as minimal.” Trbovich v. United Mine Workers of Am., 404 U.S. 528,
538 n. 10, (1972) (citing 3B J. Moore, Federal Practice 24.09–1(4) (1969)). Doe’s interests in
this action are far superior to Defendants. Although all of the Defendants seek a finding that
Doe’s Final Judgment is covered by the liability policy issued by Century, Doe has much more at
stake in this action, at least $21,911,141 more. Doe also has far superior knowledge of the
relevant facts and evidence that support the Final Judgment and Findings of Fact and
Conclusions of Law than does counsel for Defendants in this action. Counsel for Doe handled
the Underlying Litigation for over two years, developed all of the evidence, and tried the case to
final judgment. Doe is entitled to have counsel of her choosing, and the ones most
knowledgeable about the underlying facts participate in this litigation to protect her legally
recognized interests in the outcome of this litigation. Notably, none of the other parties to this
case disagree. Thus, Doe should be permitted to intervene as a matter of right.
B. IN THE ALTERNATIVE, DOE SHOULD BE PERMITTED TO INTERVENE
PERMISSIVELY.
Rule 24(b)(2) permits intervention upon a timely motion when an applicant “has a claim
or defense that shares with the main action a common question of law or fact.” FED. R. CIV. P.
24(b)(2). “[P]ermissive intervention is within a district court's discretion,” Newby v. Enron
Corp., 443 F.3d 416, 424 (5th Cir. 2006), and is “only subject to reversal if extraordinary
circumstances so require,” Trans Chem. Ltd. v. China Nat'l Mach. Import and Export Corp., 332
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 8
SUPP APP 0867
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 9 of 10 PageID 1857
F.3d 815, 822 (5th Cir. 2003). Permission intervention should be allowed “where no one would
be hurt and greater justice could be attained.” Sierra Club, 18 F.3d at 1205 (quoting McDonald
v. E.J. Lavino Co., 430 F.2d 1065, 1074 (5th Cir. 1970).
It is also proper to consider whether the intervenor will significantly contribute to the full
development of the underlying factual issues in the suit. First Mercury Ins. Co. v. Rosenboom
Welding & Fabrication, L.L.C., 2013 WL 4804494, at *2 (N.D. Tex. Sept. 9, 2013).
In Lincoln Gen. Ins. Co. v. Aisha's Learning Ctr., the court examined whether an
intervenor’s claim or defense shared common questions of law or fact with the main action.
2004 WL 2533575, at *4 (N.D. Tex. Nov. 9, 2004). The main action centered around whether
the insurance company was obligated to provide coverage under its insurance policy to its
insured. Id. In the complaint to intervene, the movant sought a declaration that the insurance
company was “solely responsible for providing a defense and indemnification” for its insured,
and that any loss by the insured at the expense of the movant is covered under the insurance
policy. Id. The court found that both the intervenor’s claims shared nearly identical questions of
law or fact to the main action, and granted permissive intervention. Id. The Court should
likewise do so here.
III.
CONCLUSION
WHEREFORE, PREMISES CONSIDERED, Jane Doe respectfully requests that the
Court grant her Unopposed Motion to intervene as of right pursuant to Rule 24(a), or in the
alternative, permissively intervene pursuant to Rule 24(b), whereby Jane Doe seeks to join in
Defendant Pastazios Pizza, Inc. Creditor Trust’s pleadings in defense of Century’s declaratory
judgment action, as well as join in Defendant Pastazios Pizza, Inc. Creditor Trust’s
counterclaims against Century. Upon the granting of this Unopposed Motion, Doe will file its
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 9
SUPP APP 0868
Case 3:13-cv-02553-P Document 50 Filed 08/25/15 Page 10 of 10 PageID 1858
direct claim against Century for breach of contract within ten (10) days of the Order being signed
by this Court. Jane Doe also seeks any and all other and further relief, both at law or in equity, to
which she may show herself to be justly entitled.
Respectfully submitted,
/s/ Trey H. Crawford
ROYCE WEST G. MICHAEL GRUBER
State Bar No. 21206800 State Bar No. 08555400
royce.w@westllp.com mgruber@ghetrial.com
VERETTA FRAZIER TREY CRAWFORD
State Bar No. 00793264 State Bar No. 24059623
veretta.f@westllp.com tcrawford@ghetrial.com
WEST & ASSOCIATES, L.L.P. BRIAN E. MASON
P.O. Box 3960 State Bar No. 24079906
Dallas, Texas 75208-1260 bmason@ghetrial.com
Ofc.: (214) 941-1881 GRUBER HURST ELROD JOHANSEN HAIL
Fax: (214) 941-1399 SHANK LLP
1445 Ross Avenue, Suite 2500
Dallas, Texas 75202
214.855.6800 (main)
214.855.6808 (facsimile)
ATTORNEYS FOR INTERVENOR JANE
DOE
CERTIFICATE OF CONFERENCE
The undersigned hereby certifies that he has conferred with all parties of record
concerning the relief sought in this motion and that no parties are opposed to the relief requested.
/s/ Trey H. Crawford
TREY H. CRAWFORD
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document has been served
on all counsel of record through ECF in accordance with the Federal Rules of Civil Procedure on
this the 25th day of August, 2015.
/s/ Trey H. Crawford
TREY H. CRAWFORD
_____________________________________________________________________________________
JANE DOE’S MOTION TO INTERVENE PAGE 10
SUPP APP 0869
Exhibit 5
SUPP APP 0870
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 1 of 258 PageID 2571
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CENTURY SURETY COMPANY §
§
Plaintiff, §
v. §
§
AJREDIN “DANNY” DEARI; §
DRITAN KREKA; PASTAZIOS §
PIZZA, INC. CREDITOR TRUST; and §
POST PROPERTIES, INC. § CASE NO. 3:13-cv-2553
§
Defendants, §
§
and §
§
JANE DOE, §
§
Intervenor. §
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS
TO THE HONORABLE JORGE A. SOLIS, UNITED STATES DISTRICT COURT JUDGE:
COMES NOW, Scott M. Seidel, as trustee (the “Trustee”) for the Pastazios Pizza, Inc.
Creditor Trust (the “Trust”), and files this the Pastazios Pizza, Inc. Creditor Trust’s Amended
Counterclaims, and in support thereof respectfully states as follows:
I. PARTIES
1. Plaintiff Century Surety Company (“Century”) filed this lawsuit and has appeared
through counsel of record. Century is a corporation organized under the laws of the State of
Ohio with its principal place of business in the State of Michigan.
2. The Trust is the successor in interest to Pastazios Pizza, Inc. (“PPI”) in all
respects to this litigation and the insurance policy at issue herein pursuant to that certain First
Amended Plan of Reorganization Dated February 2015 and the Order Confirming Debtor’s First
Amended Plan of Reorganization Dated February 11, 2015, as filed and entered in the
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 1
SUPP APP 0871
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 2 of 258 PageID 2572
Bankruptcy Case (defined below). Pursuant to the same, the trustee for the Trust is Scott M.
Seidel. Pursuant to this Court’s June 15, 2015 Order,1 the Trust is substituted for PPI in all
respects. PPI is a Texas corporation.
3. On August 25, 2015, Jane Doe filed an Unopposed Motion to Intervene [Doc. 50]
in this lawsuit and has appeared through counsel. The Court granted Jane Doe’s Unopposed
Motion to Intervene on August 26, 2015 [Doc. 52]. Jane Doe is a citizen of the State of Texas.
II. JURISDICTION AND VENUE
4. This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
1332(a)(1) because there is complete diversity and the amount in controversy exceeds the
jurisdictional minimum. Venue is proper pursuant to 28 U.S.C. § 1391(a)(2).
III. FACTUAL BACKGROUND
A. JANE DOE SUES PPI, ALLEGING GENERAL NEGLIGENCE, DRAM SHOP, PREMISES
LIABILITY, AND FALSE IMPRISONMENT CAUSES OF ACTION
5. This liability insurance dispute concerns a lawsuit (the “Doe Suit”) filed by Jane
Doe, an eighteen year old recent high-school valedictorian when the events made the basis of the
underlying liability suit occurred.
6. In the Doe Suit, Doe alleged that, on the afternoon of April 26, 2011, after
working the lunch shift at the Fox Sports Grill, she met Dritan Kreka at Back Nine Bar and
Grill to discuss potential job opportunities at his restaurant and bar. When she arrived at Back
Nine, Doe was introduced to Danny Deari (“Deari”), who was the owner of another restaurant—
PPI—located in Post Addison Circle. At the time, Deari was 49 years old and Kreka was 33
years old. Deari and Kreka started consuming alcohol at Back Nine bar, and attempted to
1
See docket entry 39.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 2
SUPP APP 0872
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 3 of 258 PageID 2573
order Doe an alcoholic drink. After the Back Nine server asked Doe for identification, Doe
informed the server she did have not her identification and asked for a Dr. Pepper. Deari and
Kreka convinced Doe that the three of them should move the conversation to the pizza
restaurant operated by PPI in Addison Circle. At no point in time on April 26, 2011 was Doe
interviewing for or seeking a job at PPI.
7. Deari and Kreka convinced Doe to drive to PPI. Deari, on his drive to PPI,
stopped at a liquor store to purchase a bottle of 80-proof Crown Royal Black and took it with
him and brought it into PPI.
8. Shortly thereafter, Doe entered onto PPI's premises in Addison Circle as an
invitee of PPI. Upon arriving at PPI at approximately 4:30 p.m., and without Doe asking, Deari
walked inside of PPI, grabbed three beers and three shots of Crown Royal Black that had been
placed into 2-ounce plastic salad dressing cups owned by PPI, placed one of the beers and one of
the 2-ounce shots in front of Doe, and encouraged her to drink it. There were no customers
present that afternoon other than Kreka, Doe and Deari. PPI's manager was on duty.
9. Prior to that day, Doe had very little experience concerning the effects of alcohol.
At no point in time did anyone at PPI ask to see Doe’s identification prior to providing her with
PPI’s alcoholic products. Throughout the course of approximately the next two hours, PPI
continued to provide Doe with more alcoholic products from PPI. After serving Doe with her
second beer from PPI and third 2-ounce shot of Crown Royal Black, Doe became obviously
intoxicated to the point where she had trouble standing. As her condition visibly deteriorated,
PPI failed to “cut off” service. In total, Doe was provided with at least five 2-ounce shots of
Crown Royal Black and three beers.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 3
SUPP APP 0873
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 4 of 258 PageID 2574
10. While still at PPI, Doe expressed concerns about her growing level of intoxication
and her inability to function normally. Prior to leaving PPI, Doe was intoxicated to the point
where she was incapable of caring for or defending herself. Deari then retrieved his vehicle from
PPI’s parking lot and pulled it out in front of PPI. Kreka moved into the driver’s seat and the two
men put Doe in the back seat of the vehicle. While this was taking place, and even though Doe’s
level of intoxication was open and obvious, PPI’s employees did nothing to protect Doe from
unreasonable and foreseeable risks of harm. Doe lost consciousness shortly thereafter.
11. When Doe regained consciousness she was in a hotel room located at 4900 Edwin
Lewis Drive, Addison, Texas 75001 (less than a mile from PPI) wherein she had been
involuntarily disrobed and was actively being sexually assaulted by Deari. Doe repeatedly
insisted that Deari stop the attack and get off of her, but he did not. Deari stopped the sexual
assault after multiple demands made by Doe. Doe locked herself in the bathroom. Deari then left
the hotel, leaving his underwear behind at the scene.
12. On April 24, 2013, and based on the facts above, Doe initiated the Doe Suit by
filing her petition in the 193rd Judicial District Court for Dallas County, Texas (the "State
Court"), alleging that PPI breached its legal duties toward Doe as an invitee, that PPI falsely
imprisoned Doe, and that PPI served alcohol to Doe in violation of the Dram Shop Act when
Doe was visibly and obviously intoxicated to the point where she was a danger to herself or
others, causing her serious bodily injury. Doe further alleged that PPI was negligent in various
respects recognized under Texas law. Doe alleged that PPI’s acts and omissions were a
proximate cause of her bodily injuries.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 4
SUPP APP 0874
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 5 of 258 PageID 2575
B. THE POLICY, TENDERS OF DOE’S PETITIONS, AND STOWERS SETTLEMENT OFFERS
13. At all relevant times to this action, “Pastazios Pizza, Inc.” was the named insured
under a surplus lines policy of liability insurance issued by Century and assigned number CCP
672836, effective from September 21, 2010 to September 21, 2011 (the “Policy”).
14. A true and correct copy of the Policy is attached hereto and incorporated herein as
Exhibit “A”.
15. Throughout the pendency of the Doe Suit, at least three of Doe’s petitions (the
Original, First Amended, and Fourth Amended petitions) were tendered to Century with a
request for defense under the Policy. Said original, first amended, and fourth amended petitions
are attached hereto and incorporated herein as Exhibits “B” through “D,” respectively.
16. On May 24, 2013, Century acknowledged PPI’s claim regarding the Doe Suit and
Doe’s Original Petition. A true and correct copy of the May 24, 2013 letter is attached hereto
and incorporated herein as Exhibit “E”.
17. On May 24, 2013, by letter, Century informed PPI that, pursuant to a full
reservation of rights, the Dallas law firm of Stacy & Condor, LLP would be defending PPI in the
Doe Suit. Despite the fact that the reservation revealed a disqualifying conflict of interest,
Century did not offer a defense through independent counsel or reveal that the insured had a right
to such a defense. Upon information and belief, Century violated the Tilley2 rights of PPI and
the Trust because Century unduly influenced and guided the firm retained to defend PPI under
the Policy to make discovery responses that were beneficial to Century’s position concerning
coverage and detrimental to the defense of PPI. Specifically, said prior counsel responded to a
2
See Employers Cas. Co. v. Tilley, 496 S.W.2d 552 (Tex. 1973).
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 5
SUPP APP 0875
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 6 of 258 PageID 2576
discovery request from Doe seeking the legal theories of PPI’s defense by stating only that PPI
denies that the incident and/or injuries in question was the result of any negligence by PPI.
18. On July 2, 2013, thirty-nine days later, Century filed this lawsuit against PPI,
seeking a declaration that Century owed no duty to defend or indemnify PPI.
19. On July 8, 2013, six days after suing its insured, Century wrote to PPI. There,
Century asserted that it had no duty to defend or indemnify PPI in the Doe Suit which was still
pending and had not yet been tried in State Court.
20. On July 29, 2013, Doe sent Century a settlement offer pursuant to Stowers.3
21. On August 15, 2013, Century rejected the offer.
22. On February 27, 2014, Doe sent Century a second settlement offer pursuant to
Stowers.
23. Century failed to respond to this offer and it expired according to its terms.
24. On June 11, 2015, Doe sent the Trust a settlement offer pursuant to Stowers,
which the Trust forwarded to Century on June 17, 2015, with a demand that Century accept the
offer. A true and correct copy of the June 11, 2015 settlement offer is attached hereto and
incorporated herein as Exhibit “F”.
25. Century rejected the settlement offer on June 23, 2015.
C. CENTURY FORCES PPI INTO BANKRUPTCY
26. Following Century’s July 8, 2013 letter stating that Century has no duty to
provide PPI with a defense or indemnity for the Doe Suit pursuant to the issues raised in
Century’s recently filed declaratory judgment action and in Century’s May 24, 2013 letter, PPI
hired counsel in the Doe Suit and in this lawsuit.
3
“Stowers” referring to G.A. Stowers Furniture Co. v. Am. Indem. Co., 15 S.W.2d 544, 544 (Tex.
Com. App. 1929), and the doctrine recognized therein.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 6
SUPP APP 0876
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 7 of 258 PageID 2577
27. PPI’s counsel defended PPI at each stage of the Doe Suit until the involvement of
the Trust. PPI’s counsel served and responded to written discovery, attended depositions, filed
motions and responses on PPI’s behalf, designated experts, and participated in hearings all
throughout the pendency of the Doe Suit, at PPI’s own expense.
28. On September 2, 2014, with the mounting burden of financing its own defense—
in light of Century’s refusal to provide a defense to PPI in the Doe Suit—and with the prospect
of a large judgment against PPI in the near future for which Century prematurely announced it
would refuse to indemnify PPI—PPI filed a voluntary petition for relief pursuant to Chapter 11
of Title 11, United States Code. That filing was assigned Case No. 13-32423 (the “Bankruptcy
Case”) pending in the United States Bankruptcy Court for the Northern District of Texas before
the Honorable United States Bankruptcy Judge Harlin D. Hale (the “Bankruptcy Court”).
29. As a corporation, PPI filed and prosecuted its bankruptcy case through counsel,
adding another layer of legal expenses.
D. CENTURY PARTICIPATES IN THE BANKRUPTCY CASE
30. On January 28, 2015, Century filed its Notice of Appearance and Request for
Notices in the Bankruptcy Case.
31. On February 11, 2015, PPI filed its First Amended Plan of Reorganization Dated
February 11, 2015 (the “Plan”) and its First Amended Disclosure Statement Dated February 11,
2015 in the Bankruptcy Case.
32. Century did not object to the Plan.
33. On March 5, 2015, Century filed its Motion for Relief from the Automatic Stay
Pursuant to 11 U.S.C. § 362(d) in the Bankruptcy Case, seeking relief from the automatic stay to
permit the continuation of this litigation. In its motion, Century stated that “all parties to this
proceeding will benefit from an expedient determination as to the applicability of coverage,
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 7
SUPP APP 0877
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which the Debtor presupposes as part of its First Amended Disclosure Statement Dated February
11, 2015” and that “. . . the determination of applicability of coverage under the Policy is in the
best interest of the Debtor and its creditors to obtain clarity as to its potential sources of funds…”
34. On March 30, 2015, the Bankruptcy Court held a hearing on Century’s motion
for relief from the stay and on confirmation of PPI’s Plan. Century appeared at, and participated
in, the hearings. After being given an opportunity to object and be heard, Century asserted no
objections to the Plan.
35. On March 31, 2015, the Bankruptcy Court entered its Agreed Order on Century’s
motion for relief from the stay, ordering that the automatic stay be modified as to the earlier of
thirty days following the entry of an order confirming the Plan or May 14, 2015.
36. On April 2, 2015, the Bankruptcy Court entered its Order Confirming Debtor’s
First Amended Plan of Reorganization Dated February 11, 2015 (the “Confirmation Order”),
whereby the Plan was confirmed.
37. Pursuant to the Plan and the Confirmation Order, the Trust was created and the
Trustee was appointed as the trustee of the Trust.
38. Article IX of the Plan provided that all causes of action, including any of PPI’s
rights and causes of action related to the Policy, are preserved and retained for enforcement by
the Trustee for the benefit of creditors. Therefore, the Trust owns all rights under or related to
the Policy, all rights related to this litigation, and the Counterclaims asserted herein and all rights
related thereto.
E. TRIAL OF THE DOE SUIT
39. Following his appointment, the Trustee promptly retained counsel in the Doe Suit
to defend PPI.
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SUPP APP 0878
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 9 of 258 PageID 2579
40. On June 17, 2015 the Trustee forwarded to Century the above described
settlement offer pursuant to Stowers received by the Trustee from Doe, and urged Century to
accept the offer.
41. The Trust also requested a defense and indemnity in light of Doe’s Fourth
Amended Petition dated June 5, 2015.
42. Century denied the settlement offer.
43. Century denied that it had a duty to defend or indemnify.
44. On July 7, 2015, the State Court called the Doe Suit to trial to the bench. All
parties to the Doe Suit, including PPI, appeared through their respective attorneys of record. On
July 7, 2010, Doe began her case in chief, introduced and admitted evidence to the Court, and
called various witnesses to testify.
45. PPI and Deari vigorously defended the claims brought by Doe against each
defendant, respectively, presented counter-evidence, and cross examined witnesses. On July 9,
2015, after a three-day adversarial trial, all parties rested, the evidence was closed, and closing
arguments were presented by all parties. At the close of the evidence and after closing
arguments, Doe’s claims against PPI and Deari, respectively, as well as PPI and Deari’s
affirmative defenses were submitted to the Court for final determination based on the evidence.
46. On July 9, 2015, after a three-day adversarial trial, the State Court rendered
judgment in favor of Doe against PPI and Deari on all causes of action.
47. The State Court awarded Doe actual damages and prejudgment interest totaling
$16,911,350.42, plus post-judgment interest and court costs, jointly and severally against PPI
and Deari for each and every cause of action alleged by Doe (general negligence, dram shop
liability, and premises liability against PPI). The State Court also rendered judgment against PPI
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 9
SUPP APP 0879
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 10 of 258 PageID 2580
for $2,500,000 as exemplary damages. A true and correct copy of the Final Judgment is
attached hereto and incorporated herein as Exhibit “G”.
48. On August 7, 2015, the State Court entered its Findings of Fact and Conclusions
of Law, a true and correct copy of which is attached hereto and incorporated herein as Exhibit
“H”.
49. The State Court’s judgment and findings of fact and conclusions of law constitute
collateral estoppel and res judicata as to the underlying facts that occurred with respect to the
injuries and damages suffered by Doe, the negligence of PPI, proximate cause between that
negligence and Doe’s injuries, new and superseding cause, and all other underlying facts
necessary to determine the scope of the Policy with respect to the Doe Suit.
IV. CAUSES OF ACTION
COUNT 1 - BREACH OF CONTRACT
50. The foregoing allegations are incorporated herein by reference.
51. The Trust seeks damages based on Century’s breach of the Policy.
52. Century agreed to insure PPI against loss or damage caused by a covered peril
arising out of PPI’s business.
53. The plain language of the Policy provides coverage for the Doe Suit and the
judgment.
54. In the alternative, the Policy is ambiguous and must be construed in the light most
favorable to the insured and finding a duty to defend and/or to indemnify.
55. Accordingly, Century has breached the contract by repeatedly denying a duty to
defend and/or indemnify.
56. The facts asserted in the Doe Suit were alleged to have transpired while the Policy
was in effect.
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SUPP APP 0880
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57. The facts alleged in the Doe Suit fell within Century’s duty to defend PPI and the
Trust. Among other things Doe alleged that she suffered bodily injury because (i) PPI continued
to serve Doe alcohol when she was obviously intoxicated; (ii) PPI did nothing to ensure Doe’s
safety; and (iii) Doe was not free to leave of her own volition due to being intoxicated.
58. The facts as conclusively determined by the State Court confirm that the Doe Suit
at all times fell within Century’s duty to defend PPI and the Trust.
59. The facts as conclusively determined by the State Court fell within Century’s duty
to indemnify PPI and the Trust, including for the amounts awarded to Doe by the State Court.
Among other things, the State Court found that:
(i) Doe was an invitee of PPI;
(ii) PPI did not ask to see Doe’s identification;
(iii) PPI provided Doe with alcoholic beverages;
(iv) Doe became obviously intoxicated;
(v) Prior to leaving PPI, Doe was intoxicated to the point where she was
incapable of caring for or defending herself;
(vi) Doe was raped shortly after leaving PPI’s premises; and
(vii) Deari’s acts did not act as a new and superseding cause.
60. The State Court held PPI liable for general negligence, dram shop liability,
premises liability, and false imprisonment as further described in its findings of fact and
conclusions of law.
61. As to each of these theories of liability, the State Court judicially determined that
PPI’s actions and/or inactions were a proximate cause of Doe’s bodily injuries and that, but-for
PPI’s actions and/or inactions, Doe never would have suffered the resulting serious bodily injury.
The State Court judicially determined that PPI’s actions, inactions, or omissions were a
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 11
SUPP APP 0881
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substantial factor in causing Plaintiff’s damages and bodily injuries, without which Doe would
not have suffered any damage. The State Court judicially determined that PPI was
independently liable for all damages awarded to Doe for each cause of action Doe asserted
against PPI. The State Court judicially determined that any alleged intentional or negligent acts
of any other person that may have caused or contributed to Doe’s injuries did not act to
extinguish PPI’s liability, did not constitute “outside agency”, and are not a new and independent
cause that would extinguish PPI’s liability to Doe. The State Court also judicially determined
that any purported acts or intervening forces PPI alleged to have been a “new and independent
cause” were foreseeable to PPI.
62. Century is estopped from challenging the State Court’s findings of fact and
conclusions of law.
63. PPI timely notified Century of the claims asserted against it.
64. The Trust timely notified Century of the claims asserted against it.
65. PPI and the Trust suffered monetary damages as a result of Century’s breach.
Among other things, the failure by Century to honor its duty to defend PPI forced PPI to incur
substantial attorney’s fees and, when it could no longer pay the same, to file for bankruptcy. All
of the fees and costs thereof are damages caused by Century. Both PPI and the Trust have had to
incur substantial attorney’s fees as a result of Century’s failure to defend, and then additionally
to defend against this litigation. Finally, both PPI and the Trust are now liable to Doe for the
amount of the State Court judgment, for which Century is liable and which, but for Century’s
wrongful actions and breaches in refusing reasonable settlement offers, would not have been
nearly as large as it now is.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 12
SUPP APP 0882
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 13 of 258 PageID 2583
66. At all relevant times, PPI and the Trust performed all obligations and conditions
under the Policy, the performance of all such obligations and conditions has been excused, or
Century is estopped to assert the performance of such obligations and conditions due to, among
other things, its breach of the Policy and breach of duties owed to PPI and the Trust as its
insureds.
67. Because of Century’s ineffective and wrongful reservation of rights letter and/or
its violations of the Texas Insurance Code regarding the timely denial of claims, Century is
estopped from asserting its policy defenses.
68. The Trust seeks its reasonably attorney’s fees pursuant to TEX. CIV. PRAC. & REM.
CODE § 38.001 et seq.
69. Accordingly, the Trustee seeks judgment against Century for its breaches of
contract in an amount to be proven at trial, but including all of PPI’s and the Trust’s reasonable
attorney’s fees incurred in this litigation, the State Court litigation, and the Bankruptcy Case, and
further including the amount of the Doe judgment, and further including the amount that is
owing to creditors in the Bankruptcy Case.
COUNT 2 - VIOLATION OF THE PROMPT PAYMENT OF CLAIMS PROVISION IN CHAPTER 542 OF
THE TEXAS INSURANCE CODE
70. The foregoing allegations are incorporated herein by reference.
71. Defense costs are a “first-party” insurance claim.
72. Century’s failure to fund PPI and the Trust for their defense costs in the Doe Suit
violates the Prompt Payment of Claims provisions in Chapter 542 of the Texas Insurance Code.
See TEX. INS. CODE § 542.051 et seq.
73. As a consequence of its statutory violation, Century is liable to pay the Trust, in
addition to the amount of the defense costs asserted, interest on the amount of said claim at the
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SUPP APP 0883
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 14 of 258 PageID 2584
rate of 18 percent per annum, together with reasonable attorney fees, for which amounts the
Trust hereby sues. See TEX. INS. CODE § 542.060.
74. Because of Century’s ineffective and wrongful reservation of rights letter and/or
its violations of the Texas Insurance Code regarding the timely denial of claims, Century is
estopped from asserting its policy defenses.
COUNT 3 - VIOLATIONS OF CHAPTER 542 OF THE TEXAS INSURANCE CODE
75. The foregoing allegations are incorporated herein by reference.
76. Century violated TEX. INS. CODE § 542.055 which provides that, not later than the
30th business day after the date an insurer receives notice of a claim, the insurer shall
acknowledge receipt of the claim; commence any investigation of the claim; and request from
the claimant all items, statements, and forms that the insurer reasonably believes, at that time,
will be required from the claimant.
77. Century failed to investigate the claim related to, or acknowledge receipt of,
Doe’s Fourth Amended Petition or the final judgment in the Doe Suit and/or failed to request
from the Trust within a reasonable and timely fashion items, statements, or forms. Century never
engaged in a full and unbiased investigation which would have made coverage reasonably clear.
Rather, after its initial reservation of rights letter, Century thereafter relied only on its original
complaint filed herein, which asserts coverage positions that are directly in opposition to the
May 24, 2013 reservation of rights letter. Any investigation Century conducted was outcome-
oriented and self-serving.
78. Century violated TEX. INS. CODE § 542.056 which provides that an insurer shall
notify a claimant in writing of the acceptance or rejection of a claim not later than the 15 th
business day after the date the insurer receives all items, statements, and forms required by the
insurer to secure final proof of loss, and that if the insurer rejects the claim, the notice must state
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SUPP APP 0884
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the reasons for the rejection. Century never engaged in a full and unbiased investigation which
would have made coverage reasonably clear. Rather, after its initial reservation of rights letter,
Century thereafter relied only on its original complaint filed herein, which asserts coverage
positions that are directly in opposition to the May 24, 2013 reservation of rights letter. Any
investigation Century conducted was outcome-oriented and self-serving.
79. Century failed to accept or reject the Trust’s claim in relation to the Doe Suit
within 15 business days after the Trust provided Century with the Fourth Amended Petition.
80. Century failed to accept or reject the Trust’s claim in relation to the Doe Suit
judgment within 15 business days after the Trust provided Century with the final judgment in the
Doe Suit.
81. Century violated TEX. INS. CODE § 542.056 which provides that an insurer, after
receiving all items, statements, and forms reasonably requested and required delays payment of
the claim for a period exceeding the period specified by other applicable statutes, or, if other
statutes do not specify a period, for more than 60 days, the insurer shall pay damages and other
items as provided by Section 542.060.
82. Century failed to make any payments due under the Policy and, moreover,
anticipatorily breached all duties under the Policy and announced that it would make no
payments under the Policy. As a result of Century’s failure to make payments in a timely
manner, PPI and the Trust were prejudiced and damaged. PPI and the Trust were left to defend
the Doe Suit. Century’s withdrawal of the defense, refusal to settle the Doe Suit, and its refusal
to indemnify PPI forced PPI to file its bankruptcy case.
83. Century delayed payment of the claim for a period exceeding 60 days after
receiving all items, statements, and forms reasonably requested and required.
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SUPP APP 0885
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84. The wrongful denial of PPI and the Trust’s request for a defense in the Doe Suit is
a delay in payment.
85. The wrongful refusal to indemnify the Trust for the Doe judgment is a delay in
payment.
86. As a consequence of its statutory violations, Century is liable to pay the Trust, in
addition to the amount of the defense costs asserted, interest on the amount of said claim at the
rate of 18 percent per annum, together with reasonable attorney’s fees, for which amounts the
Trust hereby sues. See TEX. INS. CODE § 542.060.
87. Because of Century’s ineffective and wrongful reservation of rights letter and/or
its violations of the Texas Insurance Code regarding the timely denial of claims, Century is
estopped from asserting its policy defenses.
COUNT 4 - VIOLATIONS OF CHAPTER 541 OF THE TEXAS INSURANCE CODE
88. The foregoing allegations are incorporated herein by reference.
89. PPI, the Trust, and Century are “persons” as defined by TEX. INS. CODE §
541.002(2).
90. Century violated TEX. INS. CODE § 541.051(1)(a)–(b), (4) which provides that it is
an unfair or deceptive act or practice in the business of insurance to make, issue, or circulate a
statement misrepresenting with respect to a policy issued the terms of the policy; the benefits or
advantages promised by the policy; to use a name or title of a policy that misrepresents the true
nature of the policy; and to make a misrepresentation to a policyholder for the purpose of
inducing or that tends to induce the policyholder to allow an existing policy to lapse or to forfeit
or surrender the policy.
91. Century has made statements misrepresenting the terms of the Policy and the
coverage it provides related to the separation-of-insureds clause. In its May 24, 2013 letter,
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Century stated that “Century will pay those sums the Insured is held liable for as a result of
‘bodily injury’ resulting from the Insured’s causing or contributing to the intoxication of any
person so long as your liquor license was in effect on the date of loss.” Each subsequent denial
of PPI’s and/or the Trust’s demands referred to Century’s July 2, 2013 declaratory judgment
action complaint, where Century stated, “to the extent the Original Petition alleges bodily injury
that result from the provision of liquor to the underage Plaintiff . . . the following policy
language . . . excludes coverage,” and cited the liquor liability coverage form which Century
previously stated provided coverage for liquor liability. Century further stated, “the Policy also
contains a liquor liability coverage endorsement, Form CLL 1902 0306, that provides that there
is no duty to defend or indemnify if the bodily injury is expected or intended from the standpoint
of any insured, or if any proximate or contributing cause of an ‘occurrence’ arises out of ‘liquor
liability.’” Accordingly Century misrepresented the terms of the Policy and both admitted and
denied, without justification, that the Policy was a policy covering liquor liability.
92. The Policy unambiguously covers liquor liability.
93. In its May 24, 2013 letter, Century also misrepresented the terms of the Policy
because it stated that, “The Petition alleges that a number of crimes were committed by Mr.
Deari and Mr. Kreka and we understand that criminal charges are currently pending against both.
As such, Century reserves the right to limit or deny coverage pursuant to this exclusion as well.”
Century misrepresented the Policy because the Policy contains a separation-of-insureds clause
which requires that Century treat PPI and Deari as separate “insureds,” Texas law holds that an
insurer may not impute intent onto PPI, and that, if Deari was not an “insured” under the Policy,
coverage for PPI remained available.
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SUPP APP 0887
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94. Lastly, Century misrepresented the Policy because it failed to properly or
correctly analyze the coverage provided by the liquor liability endorsement, which provides that
if a claim falls within the products-completed operations hazard coverage, then the liquor
liability “exclusion” does not apply.
95. Century made these statements to induce, or these statements tended to induce
PPI to forego or forfeit its rights under the Policy. Century failed to inform PPI that it had a right
to independent counsel, that PPI could obtain coverage if Deari were not found to be an
“insured,” and that PPI had the option to retain its own counsel, among other things.
96. These violations were a producing cause of actual damages, including but not
limited to PPI’s costs for counsel to defend it in the Doe Suit, PPI’s costs for counsel to defend it
in this suit, the Trust’s costs for counsel to defend it in the Doe Suit, and all damages, expenses,
fees, and costs associated with PPI’s bankruptcy case.
97. Century violated TEX. INS. CODE § 541.060(a)(1), (2), (3), (4), and (7) which
provides that it is an unfair or deceptive act or practice in the business of insurance to engage in
the following unfair settlement practices with respect to a claim by an insured: misrepresenting
to a claimant a material fact or policy provision relating to coverage at issue; failing to attempt in
good faith to effectuate a prompt, fair, and equitable settlement of a claim with respect to which
the insurer’s liability has become reasonably clear; failing to promptly provide to a policyholder
a reasonable explanation of the basis in the policy, in relation to the facts or applicable law, for
the insurer’s denial of a claim or offer of a compromise settlement of a claim; and failing within
a reasonable time to affirm or deny coverage of a claim to a policyholder or submit a reservation
of rights to a policyholder.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 18
SUPP APP 0888
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 19 of 258 PageID 2589
98. As stated above, Century misrepresented to PPI and the Trust the policy
provisions relating to the Doe Suit, including representations and statements related to the
separation-of-insureds clause, liquor liability coverage, and the products-completed operations
hazard coverage and the law related to the same. Century has failed to attempt in good faith to
settle the Doe Suit when PPI’s liability became reasonably clear, has failed to provide a
reasonable explanation of the basis of its denial, and has failed within a reasonable time to affirm
or deny coverage of the Doe Suit in relation to the Fourth Amended Petition and the Doe
judgment.
99. These violations were a producing cause of actual damages including but not
limited to PPI’s costs for counsel to defend it in the Doe Suit, PPI’s costs for counsel to defend it
in this suit, the Trust’s costs for counsel to defend it in the Doe Suit, and all damages, expenses,
fees, and costs associated with PPI’s bankruptcy case.
100. Century violated TEX. INS. CODE § 541.061 which provides that it is an unfair or
deceptive act or practice in the business of insurance to misrepresent an insurance policy by
making an untrue statement of material fact; failing to state a material fact necessary to make
other statements made not misleading, considering the circumstances under which the statements
were made; making a statement in a manner that would mislead a reasonably prudent person to a
false conclusion of a material fact; making a material misstatement of law; and failing to disclose
a matter required by law to be disclosed.
101. Among other things, and as stated above, Century misstated the coverage
provided by the Policy as described above, misstated the law applicable to the coverage provided
by the Policy as it relates to the Doe Suit, including but not limited to the law in Texas regarding
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 19
SUPP APP 0889
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 20 of 258 PageID 2590
separation-of-insureds, and failed to disclose connections between counsel appointed to defend
PPI in the Doe Suit and Century.
102. These violations were a producing cause of actual damages including but not
limited to PPI’s costs for counsel to defend it in the Doe Suit, PPI’s costs for counsel to defend it
in this suit, the Trust’s costs for counsel to defend it in the Doe Suit, and all damages, expenses,
fees, and costs associated with PPI’s bankruptcy case.
103. As a result of said violations, PPI and the Trust are entitled to recover actual
damages including the policy limits, all damages associated with the Bankruptcy Case, court
costs and reasonable attorney’s fees and, because Century knowingly committed these acts
complained of, a trebling of the amount of actual damages pursuant to TEX. INS. CODE §§
541.151–152.
104. Because of Century’s ineffective and wrongful reservation of rights letter and/or
its violations of the Texas Insurance Code regarding the timely denial of claims Century is
estopped from asserting its policy defenses.
COUNT 5 – VIOLATIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES ACT
105. The foregoing allegations are incorporated herein by reference.
106. PPI is a consumer under the Texas Business and Commerce Code.
107. The Trust is a consumer under the Texas Business and Commerce Code.
108. Century violated TEX. BUS. COMM. CODE §17.46(b) because it engaged in one or
more acts or practices which violate TEX. INS. CODE §§ 541.001, et seq., as stated above. PPI
and the Trust’s claims against Century under TEX. INS. CODE §§ 541.001, et seq., as set out
above are actionable under TEX. BUS. COMM. CODE §17.50(a)(4).
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 20
SUPP APP 0890
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109. PPI and the Trust relied on Century’s acts and practices to their detriment because
each relied on the Policy to provide a defense and indemnity in relation to the Doe Suit.
Additionally, Century’s acts and practices caused PPI not to tender amended petition in the Doe
Suit.
110. Century’s acts and practices were a producing cause of damages to PPI and the
Trust, and the Trust is entitled to economic damages, including but not limited to PPI’s and the
Trust’s benefit of the bargain, lost profits, and costs of mitigation, and actual damages including
but not limited to the policy limits, and all damages associated with the Bankruptcy Case,
together with court costs and reasonable attorney’s fees incurred herein.
111. Because Century acted knowingly, PPI and the Trust are entitled to additional
damages pursuant to TEX. BUS. COMM. CODE § 17.50(b)(1).
112. Because Century acted knowingly, PPI and the Trust are entitled to an additional
three times their economic damages. TEX. BUS. COMM. CODE § 17.50(b)(1).
113. The Trust seeks its court costs and pre- and post-judgment interest hereon. TEX.
BUS. COMM. CODE § 17.50(d), (f).
114. Because of Century’s ineffective and wrongful reservation of rights letter and/or
its violations of the Texas Insurance Code regarding the timely denial of claims, Century is
estopped from asserting its policy defenses.
COUNT 6 – VIOLATIONS OF CHAPTER 981 OF THE TEXAS INSURANCE CODE
115. The foregoing allegations are incorporated herein by reference.
116. Chapter 981 of the Texas Insurance Code regulates surplus lines insurers and
surplus lines agents.
117. The Policy is a surplus lines insurance policy.
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SUPP APP 0891
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118. Pursuant to TEX. INS. CODE § 101.201, an insurance contract effective in this state
and entered into by an unauthorized insurer is unenforceable by the insurer. Any person who in
any manner assisted directly or indirectly in the procurement of the contract is liable to the
insured for the full amount of a claim or loss under the terms of the contract if the unauthorized
insurer fails to pay the claim or loss.
119. Pursuant to TEX. INS. CODE § 981.004, an eligible surplus lines insurer may
provide surplus lines insurance only if the full amount of required insurance cannot be obtained,
after a diligent effort, from an insurer authorized to write and actually writing that kind and class
of insurance in this state, the insurance is placed through a surplus lines agent, and the insurer
meets the eligibility requirements of subchapter B of chapter 981 as of the inception date and
annual anniversary date of each insurance contract. An eligible surplus lines insurer may
provide surplus lines insurance only in the amount that exceeds the amount of insurance
obtainable form authorized insurers.
120. Pursuant to TEX. INS. CODE § 981.005, unless a material and intentional violation
of chapter 981 or 225 exists, an insurance contract obtained from an eligible surplus lines insurer
is valid and enforceable as to all parties and recognized in the same manner as a comparable
contract issued by an authorized insurer. A material and intentional violation of chapter 981 or
chapter 225 does not preclude the insured from enforcing the insured’s right under the contract.
121. Upon information and belief, PPI hired, retained, and/or used the Hutson Group
and/or RISC, Inc. to produce insurance for PPI. Upon information and belief, the Hutson Group
and/or RISC, Inc. failed to use diligent efforts to obtain the full amount of insurance from an
insurer authorized to write, and actually writing, that kind and class of insurance in the State of
Texas.
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SUPP APP 0892
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122. Upon information and belief, as inducement to PPI purchasing the Policy and
paying premiums, including a premium for liquor liability, the Policy was represented to include
liquor liability coverage for PPI. Upon information and belief, PPI completed application forms
specifically requesting liquor liability coverage.
123. Because, upon information and belief, the Hutson Group and/or RISC, Inc. failed
to use diligent efforts as described above, which is a material and intentional violation of Chapter
981 of the Texas Insurance Code, Century is prohibited from alleging a defense under the Policy
to the claims asserted by the Trust herein.
124. Century violated TEX. INS. CODE § 981.102 which provides that a surplus lines
insurance policy or contract form may not be used unless use of the form is reasonably necessary
for the principal purposes of the insurance coverage.
125. Century’s reservation of rights letter provides that bodily injury arising out of
liquor liability is covered by the Policy. Century’s letter revoking the defense it was providing
PPI and denying any indemnity does not change that position. However, Century’s declaratory
judgment action, which Century subsequently relied on to justify the refusal to defend PPI, states
that the Policy does not provide liquor liability.
126. Upon information and belief, pursuant to Tex. Ins. Code § 981.001 et seq.,
Century is not an “authorized insurer.”
127. Because of these material and intentional violation of Chapter 981 of the Texas
Insurance Code, Century is prohibited from alleging a defense under the Policy to the claims
asserted by the Trust herein.
128. Pursuant to TEX. INS. CODE § 101.202, in an action against an unauthorized
insurer or unauthorized person on a contract of insurance issued or delivered in this state to a
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SUPP APP 0893
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resident of this state or to a corporation authorized to do business in this state, the court may
award to the plaintiff a reasonable attorney’s fee if the insurer or person failed, for at least 30
days after a demand made before the commencement of the action, to make payment under the
contract’s terms; and the failure to make the payment was vexatious and without reasonable
cause. An insurer’s or person’s failure to defend an action described is prima facie evidence that
the failure to make payment was vexatious and without reasonable cause.
129. The Trust made demands on Century to make payment under the Policy’s terms.
Century refused to make such payments. These actions took place more than thirty days before
the filing of these counterclaims. Century has failed to defend the Doe Suit, which is prima facie
evidence that its failure to make the payments demanded was vexatious and without reasonable
cause.
130. The Trust therefore makes demand for its reasonable attorney’s fees in this action
against an unauthorized insurer.
COUNT 7 – BAD FAITH & BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING
131. The foregoing allegations are incorporated herein by reference.
132. There was an insurance contract between PPI and Century which created a duty of
good faith and fair dealing.
133. There was an insurance contract between the Trust and Century which created a
duty of good faith and fair dealing.
134. Century breached its duty when it denied payment when liability was reasonably
clear. Without investigating, and relying only on its reservation-of-rights letter, Century denied
defense and indemnity.
135. Century violated the Tilley rights of PPI and the Trust because Century unduly
influenced and guided the firm retained to defend PPI under the Policy to make discovery
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 24
SUPP APP 0894
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 25 of 258 PageID 2595
responses that were beneficial to Century’s position concerning coverage and detrimental to the
defense of PPI.
136. Century’s breach of the duty of good faith and fair dealing proximately caused
damages to PPI. These breaches caused PPI damage as Century withdrew its defense of PPI,
leaving PPI and the Trust to defend the case. Century’s withdrawal of the defense, refusal to
settle the Doe Suit, and its refusal to indemnify PPI forced PPI to file its bankruptcy case.
137. Century’s breach of the duty of good faith and fair dealing was grossly negligent.
Century briefly defended PPI and, without further investigation or explanation, withdrew the
defense and denied indemnity. Subsequently, Century relied on its complaint filed herein as its
reasons for denying a defense and indemnity, wherein Century misrepresents the coverage
provided by the Policy. Additionally, Century was grossly negligent in accepting premium in
exchange for liquor liability coverage and subsequently denying coverage on the basis that the
Policy does not include liquor liability.
138. Century acted maliciously. Century refused to defend or indemnify PPI or the
Trust, gambling on any liability as to PPI being outside of the scope of coverage and on pushing
PPI into bankruptcy/insolvency to compromise PPI’s ability to fight the coverage suit.
Additionally, counsel provided by Century to defend PPI provided discovery responses that
asserted that PPI only engaged in conduct for which liability in the Doe Suit would not be
covered under the Policy.
139. The Trust is entitled to recover punitive damages.
140. The Trust also seeks pre-and post-judgment interest and court costs and its
attorney’s fees incurred herein.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 25
SUPP APP 0895
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 26 of 258 PageID 2596
141. Even if the liability in the Doe Suit had not been covered under the Policy,
Century’s conduct was extreme and produced damages unrelated to and independent from the
claim on the Policy because Century’s acts and omissions forced PPI into bankruptcy.
142. Because of Century’s ineffective and wrongful reservation of rights letter and/or
its violations of the Texas Insurance Code regarding the timely denial of claims, Century is
estopped from asserting its policy defenses.
COUNT 8 – BREACH OF STOWERS DUTY
143. The foregoing allegations are incorporated herein by reference.
144. PPI was an insured under a contract of insurance issued by Century.
145. Jane Doe asserted a liability claim against PPI that was covered by the Policy.
146. On or about September 13, 2013, Jane Doe offered to settle the claim against PPI
within the limits of the Policy.
147. On or about February 27, 2014, Jane Doe offered to settle the claim against PPI
within the limits of the Policy.
148. On or about June 11, 2015, Jane Doe offered to settle the claim against the Trust
within the limits of the Policy. On June 17, 2015, the Trust forwarded the offer to Century.
149. Century owed PPI and the Trust a duty to accept reasonable settlement offers
within the policy limits. Pursuant to Stowers, Doe’s offers were reasonable settlement offers
within the Policy limits. Among other things, Doe’s pleadings alleged claims within the Policy
and it was reasonable to foresee that a judgment in the Doe Suit would exceed Policy limits.
150. Century breached the duty of care to PPI and the Trust by not reasonably
evaluating and/or timely accepting the Stowers offers.
151. Century’s breach of duty proximately caused the Trust damages.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 26
SUPP APP 0896
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 27 of 258 PageID 2597
152. As a matter of law, the Trust’s damages include the amount of the judgment. The
judgment amount as to PPI and the Trust is $19,411,141.42 plus pre-judgment interest on the
date the Judgment was entered, which judgment amount continues to accrue post-judgment
interest, for which the Trust also seeks recovery.
153. Century’s breach of duty proximately caused PPI and the Trust damages. Among
other things, had Century complied with its obligations by accepting one of these Stowers
demands, PPI would not have had to file bankruptcy, its creditors would have been paid, and PPI
and the Trust would not now be liable for the judgment rendered in the Doe Suit. The liability in
the Doe Suit could have been settled for much, much less, and within Policy limits, had Century
defended and/or had it acted reasonably in investigating the Doe Suit and reasonably evaluating
each and every settlement offer therein.
154. Because of Century’s ineffective and wrongful reservation of rights letter and/or
its violations of the Texas Insurance Code regarding the timely denial of claims, Century is
estopped from asserting its policy defenses.
COUNT 9 – GROSS NEGLIGENCE
155. The foregoing allegations are incorporated herein by reference.
156. The acts and/or omissions complained of above against Century constitute gross
negligence, malice, or actual fraud, which conduct proximately caused PPI and the Trust’s
injuries herein.
157. The Trust is entitled to exemplary damages under TEX. CIV. PRAC. & REM. CODE
§ 41.003(a).
V. JURY DEMAND
158. The Trust demands a trial by jury on all issues of fact.
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 27
SUPP APP 0897
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 28 of 258 PageID 2598
VI. SPECIAL DAMAGES
159. The Trust seeks additional special damages because Century’s actions caused
PPI’s insolvency and bankruptcy. Century’s wrongful refusal to defend and indemnify PPI,
and/or Century’s continual refusal to settle the Doe Suit within policy limits when liability was
reasonably clear, caused PPI to incur significant attorney’s fees and exposed PPI to a large
judgment which it would not be able to satisfy without indemnity from Century. Century took
PPI’s money in exchange for a promise to defend and indemnify PPI for covered suits. When
PPI looked to Century to honor its obligations, Century declined and instead sued PPI. Such
malicious actions warrant special damages- instead of providing a defense and indemnity upon
which PPI relied, Century is the sole reason for PPI’s bankruptcy.
VII. CONDITIONS PRECEDENT
160. All conditions precedent have occurred or have been performed.
VIII. PRAYER
WHEREFORE, PREMISES CONSIDERED, Scott M. Seidel, as trustee for Defendant
Pastazios Pizza, Inc. Creditors Trust, prays this Honorable Court:
a. Enter judgment in favor of the Trust;
b. Award the Trust actual damages;
c. Award the Trust economic damages;
d. Award the Trust special damages;
e. Award the Trust exemplary damages;
f. Award the Trust treble damages pursuant to TEX. INS. CODE § 541.152(b);
g. Award the Trust treble damages pursuant to TEX. BUS. & COM. CODE § 17.50(b)(1);
h. Award the Trust its costs;
i. Grant the Trust its reasonable attorneys’ fees and costs pursuant to TEX. INS. CODE §
541.152(a)(1);
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 28
SUPP APP 0898
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 29 of 258 PageID 2599
j. Grant the Trust its reasonable attorney’s fees and costs pursuant to TEX. CIV. PRAC. &
REM. CODE § 38.001(8);
k. Grant the Trust its reasonable attorney’s fees and costs pursuant to TEX. INS. CODE §
542.060;
l. Grant the Trust its reasonable attorney’s fees and costs pursuant to TEX. BUS. & COM.
CODE § 17.50(d);
m. Grant the Trust its reasonable attorney’s fees and costs pursuant to TEX. INS. CODE §
101.201; and
n. Grant the Trust such other and further legal and/or equitable relief to which it has shown
itself justly entitled.
RESPECTFULLY SUBMITTED this 30th day of October, 2015.
MUNSCH HARDT KOPF & HARR, P.C.
By: /s/ Michael W. Huddleston
Michael W. Huddleston, Esq.
Texas Bar No. 10148415
Davor Rukavina, Esq.
Texas Bar No. 24030781
J. Stephen Gibson, Esq.
Texas Bar No. 07866000
Thomas D. Berghman, Esq.
Texas Bar No. 24082683
3800 Ross Tower
500 N. Akard Street
Dallas, Texas 75201
Telephone: (214) 855-7500
Facsimile: (214) 855-4346
COUNSEL FOR SCOTT M. SEIDEL,
TRUSTEE OF THE PASTAZIOS PIZZA, INC.
CREDITOR TRUST
PASTAZIOS PIZZA, INC. CREDITOR TRUST’S AMENDED COUNTERCLAIMS —Page 29
MHDocs 6646520_2 13229.3
SUPP APP 0899
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 30 of 258 PageID 2600
EXHIBIT A
SUPP APP 0900
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 31 of 258 PageID 2601
@
Century Surety Company
465 Cleveland Avenue
Westerville, Ohio 43082
614-895·2000
www.centurysurety.com
COMMERCIAL LINES POLICY
COMMON POLICY DECLARATIONS
POLICY NO.: CCP 672836 New
NAMED INSURED AND ADDRESS: CODE N0.:5645A
PASTAZIOS PIZZA, INC. INSUREDS AGENT:
5026 ADDISON CIRCLE THE HUTSON GROUP, INC.
710 EAST PARK BLVD, #200
ADDISON TX 75001-3332
PLANO TX 75074-
POLICY PERIOD: From:09-21-201 0 To:09-21.-2011 at 12:01 A.M. Standard time at your mailing address shown above.
Business Description: PIZZA RESTAURANT.
0 Individual 0 Joint Venture 0 Partnership 0 Umlted liability Company (LlC) @Organization (Other than Partnership, LLC or Joint Venture)
IN RETURN FOR THE PAYMENT OF THE PREMIUM, AND SUBJECT TO ALL THE TERMS OF THIS POLICY, WE AGREE
WITH YOU TO PROVIDE THE INSURANCE AS STATED IN THIS POLICY.
THIS POLICY CONSISTS OF THE FOLLOWING COVERAGE PARTS FOR WHICH A PREMIUM IS INDICATED. THIS
PREMIUM MAY BE SUBJECT TO ADJUSTMENT.
PREMIUM
Commercial General Liability Coverage Part $3,336.00
Commercial Property Coverage Part $4,364.00
Inspection Fee $150.00
Policy Fee $175.00
State Tax $389.21
S.O. Fee $4.82
25 % of the Policy Premium is fully earned as of the effective TOTAL $8,419.03
date of this policy and is not subject to return or refund.
Service of Suit (if form CCP 20 10 is attached} may be made upon:
R!SC, Inc.
2001 Bryan St., Bryan Tower, Suite 2900 Dallas TX 75201
orm{s) and Endorsement(s) made a part of this policy at time of issue*:
See Attached Schedule of Forms, CIL 15 OOb 02 02
•omits applicable orms an Endorsements if shown in specific Coverage Part/Coverage Form Declarations.
Any person who. with intent to defraud or knowing that he is facilitating a fraud against an insurer, subm~"tsapplication or files a claim containing false or
deceptive statement is guilty of insurance fraud. ,J.~ ./) ~- ~
COMPANYREPRESENTAT!VE: ~ Jr/~
RISC, Inc. Countersigned By
2001 Bryan St Authorized Represe
Bryan Tower, Suite 2900
Dallas TX 75201 10/20/2010 BSI
IN WITNESS WHEREOF, this Company has eXecuted and attested these presents; but this policy shall not be valid unless countersigned by the duly Authorized
Agent of this Company at the Agency hereinbefore mentioned.
Secretary President
CSCP 10 01 05 09 Page 1 of 1
SENT TO: AGT/SO
11/01/1 0//LE
SUPP APP 0901
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 32 of 258 PageID 2602
TXPN 0003 0409
TEXAS POLICYHOLDER NOTICE
This insurance contract is with an insurer not licensed to transact insurance in this state
and is issued and delivered as surplus line coverage under the Texas insurance
statutes. The Texas Department of Insurance does not audit the finances or review the
.solvency of the surplus lines insurer providing this coverage, and the insurer is not a
member of the property and casualty insurance guaranty association created under
Chapter 462 Insurance Code. Chapter 225, Insurance Code, requires payment of a
4.85 percent tax on gross premium.
TXPN 0003 0409 Page 1 of 1
SUPP APP 0902
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 33 of 258 PageID 2603
TXPN 0001 0507
TEXAS COMPLAINT NOTICE
IMPORTANT NOTICE AVISO IMPORTANTE
1. To obtain information or make a complaint: Para obtener informacion o para someter una queja:
2. You may contact your agent at telephone number Puede comunicarse con su agente al972-398-9001
972-398-9001
Usted puede llamar a numero de telefono gratis de
3. You may call Century Surety Company's toll- free
telephone number for information or to make a Century Surety Company's para informacion o para
someter uns queja al:
complaint at:
1-800-878-7389
1-800-878-7389
4. You may also write to Century Surety Co. at: Usted tambien puede escribir a Century Surety Co.
Century Surety Co. Century Surety Co.
465 Cleveland Ave. 465 Cleveland Ave.
Westerville, OH 43082 Westerville, OH 43082
5. You may contact the Texas Department of Puede comunicarse con el Departmento de Seguros de
Insurance to obtain information on companies, Texas para obtener informacion acerda de
coverages, rights or complaints at: companieas, coberturas, derechos o quejas al:
1-800-252-3439 1-800-252-3439
6. You may write the Texas Department oflnsurance: Puede escribir al Departmento de Seguros de Texas:
P.O. Box 149104 P.O. Box 149104
Austin, Texas 787i4-9104 Austin, Texas 78714-9104
FAX #(512) 475-1771 FAX# (512) 475-1771
Web: http://www.tdi.state.tx.us Web: http://www.tdi.state.tx.us
E-mail: ConsumerProtection@tdi.state.tx.us E-mail: ConsumerProtection@tdi.state.tx.us
7. PREMIUM OR CLAIM DISPUTES: DISPUTAS SOMBRE PRIMAS 0 RECLAMOS:
Should you have a dispute concerning your Si tiene una disputa concemiente a su prima o a un
premium or about a claim you should contact the reclamo, debe comunicarse con e1 (agente) (la
(agent} (company) (agent or the company) first. If campania) (agente o la compania) primero. Sino
the dispute is not resolved, you may contact the resulve la disputa, puede entonces comunicarse con el
Texas Department of Insurance (TDI). departmento (TDI).
8. ATTACH TffiS NOTICE TO YOUR POLICY: UNA ESTE AVISO A SU POLIZA:
This notice is for information only and does not Este aviso es solo para proposito de informacion y no
become a part or condition of the attached se conviete en parte o condicion del documento
document. adjunto.
TXPN 0001 0507
SUPP APP 0903
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 34 of 258 PageID 2604
Century -Surety Company
465 CLEVELAND AVENUE
WESTERVILLE, OH 43082
A STOCK COMPANY
COMMERCIAL
LINES
POLICY
THIS POLICY JACKET WITH COMMON POLICY CONDITIONS, THE
DECLARATIONS PAGE, COVERAGE PART(S), COVERAGE FORM(S) AND
APPLICABLE FORMS AND ENDORSEMENTS COMPLETE THIS POLICY.
CSCP1 000 (02/04)
SUPP APP 0904
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 35 of 258 PageID 2605
Policy Number: CCP 672836 CIL 15 OOb 02 02
SCHEDULE OF FORMS AND ENDORSEMENTS
(other than applicable forms and endorsements shown elsewhere in the policy)
Forms and Endorsements applying to the Coverage Parts listed below and made a part of this policy attime of issue:
Form/ Edition
Endt. # Date Title Total# of Forms Selected: 47
Forms Applicable to this Coverage part -INTERLINE-ALL COVERAGE PARTS
CCP 2010 05 08 Service of Suit Clause .
CIL 15008 02 02 Schedule of Forms and Endorsements
CSCP 1000 02 04 Century Insurance Group Policy Jacket
CSCP 1001 0509 Century Insurance Group Common Policy Declaration
IL 0003 0908 Calculation of Premium
IL 0017 1198 Common Policy Conditions
PRIV 0001 11 09 Privacy Statement I
TRIA 0001 1008 Policyholder Disclosure Notice ofTerrorism
TXPN 0001 0507 Texas Complaint Notice
TXPN 0003 0409 Texas Policyholder Notice
10 Forms
CIL 15 OOb 02 02 Page 1 of3
SUPP APP 0905
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 36 of 258 PageID 2606
Forms Applicable to this Coverage part- GENERAL LIABILITY
CG 0001 12 07 Commercial General Liability Coverage Form
CG 0068 05 09 Recording and Distribution of Material or Information In Violation of Law Exclusion
CG 0300 01 96 Deductible Liability Insurance
CG 2011 01 96 Additional Insured-Managers or Lessors of Premises
CG 2026 0704 Additional Insured-Designated Person or Organization
CG. 2146 0798 Abuse or Molestation Exclusion
CG 2147 1207 Employment-Related Practices Exclusion
Total Pollution Exclusion Wrth A Building Heating, Cooling and Dehumidifying Equipment
CG 2165 1204
Exception and A Hostile Fire Exception
Exclusion of Certified Acts of Terrorism and Exclusion of Other Acts ofTerrorism Committed
CG 2175 0608
Outside the United States
CG 2176 0108 Exclusion of Punitive Damages Related to Certified Act of of Terrorism
Exclusion of Certified Nuclear, Biological, Chemical or Radiological Acts of Terrorism; Cap
CG 2184 0108
on Losses from Certified Acts of Terrorism
CG 2196 0305 Silica or Silica-Related Dust Exclusion
CG 2404 0509 Waiver Of Transfer Of Rights Of Recovery Against Others To Us
CG 2407 0196 Products/Completed Operations Hazard Redefined
CGL 1500 0407 Century Insurance Group Commercial General Liability Declarations
CGL 1701a 0510 Special Exclusions And Limitations Endorsement
CGL 1702 1100 Action Over Exclusion
CGL 1711 0406 Limitation of Coverage To Specified Classifications, Operations, Premises or Projects
Restaurant, Bar, Tavern & Grocery Store Food Poisoning & Food Contamination Coverage
CGL 1742 0310
Endorsement
CLL 1902 0306 Liquor liability Coverage Endorsement
IL 0021 0908 Nuclear Energy Liability Exclusion Endorsement (Broad Form)
21 Forms
CIL 15 OOb 02 02 Page 2 of3
SUPP APP 0906
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 37 of 258 PageID 2607
Forms Applicable to this Coverctge part· PROPERlY
CCF 1500 09 07 Commercial Property Coverage Part Declarations
CCF 1503 1001 Exclusion- "Vacant or Unoccupied" Property
CCF 1504 0794 · Theft Exclusion - Outside of Building
CCF 1512 0506 Multiple Deductible Form
CCF 1514 0410 Limited Property Extentions
CCF 1515 0410 Equipment Breakdown Enhancement Endt
CP 0010 0601 Building and Personal Property Coverage Form
CP 0090 0788 Commercial Property Conditions
CP 0140 0706 Exclusion of loss Due to Virus or Bacteria
CP 1030 0607 Cause of loss ·Special Form
CP 1211 1000 Burglary and Robbery Protective Systems
CP 1440 1000 Outside Signs
CP 1470 0607 Building Glass- Tenant'S Policy
IL 0415 0498 Protective Safeguards
IL 0935 0702 Exclusion of Certain Computer-Related Losses
Exclusion of Certified Acts ofTerrorism Involving Nuclear, Biological, Chemical or
IL 0986 0308
Radiological Terrorism; Cap on Covered Certified Acts Losses
16 Forms
CIL 15 OOb 02 02 Page 3of3
SUPP APP 0907
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 38 of 258 PageID 2608
CCP 2010 0508
SERVICE OF SUIT CLAUSE
This endorsement modifies insurance provided by the policy to which this form is
attached.
It is agreed that in the event of the failure by us to pay any amount claimed to be due
hereunder, we will, at your request, submit to the jurisdiction of a court of competent
jurisdiction within the United States of America. Nothing in this clause constitutes or
should be understood to constitute a waiver of our rights to commence an action in a
court of competent jurisdiction in the United States of America, to remove an action to a
United States District Court, or to seek a transfer of a case to another court as
permitted by the laws of ·the United States of America or of any state in the United
States of America. In any such suit against us, we will abide by the final decision of
such court or of any Appellate Court in the event of an appeal.
It is further agreed that service of process in such suit may be made upon the person or
organization shown in the Policy Declarations or upon us at the address shown in the
policy jacket.
The above named are authorized and directed to accept service of process on behalf of
us in any such suit and/or upon your request to give a written undertaking to you that
we will enter a general appearance upon our beha~f in the event such a suit shall be
instituted.
Further, pursuant to any statute of any state, territory, or district of the United States of
America, which makes .provision therefore, we hereby designate the Superintendent,
Commissioner, or Directors of Insurance or other officer specified for that purpose in
the statute or his successor or successors in office, as their true and lawful attorney
upon whom may be served any lawful process in any action, suit, or proceeding
instituted by or on your behalf or any beneficiary hereunder arising out of this contract
of insurance, and hereby designates the above named as the person to whom the said
officer is authorized to mail such process or a true copy thereof.
CCP 20 10 0508 Page 1 of 1
SUPP APP 0908
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 39 of 258 PageID 2609
COMMERCIAL GENERAL LIABILITY
CG 21 75 06 08
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
EXCLUSION OF CERTIFIED ACTS OF TERRORISM AND
EXCLUSION OF OTHER ACTS OF TERRORISM
COMMITTED OUTSIDE THE UNITED STATES
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
LIQUOR LIABILITY COVERAGE PART
OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART
POLLUTION LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
RAILROAD PROTECTIVE LIABILITY COVERAGE PART
UNDERGROUND STORAGE TANK POLICY
A. The following exclusion is added: b. Protracted and obvious physical disfigure-
This insurance does not apply to: ment; or
TERRORISM c. Protracted loss of or impairment of the
function of a bodily member or organ; or
"Any injury or damage" arising, directly or indirect-
ly, out of a "certified act of terrorism'', or out of an 3. The terrorism involves the use, release or
"other act of terrorism" that is committed outside of escape of nuclear. materials, or directly or indi-
the United States (including its territories and pos- rectly results in nuclear reaction or radiation or
sessions and Puerto Rico), but within the "cover- radioactive contamination; or
age territory". However, with respect to an "other 4. The terrorism is carried out by means of the
act of terrorism", this exclusion applies only when dispersal or application of pathogenic or poi-
one or more of the following are attributed to such sonous biological or chemical materials; or
act: 5. Pathogenic or poisonous biological or chemical
1. The total of insured damage to all types of materials are released, and it appears that one
property exceeds $25,000,000 (valued in US purpose of the terrorism was to release such
dollars). In determining whether the materials.
$25,000,000 threshold is exceeded, we will in- With respect to this exclusion, Paragraphs 1. and
clude all insured damage sustained by"property 2. describe the thresholds used to measure the
of all persons and entities affected by the ter- magnitude of an incident of an "other act of terror-
rorism and business interruption losses sus- ism" and the circumstances in which the threshold
tained by owners or occupants of the damaged will apply for the purpose of determining whether
property. For the purpose of this provision, in- this exclusion will apply to that incident.
sured damage means damage that is covered
by any insurance plus damage that would be B. The following definitions are added:
covered by any insurance but for the applica- 1. For the purposes of this endorsement, "any
tion of any terrorism exclusions; or injury or damage" means any injury or damage
2. Fifty or more persons sustain death or serious covered under any Coverage Part to which this
physical injury. For the purposes of this provi- endorsement is applicable, and includes but is
sion, serious physical injury means: not limited to "bodily injury", "property dam-
age", "personal and advertising injury'', "injury''
a. Physical injury that involves a substantial or "environmental damagen as may be defined
risk of death; or in any applicable Coverage Part.
CG 217506 08 © Insurance Services Office, Inc., 2008 Page 1 of2 D
SUPP APP 0909
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 40 of 258 PageID 2610
2. "Certified act of terrorism" means an act that is c. The act is a violent act or an act that is
certified by the Secretary of the Treasury, in dangerous to human life, property or infra-
concurrence with the Secretary of State and structure and is committed by an individual
the Attorney General of the United States, to or individuals as part of an effort to coerce
be an act of terrorism pursuant to the federal the civilian population of the United States
Terrorism Risk Insurance Act. The criteria con- · or to influence the policy or affect the con-
tained in the Terrorism Risk Insurance Act for a duct of the United States Government by
"certified act of terrorism" include the following: coercion.
a. The act resulted in insured losses in excess 3. "Other act of terrorism" means a violent act or
of $5 million in the aggregate, attributable to an act that is dangerous to human life, property
all types of insurance subject to the Terror- or infrastructure that is committed by an indi-
ism Risk Insurance Act; vidual or individuals and that appears to be
b. The act resulted in damage: part of an effort to coerce a civilian population
or to influence the policy or affect the conduct
{1) Within the United States (including its of any government by coercion, and the act is
territories and possessions and Puerto not a "certified act of terrorism".
Rico); or
Multiple incidents of an "other act of terrorism"
(2) Outside of the United States in the case which occur within a seventy-two hour period
of: · and appear to be carried out in concert or to
(a) An air carrier (as defined in Section have a related purpose or common leadership
40102 of title 49, United States shall be considered to be one incident.
Code) or United States flag vessel C. In the event of any incident of a "certified act of
(or a vessel based principally in the terrorism" or an 'iother act of terrorism" that is not
United States, on which United subject to this exclusion, coverage does not apply
States income tax is paid and whose to any loss or damage that is otherwise excluded
insurance coverage is subject to under this Coverage Part.
regulation in the United States), re-
gardless of where the loss occurs; or
(b) The premises of any United States
mission; and
Page 2 of2 © Insurance Services Office, Inc., 2008 CG217506 08
SUPP APP 0910
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 41 of 258 PageID 2611
COMMERCIAL GENERAL LIABILITY
CG 21 760108
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
EXCLUSION OF PUNITIVE DAMAGES
RELATED TO A CERTIFIED ACT OF TERRORISM
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
LIQUOR LIABILITY COVERAGE PART
OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART
POLLUTION LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
RAILROAD PROTECTIVE LIABILITY COVERAGE PART
UNDE;RGROUND STORAGE TANK POLICY
A. The following exclusion is added: 2. The act is a violent act or an act that is dan-
This insurance does not apply to: gerous to human life, property or infrastructure
and is committed by an individual or individuals
TERRORISM PUNITIVE DAMAGES as part of an effort to coerce the civilian popu-
Damages arising, directly or indirectly, out of a lation of the United States or to influence the
"certified act of terrorism'' that are awarded as pu- policy or affect the conduct of the United States
nitive damages. Government by coercion.
B. The following definition is added:
"Certified act of terrorism" means an act that is
certified by the Secretary of the Treasury, in con-
currence with the Secretary of State and the Attor-
ney General of the United States, to be an act of
terrorism pursuant to the federal Terrorism Risk
Insurance Act. The criteria contained in the Terror-
ism Risk Insurance Act for a "certified act of terror-
ism" include the following:
1. The act resulted in insured losses in excess of
$5 million in the aggregate, attributable to all
types of insurance subject to the Terrorism
Risk Insurance Act; and
CG 2176 01 08 ©ISO Properties, Inc., 2007 Page 1 of 1 []
SUPP APP 0911
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 42 of 258 PageID 2612
COMMERCIAL GENERAL LIABILITY
CG 2184 01 08
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
EXCLUSION OF CERTIFIED NUCLEAR,
BIOLOGICAL, CHEMICAL OR RADIOLOGICAL ACTS
OF TERRORISM; CAP ON LOSSES FROM CERTIFIED
ACTS OF TERRORISM
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
LIQUOR LIABILITY COVERAGE PART
OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART
POLLUTION LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
RAILROAD PROTECTIVE LIABILITY COVERAGE PART
UNDERGROUND STORAGE TANK POLICY
A. The following exclusion is added: 2. "Certified act of terrorism" means an act that is
This insurance does not apply to: certified by the Secretary of the Treasury, in
concurrence with the Secretary of State and
TERRORISM the Attorney General of the United States. to
"Any injury or damage" arising, directly or indirect- be an act of terrorism pursuant to the federal
ly, out of a "certified act of terrorism". However, Terrorism Risk Insurance Act. The criteria con-
this exclusion applies only when one or more of tained in the Terrorism Risk Insurance Act for a
the following are attributed to such act: "certified act of terrorism" include the following:
1. The terrorism involves the use, release or a. The act resulted in insured losses in excess
escape of nuclear materials, or directly or indi- of $5 million in the aggregate, attributable to
rectly results in nuclear reaction or radiation or all types of insurance subject to the Terror-
radioactive contamination; or ism Risk Insurance Act; and
2. The terrorism is carried out by means of the b. The act is a violent act or an act that is
dispersal or application of pathogenic or poi- dangerous to human life, property or infra-
sonous biological or chemical materials; or structure and is committed by an individual
3. Pathogenic or poisonous biological or chemical or individuals as part of an effort to coerce
materials are released, and it appears that one the civilian population of the United States
purpose of the terrorism was to release such or to influence the policy or affect the con-
materials. duct of the United States Government by
coercion.
B. The following definitions are added:
C. In the event of any incident of a "certified act of
1. For the purposes of this endorsement, "any terrorism" that is not subject to this exclusion, cov-
injury or damage" means any injury or damage erage does not apply to any loss or damage that is
covered under any Coverage Part to which this otherwise excluded under this Coverage Part.
endorsement is applicable, and includes but is
not limited to "bodily injury'', "property dam-
age", "personal and advertising injury", "injury"
or "environmental damage" as may be defined
in any applicable Coverage Part.
CG 21 84 01 08 ©ISO Properties, Inc., 2007 Page 1 of 2 0
SUPP APP 0912
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 43 of 258 PageID 2613
D. If aggregate insured losses attributable to terrorist
acts certified under the federal Terrorism Risk In-
surance Act exceed $100 billion in a Program
Year (January 1 through December 31) and we
have met our insurer deductible under the Terror-
ism Risk Insurance Act, we shall not be liable for
the payment of any portion of the amount of such
losses that exceeds $100 billion, and in such case
insured losses up to that amount are subject to pro
rata allocation in accordance with procedures es-
tablished by the Secretary of the Treasury.
Page2 of2 ©ISO Properties, Inc., 2007 CG 21 84 01 08 [J
SUPP APP 0913
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 44 of 258 PageID 2614
IL 00 03 09 08
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
CALCULATION OF PREMIUM
This endorsement modifies insurance provided under the following:
CAPITAL ASSETS PROGRAM (OUTPUT POLICY) COVERAGE PART
COMMERCIAL AUTOMOBILE COVERAGE PART
COMMERCIAL GENERAL LIABILITY COVERAGE PART
COMMERCIAL INLAND MARINE COVERAGE PART
COMMERCIAL PROPERTY COVERAGE PART
CRIME AND FIDELITY COVERAGE PART
EMPLOYMENT~RELATED PRACTICES LIABILlTY COVERAGE PART
EQUIPMENT BREAKDOWN COVERAGE PART
FARM COVERAGE PART
LIQUOR LIABILITY COVERAGE PART
MEDICAL PROFESSIONAL LIABILITY COVERAGE PART
OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART
POLLUTION LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
RAILROAD PROTECTIVE LIABILITY COVERAGE PART
The following is added:
The premium shown in the Declarations was com-
puted based on rates in effect at the time the policy
was issued. On each renewal, continuation, or anni-
versary of the effective date of this policy, we will
compute the premium in accordance with our rates
and rules then in effect.
IL 00 03 09 08 © ISO Properties, Inc., 2007 Page 1 of 1 [J
SUPP APP 0914
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 45 of 258 PageID 2615
COMMON POLICY CONDITIONS
All Coverage parts included in this policy are subject to the following conditions.
A. Cancellation b. Give- you reports on the conditions we
1. The first Named Insured shown in the find; and
Declarations may cancel this policy by c. Recommend changes.
mailing or delivering to us advanced written 2. We are not obligated to make any
notice of cancellation. inspections, surveys, reports or recom-
2. We may cancel this policy by mailing or mendations arid any such actions we do
delivering to the first Named Insw-ed written undertake relate only to insurability and the
notice of cancellation at least: · premiums to be charged. We do not make
a. 10 days before the effective date of safety inspections. We do not undertake to
cancellation if we cancel for nonpayment perform the duty of any per.>on or
ofpremium; or organization to provide for the health or
safety of workers or the public. And we do
b. 30 days before the effective date of not warrant that conditions:
cancellatio:n if we cancel for any other
reason. a. Are safe or healthful; or
3. We will mail or deliver our notice to the first b. Comply with laws, regulations, codes or
Named Insured's last mailing address known standards.
tous. . 3. Paragraphs 1. and 2. of this condition apply
4. Notice of cancellation will state the effective not only to us, but also to any rating,
date of cancellation. The policy period will advisory, rate services or similar organization
end on that date. which makes insurance inspections. surveys,
reports or recommendations.
5. If this policy is cancelled, we will send the
first Named Insured any premium refund due. 4. Paragraph 2. of this condition does not apply
If we cancel, the refund will be pro rata. lf to any inspections, surveys, reports or
the first Named Insured cancels, the refund recommendations we may make relative to
may be less than pro rata. The cancellation certification, under state or ·municipal
will be effective even if we have not made or statutes, ordinances or regulations, of boilen;,
offered a refund. pressure vessels or elevators.
6. If notice is mailed, proof of mailing will be E. Premiums
sufficient proof of notice. The first Named Insured shown m the
B. Changes Declarations:
This policy contains all the agreements between 1. Is responsible for the payment of all
you and us concerning the insurance afforded. premiums; and
The first named Insured shown in the 2. Will be the payee for any return premiums
Declarations is authorized to make changes in the we pay.
terms of this policy with our consent. This F. Transfer Of Your Rights And Duties Under
policy's tenns can be amended or waived only by This Policy
endorsement issued by us and made a part of this
policy. Your rights and duties under this policy may not
be transferred without our written consent except
C. Examination Of Your Books And Records in the case of death of an individual named
We may examine and audit your books and insured.
records as they relate to this policy at any time If you die, your rights and duties will be
during the policy period and up to three years transferred to your legal representative but only
afterward. while acting within the scope of .duties as your
D. Inspections And Surveys legal representative. Until your legal repre-
1. We have the right to: sentative is appointed, anyone having proper
temporary custody of your property will have
a. Make inspections and surveys at any your rights and duties but only with respect to
time; that property. ,
1L 00 17 11 98 Copyright, Insurance Services Office, Inc., 1998 Page 1 ofl
SUPP APP 0915
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 46 of 258 PageID 2616
ILOO 21 09 08
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
NUCLEAR ENERGY LIABILITY EXCLUSION
ENDORSEMENT
(Broad Form)
This endorsement modifies insurance provided under the following:
COMMERCIAL AUTOMOBILE COVERAGE PART
COMMERCIAL GENERAL LIABILITY COVERAGE PART
FARM COVERAGE PART
LIQUOR LIABILITY COVERAGE PART
MEDICAL PROFESSIONAL LIABILITY COVERAGE PART
OWNERS AND CONTRACTORS PROTECTIVE LIABILITY COVERAGE PART
POLLUTION LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
RAILROAD PROTECTIVE LIABILITY COVERAGE PART
UNDERGROUND STORAGE TANK POLICY
1. The insurance does not apply: C. Under any Liability Coverage, to "bodily injury"
A Under any Liability Coverage, to "bodily injury" or "property· damage" resulting from "hazard-
or "property damage": ous properties" of "nuclear material", if:
(1) With respect to which an "insured" under (1) The "nuclear material" (a) is at any "nuclear
the policy is also an insured under a nuc- facility" owned by, or operated by or on be-
lear energy liability policy issued by Nuclear half of, an "insured" or (b) has been dis-
Energy Liability Insurance Association, Mu- . charged or dispersed therefrom;
tual Atomic Energy Liabifity Underwriters, {2) The "nuclear material" is contained in
Nuclear Insurance Association of Canada "spent fuel" or "waste" at any time pos-
or any of their successors, or would be an sessed, handled, used, processed, stored,
insured under any such policy but for its transported or disposed of, by or on behalf
termination upon exhaustion of its limit of of an "insured~; or
liability; or (3) The "bodily injury" or "property damage"
(2) Resulting from the "hazardous properties" arises out of the furnishing by an Ninsured"
of "nuclear material" and with respect to of services, materials, parts or equipment in
which (a) any person or organization is re- connection with the planning, construction,
quired to maintain financial protection pur- maintenance, operation or use of any "nuc-
suant to the Atomic Energy Act of 1954, or lear facility", but if such facility is located
any law amendatory thereof, or (b) the "in- within the United States of America, its terri-
sured" is, or had this policy not been issued tories or possessions or Canada, this ex-
would be, entitled to indemnity from the clusion (3) applies only to "property dam-
United States of America, or any agency age" to such "nuclear facility" and any
thereof, under any agreement entered into property thereat.
by the United States of America, or any 2. As used in this endorsement:
agency thereof, with any person or organi-
zation. "Hazardous properties• includes radioactive, toxic
or explosive properties.
B. Under any Medical Payments coverage, to
expenses incurred with respect to "bodily in- "Nuclear material" means "source material", "spe-
jury" resulting from the "hazardous properties" cial nuclear material" or "by-product material".
of "nuclear material" and arising out of the op-
eration of a "nuclear facility" by any person or
organization.
JL 00 21 09 08 © ISO Properties, Inc., 2007 Page 1 of2 0
SUPP APP 0916
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 47 of 258 PageID 2617
"Source material", "special nuclear material", and (c) Any equipment or device used for the
"by-product material" have the meanings given processing, fabricating or alloying of "spe-
them in the Atomic Energy Act of 1954 or in any cial nuclear material" if at any time the total
law amendatory thereof. amount of such material in the custody of
"Spent fuel" means any fuel element or fuel com- the "insured" at the premises where such
ponent, solid or liquid, which has been used or ex- equipment or device is located consists of
posed to radiation in a "nuclear reactor". or contains more than 25 grams of pluto-
nium or uranium 233 or any combination
'Waste" means any waste material (a) containing thereof, or more than 250 grams of uranium
"by-product material" other than the tailings or 235;
wastes produced by the extraction or concentra-
tion of uranium or thorium from any ore processed (d) Any structure, basin, excavation, premises
primarily for its "source material" content, and (b) or place prepared or used for the storage or
resulting from the operation by any person or or- disposal of "waste";
ganization of any "nuclear facility'' included under and includes the site on which any of the foregoing
the first two paragraphs of the definition of "nuc- is located, all operations conducted on such site
lear facility". and all premises used for such operations.
"Nuclear facility" means: "Nuclear reactor" means any apparatus designed
(a) Any "nuclear reactor"; or used to sustain nuclear fission in a self-
supporting chain reaction or to contain a critical
(b) Any equipment or device designed or used mass of fissionable material.
for (1) separating the isotopes of uranium or
plutonium, (2) processing or utilizing "spent "Property damage" includes all forms of radioac-
fuel", or (3) handling, processing or packag- tive contamination of property.
ing "waste";
Page 2 of2 © ISO Properties, Inc., 2007 IL 00 2109 08 0
SUPP APP 0917
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 48 of 258 PageID 2618
Privacy Statement
In applying for insurance products and services with Meadowbrook Insurance Group, Inc.'s
subsidiaries, you may have provided us with non-public personal information. Additionally, we
may seek additional information, such as your creditworthiness or credit history, from third party
reporting agencies. This information allows us to provide you with the best products and
customer service. Keeping your personal information private and secure, whether learned
directly from you or a third party reporting agency, is our priority.
The categories of non-public personal and financial information that we collect may include your
name, address, social security or employer identification number, assets, income, date of birth,
motor vehicle driving information and other information that is appropriate or necessary to
provide you with the insurance products and services that you request.
We do not disclose any non-public personal or financial information about you, unless permitted
or required by law or with your consent.
We may have shared this information with affiliated parties as permitted by law. We refer to and
use that information to issue and service your insurance policies, provide insurance services or
administer claims. We restrict access to your non-public personal and financial information to
those employees who need the information to provide you with products or services.
We maintain physical, electronic and procedural safeguards to protect your non-public personal
and financial information. These safeguards comply with federal and state regulations.
If you contact us at our website, "www. Meadowbrook.com" we do not use "cookies", which
many organizations use to track visitors' actions on their websites. Cookies are a general
mechanism that can store and retrieve information on your computer.
We value the relationship that we have established with current and former customers. Should
you have any comments or questions regarding our Privacy Policy, please contact us at 800-
482-2726.
This Privacy Policy applies to the following companies: (1) Meadowbrook Insurance Group, Inc.'s
insurance company subsidiaries (Star Insurance Company, Ameritrust Insurance Corporation, Savers
Property & Casualty Insurance Company, Williamsburg National Insurance Company, ProCentury
Insurance Company, and Century Surety Company}; (2) Crest Financial Corporation's subsidiaries; and
(3) Meadowbrook, Inc.'s subsidiaries,
PRIV 0001 1109 PAGE 1 OF 1
SUPP APP 0918
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 49 of 258 PageID 2619
NOTE TO AGENT:
It is required by federal law that you provide this document to the insured.
POLICYHOLDER DISCLOSURE NOTICE OF TERRORISM
INSURANCE COVERAGE
Coverage for acts of terrorism is included in your policy. You are hereby notified that under the Terrorism Risk Insurance Act as
amended in 2007, the definition of act of terrorism has changed. As defined in Section 102(1) of the Act The term "act of
terrorism" means any act that is certified by the Secretary of the Treasury-in concurrence with the Secretary of State, and the
Attorney General of the United States-to be an act of terrorism; to be a violent act or an act that is dangerous to human life,
property, or infrastructure; to have resulted in damage within the United States, or outside the United States in the case of certain
air carriers or vessels or the premises of a United States mission; and to have been committed by an individual or individuals as
part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United
States Government by coercion. Under your coverage, any losses resulting from certified acts of terrorism may be partially
reimbursed by the United States Government under a formula established by the Terrorism Risk Insurance Act, as amended.
However, your policy may contain other exclusions which might affect your coverage, such as an exclusion for nuclear events.
Under the formula, the United States Government generally reimburses 85% of covered terrorism losses exceeding the statutorily
established deductible paid by the insurance company providing the coverage. The Terrorism Risk Insurance Act, as amended,
contains a $100 billion cap that limits US. Government reimbursement as well as insurers' liability for losses resulting from
certified acts of terrorism when the amount of such losses exceeds $100 billion in any one calendar year. If the aggregate insured
losses for all insurers exceed $100 billion, your coverage may be reduced.
THIS IS NOTIFICATION THAT UNDER THE TERRORISM RISK INSURANCE ACT, AS AMENDED, ANY LOSSES RESULTING FROM
CERTIFIED ACTS OF TERRORISM UNDER THE POLICY COVERAGE MAY BE PARTIALLY REIMBURSED BY THE UNITED STATES
GOVERNMENT, MAY BE SUBJECT TO A $100 BILLION CAP THAT MAY REDUCE THE COVERAGE AND THE POLICYHOLDER HAS BEEN
NOTIFIED OF THE PORTION OF THE PREMIUM ATTRIBUTABLE TO SUCH COVERAGE
The portion of your annual premium that is attributable to coverage for acts of terrorism is:
Property $ 0
Inland Marine $
Crime Excluded
General Liability $ 0
Garage Excluded
$
Total $ 0
Name of Insurer: Century Surety Company
Policy Number: CCP 672836
TRIA 0001 1008
Page 1 of1
SUPP APP 0919
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 50 of 258 PageID 2620
Century Surety Company
COMMERCIAL GENERAL LIABILITY COVERAGE PART DECLARATIONS
Policy No: CCP 672836 Effective Date: 09/21/2010 **
12:01 A.M. Standard Time
NAMED INSURED: PASTAZIOS PIZZA, INC.
LIMITS OF INSURANCE:
General Aggregate Limit (Other than Product-Completed Operations) $2,000,000
Products-Completed Operations Aggregate Limit $2,000,000
Personal and Advertising Injury Limit $1,000,000
Each Occurrence Limit $1,000,000
Damage to Premises. Rented to You $100,000 Any one Fire/
Occurrence
Medical Expense Limit $5,000 Any one Person
RETROACTIVE DATE: (CG 00 02, CGL 0002, CGL 1551 or CGL 1553)
Coverage A and B of this insurance does not apply to "bodily injury", "property damage", "personal and advertising injury",
"personal injury" or "advertising injury" which occurs before the retroactive date shown here: N/A
DEDUCTIBLE: PER CLAIM
$ 500 Bodily Injury Liability & Property Damage Liability Combined
(this deductible also applies to Personal and Advertising Injury Liability.)
Deductible also applies to Supplementary Payments - Coverages A and 8;
Defense Expenses Coverages A and B {form CGL 0002 only) [gj Yes 0 No
...OCATION OF ALL PREMISES YOU OWN, RENT OR OCCUPY:
5026 ADDISON CIRCLE
ADDISON, TX 75001-3332
PREMIUM RATE: ADVANCED PREMIUM
State Terr Code Classification Prem. Basis Prem. Ops. Pr/Co Pr/Co All Other
TX 001 16910 Restaurants-with sale of alcohOlic s) 527,461 3.430 0.373 $197 1,809
beverages that are less than 30% ofthe
annual receipts of the restaurants-with
table service
TX 001 58161 Liquor Liability- Restaurants with alcohol s} 69,000 9.683 668
less than 50% of the total sales Rated As:
Restaurants, Taverns, Hotels, Motels,
including package sales
TX 001 11039CATERERS S) 152,821 4.075 0.258 INCL 662
TX 001 49950ADDITIONAL INSURED- MANAGERS OR T) FLAT INCL
LESSORS OF PREMISES - PER CG2011
TX 001 49950ADDJTIONAL INSURED- DESIGNATED
PERSON OR ORGANIZATION - PER
n FLAT INCL
CG2026
WAIVER OF TRANSFER OR RIGHTS OF Flat INCL
RECEOVERY AGAINST US
CGL 1500 04/07 Page 1 of2
SUPP APP 0920
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 51 of 258 PageID 2621
Policy No: CCP 672836
NAMED INSURED: PASTAZIOS PIZZA, INC.
PREMIUM RATE: ADVANCED PREMIUM
State Terr Code Classification Prem. Basis Prem. Ops. PrfCo Pr/Co NIOther
Audit period is Annual Unless otherwise Stated
Total Advance Premium $ 3,336
TRIA Coverage $ 0
Minimum Premium for This Coverage Part $ 3,336
FORMS AND ENDORSEMENTS (other than applicable Forms and Endorsements shown elsewhere in the policy):
Forms and Endorsements applying to this Coverage Part and made part of this policy at time of issue:
See Attached Forms, GIL 15 008 02 02
"tnctuston of Date Optional
THESE DECLARATIONS ARE PART OF THE POLICY DECLARATIONS CONTAINING THE
NAME OF THIS INSURED AND THE POLICY PERIOD
CGL 150D 04107 Page 2 of2
SUPP APP 0921
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 52 of 258 PageID 2622
COMMERCIAL GENERAL LIABILITY
CG00011207
COMMERCIAL GENERAL LIABILITY COVERAGE FORM
Various provisions in this policy restrict coverage. b. This insurance applies to "bodily injury" and
Read the entire policy carefully to determine rights, "property damage" only if:
duties and what is and is not covered. {1) The ftbodily injury" or "property damage" is
Throughout this policy the words "you" and "your" caused by an "occurrence" that takes· place
refer to the Named Insured shown in the Declarations, in the "coverage territory";
and any other person or organization qualifying as a (2) The "bodily injury" or "property damage"
Named lnsl)red under this policy. The words "we", occurs during the policy period; and
"us" and "our'' refer to the company providing this
insurance. (3) Prior to the policy period, no insured listed
under Paragraph 1. of Section II - Who Is
The word "insl.lred" means any person or organization An Insured and no "employee" authorized
qualifying as such under Section II -Who Is An In- by you to give or receive notice of an "oc-
sured. currence" or claim, knew that the "bodily in-
Other words and phrases that appear in quotation jury" or "property damage" had occurred, in
marks have special meaning. Refer to Section V - whole or in part. If such a listed insured or
Definitions. authorized "employee" knew, prior to the
SECTION 1- COVERAGES policy period, that the. "bodily injury" or
"property damage" occurred, then any con-
COVERAGE A BOOILY INJURY AND PROPERTY tinuation, change or resumption of such
DAMAGE LIABILITY "bodily injury" or "property damage" during
1. Insuring Agreement or after the policy period will be deemed to
a. We will pay those sums that the insured be- have been known prior to the policy period.
comes legally obligated to pay as damages c. "Bodily injury" or "property damage" which
because of "bodily injury" or "property damage" occurs during the policy period and was not,
to which this insurance applies. We will have prior to the policy perlod, known to have oc-
the right and duty to defend the insured against curred by any insured listed under Paragraph
any "suit" seeking those damages. However, 1. of Section II - Who Is An Insured or any
we will have no duty to defend the insured "employee" authorized by you to give or re-
against any "suit" seeking damages for "bodily ceive notice of an "occurrence" or claim, in-
injury" or "property damage" to which this in- cludes any continuation, change or resumption
surance does not apply. We may, at our discre- of that "bodily injury" or "property damage" af-
tion, investigate any "occurrence" and settle ter the end of the policy period.
any claim or "suit" that may result. But: d. "Bodily injury" or "property damage" will be
(1) The amount we will pay for damages is deemed to have been known to have occurred
limited as described in Section Ill - Limits at the earliest time when any insured listed un-
Of Insurance; and der Paragraph 1. of Section II- Who Is An In-
(2) Our right and duty to defend ends when we sured or any "employee" authorized by you to
have used up the applicable limit of insur- give or receive notice of an "occurrence" or
ance in the payment of judgments or set- claim:
tlements under Coverages A or B or medi- (1) Reports all, or any part, of the "bodily injury"
cal expenses under Coverage C. or "property damage" to us or any other in-
surer;
No other obligation or liability to pay sums or
perform acts or services is covered unless ex- (2) Receives a written or verbal demand or
plicitly provided for under Supplementary Pay- claim for damages because of the "bodily
ments - Coverages A and B. injury" or "property damage"; or
{3) Becomes aware by any other means that
"bodily injury" or "property damage" has oc-
curred or has begun to occur.
CG00011207 · ©ISO Properties, Inc., 2006 Page 1 of16 0
SUPP APP 0922
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 53 of 258 PageID 2623
e. Damages because of "bodily injury" include c. Liquor Liability
damages claimed by any person or organiza- "Bodily injury" or "property damage" for which
tion for care, loss of services or death resulting any insured may be held liable by reason ot
at any time from the "bodily injury".
(1) Causing or contributing to the intoxication of
2. Exclusions any person;
This insurance does not apply to: (2) The furnishing of alcoholic beverages to a
a. Expected Or Intended Injury person under the legal drinking age or un-
"Bodily injury" or "property damage" expected der the influence of alcohol; or
or intended from the standpoint of the insured. (3) Any statute, ordinance or regulation relating
This exclusion does not apply to "bodily injury" to the sale, gift, distribution or use of alco-
resulting from the use of reasonable force to holic beverages.
protect persons or property. This exclusion applies only if you are in the
b. Contractual Liability business of manufacturing, distributing, selling,
"Bodily injury" or "property damage" for which serving or furnishing alcoholic beverages.
the insured is obligated to pay damages by d. Workers' Compensation And Similar Laws
reason of the assumption of liability in a con- Any obligation of the insured under a workers'
tract or agreement. This exclusion does not compensation, disability benefits or unem-
apply to liability for damages: ployment compensation law or any similar law.
(1) That the insured would have in the absence e. E~ployer's Liability
of the contract or agreement; or
nBodify injury" to:
(2) Assumed in a contract or agreement that is
an "insured contract", provided the "bodily (1) An Remployee" of the insured arising out of
injury" or "property damage" occurs subse- and in the course ot
quent to the execution of the contract or (a) Employment by the insured; or
agreement. Solely for the purposes of lia-
{b) Performing duties related to the conduct
bility assumed in an "insured contract", rea-
of the insured's business; or
sonable attorney fees and necessary litiga-
tion expenses incurred by or for a party (2) The spouse, child, parent, brother or sister
other than an insured are deemed to be of that "employee" as a consequence of Pa-
damages because of "bodily injury" or ragraph (1) above.
"property damage", provided: This exclusion applies whether the insured
(a) Liability to such party for, or for the cost may be liable as an employer or in any other
of, that party's defense has also been capacity and to any obligation to share damag-
assumed in the same "insured contract"; es with or repay someone else who must pay
and damages because of the injury.
(b) Such attorney fees and litigation ex- This exclusion does not apply to liability as-
penses are for defense of that party sumed by the insured under an "insured con-
against a civil or alternative dispute res- tract".
olution proceeding in which damages to
which this insurance applies are alleged.
Page 2 of 16 © ISO Properties, Inc., 2006 CG 00 0112 07 Cl
SUPP APP 0923
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 54 of 258 PageID 2624
f. Pollution (d) At or from any premises, site or location
(1) "Bodily injury" or "property damage" arising on which any insured or any contractors
out of the actual, alleged or threatened dis- or subcontractors working directly or in-
charge, dispersal, seepage, migration, re- directly on any insured's behalf are per-
lease or escape of "pollutants": forming operations if the "pollutants" are
brought on or to the premises, site or lo-
(a) At or from any premises, site or location cation in connection with such opera-
which is or was at any time owned or tions by such insured, contractor or sub-
occupied by, or rented or loaned to, any contractor. However, this subparagraph
insured. However, this subparagraph does not apply to:
does not apply to:
(i) "Bodily injury" or "property damage"
(i) "Bodily injury'' if sustained within a arising out of the escap~ of fuels, lu-
building and caused by smoke, bricants or other operating fluids
fumes, vapor or soot produced by or which are needed to perform the
originating from equipment that . is normal electrical, hydraulic ·or me-
used to heat, cool or dehumidify the chanical functions necessary for the
building, or equipment that is used to operation of "mobile equipment" or
heat water for personal use, by the its parts, if such fuels, lubricants or
building's occupants or their guests; other operating fluids escape from a
(ii) "Bodily injury" or "property damage" vehicle part designed to hold, store
for which you may be held liable, if or receive them. This exception does
you are a contractor and the owner not apply if the "bodily injury'' or
or lessee of such premises, site or "property damage" arises out of the
location has been added to your pol- intentional discharge, dispersal or re-
icy as an additional insured with re- lease of the fuels, lubricants or other
spect to your ongoing operations operating fluids, or if such fuels, lu-
performed for that additional insured bricants or other operating fluids are
at that premises, site or location and brought on or to the premises, site or
such premises, site or location is not location with the intent that they be
and never was owned or occupied discharged, dispersed or released as
by, or rented or loaned to, any in- part of the operations being per-
sured, other than that additional in- formed by such insured, contractor
sured; or or subcontractor;
(iii) "Bodily injury" or "property damage" (ii) "Bodily injury" or "property damage"
arising out of heat, smoke or fumes sustained within a building and
from a "hostile fire"; caused by the release of gases,
(b) At or from any premises, site or location fumes or vapors from materials
which is or was at any time used by or brought into that building in connec-
for any insured or others for the han- tion with operations being performed
dling, storage, disposal, processing or by you or on your behalf by a con-
treatment of waste; tractor or subcontractor; or
(c} Which are or were at any time trans- (iii) "Bodily injury" or "property damage"
ported, handled, stored, treated, dis- arising out of heat, smoke or fumes
posed of, or processed as waste by or from a "hostile fire".
for: (e) At or from any premises, site or location
{i) Any insured; or on which any insured or any contractors
or subcontractors working directly or in-
(ii) Any person or organization for whom directly on any insured's behalf are per-
you may be legally responsible; or forming operations if the operations are
to test for, monitor, clean up, remove,
contain, treat, detoxify or neutralize, or
in any way respond to, or assess the ef-
fects of, "pollutants".
CG 00 0112 07 ©ISO Properties, Inc., 2006 Page 3 of 16 D
SUPP APP 0924
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 55 of 258 PageID 2625
· (2) Any loss, cost or expense arising out of (5) "Bodily injury" or "property damage" arising
any: out of:
(a) Request, demand, order or statutory or (a) The operation of machinery or equip-
regulatory requirement that any insured ment that is attached to, or part of, a
or others test for, monitor, clean up, re- land vehicle that would qualify under the
move, contain, treat, detoxify or neutral- definition of "mobile equipment" if it were
ize, or in any way respond to, or assess not subject to a compulsory or financial
the effects of, "pollutants"; or responsibility law or other motor vehicle
(b) Claim or "suit" by or on behalf of a go- insurance law in the state where it is li-
vernmental authority for damages be- censed or principally garaged; or
cause of testing for, monitoring, cleaning (b) the operation of any of the machinery or
up, removing, containing, treating, de- equipment listed in Paragraph f.(2) or
toxifying or neutralizing, or in any way f.(3) of the definition of "mobile equip-
responding to, or assessing the effects ment".
of, "pollutants". h. Mobile Equipment
However, this paragraph does not apply to "Bodily injury" or "property damage" arising out
liability for damages because of "property of:
damage" that the insured would have in the
absence of such request, demand, order or (1) The transportation of "mobile equipmenf' by
statutory or regulatory requirement, or such an "auto" owned or operated by or rented or
claim or Nsuit" by or on behalf of a govern- loaned to any insured; or
mental authority. (2) The use of "mobile equipment" in, or while
g. Aircraft, Auto Or Watercraft in practice for, or while being prepared for,
any prearranged racing, speed, demolition,
"Bodily injury" or "property damage" arising out or stunting activity.
of the ownership, maintenance, use or en-
trustment to others of any aircraft, "auto" or wa- i. War
tercraft owned or operated by or rented or "Bodily injury" or "property damage'', however
loaned to any insured. Use includes operation caused, arising, directly or indirectly, out of:
and "loading or unloading".
(1) War, including undeclared or civil war;
This exclusion applies even if the claims
(2) Warlike action by a military force, including
against any insured allege negligence or other
action in hindering or defending against an
wrongdoing in the supervision, hiring, employ-
actual or expected attack, by any govern-
ment, training or monitoring of others by that
ment, sovereign or other authority using
insured, if the "occurrence" which caused the
military personnel or other agents; or
"bodily injury" or "property damage" involved
the ownership, maintenance, use or entrust- (3) Insurrection, rebellion, revolution, usurped
ment to others of any aircraft, "auto" or water- power, or action taken by governmental au-
thority in hindering or defending against any
craft that is owned or operated by or rented or
loaned to any insured. of these.
This exclusion does not apply to: j. Damage To Property
(1) A watercraft while ashore on premises you "Property damage" to:
· own or rent; (1) Property you own, rent, or occupy, including
(2) A watercraft you do not own that is: any costs or expenses incurred by you, or
any other person, organization or entity, for
(a) Less than 26 feet long; and
repair, replacement, enhancement, restora-
(b) Not being used to carry persons or tion or maintenance of such property for
property for a charge; any reason, including prevention of injury to
(3) Parking an "autou on, or on the ways next a person or damage to another's property;
to, premises you own or rent, provided the (2) Premises you sell, give away or abandon, if
"auto" is not owned by or rented or loaned the "property damage" arises out of any
to you or the insured; part of those premises;
(4) Liability assumed under any "insured con- (3) Property loaned to you;
tract" for the ownership, maintenance or
(4) Personal property in the care, custody or
use of aircraft or watercraft; or
control of the insured;
Page 4 of 16 © ISO Properties, Inc., 2006 CG00011207 D
SUPP APP 0925
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 56 of 258 PageID 2626
(5) That particular part of real property on This exclusion does not apply to the loss of use
which you or any contractors or subcontrac- of other property arising out of sudden and ac-
tors working directly or indirectly on your cidental physical injury to "your product" or
behalf are performing operations, if the "your work" after it has been put to its intended
"property damage" arises out of those op- use.
erations; or n. Recall Of Products, Work Or Impaired
(6) That particular part of any property that Property
must be restored, repaired or replaced be- Damages claimed for any loss, cost or ex-
cause "your work" was incorrectly per- pense incurred by you or others for the Joss of
formed on it. use, withdrawal, recall, inspection, repair, re-
Paragraphs {1 ), (3) and (4) of this exclusion do placement, adjustment, removal or disposal of:
not apply to "property damage" (other than {1) "Your product";
damage by fire) to premises, including the con-
tents of such premises, rented to you for a pa- (2) "Your work"; or
riod of 7 or fewer consecutive days. A separate (3) "Impaired property'';
limit of insurance applies to Damage To Pre-
if such product, work, or property is withdrawn
mises Rented To You as described in Section
or recalled from the market or from use by any
Ill - Limits Of Insurance. person or organization because of a known or
Paragraph (2) of this exclusion does not apply suspected defect, deficiency, inadequacy or
if the premises are "your work" and were never dangerous condition in it.
occupied, rented or held for rental by you.
o. Personal And Advertising Injury
Paragraphs (3), (4), (5) and (6) of this exclu-
"Bodily injury" arising out of ~personal and ad-
sion do not apply to liability assumed under a
vertising injury".
sidetrack agreement.
p. Electronic Data
· Paragraph (6) of this exclusion does not apply
to "property damage" included in the "products- Damages arising out of the loss of, loss of use
completed operations hazard". of, damage to, corruption of, inability to access,
or inability to manipulate electronic data.
k. Damage To Your Product
As used in this exclusion, electronic data
"Property damage" to "your product" arising out
means information, facts or programs stored as
of it or any part of it. or on, created or used on, or transmitted to or
I. Damage To Your Work from computer software, including systems and
"Property damage" to "your work" arising out of applications software, hard or floppy disks, CD-
it or any part of it and included in the "products- ROMS, tapes, drives, cells, data processing
completed operations hazard". devices or any other media which are used
with electronically controlled equipment.,
This exclusion does not apply if the damaged
work or the work out of which the damage aris- q. Distribution Of Material In Violation Of
es was perfollTled on your behalf by a subcon- Statutes
tractor. "Bodily injury" or "property damage" arising di-
m. Dame~geTo Impaired Property Or Property rectly or indirectly out of any action or omission
Not Physically Injured that violates or is alleged to violate:
"Property damage" to "impaired property" or {1) The Telephone Consumer Protection Act
property that has not been physically injured, (TCPA}, including any amendment of or
arising out of: addition to such law; or
(1) A defect, deficiency, inadequacy or danger- (2) The CAN-SPAM Act of 2003, including any
ous condition in "your product" or "your amendment of or addition to such law; or
work"; or {3) Any statute, ordinance or regulation, other
{2) A delay or failure by you or anyone acting than the TCPA or CAN-SPAM Act of 2003,
on your behalf to perform a contract or that prohibits or limits the sending, transmit-
agreement in accordance with its terms. ting, communicating or distribution of ma-
terial or information.
CG 00 0112 07 © ISO Properties, Inc., 2006 Page 5 of16 D
SUPP APP 0926
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 57 of 258 PageID 2627
Exclusions c. through n. do not apply to damage c. Material Published Prior To Policy Period
by fire to premises while rented to you or tempora- nPersonal and advertising injury" arising out of
rily occupied by you with permission of the owner. oral or written publication of material whose
A separate limit of insurance applies to this cover- first publication took place before the beginning
age as described in Section Ill - Limits Of Insur- of the policy period.
ance.
d. Criminal Acts
COVERAGE B PERSONAL AND ADVERTISING
INJURY LIABILITY "Personal and advertising injury" arising out of
a criminal act committed by or at the direction
1. Insuring Agreement of the insured.
a. We will pay those sums that the insured be- e. Contractual Liability
comes legally obligated to pay as damages
because of "personal and advertising injury" to "Pen;onal and advertising injury" for which the
which this insurance applies. We will have the insured has assumed liability in a contract or
right and duty to defend the insured against agreement. This exclusion does not apply to
any "suit" seeking those damages. However, liability for damages that the insured would
we will have no duty to defend the insured have in the absence of the contract or agree-
against any "suit" seeking damages for "per- ment.
sonal and advertising injury" to which this in- f. Breach Of Contract
surance does not apply. We may, at our discre- "Personal and advertising injury" arising out of
tion, investigate any offense and settle any a breach of contract, except an implied con-
claim or "suit" that may result. But: ·
tract to use another's advertising idea in your
(1) The amount we will pay for damages is "advertisement".
limited as described in Section Ill - Limits g. Quality Or Performance Of Goods - Failure
Of Insurance; and To Conform To Statements
(2) Our right and duty to defend end when we "Personal and advertising injury'' arising out of
have used up the applicable limit of insur- the failure of goods, products or services to
ance in the payment of judgments or set- conform with any statement of quality or per-
tlements under Coverages A or B or medi- formance made in your "advertisement".
cal expenses under Coverage C.
h. Wrong Description Of Prices
No other obligation or liability to pay sums or
perform acts or services is covered unless ex- "Personal and advertising injury'' arising out of
plicitly provided for under Supplementary Pay- the wrong description of the price of goods,
ments - Coverages A and B. products or services stated in your "advertise-
ment".
b. This insurance applies to "personal and adver-
tising injury'' caused by an offense arising out i. Infringement Of Copyright, Patent,
of your business but only if the offense was Trademark Or Trade Secret
committed in the "coverage territory'' during the "Personal and advertising injury" arising out of
policy period. the infringement of copyright, patent, trade-
2. Exclusions mark, trade secret or other intellectual property
rights. Under this exclusion, such other intellec-
This insurance does not apply to: tual property rights do not include the use of
a. Knowing Violation Of Rights Of Another another's advertising idea in your "advertise-
"Personal and advertising injury" caused by or ment".
at the direction of the insured with the know- However, this exclusion does not apply to in-
ledge that the act would violate the rights of fringement, in your "advertisement", of copy-
another and would inflict "personal and adver- right, trade dress or slogan.
tising injury". j. Insureds In Media And Internet Type
b. Material Published With Knowledge Of Businesses
Falsity "Personal and advertising injury" committed by
"Personal and advertising injury'' arising out of an insured whose business is:
oral or written publlcation of material, if done by (1) Advertising, broadcasting, publishing or
or at the direction of the insured with know-
telecasting;
ledge of its falsity.
(2) Designing or determining content of web-
sites for others; or
Page 6 of16 © ISO Properties, Inc., 2006 CG 00 0112 07 0
SUPP APP 0927
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 58 of 258 PageID 2628
(3) An Internet search, access, content or (3) · Insurrection, rebellion, revolution, usurped
service provider. power, or action taken by governmental au-
However, this exclusion does not apply to Pa- thority in hindering or defending against any
ragraphs 14.a., b. and c. of "personal and ad- of these.
vertising injury" under the Definitions Section. p. Distribution Of Material In Violation Of
For the purposes of this exclusion, the placing Statutes
of frames, borders or links, or advertising, for "Personal and advertising injury" arising direct-
you or others anywhere on the Internet, is not ly or indirectly out of any action or omission
by itself, considered the business of advertis- that violates or is alleged to violate:
ing, broadcasting, publishing or telecasting. {1) The Telephone Consumer Protection Act
k. Electronic Chatrooms Or Bulletin Boards (TCPA), including any amendment of or
"Personal and advertising injury" arising out of addition to such law; or
an electronic chatroom or bulletin board the in- (2) The CAN-SPAM Act of 2003, including any
sured hosts, owns, or over which the insured amendment of or addition to such law; or
exercises control. {3) Any statute, ordinance or regulation, other
I. Unauthorized Use Of Another's Name Or than the TCPA or CAN-SPAM Act of 2003,
Product that prohibits or limits the sending, transmit-
"Personal and advertising injury" arising out of ting, communicating or distribution of ma-
the unauthorized use of another's name or terial or information.
product in your e-mail address, domain name COVERAGE C MEDICAL PAYMENTS
or metatag, or any other similar tactics to mis- 1. Insuring Agreement
lead another's potential customers.
a. We will pay medical expenses as described
m. Pollution below for "bodily injury" caused by an accident:
"Personal and advertising injury" arising out of (1) On premises you own or rent;
. the actual, alleged or threatened discharge,
dispersal, seepage, migration, release or es- {2) On ways next to premises you own or rent;
cape of "pollutants" at any time. or
n. Pollution-Related (3) Because of your operations;
Any loss, cost or expense arising out of any: provided that:
(1) Request, demand, order or statutory or (a) The accident takes place in the "cover-
regulatory requirement that any insured or age territory" and during the policy pe-
others test for, monitor, clean up, remove, riod;
contain, treat, detoxify or neutralize, or in (b) The expenses are incurred and reported
any way respond to, or assess the effects to us within one year of the date of the
of, "pollutants"; or · accident; and
(2) Claim or suit by or on behalf of a govern- {c) The injured person submits to examina-
mental authority for damages because of tion, at our expense, by physicians of
testing for, monitoring, cleaning up, remov- our choice as often as we reasonably
ing, containing, treating, detoxifying or neu- require.
tralizing, or in any way responding to, or
b. We will make these payments regardless of
assessing the effects of, "pollutants".
fault. These payments will not exceed the ap-
o. War plicable limit of insurance. We will pay reason-
"Personal and advertising injury", however able expensl;)s for.
caused, arising, directly or indirectly, out of: (1) First aid administered at the time of an
(1} War, including undedared or civil war; accident;
(2) Warlike action by a military force, including (2). Necessary medical, surgical, x-ray and
action in hindering or defending against an dental services, including prosthetic devic-
actual or expected attack, by any govern- es; and
ment, sovereign or other authority using {3) Necessary ambulance, hospital, profes-
military personnel or other agents; or sional nursing and funeral services.
CG 00 0112 07 ©ISO Properties, Inc., 2006 Page 7 of 16 [J
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Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 59 of 258 PageID 2629
2. Exclusions f. Prejudgment interest awarded against the
We will not pay expenses for "bodily injury": insured on that part of the judgment we pay. If
we make an offer to pay the applicable limit of
a. Any Insured insurance, we will not pay any prejudgment in-
To any insured, except "volunteer workers". terest based on that period of time after the of-
fer.
b. Hired Person
g. All interest on the full amount of any judgment
To a person hired to do work for or on behalf of
that accrues after entry of the judgment and
any insured or a tenant of any insured.
before we have paid, offered to pay, or depo-
c. Injury On Normally Occupied Premises sited in court the part of the judgment that is
To a person injured on that part of premises within the applicable limit of insurance.
you own or rent that the person normally occu- These payments will not reduce the limits of insur-
pies. ance.
d. Workers Compensation And Similar Laws 2. If we defend an insured against a "suit" and an
To a person, whether or not an "employee" of indemnitee of the insured is also named as a party
any insured, if benefits for the "bodily injury'' to the "suit", we will defend that indemnitee if all of
are payable or must be provided under a work- the following conditions are met:
ers' compensation or disability benefits law or a a. The "suit" against the indemnitee seeks dam-
similar law. ages for which the insured has assumed the
e. Athletics Activities liability of the indemnitee in a contract or
agreement that is an "insured contract";
To a person injured while practicing .. instructing
or participating in any physical exercises or b. This insurance applies to such liability as-·
games, sports, or athletic contests. sumed by the insured;
f. Products-Completed Operations Haz;ard c. The obligation to defend; or the cost of the
defense of, that indemnitee, has also been as-
Included within the "products-completed opera- sumed by the insured in the same "insured
tions hazard". contract"; ·
g. Coverage A Exclusions d. The allegations in the Rsuit" and the infonnation
Excluded under Coverage A. we know about the "occurrence" are such that
SUPPLEMENTARY PAYMENTS- COVERAGES A no conflict appears to exist between the inter-
ANOB ests of the insured and the interests of the in-
demnitee;
1. We will pay, with respect to any claim we investi-
gate or settle, or any "suit" against an insured we e. The indemnitee and the insured ask us to
defend: conduct and control the defense of that indem-
nitee against such "suit" and agree that we can
a. All expenses we incur. assign the same counsel to defend the insured
b. Up to $250 for cost of bail bonds required and the indemnitee; and
because of accidents or traffic law violations f. The indemnitee:
arising out of the use of any vehicle to which
the Bodily Injury Liability Coverage applies. We (1) Agrees in writing to:
do not have to furnish these bonds. (a) Cooperate with us in the investigation,
c. The cost of bonds to release attachments, but seWement or defense of the "suit";
only for bond amounts within the applicable (b) Immediately send us copies of any
limit of insurance. We do not have to furnish demands, notices, summonses or legal
these bonds. papers received in connection with the
d. All reasonable expenses incurred by the in- "suit";
sured at our request to assist us in the investi- (c) Notify any other insurer whose coverage
gation or defense of the claim or "suit", ·includ- is available to the indemnitee; and
ing actual loss of earnings up to $250 a day (d) Cooperate with us with respect to coor-
because of time off from work. dinating other applicable insurance
e. All court costs taxed against the insured in the available to the indemnitee; and
"suit". However, these payments do not include (2) Provides us with written authorization to:
attorneys' fees or attorneys' expenses taxed
against the insured. (a) Obtain records and other infonnation
related to the "suit"; and
Page 8 of16 © ISO Properties, Inc., 2006 CG 00 0112 07 0
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Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 60 of 258 PageID 2630
(b) Conduct and control the defense of the 2. Each of the following is also an insured:
indemnitee in such "suit". a. Your "volunteer workers" only while performing
So .long as the above conditions are met, attor- duties related to the conduct of your business,
neys' fees incurred by us in the defense of that in- or your "employees", other than either your
demnitee, necessary litigation expenses incurred "executive officers" {if you are an organization
by us and necessary litigation expenses incurred other than a partnership, joint venture or limited
by the indemnitee at our request will be paid as liability company) or your managers (if you are
Supplementary Payments. Notwithstanding the a limited liability company), but only for acts
provisions of Paragraph 2.b.{2) of Section I - within the scope of their employment by you or
Coverage A - Bodily Injury And Property Damage while performing duties related to the conduct
Liability, such payments will not be deemed to be of your business. However, none of these "em-
damages for "bodily injury" and "property damage" ployees" or "volunteer workers" are insureds
and will not reduce the limits of insurance. for:
Our obligation to defend an insured's indemnitee- {1) "Bodily injury" or "personal and advertising
and to pay for attorneys' fees and necessary litiga- injury":
tion expenses as Supplementary Payments ends (a) To you, to your partners or members (if
when we have used up the appticable limit of in- you are a partnership or joint venture),
surance in the payment of judgments or settle- to your members {if you are a limited
ments or the conditions set forth above, or the liability company), to a co-"employee"
terms of the agreement described in Paragraph f. while in the course of his or her em-
above, are no longer met. ployment or performing duties related to
SECTION II- WHO IS AN INSURED the conduct of your business, or to your
1. If you are designated in the Declarations as: other "volunteer workers" while perform-
ing duties related to the conduct of your
a. An indiVidual, you and your spouse are insu- business;
reds, but only with respect to the conduct of a
business of which you are the sole owner. {b) To the spouse, child, parent, brother or
sister of that co-"employee" or "volun-
b. A partnership or joint venture, you are an in- teer worker" as a consequence of Para-
sured. Your members, your partners, and their graph (1){a) above;
spouses are also insureds, but only· with re-
spect to the conduct of your business. {c) For which there is any obligation to
share damages with or repay someone
c. A limited liability company, you are an insured. else who must pay damages because of
Your members are also insureds, but only with the injury described in Paragraphs {1)(a)
respect to the conduct of your business. Your or (b) above; or
managers are insureds, but only with respect
·to. their duties as your managers. (d) Arising out of his or her providing or
failing to provide professional health
d. An organization other than a partnership, joint care services.
venture or limited liability company, you are an
insured. Your "executive officers" and directors (2) "Property damage" to property:
are insureds, but only with respect to their du- (a) Owned, occupied or used by,
ties as your officers or directors. Your stock- (b) Rented to, in the care, custody or con-
holders are also insureds, but only with respect trol of, or over which physical control is
to their liability as stockholders. being exercised for any purpose by
e. A trust, you are an insured. Your trustees are you, any of your "employees", "volunteer
also insureds, but only with respect to their du- workers", any partner or member (if you are
ties as trustees. a partnership or joint venture), or any mem-
ber (if you are a limited liability company).
CG 000112 07 © ISO Properties, Inc., 2006 Page 9 of 16 [J
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Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 61 of 258 PageID 2631
b. Any person (other than your "employee" or 3. The Products-Completed Operations Aggregate
"volunteer worker"), or any organization while Limit is the most we will pay under Coverage A for
acting as your real estate manager. damages because of "bodily injury" and "property
c. Any person or . organization having proper damage• included in the "products-completed op-
temporary custody of your property if you die, erations hazard".
but only: 4. Subject to Paragraph 2. above, the Personal and
(1) With respect to liability arising out of the Advertising Injury Limit is the most we will pay un-
maintenance or use of that property; and der Coverage B for the sum of all damages be-
cause of all "personal and advertising injury'' sus-
(2) Until your legal representative has been .tained by any one person or organization.
appointed.
5. Subject to Paragraph 2. or 3. above, whichever
d. Your legal representative if you die, but only applies, the Each Occurrence Limit is the most we
with respect to duties as such. That represent- will pay for the sum of:
ative will have all your rights and duties under
this Coverage Part. a. Damages under Coverage A; and
3. Any organization you newly acquire or form, other b. Medical expenses under Coverage C
than a partnership, joint venture or limited liability because of all "bodily injury" and "property dam·
company, and over which you maintain ownership age" arising out of any one "occurrence''.
or majority interest, will qualify as a Named In- 6. Subject to Paragraph 5. above, the Damage To
sured if there is no other similar insurance availa- Premises Rented To You Limit is the most we will
ble to that organization. However:· pay under Coverage A for damages because of
a. Coverage under this provision is afforded only "property damage" to any one premises, while
until the 90th day after you acquire or form the rented to you, or in the case of damage by fire,
organization or the end of the policy period, while rented to you or temporarily occupied by you
whichever is earlier; with permission of the owner.
b. Coverage A does not apply to "bodily injury" or 7. Subject to Paragraph 5. above, the Medical Ex-
"property damage" that occurred before you pense Limit is the most we will pay under Cover-
acquired or formed the organization; and age C for all medical expenses because of "bodily
c. Coverage B does not apply to "personal and injury" sustained by any one person.
advertising injury" arising out of an offense The Limits of Insurance of this Coverage Part apply
committed before you acquired or formed the separately to each consecutive annual period and to
organization. any remaining period of less than 12 months, starting
No person or organization is an insured with respect with the beginning of the policy period shown in the
to the conduct of any current or past partnership, joint Declarations, unless the policy period is extended
venture or limited liability company that is not shown after issuance for an additional period of less than 12
as a Named Insured in the Declarations. months. In that case, the additional period will be
deemed part of the last preceding period for purposes
SECTION 111 -LIMITS OF INSURANCE of determining the Limits of Insurance.
1. The Limits of Insurance shown in the Declarations SECTION IV- COMMERCIAL G~NERAL LIABILITY
, and the rules below fix the most we will pay re- CONDITIONS
gardless of the number of:
1. Bankruptcy
a. Insureds;
Bankruptcy or insolvency of the insured or of the
b. Claims made or "suits" brought; or insured's estate will not relieve us of our obliga-
c. Persons or organizations making claims or tions under this Coverage Part.
bringing "suits" .. 2. Duties In The Event Of Occurrence, Offense,
2. The General Aggregate Limit is the most we will Claim Or Suit
pay for the sum of: a. You must see to it that we are notified as soon
a. Medical expenses under Coverage C; as practicable of an "occurrence" or an offense
which may result in a claim. To the extent
b. Damages under Coverage A, except damages
because of "bodily injury" or "property damage" possible, notice should include:
included in the "products-completed operations {1) How, when and where the "occurrence" or
hazard"; and offense took place; ·
c. Damages under Coverage B. (2) The names and addresses of any injured
persons and witnesses; and
Page 10 of16 © ISO Properties, Inc., 2006 · CG 00011207 []
SUPP APP 0931
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 62 of 258 PageID 2632
(3) The nature and location of any injury or 4. Other Insurance
damage arising out of the "occurrence" or If other valid and collectible insurance is available
offense. to the insured for a loss we cover under Coverag-
b. If a claim is made or "suit" is brought against es A or B of this Coverage Part, our obligations
any insured, you must: are limited as follows:
(1) Immediately record the specifics of the a. Primary Insurance
claim or "suit" and the date received; and This insurance is primary except when Para-
(2) Notify us as soon as practicable. graph. b. below applies. If this insurance is pri-
You must see to it that we receive written no- mary, our obligations are not affected unless
tice of the claim or "suit" as soon al) practica- any of the other insurance is also primary.
ble. Then, we will share with all that other insur-
ance by the method described in Paragraph c.
c. You and any other involved insured must: below.
(1) Immediately send us copies of any de- b. Excess Insurance
mands, notices, summonses or legal pa-
pers received in connection with the claim (1) This insurance is excess over:
or "suit"; (a) Any of the other insurance, whether
(2) Authorize us to obtain records and other primary, excess, contingent or on any
information; othe·r basis:
(3) Cooperate with us in the investigation or (i) That is Fire, Extended Coverage,
settlement of the claim or defense against Builder's Risk, Installation Risk or
the "suit"; and · similar coverage for "your work";
{4) Assist us, upon our request, in the en· (ii) That is Fire insurance for premises
forcement of any right against any person rented to you or temporarily occu-
or organization which may be liable to the pied by you with permission of the
insured because of injury or damage to owner;
which this insurance may also apply. (iii) That is insurance purchased by you
d. No insured will, except at that insured's own to cover your liability as a tenant for
cost, voluntarily make a payment, assume any "property damagen to premises
obligation, or incur any expense, other than for rented to you or temporarily occu-
first aid, without our consent. pied by you with permission of the
owner; or
3. Legal Action Against Us
(iv) If the loss arises out of the mainten-
No person or organization has a right under this ance or use of aircraft, "autos" or wa-
Coverage Part: tercraft to the extent not subject to
a. To join us as a party or-otherwise bring us into Exclusion g. of Section I - Coverage
a "suit" asking for damages from an insured; or A - Bodily Injury And Property Dam-
age Liability.
b. To sue us on this Coverage Part unless all of
its terms have been fully complied with. (b) Any other primary insurance available to
you covering liability for damages aris-
A person or organization may sue us to recover on
an agreed settlement or on a final judgment ing out of the premises or operations, or
the products and completed operations,
against an insured; but we will not be liable for
for which you have been added as an
damages that are not payable under the terms of
this Coverage Part or that are in excess of the ap- additional insured by attachment of an
endorsement.
plicable limit of insurance. An agreed settlement
means a settlement and release of liability signed (2) When this insurance is excess, we will have
by us, the insured and the claimant or the clai- no duty under Coverages A orB to defend
mant's legal representative. the insured against any "suit" if any other
insurer has a duty to defend the insured
against that "suit". If no other insurer de-
fends, we will undertake to do so, but we
will be entitled to the insured's rights
against all those other insurers.
CG00011207 ©ISO Properties, Inc., 2006 Page 11 of 16 []
SUPP APP 0932
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 63 of 258 PageID 2633
(3) When this insurance is excess over other c. We have issued this policy in reliance upon
insurance, we will pay only our share of the your representations.
amount of the loss, if any, that exceeds the 7. Separation Of Insureds
sum of:
Except with respect to the Limits of Insurance, and
{a) The total amount that all such other any rights or duties specifically assigned in this
insurance would pay for the loss in the Coverage Part to the first Named Insured, this in-
absence of this insurance; and surance applies:
(b) The total of all deductible and self- a. As if each Named Insured were the only
insured amounts under all that other in- Named Insured; and
surance.
b. Separately to each insured against whom claim
(4) We will share the remaining loss, if any, is made or "suit" is brought.
with any other insurance that is not de-
scribed in 1his Excess Insurance provision 8. Transfer Of Rights Of Recovery Against Others
and was not bought specifically to apply in To Us
excess of the Limits of Insurance shown in If the insured has rights to recover all or part of
the Declarations of this Coverage Part. any payment we have made under this Coverage
c. Method Of Sharing Part, those rights are transferred to us. The in-
sured must do nothing after loss to impair them. At
If all of the other insurance permits contribution our request, the insured will bring "suit" or transfer
by equal shares, we will follow this method al- those rights to us and help us enforce them.
so. Under this approach each insurer contri-
butes equal amounts until it has paid its appli- 9. When We Do Not Renew
cable limit of insurance or none of the loss If we decide not to renew this Coverage Part, we
remains. whichever comes first. will mail or deliver to the first Named Insured
If any of the other insurance does not permit shown in the Declarations written notice of the
contribution by equal shares, we will contribute nonrenewal not less than 30 days before the expi-
by limits. Under this method, each insurer's ration date.
share is based on the ratio of its applicable lim- If notice is mailed, proof of mailing will be sufficient
it of insurance to the total applicable limits of proof of notice.
insurance of all insurers. SECTION V- DEFINITIONS
5. Premium Audit 1. "Advertisement" means a notice that is broadcast
a. We will compute all premiums for this Cover- or published to the general public or specific mar-
age Part in accordance with our rules and ket segments about your goods, products or ser-
rates. vices for the purpose of attracting customers or
b. Premium shown in this Coverage Part as ad- supporters. For the purposes of this defmition:
vance premium is a deposit premium only. At a. Notices that are published include material
the close of each audit period we will compute placed on the Internet or on similar electronic
the earned premium for that period and send means of communication; and
notice to the first Named Insured. The due date b. Regarding web-sites, only that part of a web-
for audit and retrospective premiums is the site that is about your goods, products or ser-
date shown as the due date on the bill. If the vices for the purposes of attracting customers
sum of the advance and audit premiums paid or supporters is considered an advertisement.
for the policy period is greater than the earned
premium, we will return the excess to the first 2. "Auto" means:
Named Insured. a. A land motor vehicle, trailer or semitrailer de-
c. The first Named Insured must keep records of signed for travel on public roads, including any
the information we need for premium computa- attached machinery or equipment; or
tion, and send us copies at such times as we b. Any other land vehicle that is subject to a com-
may request. pulsory or financial responsibility law or other
6. Representations motor vehicle insurance law in the state where
it is licensed or principally garaged.
By accepting this policy, you agree:
However, "auto" does not include "mobile equip-
a. The statements in the Declarations are accu- ment".
rate and complete;
b. Those statements are based upon representa-
tions you made to us; and
Page 12 of16 © ISO Properties, Inc., 2006 CG 00 0112 07 0
SUPP APP 0933
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 64 of 258 PageID 2634
3. "Bodily injury'' means bodily injury, sickness or 9. "Insured contract" means:
disease sustained by a person, including death re- a. A contract for a lease of premises. However,
sulting from any of these at any time. that portion of the contract for a lease of pre-
4. "Coverage territory" means: mises that indemnifies any person or organiza-
a. The United States of America (including its tion for damage by fire to premises while
territories and possessions), Puerto Rico and rented to you or temporarily occupied by you
Canada; with permission of the owner is not an "insured
contract";
b. International waters or airspace, but only if the
injury or damage occurs in the course of travel b. A sidetrack agreement;
or transportation between any places included c. Any easement or license agreement, except in
in Paragraph a. above; or connection with construction or demolition op-
c. All other parts of the world if the injury or dam- erations on or within 50 feet of a railroad;
age arises out of: d. An obligation, as required by ordinance, to
{1) Goods or products made or sold by you in indemnify a municipality, except in connection
the territory described in Paragraph a. with work for a municipality;
above; e. An elevator maintenance agreement:
(2) The activities of a person whose home is in f. That part of any other contract or agreement
the territory described in Paragraph a. pertaining to your business (including an in~
above, but is away for a short time on your damnification of a municipality in connection
business; or with work performed for a municipality) under
(3) "Personal and advertising injury" offenses which you assume the tort liability of another
that take place through the Internet or simi- party to pay for "bodily injury" or "property
lar electronic means of communication damage" to a third person or organization. Tort
liability means a liability that would be imposed
provided the insured's responsibility to pay dam- by law in the absence of any contract or
ages is determined in a "suit" on the merits, in the agreement.
territory descri~ed in Paragraph a. above or in a
settlement we agree to. Paragraph f. does not include that part of any
contract or agreement:..
5. "Employee" includes a "leased worker". "Em-
ployee" does not include a "temporary worker". {1) That indemnifies a railroad for "bodily injury"
or "property damage" arising out of con-
6. "Executive officer" means a person holding any of struction or demolition operations, within 50
the officer positions created by your charter, con- feet of any railroad property and affecting
stitution, by-laws or any other similar governing any railroad bridge or trestle, tracks, road-
document. beds, tunnel, underpass or crossing;
7. "Hostile fire" means one which becomes uncon- (2) That indemnifies an architect, engineer or
trollable or breaks out from where it was intended surveyor for injury or damage arising out of:
to be.
(a) Preparing, approving, or failing to pre-
8. "Impaired property" means tangible property, other pare or approve, maps, shop drawings,
than "your product" or "your work", that cannot be opinions, reports, surveys, field orders,
used or is less useful because: change orders or drawings and specifi-
a. It incorporates "your product" or "your work" cations; or
that is known or thought to be defective, defi- (b) Giving directions or instructions, or
cient, inadequate or dangerous; or failing to give them, if that is the primary
b. You have failed to fulfill the terms of a contract cause of the injury or damage; or
or agreement; (3) Under which the insured, if an architect,
if such property can be restored to use by the re- engineer or surveyor, assumes liability for
pair, replacement, adjustment or removal of "your an injury or damage arising out of the in-
product" or "your work" or your fulfilling the terms sured's rendering. or failure to render pro-
of the contract or agreement. fessional services, including those listed in
(2) above and supervisory, inspection, arc-
hitectural or engineering activities.
CGOO 0112 07 © ISO Properties, Inc., 2006 Page 13 of16 IJ
SUPP APP 0934
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 65 of 258 PageID 2635
10. "Leased worker" means a person leased to you by However, self-propelled vehicles with the fol-
a labor leasing firm under an agreement between lowing types of permanently attached equip-
you and the labor leasing firm, to perform duties ment are not "mobile equipmenf' but will be
related to the conduct of your business. "Leased considered "autos":
worker" does not include a "temporary worker''. (1) Equipment designed primarily for:
11. hloading or unloading" means the handling of (a) Snow removal;
property:
(b) Road maintenance, but not construction
a. After it is moved from the place where it is or resurfacing; or
accepted for movement into or onto an aircraft,
watercraft or "auto"; (c) Street cleaning;
b. While it is in or on an aircraft, watercraft or (2) Cherry pickers and similar devices mounted
hauto"; or on automobile or truck chassis and used to
raise or lower workers; and
c. While it is being moved from an aircraft, water-
craft or "auto" to the place where it is finally de- (3) Air compressors, pumps and generators,
livered; · including spraying, welding, building clean-
ing, geophysical exploration, lighting and
but "loading or unloading" does not include the well servicing equipment.
movement of property by means of a mechanical
device, other than a hand truck, that is not at- However, "mobile equipment" does not include
tached to the aircraft, watercraft or "auto". any land vehicles that are subject to a compulsory
or financial responsibility law or other motor ve-
12. "Mobile equipment" means any of the following hicle insurance law in the state where it is licensed
types of land vehicles, including any attached ma- or principally garaged. Land vehicles subject to a
chinery or equipment: compulsory or financial responsibility law or other
a. Bulldozers, farm machinery, forklifts and other motor vehicle insurance law are considered "au-
vehicles designed for use principally off public tos".
roads; 13. "Occurrence" means an accident, including conti-
b. Vehicles maintained for use solely on or next to nuous or repeated exposure to substantially the
premises you own or rent; same general harmful conditions.
c. Vehicles that travel on crawler treads; 14. "Personal and advertising injury" means injury,
d. Vehicles, whether self-propelled or not, main- including consequential "bodily injury", arising out
tained primarily to provide mobility to perma- of one or more of the following offenses:
nently mounted: a. False arrest, detention or imprisonment;
(1) Power cranes, shovels, loaders, diggers or b. Malicious prosecution;
drills; or c. The wrongful eviction from, wrongful entry into,
(2) Road construction or resurfacing equipment or invasion. of the right of private occupancy of
such as graders, scrapers or rollers; a room, dwelling or premises that a person oc-
e. Vehicles not described in Paragraph a., b., c. cupies, committed by or on behalf of its owner,
or d. above that are not self-propelled and are landlord or lessor;
maintained primarily to provide mobility to per- d. Oral or written publication, in any manner, of
manently attached equipment of the following material that slanders or libels a person or or-
types: ganization or disparages a person's or organi-
(1) Air compressors, pumps and generators, zation's goods, products or services;
including spraying, welding, building clean- e. Oral or written publication, in any manner, of
ing, geophysical exploration, lighting and material that violates a person's right of priva-
well servicing equipment; or cy;
(2) Cherry pickers and similar devices used to f. The use of another's advertising idea in your
raise or lower workers; "advertisemenf'; or
f. Vehicles not described in Paragraph a., b., c. g. Infringing upon another's copyright, trade dress
or d. above maintained primarily for purposes or slogan in your "advertisementd.
, other than the transportation of persons or car-
go.
Page 14 of16 ©ISO Properties, Inc., 2006 CG00011207 0
SUPP APP 0935
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 66 of 258 PageID 2636
15. "Pollutants" mean any solid, liquid, gaseous or b. Loss of use of tangible property that is not
thermal irritant or contaminant, including smoke, physically injured. All such loss of use shall be
vapor, soot, fumes, acids, alkalis, chemicals and deemed to occur at the time of the "occur-
waste. Waste includes materials to be recy-cled, rence" that caused it.
reconditioned or reclaimed. For the purposes of this insurance, electronic data
16. "Products-completed operations hazard": is not tangible property.
a. Includes all "bodily injury• and "property dam- As used in this definition, electronic data means
age" occurring away from premises you own or information, facts or programs stored as or on,
rent and arising out of "your product" or "your created or used on, or transmitted to or from com-
work" except: puter software, including systems and applications
(1) Products that are still in your physical pos- software, hard or floppy disks, CO-ROMS, tapes,
session; or drives, cells, data processing devices or any other
media which are used with electronically controlled
(2) Work that has not yet been completed or equipment.
abandoned. However, "your work" will be
deemed completed at the earliest of the fol- 18. "Suit" means a civil proceeding in which damages
lowing times: because of "bodily injury", "property damage" or
"personal and advertising injury" to which this in-
(a) When all of the work called for in your surance applies are alleged. "Suit" includes:
contract has been completed.
a. An arbitration proceeding in which such dam-
(b) When all of the work to be done at the ages are claimed and to which the insured
job site has been completed if your con- must submit or does submit with our consent;
tract caHs for work at more than one job or
site.
b. Any other alternative dispute resolution pro-
(c) When that part of the work done at a job ceeding in which such damages are claimed
site has been put to its intended use by and to which the insured submits with our con-
any person or organization other than sent.
another contractor or subcontractor
working on the same project. 19. "Temporary worker" means a person who is fur-
nished to you to substitute for a permanent "em-
Work that may need service, maintenance, ployee" on leave or to meet seasanal or short-term
correction, repair or replacement. but which workload conditions.
is otherwise complete, will be treated as
completed. 20. "Volunteer worker" means a person who is not
your "employee", and who donates his or her work
b. Does not include "bodily injury" or "property and acts at the direction of and within the scope of
damage" arising out of: duties determined by you, and is not paid a fee,
(1) The transportation of property, unless the salary or other compensation by you or anyone
injury or damage arises out of a condition in else for their work performed for you.
or on a vehicle not owned or operated by 21. "Your product":
you, and that condition was created by the
"loading or unloading" of that vehicle by any a. Means:
insured; (1) Any goods or products, other than real
(2) The existence of tools, uninstalled equip- property, manufactured, sold, handl~d. dis-
ment or abandoned or unused materials; or tributed or disposed of by:
(3) Products or operations for which the classi- (a) You;
fication, listed in the Declarations or in a (b) Others trading under your name; or
policy schedule, states that products- (c) A person or organization whose busi-
completed operations are subject to the . ness or assets you have acquired; and
General Aggregate Umit.
(2) Containers (other than vehicles), materials,
17. "Property damage" means: parts or equipment furnished in connection
a. Physical injury to tangible property, including with such goods or products.
all resulting loss of use of that property. All b. Includes:
such Joss of use shall be deemed to occur at
the time of the physical injury that caused it; or (1) Warranties or representations made at any
time with respect to the fitness, quality, du-
rability, performance or use of "your prod-
uct"; and
CG00011207 © ISO Properties, Inc., 2006 Page 15 of16 0
SUPP APP 0936
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 67 of 258 PageID 2637
(2) The providing of or failure to provide warn-
ings or instructions.
c. Does not include vending machines or other
property rented to or located for the use of oth-
ers but not sold.
22. "Your work":
a. Means:
(1) Work or operations performed by you or on
your behalf; and
(2) Materials, parts or equipment furnished in
connection with such work or operations.
b. Includes:
(1}. Warranties or representations made at any
time with respect to the fitness, quality, du-
rability, performance or use of "your work",
and
(2) The providing of or failure to provide warn-
ings or instructions.
Page 16 of16 © ISO Properties, Inc., 2006 CG 00 0112 07 Cl
SUPP APP 0937
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 68 of 258 PageID 2638
COMMERCIAL GENERAL LIABILITY
CGOO 68 0509
RECORDING AND DISTRIBUTION OF MATERIAL OR
INFORMATION IN VIOLATION OF LAW EXCLUSION
. This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
A. Exclusion q. of Paragraph 2. EXclusions of Sec~ B. Exclusion p. of Paragraph 2. Exclusions of Sec-
tion I - Coverage A - Bodily Injury And Proper- tion I - Coverage B - Personal And Advertising
ty Damage Liability is replaced by the following: Injury Liability is replaced by the following:
2. Exclusions 2. Exclusions
This insurance does not apply to: This insurance does not apply to:
q. Recording And Distribution Of Material p. Recording And Distribution Of Material
Or Information In Violation Of Law Or Information In Violation Of Law
"Bodily injury'' or "property damage" arising "Personal and advertising injury" arising di-
directly or indirectly out of any action or rectly or indirectly out of any action or omis·
omission that violates or is alleged to vi~ sion that violates or is alleged to violate:
alate: (1} The Telephone Consumer Protection
(1) The Telephone Consumer Protection Act (TCPA), including any amendment
Act {TCPA), including any amendment of or addition to such law;
of or addition to such law; (2) The CAN-SPAM Act of 2003, including
(2) The CAN-SPAM Act of 2003, including any amendment of or addition to such
any amendment of or addition to such law;
law; (3) The Fair Credit Reporting Act (FCRA),
(3) The Fair. Credit Reporting Act (FCRA), and any amendment of or addition to
·and any amendment of or addition to such law, including the Fair and Accu-
such law, including the Fair and Accu~ rate Credit Transaction Act (FACTA}; or ·
rate Credit Transaction Act (FACTA); or (4) Any federal, state or local statute, ordin-
(4) Any federal, state or local statute, ordin- ance or regulation, other than the TCPA,
ance or regulation, other than the TCPA, CAN-SPAM Act of 2003 or FCRA and
CAN-SPAM Act of 2003 or FCRA and their amendments and additions, that
their amendments and additions, that addresses, prohibits, or limits the print-
addresses, prohibits, or limits the ptint~ ing, dissemination, disposal, collecting,
ing, dissemination, disposal, collecting, recording, sending, transmitting, com-
recording, sending, transmitting, com- municating or distribution of material or
municating or distribution of material or information.
information.
CGOO 68 0509 © Insurance Services Office, Inc., 2008 Page 1 of 1 D
SUPP APP 0938
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 69 of 258 PageID 2639
POLICY NUMBER: CCP 672836 COMMERCIAL GENERAl. LIABILITY·
CG 03 00 01 96
THIS ENDORSEMENT CHANGES THE POLJCY. PLEASE READ IT CAREFULLY.
DEDUCTIBLE LIABILITY INSURANCE
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
SCHEDULE
Coverage Amount and Basis of Deductible
PER CLAIM or PER OCCURRENCE
Bodily Injury Liability $ $
OR
Property Damage Liability $ $
OR
Bodily Injury Liability and/or $ 500 $
Property Damage Liability Combined
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations
as applicable to this endorsement.)
APPLICATION OF ENDORSEMENT Enter below any limitations on the application of this endorsement. If no
limitation Is entered, the deductibles apply to damages for all "bodily injury" and "property damage", however
caused):
A. Our obligation under the Bodily Injury Liability and b. Under Property Damage Liability Coverage, to
Property Damage Liability Coverages to pay dam- all damages sustained by any one person be-
ages on your behalf applies only to the amount of cause of "property damageD; or
damages in excess of any deductible amounts c. Under Bodily Injury Liability and/or Property
stated in the Schedule above as applicable to Damage Liability Coverage Combined, to
such coverages. aU damages sustained by any one person
8. You may select a deductible amount on either a because of:
per claim or a per "occurrence" basis. Your se- (1) "Bodily injury'';
lected deductible applies to the coverage option
(2) "Property damage"; or
and to the basis of the deductible indicated by the
placement of the deductible amount in the Sched- (3) "Bodily injury~ and "property damageD
ule above. The deductible amount stated in the combined
as the result of any one "occurrence". If
Schedule above applies as follows:
damages are claimed for care, Joss of ser-
1. PER CLAIM BASIS. If the deductible amount
vices or death resulting at any time from nbodily
indicated in the Schedule above is on a per claim
injury", a separate deductible amount will be
basis, that deductible applies as follows:
applied to each person making a claim for such
a. Under Bodily Injury Liability Coverage, to all damages. With respect to "property damage",
damages sustained by any one person be- person in-
cause of nbodily injury"; cludes an organization.
CG0300 0196 Copyright, Insurance Services Office, Inc., 1994 Page 1 of2
SUPP APP 0939
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 70 of 258 PageID 2640
2. PER OCCURRENCE BASIS. If the deductible C. The terms of this insurance, including those with
amount indicated in the Schedule above is on respect to:
a "per occurrence" basis, that deductible 1. Our right and duty to defend the insured
amount applies as follows: against any "suits" seeking those damages;
a. Under Bodily Injury Liability Coverage, to all and
damages because of "bodily injury''; 2. Your duties in the event of an "occurrence•,
b. Under Property Damage Liability Coverage, claim, or "suit"
to all damages because of "property dam- apply irrespective of the application of the de-
age~; or ductible amount.
c. Under Bodily Injury Liability and/or Property D. We may pay any part or all of the deductible
Damage Liability Coverage Combined, to amount to effect seWement of any cJaim or "suit"
all damages because of: and, upon notification of the action taken, you shall
(1) "Bodily injury''; promptly reimburse us for such part of the de-
(2) AProperty damage"; or ductible amount as has been paid by us.
(3) "Bodily injury" and "property damage"
combined
as the result of any one "occurrence", regard-
less of the number of persons or organizations
who sustain damages because of that "occur.:.
renee".
CG 03 00 0196 Copyright, Insurance Services Office, Inc., 1994 Page2of2
SUPP APP 0940
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 71 of 258 PageID 2641
POLICY NUMBER: CCP 672836 COMMERCIAL GENERAL LIABILITY
TIDS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULY.
ADDITIONAL INSURED- MANAGERS OR LESSORS OF
PREMISES
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
SCHEDULE
1. Designation of Premises (Part Leased to You):
5026 ADDISON CIRCLE
ADDISON, TX 75001-3332
2. Name of Person or Organization (Additional Insured):
. POST PROPERTIES INC
5040 ADDISON CIRCLE, SUITE 200
ADDISON, TX 75001
3. Additional Premium: $ INCLUDED
(If no entry appears above, the information required to complete this endorsement will be shown in the Declarations
as applicable to this endorsement)
WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the
Schedule but only with respect to liability arising out of the ownership, maintenance or use of that part of the
premises leased to you and shown in the Schedule and subject to the following additional exclusions:
This insurance does not apply to:
1. Any "occurrence" which takes place after you cease to be a tenant in that premises.
2. Structural altemtions, new construction or demolition operations performed by or on behalf of the person or
organization shown in the Schedule.
CG20 110196 Copyright, Insurance Services Office, Inc., 1994 Page I ofl
SUPP APP 0941
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 72 of 258 PageID 2642
COMMERCIAL GENERAL LIABILITY
CG 20 26 0704
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED - DESIGNATED
PERSON OR ORGANIZATION
This endorsement modifies insurance provided under the following;
COMMERCIAL GENERAL LIABILITY COVERAGE PART
SCHEDULE
Name Of Additional Insured Person(s) Or Organization(s)
TOWN OF ADDISON
PO BOX9010
ADDISON, TX 5001·
Section II - Who Is An Insured is amended to in-
clude as an additional insured the person{s) or or-
ganization(s) shown in the Schedule, but only with
respect to liability for "bodily injury", "property dam-
age" or "personal and advertising injurY' caused, in
whole or in part, by your acts or omissions or the acts
or omissions of those acting on your behalf:
A. In the performance of your ongoing operations; or
B. In connection with your premises owned by or
rented to you.
CG 202607 04 ©ISO Properties, Inc., 2004 Page 1 of1
SUPP APP 0942
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 73 of 258 PageID 2643
COMMERCIAL GENERAL LIABILITY
CG 21 46 07 98
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ABUSE OR MOLESTATION EXCLUSION
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL UABILITY COVERAGE PART
The following exclusion is added to Paragraph 2., 2. The negligent:
Exclusions of Section I - Coverage A - Bodily a. Employment;
Injury And Property Damage Liability and Para-
graph 2., Exclusions of Section I - Coverage B - b. Investigation;
Personal And Advertising Injury Liability: c. Supervision;
This insurance does not apply to nbodily injury", d. Reporting to the proper authorities, or failure
"property damage" or "personal and advertising to so report; or
injury" arising out of: e. Retention;
1. The actual or threatened abuse or molestation by of a person for whom any insured is or ever was
·anyone of any person while in the care, custody legally responsible and whose conduct would be
or control of any insured, or excluded by Paragraph 1. above.
CG 214607 98 Copyright, Insurance Services Offic&, Inc., 1997 Page 1 of 1 0
SUPP APP 0943
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 74 of 258 PageID 2644
COMMERCIAL GENERAL LIABILITY
CG 21 4712 07
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
EMPLOYMENT-RELATED PRACTICES EXCLUSION
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
A. The following exclusion is added to Paragraph 2., B. The following exclusion is added to Paragraph 2.,
Exclusions of Section I - Coverage A - Bodily Exclusions of Section I -. Coverage B - Person-
Injury And Property Damage Liability: al And Advertising Injury Liability:
This insurance does not apply to: This insurance does not apply to:
"Bodily injury" to: "Personal and advertising injury'' to:
(1) A person arising out of any: (1) A person arising out of any:
(a) Refusal to employ that person; (a) Refusal to employ that person;
(b) Termination of that person's employment; (b) Termination of that person's employment;
or or
(c) Employment-related practices, policies, (c) Employment-related practices, policies,
acts or omissions, such as coercion, demo- acts or omissions, such as coercion, demo-
tion, evaluation, reassignment, discipline, tion, evaluation, reassignment, discipline,
defamation, harassment, humiliation, dis- defamation, harassment, humiliation, dis-
crimination or malicious prosecution di- crimination or malicious prosecution di-
rected at that person; or rected at that person; or
(2) The spouse, child, parent, brother or sister of (2) The spouse, child, parent, brother or sister of
that person as a consequence of "bodily injury" that person as a consequence of "personal and
to that person at whom any of the employment- advertising injury" to that person at whom any
related practices described in Paragraphs (a), of the employment-related practices ·described
(b), or (c) above is directed. in Paragraphs (a), (b), or (c) above is directed;
This exclusion applies: This exclusion applies:
(1) Whether the injury-causing event described in (1) Whether the injury-causing event described in
Paragraphs (a), {b) or (c) above occurs before Paragraphs (a), (b) or (c) above occurs before
employment, during employment or after em· employment, during employment or after em-
ployment of that person; ployment of that person;
(2) Whether the insured may be liable as an em- (2) Whether the insured may be liable as an em-
ployer or in any other capacity; and ployer or in any other capacity; and
(3) To any obligation to share damages with or (3) To any obligation to share damages with or
repay someone else who must pay damages repay someone else who must pay damages
because of the injury. because of the injury. ·
CG21471207 © ISO Properties, Inc., 2006 Page 1 of 1 0
SUPP APP 0944
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 75 of 258 PageID 2645
'COMMERCIAL GENERAL LIABILITY
CG 21 6512 04
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
TOTAL POLLUTION EXCLUSION WITH A BUILDING
HEATING, COOLING AND DEHUMIDIFYING EQUIPMENT
EXCEPTION AND A HOSTILE FIRE EXCEPTION
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABIUTY COVERAGE PART
Exclusion f. under Paragraph 2. Exclusions of Sec- (ii) At any premises, site or location on
tion I - Coverage A - Bodily Injury And Property which any insured or any contractors or
Damage Liability is replaced by the following: subcontractors working directly or indi-
This insurance does not apply to: rectly on any insured's behalf are per-
forming operations to test for, monitor,
f. Pollution clean up, remove, contain, treat, detox-
(1) nBodily injury" or "property damage" which ify, neutralize or in any way respond to,
would not have occurred in whole or part but or assess the effects of, "pollutants".
for the actual, alleged or threatened discharge, (2) Any loss, cost or expense arising out of any:
dispersal, seepage, migration, release or es-
cape of "pollutants" at any time. (a) Request, demand, order or statutory or
regulatory requirement that any insured or
This exclusion does not apply to: others test for, monitor, clean up, remove,
(a) "Bodily injury" if sustained within a building contain, treat, detoxify or neutralize, or in
which is or was at any time owned or occu- any way respond to, or assess the effects
pied by, or rented or loaned to, any insured of, "pollutants"; or
and caused by smoke, fumes, vapor or soot (b) Claim or suit by or on behalf of a govern-
produced by or originating from equipment mental authority for damages because of
that is used to heat, cool or dehumidify the testing for, monitoring, cleaning up, remov-
building, or equipment that is used to heat ing, containing, treating, detoxifying or neu-
water for personal use, by the building's oc- tralizing, or in any way responding to, or
cupants or their guests; or assessing the effects of, "pollutants".
(b) "Bodily injury" or "property damage" arising
out of heat, smoke or fumes from a "hostile
fire" unless that "hostile fire" occurred or
originated:
(i) At any premises, site or location which
is or was at any time used by or for any
insured or others for the handling, stor-
age, disposal, processing or treatment
of waste; or
CG 216512 04 ©ISO Properties, Inc., 2003 Page 1 of1 D
SUPP APP 0945
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 76 of 258 PageID 2646
COMMERCIAL GENERAL LIABILITY
CG2196 0305
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
SILICA OR SILICA-RELATED DUST EXCLUSION
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
A. The foilowing exclusion is added to Paragraph 2., B. The following exclusion is added to Paragraph 2.,
Exclusions of Section I - Coverage A - Bodily Exclusions of Section I - Coverage B - Per-
Injury And Property Damage Liability: sonal And Advertising Injury Liability:
2. Exclusions 2. Exclusions
This insurance does not apply to: This insurance does not apply to:
Silica Or Silica-Related Dust Silica Or Silica-Related Dust
a. "Bodily injury" arising, in whole or in part, a. "Personal and advertising injury" arising, in
out of the actual, alleged, threatened or whole or in part, out of the actual, alleged,
suspected inhalation of, or ingestion of, "sil- threatened or suspected inhalation of. in-
ica" or "silica-related dust". gestion of, contact with, exposure to, exis-
·b. "Property damage" arising, in whole or in tence of, or presence of, "silica" or "silica-
part, out of the actual, alleged, threatened related dust".
or suspected contact With, exposure to. ex- b. Any loss, cost or expense arising, in whole
istence of, or presence of, "silica" or "silica- or in part, out of the abating, testing for,
related dust". monitoring, cleaning up, removing, contain-
c. Any loss, cost or expense arising, in whole ing, treating, detoxifying, neutralizing, reme-
or in part, out of the abating, testing for, diating or disposing of, or in any way re-
monitoring, cleaning up, removing, contain- sponding to or assessing the effects of,
ing, treating, detoxifying, neutralizing, reme- "silica" or "silica-related dust", by any in-
diating or disposing of, or in any way re- sured or by any other person or entfty.
sponding to or assessing the effects of, C. The following definitions are added to the Defini-
"silica" or "silica-related dust", by any in- tions Section:
sured or by any other person or entity. 1. "Silica" means silicon dioxide (occurring in
crystalline, amorphous and impure forms), sil-
ica particles, silica dust or silica compounds.
2. "Silica-related dust" means a mixture or com-
bination of silica and other dust or particles.
CG219603 05 ©ISO Properties, Inc., 2004 Page 1 of1 []
SUPP APP 0946
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 77 of 258 PageID 2647
COMMERCIAL GENERAL LIABILITY
CG 240405 09
WAIVER OF TRANSFER RIGHTS OF RECOVERY
AGAINST OTHERS TO US
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
SCHEDULE
·~arne of Person or Organization:
TOWN OF ADDISON
PO BOX9010
ADDISON, TX 75001
The following is added to Paragraph 8. Transfer Of
Rights Of Recovery Against Others To Us of
·Section IV Conditions:
M
We waive any right of recovery we may have against
the person or organization shown in the Schedule
above because of payments we make for injury or
damage arising out of your ongoing operations or
· ''your work" done under a contract with that person
or ()rganization and included in the "products·
completed operations hazard". This waiver applies
only to the person or organization shown in the
Schedule above.
CG240405 09 ©Insurance Services Office, Inc., 2008 ·Page I ofl
SUPP APP 0947
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 78 of 258 PageID 2648
POLICY NUMBER: CCP 672836 COMMERCIAL GENERAL UABILITY
TinS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
PRODUCTS/COMPLETED OPERATIONS HAZARD
REDEFINED
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE PART
SCHEDULE
Description of Premises and Operations :
PIZZA RESTAURANT
5026 ADDISON CIRCLE
ADDISON, TX 75001-3332
(If no entry appears above, infonnation required to complete this endorsement will be shown in the Declarations
as applicable to this endorsement.)
With respect to ''bodily injury" or "property damage" Paragraph a. of the definition of"Products- completed
arising out of "your products" manufactured, sold, operations hazard" in the DEFINITIONS Section is
handled or distributed: · replaced by the following: "Products - completed
1. On, from or in connection with the use of any operations hazard":
premises described in the Schedule, or a Includes all "bodily injury" and "property
damage" that arises out of "your products" if the
2. In connection with the conduct of any operation
"bodily injury" or ''property damage" occurs after
descn"bed in the Schedule, when conducted by
you have relinquished possession of those
you or on your behalf.
products.
CG24 07 01 96 Copyright, Insurance Services Office, Inc., 1994 Page 1 of1
SUPP APP 0948
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 79 of 258 PageID 2649
CGL 1701a 0510
TIDS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
SPECIAL EXCLUSIONS AND LIMITATIONS ENDORSEMENT
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABlllTY COVERAGE PART
A. In consideration of the premium charged this policy has been issued subject to the foUowing
exclusions being added to Coverages A & B:
This insurance does not apply to:
1. Asbestos or Lead
"Bodily injury", "property damage", or "personal and advertising injury" arising out of or resulting
from the disposal, existence, handling, ingestion, inhalation, removal, sale, storage, transportation or
use of:
a. Asbestos or any material containing asbestos; or
b. Lead, lead based paint, lead compounds or any material containing lead.
2. Athletic or Sports Participants
"Bodily injury" to any person while practicing for, participating in or officiating at any sports or
athletic contest or exhibition that you sponsor or in which you or your employees or guests participate.
3. Communicable Disease or Diseases
''Bodily injury'' or "personal and advertising injury" arising out of or resulting from the transmission or
alleged transmission of any sexually transmitted disease or any other disease transmitted by bodily
fluids or excretions.
4. Criminal Acts
a. "Bodily injury" or "property damage" arising out of or resulting from a criminal act committed by
any insured, including any additional insureds or
b: "Bodily injury" or '149 S.W.3d 300, 306 (Tex. App.—Dallas 2004); see also S&A Beverage Co. of Beaumont v.
DeRouen, 753 S.W2d 507 (Tex. App. – Beaumont 1988, pet. denied). Stated differently,
Plaintiff’s damages and bodily injuries complained of herein did not solely arise out of or result
from any criminal acts of other Defendants.
52. All of Plaintiff’s damages and bodily injuries complained of herein arise out of
Pastazios’ breaches of its legal duties owed to Plaintiff—without which, Plaintiff never would
have been injured. Any alleged new and independent cause alleged by Pastazios is legally and
necessarily dependent on Pastazios’ own prior and contemporaneous negligence and gross
negligence. See S&A Beverage Co. of Beaumont, 753 S.W2d 507.
COUNT 5: DRAM SHOP LIABILITY (DEFENDANT PASTAZIOS)
53. Plaintiff incorporates by reference, as if fully set forth herein, all of the preceding
paragraphs.
54. Plaintiff’s cause of action for Dram Shop Liability is alleged against Pastazios
only.
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 17 OF 28
SUPP APP 1080
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 211 of 258 PageID 2781
55. As further alleged herein, on or about April 26, 2011, Pastazios held a Texas
Alcoholic Beverage Commission license for the sale, service or provision of alcoholic goods or
products and did, in fact, sell, serve, provide, or otherwise distribute multiple alcoholic products
to Plaintiff when, at the time, it was apparent, obvious, and evident to Pastazios that Plaintiff was
obviously intoxicated. As further alleged herein, it was it is visible, evident, and easily
observable to Pastazios that Plaintiff was obviously intoxicated at the time she was provided
such alcoholic products by Pastazios.
56. Such signs of obvious intoxication of Plaintiff were self-evident from the
circumstances and observations that any ordinary person could see throughout the course of the
approximate 2 hours in which Pastazios was providing Plaintiff with its alcoholic products while
on the premises. The testimony and admissions from multiple eye witnesses, the fact that
Plaintiff was sometimes non-responsive, in and out of consciousness, the physical clues that an
ordinary person could observe, the shear amount of alcoholic products Pastazios distributed to
Plaintiff, the changes in her behavior, clearly manifested the fact that Plaintiff was a danger to
herself and others. Moreover, Plaintiff’s blood alcohol levels taken several hours after she was
last provided alcoholic products by Pastazios, statements and observations made by the Addison
Police Department and treating medical providers at Parkland hospital, testimony that Plaintiff
has virtually no memory after the time she left Pastazios until she woke up while actively being
raped, as well as the testimony of the multiple instances of vomiting likewise show that Pastazios
had provided Plaintiff with alcoholic products at a time when she was obviously intoxicated and
a danger to herself and dangers from others.
57. Plaintiff’s intoxication—as a result of the provision and/or distribution of
alcoholic products by Pastazios was a proximate cause of Plaintiff’s damages and bodily injuries
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 18 OF 28
SUPP APP 1081
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 212 of 258 PageID 2782
complained of herein. In fact, all of Plaintiff’s damages and bodily injuries arise out of the
products provided and/or distributed to her by Pastazios. But for Plaintiff’s intoxication at the
hands of Pastazios, Plaintiff would not have suffered the damages and serious bodily injuries
complained of herein. As such, Pastazios provision and/or distribution of alcoholic products to
Plaintiff while she was obviously intoxicated was a “substantial factor in bringing about the
injury and without which no harm would have been incurred.” See El Chico Corp. v. Poole, 732
S.W.2d 306, 313 (Tex. 1987). A restaurant of ordinary intelligence should have anticipated the
dangers that its negligent acts created for others, including Plaintiff, and would reasonably
anticipate the general character of the bodily injury suffered by Plaintiff which arose out of such
negligence. See S&A Beverage Co., 753 S.W2d 507.
58. Moreover, any alleged intentional or negligent acts of any other person or
Defendant that contributed to Plaintiff’s injuries did not act to extinguish Pastazios’ liability for
its own negligence and gross negligence, do not constitute an “outside agency,” and do not rise
to the level of a new and independent cause that would extinguish Pastazios’ liability. Any
purported acts or intervening forces Pastazios may allege to be a “new and independent cause”
fails said acts were foreseeable to Pastazios under the circumstances that existed at the time. In
the alternative, even if said intervening forces were unforeseeable, the chain of causation flowing
from Pastazios’ negligence was continuous and unbroken. See Biaggi v. Patrizio Restaurant Inc.,
149 S.W.3d 300, 306 (Tex. App.—Dallas 2004); see also S&A Beverage Co. of Beaumont v.
DeRouen, 753 S.W2d 507 (Tex. App. – Beaumont 1988, pet. denied). Stated differently,
Plaintiff’s damages and bodily injuries complained of herein did not solely arise out of or result
from any criminal acts of other Defendants.
59. All of Plaintiff’s damages and bodily injuries complained of herein arise out of
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 19 OF 28
SUPP APP 1082
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 213 of 258 PageID 2783
and/or result from Plaintiff’s intoxication at the hands of Pastazios’—without which, Plaintiff
never would have been injured. Any alleged new and independent cause alleged by Pastazios is
legally and necessarily dependent on Pastazios’ own prior and contemporaneous negligence and
gross negligence. See S&A Beverage Co. of Beaumont, 753 S.W2d 507. This is so even though
the physical act of being raped occurred a half mile away from the premises. See id. Thus,
Plaintiff hereby pleads that Pastazios is barred as a matter of Texas law from submitting the issue
of “new and independent cause” to the Court or jury in these proceedings. See id.; see also
Biaggi, 149 S.W.3d at 304-305 (Tex. App. – Dallas 2004).
60. Pleading in the alternative, to the extent Pastazios claims that other Defendants—
namely Defendant Deari—is responsible for the provision of alcoholic products to Plaintiff,
Defendant Deari was acting under the actual and/or apparent authority of Pastazios and, thus, the
provision of alcohol by Defendant Deari is imputed to Pastazios as a matter of Texas law. This is
the case irrespective of whether Defendant Deari was acting in the course and scope of his
employment with Pastazios.
61. Under Texas proportionate responsibility law, to the extent that the jury
apportions responsibility to anyone other than Pastazios, Plaintiff is entitled to fully recover from
Pastazios “without assuming the risk of [Defendant Deari’s] insolvency. See Biaggi, 149 S.W.3d
at 304-305 (Tex. App. – Dallas 2004). In such instances, Texas law makes clear that Plaintiff is
entitled to fully recover from Pastazios, and it is Pastazios “who may then recover from [other
Defendants] based upon the percentages of responsibility that the jury assessed between them.”
Plaintiff hereby pleads and invokes said rights recognized under Texas law.
COUNT 6: FALSE IMPRISONMENT/DETENTION (DEFENDANT PASTAZIOS)
62. Plaintiff incorporates by reference, as if fully set forth herein, all of the preceding
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 20 OF 28
SUPP APP 1083
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 214 of 258 PageID 2784
paragraphs. This cause of action only applies to Defendant Pastazios.
63. Without legal authority or justification, Defendant Pastazios willfully detained or
participated in the detainment of Plaintiff without Plaintiff’s consent and without the authority of
law. Pastazios willfully accomplished the detainment of Plaintiff by virtue of providing her with
intoxicating products and substances handled and/or distributed by Pastazios to the point where
Plaintiff was virtually unconscious and/or incapable of freely moving herself from one place to
another. Such detention was willful, was without Plaintiff’s consent, and placed her in a position
where she could not exercise her will in going where she could otherwise lawfully go. Pastazios’
actions, combined with Plaintiff’s vulnerabilities and the oppressive circumstances surrounding
these events had the effect of unlawfully detaining Plaintiff in a manner which ultimately caused
her to suffer serious bodily injuries and consequential damages arising out of said detainment.
64. The false imprisonment and detainment committed by Pastazios was a proximate
cause of the damages and serious bodily injury suffered by Plaintiff as alleged herein.
COUNT 7: PREMISES LIABILITY (DEFENDANT PASTAZIOS)
65. Plaintiff incorporates by reference, as if fully set forth herein, all of the preceding
paragraphs. Plaintiff’s cause of action for Premises Liability is alleged against Defendant
Pastazios only.
66. Under Texas law, a premises-liability defendant may be held liable for a
dangerous condition on the property if it assumed control over and responsibility for the
premises. As further alleged herein, Pastazios exercised actual and contractual control over the
premises. Thus, Pastazios, owed Plaintiff, as an invitee, a legal duty to avoid risks of harm that
are unreasonable and foreseeable. Pastazios also had a duty to inspect and make safe any
dangerous conditions or situations on its property or give Plaintiff an adequate warning of the
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 21 OF 28
SUPP APP 1084
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 215 of 258 PageID 2785
dangerous conditions or situations; however, Pastazios failed to do so.
67. Pastazios failed to exercise ordinary care by, among other things, failing to take
any reasonable steps to protect its invitees, including Plaintiff, from unreasonable and
foreseeable risks of harm—including risks of harm from the criminal or grossly negligent acts of
third parties.
68. Said breaches set forth above constitute gross negligence on the part of Pastazios
because, when viewed objectively from the standpoint of Pastazios at the time of their
occurrence involved an extreme degree of risk, considering the probability and magnitude of the
potential harm to others, including Plaintiff, and of which Pastazios had actual, subjective
awareness of the risk involved, but nevertheless proceeded with conscious indifference to the
rights, safety, or welfare of others, including Plaintiff. In the alternative, Pastazios is grossly
negligent because of the acts of other Defendants to the extent any other grossly negligent
Defendant was a vice principal of Pastazios and was acting in the course and scope of that
Defendant’s employment, or to the extent Pastazios ratified said Defendant’s grossly negligent
conduct.
69. As a proximate cause of Pastazios’ breaches of these legal duties, Plaintiff
suffered and will continue to suffer damage and serious bodily injuries that will remain with her
for the rest of her adult life. But for said breaches, Plaintiff never would have suffered the serious
bodily injuries complained of herein. Pastazios’ breaches, acts and omissions were a substantial
factor in causing Plaintiff’s damages and bodily injuries complained of herein, without which,
such harm would not have occurred. Under the circumstances that existed at the time, a
restaurant operator of ordinary intelligence would have reasonably anticipated the dangers
Pastazios’ negligent and grossly negligent acts and omissions created for others, including
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 22 OF 28
SUPP APP 1085
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 216 of 258 PageID 2786
Plaintiff, as well as the general character of the damages and bodily injuries Plaintiff suffered as
a result of said negligence and gross negligence. It is undeniable that Plaintiff’s damages and
bodily injuries complained of herein arose out of the inherent nature of Pastazios’ negligent and
grossly negligent acts and omissions.
70. Moreover, any alleged intentional or negligent acts of any other person or
Defendant that contributed to Plaintiff’s injuries did not act to extinguish Pastazios’ liability for
its own negligence and gross negligence and do not constitute an “outside agency,” and do not
rise to the level of a new and independent cause that would extinguish Pastazios’ liability. Any
purported acts or intervening forces Pastazios may allege to be a “new and independent cause”
fails said acts were foreseeable to Pastazios under the circumstances that existed at the time. In
the alternative, even if said intervening forces were unforeseeable, the chain of causation flowing
from Pastazios’ negligence was continuous and unbroken. See Biaggi v. Patrizio Restaurant Inc.,
149 S.W.3d 300, 306 (Tex. App.—Dallas 2004); see also S&A Beverage Co. of Beaumont v.
DeRouen, 753 S.W2d 507 (Tex. App. – Beaumont 1988, pet. denied). Stated differently,
Plaintiff’s damages and bodily injuries complained of herein did not solely arise out of or result
from any criminal acts of other Defendants.
71. All of Plaintiff’s damages and bodily injuries complained of herein arise out of
Pastazios’ breaches of its legal duties owed to Plaintiff—without which, Plaintiff never would
have been injured. Any alleged new and independent cause alleged by Pastazios is legally and
necessarily dependent on Pastazios’ own prior and contemporaneous negligence and gross
negligence. See S&A Beverage Co. of Beaumont, 753 S.W2d 507.
72. As further alleged herein, Pastazios breached its legal duties owed to Plaintiff, and
those breaches proximately caused Plaintiff’s damages and bodily injuries alleged herein.
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 23 OF 28
SUPP APP 1086
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 217 of 258 PageID 2787
COUNT 8: PARTICIPATORY LIABILITY—AIDING AND ABETTING AND CONCERT OF ACTION
(ALL DEFENDANTS)
73. Plaintiff incorporates by reference, as if fully set forth herein, all of the preceding
paragraphs.
74. Among the Defendants was a primary actor, or primary actors, who committed an
underlying tort, or torts, against Plaintiff. Defendants had knowledge that the primary actor’s
conduct constituted a tort and Defendants gave the primary actor assistance, substantial
assistance, and/or encouragement to commit the tort against Plaintiff. Defendants’ assistance,
substantial assistance, and/or encouragement was a substantial factor in causing the tort to be
completed and a substantial factor in the damages incurred by Plaintiff as alleged herein.
75. Alternatively, Defendants’ own conduct—separate and apart from the primary
actor—was a breach of duty to Plaintiff and a substantial factor in causing Plaintiff’s injuries.
76. Due to Defendants’ joint assistance, encouragement, aiding and abetting, and/or
concert of action, Plaintiff alleges that Defendants should be held jointly and severally
responsible for the whole of damages incurred by Plaintiff.
COUNT 9: EXEMPLARY DAMAGES (ALL DEFENDANTS)
77. Plaintiff incorporates by reference, as if fully set forth herein, all of the preceding
paragraphs.
78. Defendants’ tortious conduct was not only negligent, it was malicious and/or
grossly negligent.
79. Defendants’ malicious and/or grossly negligent acts and omissions were carried
out by Defendants personally, through Defendants’ authorized agents, managers, employees,
vice-principals, and/or principals of Defendant Pastazios. Alternatively, Defendants Deari and
Kreka’ malicious and/or grossly negligent conduct was subsequently approved by or ratified by
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 24 OF 28
SUPP APP 1087
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 218 of 258 PageID 2788
Defendant Pastazios.
80. Defendants intentionally breached the legal duties it owed Plaintiff such that it
could take undue advantage of Plaintiff and/or otherwise maliciously treat Plaintiff. The acts or
omissions of Defendants, when viewed objectively from the Defendants’ standpoint, involved an
extreme degree of risk when considering the probability and magnitude of the potential harm to
Plaintiff and others.
81. Additionally, Defendants had actual, subjective awareness of the risk to Plaintiff
and others but proceeded anyway with a conscience indifference to the rights, safety, or welfare
of Plaintiff and others.
82. Defendants’ conduct was performed and/or designed with a specific intent to
cause substantial injury or harm to Plaintiff. As alleged herein, Defendants’ conduct is an
example of why punitive damages exist, and Plaintiff alleges that Defendants’ conduct rises to
the level warranting the imposition of exemplary damages against Defendants at trial.
83. Pursuant to TEX. CIV. PRAC. & REM. CODE § 41.008(c), there is no cap on the
amount of exemplary damages that may be awarded by the jury.
VII.
DAMAGES
84. Plaintiff incorporates by reference, as if fully set forth herein, all of the preceding
paragraphs.
85. Plaintiff has incurred significant damages due to Defendants' tortious and grossly
negligent conduct. Plaintiff seeks all losses sustained as a natural, probable, foreseeable, and/or
proximate result of Defendants' wrongful conduct, including:
a. General damages;
b. Actual damages;
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 25 OF 28
SUPP APP 1088
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 219 of 258 PageID 2789
c. Physical pain and suffering incurred in the past and future;
d. Mental anguish incurred in the past and future;
e. Disfigurement incurred in the past and future;
f. Physical impairment incurred in the past and future;
g. Medical expenses incurred in the past and future;
h. Loss of earning capacity incurred in the past and future;
i. Lost wages incurred in the past and future;
j. Out of pocket costs;
k. Loss of consortium;
l. Loss of companionship and society in the past and future;
m. Loss of enjoyment of life in the past and future;
n. Injury to reputation in the past and future;
o. All reasonable and necessary attorneys' fees that Plaintiff is forced to incur
pursuant to Texas common law and equity;
p. Exemplary damages;
q. Costs of court;
r. Pre-judgment interest;
s. Post-judgment interest; and
t. All other relief, in law and in equity, to which Plaintiff may be justly entitled.
VIII.
DEMAND FOR JURY
86. Plaintiff demands a jury trial and has tendered the appropriate fee.
IX.
PRAYER
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 26 OF 28
SUPP APP 1089
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 220 of 258 PageID 2790
87. WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that Defendants be
cited to appear and answer herein. Plaintiff further prays that, upon trial by jury, she have
judgment against Defendants for the damages alleged herein, as well as all other relief, in law
and in equity, to which Plaintiff may prove herself to be justly entitled.
Respectfully submitted,
___________________________________
ROYCE WEST G. MICHAEL GRUBER
State Bar No. 21206800 State Bar No. 08555400
royce.w@westllp.com mgruber@ghjhlaw.com
VERETTA FRAZIER TREY CRAWFORD
State Bar No. 00793264 State Bar No. 24059623
veretta.f@westllp.com tcrawford@ghjhlaw.com
NIGEL REDMOND BRIAN E. MASON
State Bar No. 24058852 State Bar No. 24079906
nigel.r@westllp.com bmason@ghjhlaw.com
WEST & ASSOCIATES, L.L.P. GRUBER HURST JOHANSEN HAIL SHANK LLP
P.O. Box 3960 1445 Ross Avenue, Suite 2500
Dallas, Texas 75208-1260 Dallas, Texas 75202
Ofc.: (214) 941-1881 214.855.6800 (main)
Fax: (214) 941-1399 214.855.6808 (facsimile)
ATTORNEYS FOR PLAINTIFF
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 27 OF 28
SUPP APP 1090
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 221 of 258 PageID 2791
CERTIFICATE OF SERVICE
The undersigned hereby certifies that, pursuant to TEX. R. CIV. P. 21, 21a, a true and
correct copy of the foregoing was filed on June 5, 2015 and was served on June 5, 2015 to the
following individuals:
Via Facsimile and E-mail Via Certified Mail, Return Receipt Requested
Ajredin “Danny” Deari Dritan Kreka, pro se
Pastazios Pizza, Inc.
5549 Big River Drive
Samuel H. Johnson The Colony, Texas 75056
Rosenberg & Johnson, P.C.
Facsimile: (972) 918-5274
_______________________________________
Trey Crawford
PLAINTIFF’S FOURTH AMENDED PETITION PAGE 28 OF 28
SUPP APP 1091
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 222 of 258 PageID 2792
EXHIBIT E
SUPP APP 1092
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 223 of 258 PageID 2793
CENTURY
INSURANCE GROUP~~~
DIVISION OF MEADOWBROOK INSURANCE GROUP~
May 24,2013 /"
Via Certified and Regular Mail
91 7108 2133 3936 4102 0982
)'astazios Pizza, Inc.
/ 5026 Addison Circle
Addison, TX 75001-3332
RE: Doe v. Pastazios Pizza, Inc., eta/.
Named Insured: Pastazios Pizza, Inc.
Policy No.: CCP672836
Policy Period: Ssptember 21, 2010- September 21, 2011
Date of Loss: April 26, 2011
Claim No.: 01-088423
I am a Claims Attorney for Century Insurance Group, a division of Meadowbrook Insurance
Group, assigned to oversee this claim on behalf of Century Surety Company ("Century"). As
you know, Century is in receipt of the Petition filed on behalf of Jane Doe against Ajredin
"Danny'' Deari, Dritan Kreka, and Pastazios Pizza, Inc, as well as others, in the District Court for
Dallas County, TX as Suit No. 13-04564 (hereinafter "the Doe Action"). Upon review of the
petition and the above-referenced policy, Century has determined that coverage may be
available for this claim. As such, Century agrees to provide a defense and indemnity to
Pastazios Pizza, Inc. subject to a full and complete reservation of rights.
Please read this letter carefully for a more detailed explanation of Century's coverage position.
I. FACTUAL BACKGROUND
The following facts are based largely upon the allegations contained in the Petition. The
Petition's allegations are reviewed here, simply for the purpose of explaining Century's
coverage position. Century's review of those allegations should not be construed as a comment
on their truthfulness, as Century does not mean to assert that any, or all, of the allegations
contained in the Petition are true. That said, please promptly advise us if you believe we have
misconstrued, or misunderstood, those allegations.
The Doe Action, filed April 24, 2013, alleges that on April 26, 2011, Jane Doe came to interview
for a job at your establishment. Ms. Doe, a minor, alleges that she was provided alcoholic
beverages to the point of unconsciousness. She alleges that while unconscious she was driven
by Dritan Kreka and Ajredin "Danny" Deari to a hotel where she was raped by Mr. Deari. As a
result of this incident, the Doe Action brings claims of assault, battery, sexual assault, false
imprisonment, negligence, premises liability, dram shop liability, intentional infliction of
emotional distress, participatory liability - aiding and abetting, and participatory liability -
conspiracy. Specifically, the Doe Action alleges that you had a duty to use ordinary care in
hiring and retaining employees, a duty to control your employees, a duty to supervise your
employees' activities, and a duty to prevent an employee from causing an unreasonable risk of
Shana M. Bereche
Claims Attorney
SBereche@centurysurety.com 1602-216-6568
Mailing Address: P ..O. Box 163340 Columbus, Ohio 43216-3340
Physical Address: 23733 N. Scottsdale Rd., Suite 100, Scottsdale, AZ 85255
Phone: 888-651-6424 Fax: 614-895-7040 Website: www.centurysurety.com
SUPP APP 1093
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Pastazios Pizza, Inc.
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Page 2 of 11
harm to Ms. Doe. The Doe Action alleges you violated these duties by providing intoxicating
substances to Ms. Doe and placing her in harms way. The Doe Action seeks to recover for
medical expenses, pain and suffering, disfigurement, physical impairment, attorneys' fees and
punitive damages.
II. POLICY LANGUAGE
Century issued policy number CCP672836 to Named Insured, Pastazios Pizza, Inc., for the
period spanning September 21, 2010 to September 21, 2011. The policy provides Commercial
General Liability coverage subject to liability limits of $1,000,000 per Occurrence, $2,000,000
products completed operations limit, and $2,000,000 in the aggregate, and a deductible of $500
per claim.
Pertinent portions of the policy read as follows:
SECTION I- COVERAGES
COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as
damages because of "bodily injury" or "property damage" to which this
insurance applies. We will have the right and duty to defend the insured against
any "suit" seeking those damages. However, we will have no duty to defend the
insured against any "suit" seeking damages for "bodily injury" or "property
damage" to which this insurance does not apply. We may, at our discretion,
investigate any "occurrence" and settle any claim or "suit" that may result. But:
(1) The amount we will pay for damages is limited as described in Section Ill-
Limits Of Insurance; and
(2) Our right and duty to defend ends when we have used up the applicable
limit of insurance in the payment of judgments or settlements under
Coverages A or B or medical expenses under Coverage C.
No other obligation or liability to pay sums or perform acts or services is covered
unless explicitly provided for under Supplementary Payments - Coverages A
and B.
b. This insurance applies to "bodily injury" and "property damage" only if:
(1) The "bodily injury" or "property damage" is caused by an "occurrence" that
takes place in the "coverage territory";
(2) The "bodily injury" or "property damage" occurs during the policy period;
and
(3} Prior to the policy period, no insured listed under Paragraph 1. of Section II
- Who Is An Insured and no "employee" authorized by you to give or
receive notice of an "occurrence" or claim, knew that the "bodily injury" or
"property damage" had occurred, in whole or in part. If such a listed insured
or authorized "employee" knew, prior to the policy period, that the "bodily
injury" or "property damage" occurred, then any continuation, change or
resumption of such "bodily injury" or "property damage" during or after the
policy period will be deemed to have been known prior to the policy period.
SUPP APP 1094
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COVERAGE B PERSONAL AND ADVERTISING INJURY LIABILITY
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay as
damages because of "personal and advertising injury" to which this insurance
applies. We will have the right and duty to defend the insured against any "suit"
seeking those damages. However, we will have no duty to defend the insured
against any "suit" seeking damages for "personal and advertising injury" to
which this insurance does not apply. We may, at our discretion, investigate any
offense and settle any claim or "suit" that may result. But:
(1) The amount we will pay for damages is limited as described in Section Ill-
Limits Of Insurance; and
(2) Our right and duty to defend end when we have used up the applicable limit
of insurance in the payment of judgments or settlements under Coverages
A or B or medical expenses under Coverage C.
No other obligation or liability to pay sums or perform acts or services is covered
unless explicitly provided for under Supplementary Payments - Coverages A
and B.
b. This insurance applies to "personal and advertising injury" caused by an offense
arising out of your business but only if the offense was committed in the
"coverage territory" during the policy period.
2. Exclusions
This insurance does not apply to:
a. Knowing Violation Of Rights Of Another
"Personal and advertising injury" caused by or at the direction of the insured
with the knowledge that the act would violate the rights of another and would
inflict "personal and advertising injury".
SECTION II -WHO IS AN INSURED
1. If you are designated in the Declarations as:
d. An organization other than a partnership, joint venture or limited liability
company, you are an insured. Your "executive officers" and directors are
insureds, but only with respect to their duties as your officers or directors. Your
stockholders are also insureds, but only with respect to their liability as
stockholders.
e. A trust, you are an insured. Your trustees are also insureds, but only with
respect to their duties as trustees.
2. Each of the following is also an insured:
a. Your "volunteer workers" only while performing duties related to the conduct of
your business, or your "employees", other than either your "executive officers"
(if you are an organization other than a partnership, joint venture or limited
liability company) or your managers (if you are a limited liability company), but
only for acts within the scope of their employment by you or while performing
duties related to the conduct of your business. However, none of these
"employees" or "volunteer workers" are insureds for:
(1) "Bodily injury" or "personal and advertising injury":
SUPP APP 1095
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(a) To you, to your partners or members (if you are a partnership or joint
venture), to your members (if you are a limited liability company), to a
co-"employee" while in the course of his or her employment or
performing duties related to the conduct of your business, or to your
other "volunteer workers" while performing duties related to the conduct
of your business;
(b) To the spouse, child, parent, brother or sister of that co-"employee" or
"volunteer worker" as a consequence of Paragraph (1 )(a) above;
(c) For which there is any obligation to share damages with or repay
someone else who must pay damages because of the injury described
in Paragraphs (1 )(a) or (b) above; or
(d) Arising out of his or her providing or failing to provide professional
health care services.
(2) "Property damage" to property:
(a) Owned, occupied or used by,
(b) Rented to, in the care, custody or control of, or over which physical
control is being exercised for any purpose by
you, any of your "employees", "volunteer workers", any partner or
member (if you are a partnership or joint venture), or any member (if
you are a limited liability company).
b. Any person (other than your "employee" or "volunteer worker"), or any
organization while acting as your real estate manager.
c. Any person or organization having proper temporary custody of your property if
you die, but only:
(1) With respect to liability arising out of the maintenance or use of that
property; and
(2) Until your legal representative has been appointed.
d. Your legal representative if you die, but only with respect to duties as such. That
representative will have all your rights and duties under this Coverage Part.
3. Any organization you newly acquire or form, other than a partnership, joint venture
or limited liability company, and over which you maintain ownership or majority
interest, will qualify as a Named Insured if there is no other similar insurance
available to that organization. However:
a. Coverage under this provision is afforded only until the 90th day after you
acquire or form the organization or the end of the policy period, whichever is
earlier;
b. Coverage A does not apply to "bodily injury" or "property damage" that occurred
before you acquired or formed the organization; and
c. Coverage 8 does not apply to "personal and advertising injury" arising out of an
offense committed before you acquired or formed the organization.
No person or organization is an insured with respect to the conduct of any current or
past partnership, joint venture or limited liability company that is not shown as a Named
Insured in the Declarations.
SECTION V- DEFINITIONS
3. "Bodily injury" means bodily InJury, sickness or disease sustained by a person,
including death resulting from any of these at any time.
SUPP APP 1096
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Page 5 of 11
CLL 1902 (03/06)
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
LIQUOR LIABILITY COVERAGE ENDORSEMENT
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
In consideration of the premium charged this policy has been issued subject to the
following changes, additional conditions and exclusions:
1. It is agreed that Section I- Coverages, Coverage A Bodily Injury and Property
Damage Liability, 2. Exclusions is changed as follows:
a. Expected or Intended Injury is deleted and entirely replaced by the following:
a. Expected or Intended Injury
"Bodily injury" or "property damage" expected or intended from the
standpoint of any insured.
c. Liquor Liability as stated in the Commercial General Liability Coverage Part
and as amended in CGL 1701 is deleted in its entirety and replaced by the
following:
Liquor Liability Exclusion
c. Liquor Liability
"Liquor Liability" is defined as "Bodily injury" or "property damage" for which
any insured may be held liable by reason of:
a. Causing or contributing to the intoxication of any person;
b. Furnishing of alcoholic beverages to a person under the legal drinking
age or under the influence of alcohol; or
c. Violation of any statute, ordinance or regulation relating to the sale, gift,
distribution or use of alcoholic beverages.
We have neither a duty to defend nor a duty to indemnify any insured for
any claim or suit, and this insurance does not apply, if any proximate or
contributing cause of an "occurrence" arises out of "liquor liability". This
exclusion applies to all insureds regardless of whether you are in the
business of manufacturing, distributing, selling, serving or furnishing
alcoholic beverages.
However this exclusion does not apply to claims within the "products-
completed operations hazard".
2. Additional exclusions:
This insurance does not apply to:
Liquor License Not In Effect
"Bodily injury" or "property damage" ansmg out of any alcoholic beverage sold,
served or furnished while any required license is suspended or after such license
expires, is cancelled or revoked.
SUPP APP 1097
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Pastazios Pizza, Inc.
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Alcohol Related Disease
Mental anguish, sickness, disease or any other condition arising out of, caused by or
in any way related to the use or consumption over time of alcohol, liquor or any
other product containing alcohol.
3. It is agreed that Section I - Coverages, Coverage C. Medical Payments is
deleted in its entirety.
4. The following is added to SECTION IV - COMMERCIAL GENERAL LIABILITY
CONDITIONS
In the event this policy is filed with any governmental entity instead of or as a
replacement for a statutory or other legally required Liquor Bond, this policy will not
be construed to cover or insure any requirements or obligations of such bond.
5. LIMITS of INSURANCE
It is a condition precedent to coverage under this endorsement that all such claims
arising out of coverage granted here under are covered within and will reduce the
products-completed operations aggregate limit shown in the Declarations.
All other terms and conditions of this policy remain in force.
CGL 1701 (05/10)
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
SPECIAL EXCLUSIONS AND LIMITATIONS ENDORSEMENT
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
A. In consideration of the premium charged this policy has been issued subject to
the following exclusions being added to Coverages A & B:
This insurance does not apply to:
4. Criminal Acts
a. "Bodily Injury" or "property damage" arising out of or resulting from a criminal
act committed by any insured, including any additional insureds or
b. "Bodily Injury" or "property damage" arising out of or resulting from a criminal
act at the direction of any insured, including any additional insureds.
5. Punitive, Exemplary, Treble Damages or Multipliers of Attorneys' Fees
Claims or demands for payment of punitive, exemplary or treble damages
whether arising from the acts of any insured or by anyone else for whom or which
any insured or additional insured is legally liable; including any multiplier of
attorney's fees statutorily awarded to the prevailing party.
D. It is agreed that the following changes are made to SECTION V- DEFINITIONS:
SUPP APP 1098
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Pastazios Pizza, Inc.
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The following definitions are deleted and entirely replaced:
3. Item 13. "Occurrence" is deleted in its entirety and replaced with the
following:
13. "Occurrence" means an accident, including continuous or repeated exposure
to substantially the same general harmful conditions. All "bodily injury" or
"property damage" arising out of an "occurrence" or series of related
"occurrences" is deemed to take place at the time of the first such damage or
injury even though the nature and extent of such damage or injury may
change; and even though the damage may be continuous, progressive,
cumulative, changing or evolving; and even though the "occurrence" causing
such "bodily injury" or "property damage" may be continuous or repeated
exposure to substantially the same general harmful conditions.
4. Item 14. "Personal and advertising injury" is deleted in its entirety and
replaced with the following:
14. "Personal and advertising injury" means injury, including consequential
"bodily injury", arising out of one or more of the following offenses:
a. False arrest, detention or imprisonment;
b. Malicious prosecution;
c. The wrongful eviction from, wrongful entry into, or invasion of the right of
privacy occupancy of a room, dwelling or premises that a person occupies,
committed by or on behalf of its owner, landlord or lessor; or
d. Oral or written publication, in any manner, of material that slanders or
libels a person or organization or disparages a person's or organization's
goods, products or services.
5. Item 17. "Property Damage" is deleted in its entirety and replaced with the
following.
17. "Property damage" means:
a. Physical injury to tangible property, including all resulting loss of use of
that property. All such loss of use shall be deemed to occur at the time of
the physical injury that caused it; or
b. Loss of use of tangible property that is not physically injured. All such
loss of use shall be deemed to occur at the time of the "occurrence" that
caused it.
For the purposes of this insurance, electronic data is not tangible property.
As used in this definition, electronic data means information, facts or
programs stored as or on, created or used on, or transmitted to or from
computer software, including systems and applications software, hard or
floppy disks, CD-ROMS, tapes, drives, cells, data processing devices or any
other media which are used with electronically controlled equipment.
For the purposes of this insurance, "property damage" is not physical injury
to tangible property, any resultant loss of use of tangible property, nor loss of
use of tangible property that is not physically injured that arises out of failure
to complete or abandonment of "your work".
SUPP APP 1099
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Pastazios Pizza, Inc.
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Page 8 of 11
CGL 2146 (07/98)
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.
ABUSE OR MOLESTATION EXCLUSION
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
The following exclusion is added to Paragraph 2., Exclusions of Section I - Coverage
A - Bodily Injury And Property Damage Liability and Paragraph 2., Exclusions of
Section I -Coverage B - Personal And Advertising Injury Liability:
This insurance does not apply to "bodily injury", "property damage" or "personal and
advertising injury" arising out of:
1. The actual or threatened abuse or molestation by anyone of any person while in the
care, custody or control of any insured, or
2. The negligent:
a. Employment;
b. Investigation;
c. Supervision;
d. Reporting to the proper authorities, or failure to so report; or
e. Retention;
of a person for whom any insured is or ever was legally responsible and whose
conduct would be excluded by Paragraph 1. above.
While we have quoted specific portions, Century reserves its right to rely on other portions of the
policy's language as well. We encourage you to read the policy in its entirety so you are familiar
with the coverage available.
Ill. CENTURY'S COVERAGE POSITION
Please refer to the Insuring Agreement for Coverage A, quoted above for easy reference. That
part of the policy indicates that Century will pay those sums the Insured is held liable for as a
result of "bodily injury" caused by an "occurrence" during the policy period. While the Petition
clearly contains allegations of bodily injury, we reserve the right to deny coverage under this
portion of the policy to the extent that the injuries were not caused by an "occurrence" as that
term is defined by the policy.
Note that the Liquor Liability Coverage Endorsement, also quoted above, removes the policy's
Liquor Liability exclusion and indicates that Century will pay those sums the Insured is held
liable for as a result of "bodily injury" resulting from the Insured's causing or contributing to the
intoxication of any person so long as your liquor license was in effect on the date of loss.
However, a number of other policy provisions may act to limit or preclude coverage entirely.
First, please note that the policy's Expected or Intended Injury exclusion will act to bar all
coverage for "bodily injury" expected or intended from the standpoint of any insured. The
SUPP APP 1100
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Petition clearly alleges that the injuries to Ms. Doe were the result of a series of intentional acts
perpetrated by the owners and/or employees of Pastazio's. Century therefore reserves the right
to limit or deny coverage pursuant to the Expected or Intended Injury exclusion.
Second, please review the policy's exclusion entitled "Abuse or Molestation Exlusion," also
quoted above. That exclusion bars coverage for claims of "bodily injury" arising out of or
resulting from any actual or threatened abuse or molestation by anyone of any person while in
the care, custody or control of any insured. It further indicates that coverage is barred for claims
of negligent employment, investigation, supervision, reporting to authorities or retention of a
person for whom any insured is or ever was legally responsible for whose conduct included
actual or threatened. The Petition centers on allegations that Mr. Deari, with the aid and
assistance of Mr. Kreka, raped Ms. Doe and thereby caused a number of injuries. Century
therefore reserves the right to deny all coverage pursuant to this exclusion as well.
Third, please also review the Criminal Acts exclusion quoted above. If the "bodily injury" alleged
arose out of a criminal act committed by any insured or at the direction of any insured, there is
no coverage for this claim. The Petition alleges that a number of crimes were committed by Mr.
Deari and Mr. Kreka and we understand that criminal charges are currently pending against
both. As such, Century reserves the right to limit or deny coverage pursuant to this exclusion as
well.
Please also refer to the Insuring Agreement for Coverage B, also quoted above. That part of the
policy indicates that Century will pay those sums the Insured is held liable for as a result of
"personal and advertising injury" caused by an offense arising out of your business during the
policy period. "Personal and advertising injury" is defined to include a number of offenses,
including false imprisonment. As such, some coverage may be available under this portion of
the policy as well. However, this part of the policy is subject to the same Criminal Acts
exclusion discussed above. Century reserves its right to deny coverage pursuant to this
exclusion. Additionally, the exclusion quoted above and entitled "Knowing Violation Of Rights
Of Another" acts to bar coverage for claims of "personal and advertising injury" caused with the
knowledge that the act would violate the rights of another. Century reserves the right to deny
coverage pursuant to this exclusion as well.
Please carefully review the "Who Is An Insured" provision of your policy, also quoted above. As
an organization your "executive officers" and directors are insureds, but only with respect to
their duties as your officers or directors. Similarly, your stockholders are insureds but only with
respect to their liability as stockholders. Employees pre also insureds, but only for acts within
the scope of their employment by you or while performing duties related to the conduct of the
business. To the extent that Danny Deari and Dritan Kreka were not acting within their duties
as officers or directors and were not acting within the scope of their employment with Pastazio's,
they will not qualify as insureds under the policy and there may be no coverage. Century
reserves the right to deny coverage for this reason as well.
Lastly, please note that the exclusion for Punitive, Exemplary Treble Damages or Multipliers' of
Attorney's Fees will act to bar all coverage for any punitive damages sought. Century reserves
the right to deny coverage pursuant to this exclusion.
There may be other reasons why coverage does not apply. As such, this letter should not be
construed as waiving any of Century's rights under the policy, or applicable law, to limit and/or
deny coverage. Century reserves the right to rely on any additional facts, policy provisions, or
SUPP APP 1101
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Pastazios Pizza, Inc.
May 24, 2013
Page 10 of 11
other relevant information that may affect coverage to alter its position in the future. Similarly,
Century does not waive its right to disclaim coverage for any other valid reason which may
arise.
Century hereby specifically reserves the right to pursue a declaratory judgment action to seek
an order finding no coverage. Additionally, we reserve the right to recoup any fees and
expenses incurred in your defense if, in fact, no coverage is available for this claim.
IV. ASSIGNMENT OF DEFENSE
As Pastazio Pizza, Inc.'s insurance carrier, Century has assigned its defense to:
Roy Stacy
Stacy & Conder, LLP
901 Main Street, Suite 6220
Dallas, TX 75202-3790
Phone: {214)7 48-5000
Fax: (214)748-1421
Email: stacy@stacyconder.com
We ask that Pastazios Pizza, Inc's representative(s) not discuss this matter with anyone except
Mr. Stacy, someone from his law firm, or a representative from Century Insurance. We also
request that Pastazios Pizza, Inc's representative(s) provide Mr. Stacy with all information and
cooperation needed to fully defend it in this case. This may include, but is not limited to, the
representative's assistance with responding to discovery requests and time needed to complete
a deposition and attend trial, if necessary.
V. CONCLUSION
Century trusts that you understand its coverage position, but if you have any questions or
concerns please do not hesitate to contact us. Further, if you believe we have omitted any
relevant information, or are aware of, or become aware of, any additional information that you
believe could affect Century's coverage position, please contact us immediately. Century
reserves its right to consider additional information and reassess its coverage position should
the circumstances so warrant.
Very truly yours,
CENTURY INSURANCE GROUP
/At- ~-t-?\:;..-"'V""---.
'~l ,.\, ·1' ;1-. 0
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Shana M. Bereche
Claims Attorney
SMB/jt
SUPP APP 1102
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 233 of 258 PageID 2803
Pastazios Pizza, Inc.
May 24, 2013
Page 11 of 11
cc: Roy Stacy
Stacy & Conder, LLP
via email to: stacy@stacyconder.com
The Hutson Group, Inc.
via email to: kim@thehutsongroup.com
RISC, Inc.
via email to: learl@gorisc.com
- WARNING
"Any person who knowingly and with intent to defraud any insurance company files an application for
insurance or statement of claim containing any materially false information or conceals for the purpose of
misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is
a crime and subjects such person to criminal and civil penalties."
Revised 01/2013
SUPP APP 1103
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 234 of 258 PageID 2804
EXHIBIT F
SUPP APP 1104
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 235 of 258 PageID 2805
GRUBER I HURST I ELROD I JOHANSEN I HAIL I SHANK AttorneysiCounselors
A Limited Li ability Partnership
1445 Ross Avenue Suite 2500
Dallas, Texas 75202-2711
214.855.6800 main
214.855.6808 fax
Trey H. Crawford
214.855-6866 (direct)
214.855.6808 (facsimile)
lcn!~Y.fQrQ@glletri?J&Qll!
June 11,2015
V IAE-MAIL:
Y.W. Peter Chen
David R. Dotson
Chen Dotson, PLLC
10455 N. Central Expressway
Suite 109-348
Dallas, Texas 75231
Email: peter@chendotson.com
david@chendotson.com
Re: Jane Doe v. Pastazios Pizza, Inc., et al., Dallas County, TX Cause No. DC-13-
04564
Century's Insured - Pastazios Pizza, Inc. ("Pastazios")
Century's Policy No. - CCP672836
Century's Claim No.- 01-088675
CONFIDENTIAL SETTLEMENT COMMUNICATION PER TEX. R. EVID. 408
Dear Mr. Chen and Mr. Dotson:
Pursuant to TEX. R. EVID. 408 and FED. R. EVID. 408, please be advised that this letter is
intended to be, and should only be treated as, an inadmissible and confidential settlement
communication.
I write you on behalf of my client, Plaintiff Jane Doe (hereinafter, "Plaintiff'), in the above-
entitled action (hereinafter, "Litigation"). As you know, Plaintiff has asserted various causes of action
against Pastazios including, negligence, dram shop liability, premises liability, and false
imprisonment. The factual and legal basis for these claims is more fully set forth in Plaintiff's Fourth
Amended Petition that was filed in the Litigation on June 5, 2015.
As you are aware Pastazios is an "insured" under the "Commercial Lines Policy, CCP672836"
(hereinafter, "Policy") between Century and Pastazios. Plaintiff has been demanding tender of the
policy limits under the Policy in exchange for a full and final release of all "insured(s)" under the
Policy since as early as July 29, 2013. Specifically, Plaintiff"stowerized" Century and its insureds on
July 29, 2013 and again on February 27, 2014. Plaintiff even invited Century to participate in the
SUPP APP 1105
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 236 of 258 PageID 2806
June I 1, 2015
Page - 2
mediation of this Litigation in Plaintiff's correspondence dated June 24, 2014. It is our understanding
that Century has (wrongfully) denied coverage and even denied a defense of the claims filed against
Pastazios in this case in a blatant and bad faith breach of Century's obligations under the Policy.
Moreover, Century refused to even participate in the mediation of this Litigation, despite the fact that
its insured's liability and coverage has been reasonably clear since the inception ofthe Litigation.
This letter is Plaintiff's final attempt for Pastazios and its insurer to accept responsibility for
Pastazios' negligent and grossly negligent acts and omissions that were a proximate cause of
Plaintiff's significant damages and serious bodily injuries arising out ofthe events of April26, 2011.
As has been previously communicated to Pastazios and its insurer, and as more fully set forth
in Plaintiff's Fourth Amended Petition, liability against Century's insured(s) is reasonably clear and,
indeed, liability has only become clearer as discovery in this Litigation has unfolded over the last
several years. Moreover, Plaintiff's damages and serious bodily injuries arising out of Pastazios'
negligent and grossly negligent acts and omissions far exceed the policy limits tmder the Policy.
Pursuant to G.A. Stowers Furniture v. The American Indemnity Company, 15 S.W.2d 544
(Tex. Comm. App. 1929, holding approved) and TEX. TNS. CODE§ 54L060(a)(2)(A), Plaintiff once
again demands payment ofthe policy limits under the Policy in exchange for a full and final release of
liability of all claims and causes of action, known or unknown, asserted or yet to be asserted, by
Plaintiff against Century's insw-ed(s), including Pastazios. This includes a full and final release from
liability for any and all of Plaintiff's hospital or medical liens as a result of the incident that fonns the
basis ofPlaintifPs claims in the Litigation.
Tender of the policy limits under the Policy shall be made payable to "Gruber Hurst Elrod
Johansen Hail Shank LLP, on behalf of Plaintiff Jane Doe in Case No. DC1 3-04564". This offer shall
expire and automatically be revoked at 5:01p.m. CST on Monday, June 22, 2015. Iftender of the
policy limits under the Policy is not received by this time, there will be no further settlement
discussions and Plaintiff shall proceed to trial on July 7, 2015 and obtain a final judgment against
Pastazios in an amount that far exceeds the policy limits under the Policy.
If you have any questions or comments regarding Plaintiffs final offer, please do not hesitate
to contact me directly attcrawford@ghetrial.com or (214) 855-6866.
Sincerely,
~
Trey H. Crawford
SUPP APP 1106
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 237 of 258 PageID 2807
Junell ,20 15
Page - 3
cc: VIA E-MAIL:
Scott M. Seidel as Trustee for
Pastazios Pizza, Inc., Creditor Trust
c/o Davor Rukavina
Thomas Berghman
Munsch Hardt Kopf & Harr, P.C.
Email: drukavina@mtmsch.com
tberglunan@munsch.com
SUPP APP 1107
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 238 of 258 PageID 2808
EXHIBIT G
SUPP APP 1108
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 239 of 258 PageID 2809
$3<61--
000352
Cause Number: DC-13-04564
JANE DOE, § IN THE DISTRICT COURT
§
Plaintiff, §
§
v. § 193nt JUDICIAL DISTRICT COURT
§
PASTAZIOS PIZZA, INC.; and §
AJREDIN "DANNY" DEARI, §
§
Defendants. § DALLASCOUNTY,TEXAS
FINAL JUDGMENT
On July 7, 2015, the Court called this case to trial. Plaintiff JANE DOE ("Plaintiff')
appeared personally and through her attorneys of record and announced ready for trial.
Defendant PASTAZIOS PIZZA, INC. ("PASTAZIOS") appeared through its corporate
representative and attorneys of record and announced ready for trial. Defendant AJREDIN
"DANNY" DEAIU ("DEARI")~ individually, appeared personally and through his attorney of
record and announced ready for trial. All parties agreed to try this case to the bench in front of
Honorable Carl Ginsberg and all three parties proceeded accordingly.
On July 7, 2015, Plaintiff began her case in chief, introduced and admitted evidence to
the Court, and called various witnesses to testify. Pastazios and Deari defended the claims
brought by the Plaintiff against each Defendant respectively, presented counter--evidence. and
cross examined witnesses. On July 9, 2015, after a three-day adversarial trial, all parties rested,
the evidence was closed, and all parties presented closing arguments to the Court. At the close of
the evidence and closing arguments, Plaintitrs claims against Pastazios and Deari, respectively,
as well as Defendants' affinnative defenses were submitted to the Court for final determination
based on the evidence presented by all parties at trial.
FINAL JUDGMENT PAGE10F3
SUPP APP 1109
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 240 of 258 PageID 2810
Having heard the evidence and closing arguments from all counsel of record, the Court
announced its decision on the record.
It is~ therefore, ORDERED as follows~
L Plaintiff shall have and recover from PASTAZIOS and DEARI, jointly and
severally, the following actual damages, which the Court fmds are recoverable under Texas law
and are supported by the evidence presented at trial:
a. Physical pain and mental anguish (past) = $2,000,000.00
b. Physical pain and mental anguish (future) = $5,000,000.00
c. Loss of earnings capacity (past)= $500.00
d. Loss of earnings capacjty (future)= .$1,300,000.00
e. Disfigurement (past) = $250,000.00
f. Disfigurement (future)= $500,000.00
g. Physical Impairment (past)= $2,000,000.00
h. Physical Impairment (future)= $5,000,000.00
i. Reasonable and necessary medical care expenses (past) = $6,836.83
j. Reasonable and necessary medical care expenses (future)= $375,000.00
TOTAL= $16,432,336.83;
2 Plaintiff shall have and recover from PASTAZIOS and DEARI, jointly and
severally, pre~judgment interest on the above·referenced damages in the past only in the amount
of $478,804.59, calculated as simple. interest at the rate of 5% per annum from April24, 2013
until July 24, 2015 (821 days) plus an additional $583.20 per day in pre.judgment interest from
July 25y 2015 until the day before this Final Judgment is signed;
FINAL JUDGMENT PAGE20F3
SUPP APP 1110
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 241 of 258 PageID 2811
3. Plaintiff shall have and recover from PASTAZIOS $2,500~000.00 in exemplary
damages, which the Court finds are recoverable under Texas law and are supported by clear and
convincing evidence presented at trial;
4. Plaintiff shall have and recover from DEARI $2,500,000.00 in exemplary
damages, which the Court finds are recoverable under Texas law and are supported by clear and
convincing evidence presented at trial;
5. Post-judgment interest shall be awarded on all sums awarded to Plaintiff at the
rate of 5% per annum, compounded annually, from and after the date of this Final Judgment until
it is satisfied in full;
6. Plaintiff shall have and recover all of her costs of court in the amount of
$6A84.28 from PASTAZIOS and DEARI,.jointly and severally; and
7. All writs and processes necessary or appropriate for the enforcement or collection
of this Final Judgment or the costs of court may be issued as necessary.
All relief not expressly granted herein is denied. This Final Judgment finally disposes of
all claims and all parties and is an appealable final judgment.
Signed this 2t-h day of July, 2015.
FINAL JUDGMENT PAGE30F3
SUPP APP 1111
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 242 of 258 PageID 2812
EXHIBIT H
SUPP APP 1112
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 243 of 258 PageID 2813
Cause Number: DC-13-04564
JANE DOE, § IN THE DISTRICT COURT
§
Plaintiff, §
§
v. § 193rd JUDICIAL DISTRICT COURT
§
PASTAZIOS PIZZA, INC.; and §
AJREDIN "DANNY" DEARI, §
§
Defendants. § DALLASCOUNTY,TEXAS
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This case was originally filed by Plaintiff on April 24, 2013. On July 7, 2015, the Court
called this case to trial. Plaintiff JANE DOE ("Plaintiff') appeared personally and through her
attorneys of record and announced ready for trial. Defendant PASTAZIOS PIZZA, INC.
("Pastazios") appeared through its corporate representative and attorneys of record and
announced ready for trial. Defendant AJREDJN "DANNY" DEARI ("Deari"), individually,
appeared personally and through his attorney of record and announced ready for trial. The parties
agreed to try this case to the bench in front of Honorable Carl Ginsberg and all three parties
proceeded accordingly.
On July 7, 2015, Plaintiff began her case in chief, introduced and admitted evidence to
the Court, and called various witnesses to testify. Pastazios and Deari vigorously defended the
claims brought by the Plaintiff against each Defendant, respectively, presented counter-evidence,
and cross examined witnesses. On July 9, 2015, after a three-day adversarial trial, all parties
rested, the evidence was closed, and closing arguments were presented by all parties. At the close
of the evidence and after closing arguments, Plaintiffs claims against Pastazios and Deari,
respectively, as well as Defendants' affirmative defenses were submitted to the Court for final
determination based on the evidence. Having heard the evidence and closing arguments from all
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 1 OF 16
SUPP APP 1113
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 244 of 258 PageID 2814
counsel of record, the Court hereby makes the following findings of fact and conclusions of law:
FINDINGS OFFACT
1. In April 2011, Plaintiff was a recent graduate from high school. Plaintiff excelled
in school academically, graduating as the valedictorian of her high school class. As of April 26,
2011, Plaintiff was an employee of Fox Sports Grill and was in the process of seeking another
job in the same industry that would provide her with more income.
2. On the afternoon of April 26, 2011, Plaintiff met Dritan Kreka at Back Nine Bar
and Grill to discuss potential job opportunities at his restaurant and bar. When she arrived at
Back Nine, Plaintiff was introduced to Deari, who was the owner of another restaurant-
Defendant Pastazios Pizza-located in Post Addison Circle. At the time, Deari was 49 years old
and Kreka was 33 years old. Shortly thereafter, Deari and Kreka convinced Plaintiff that the
three of them should move the conversation to Pastazios. At no point in time on April 26, 2011
was Plaintiff interviewing for or seeking a job at Pastazios. Prior to their arrival, Deari stopped
at a liquor store and purchased a bottle of 80-proof hard liquor (Crown Royal Black) and took it
with him and brought it into Pastazios.
3. Plaintiff was an invitee of Pastazios. Upon arriving at Pastazios at approximately
4:30pm, and without Plaintiff asking, Deari walked inside of Pastazios, grabbed three beers and
three shots of Crown Royal Black that bad been placed into 2-ounce plastic salad dressing cups
owned by Pastazios, placed one of the beers and one of the 2-ounce shots in front of Plaintiff,
and encouraged her to drink it. Prior to that day, Plaintiff had very little experience concerning
the effects of alcohol. At no point in time did anyone at Pastazios ask to see Plaintiffs
identification prior to providing her with Pastazios' alcoholic products. Throughout the course of
approximately the next two hours, Pastazios continued to provide Plaintiff with more alcoholic
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGEl OF 16
SUPP APP 1114
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 245 of 258 PageID 2815
products from Pastazios. After serving Plaintiff with her second beer from Pastazios and third 2-
ounce shot of Crown Royal Black, Plaintiff became obviously intoxicated to the point where she
had trouble standing. In total, Plaintiff was provided with at least five 2-ounce shots of Crown
Royal Black and three beers.
4. While still at Pastazios, Plaintiff expressed concerns about her growing level of
intoxication and her inability to function normally. Prior to leaving Pastazios, Plaintiff was
intoxicated to the point where she was incapable of caring for or defending herself. Deari then
retrieved his vehicle from Pastazios• parking lot and pulled it out in front of Pastazios. Kreka
moved into the driver•s seat and the two men put Plaintiff in the back seat of the vehicle.
Plaintiff lost consciousness shortly thereafter.
5. Plaintiff's next memory is vomiting in what she believed to be a gas station
parking lot before losing consciousness again. When Plaintiff regained consciousness she was in
a hotel room located at 4900 Edwin Lewis Drive, Addison, Texas 75001 (less than a mile from
Pastazios) wherein she had been involuntarily disrobed and was actively being sexually assaulted
by Deari. Plaintiff repeatedly insisted that Deari stop the attack and get off of her, but he did not.
Deari stopped the sexual assault after multiple demands made by Plaintiff. Plaintiff locked
herself in the bathroom. Deari then left the hotel leaving his underwear behind at the scene.
6. Plaintiff called a friend to report what had happened and the Addison Police were
dispatched to the scene. Plaintiff was immediately transmitted to the hospital and underwent a
series of examinations, tests, and administered massive quantities of drugs.
7. Within a matter of days following the sexual assault, Plaintiff went back to the
hospital after she experienced severe pain in her pubic region. The doctors informed Plaintiff that
she had contracted herpes during the assault.
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE3 OF 16
SUPP APP 1115
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 246 of 258 PageID 2816
8. To the extent necessary, each of these findings of fact shall be treated as a
conclusion of law.
CONCLUSIONS OF LAW
GENERAL NEGLIGENCE {DEFENDANT PASTAZIOS ONLY)
1. Pastazios owed Plaintiff various legal duties that Pastazios breached, thereby
proximately causing Plaintiff damages and serious bodily injuries. Based upon the evidence
presented at trial concerning the facts and circumstances surrounding the occurrence, the Court
hereby finds the following:
a. Based upon the special relationship between Plaintiff, an invitee to Pastazios'
premises, Pastazios owed Plaintiff a duty pursuant to Restatement of Torts §
314A to protect her against unreasonable risks of harm, as well as to render aid
and care until she could be cared for by others;
b. Pastazios owed Plaintiff a legal duty created under Restatement of Torts § 318 to
exercise reasonable care so as to control the conduct of its customers and invitees
from harming others, including Plaintiff;
c. Pastazios had the right, ability and responsibility to control the conduct occurring
on its premises, knew or had reason to know of the necessity of taking appropriate
action to prevent foreseeable harm to its invitees, including Plaintiff, had the
opportunity to prevent such foreseeable harm, yet consciously chose not to
intervene;
d. Pastazios owed a legal duty to Plaintiff pursuant to Restatement of Torts § 319 to
prevent tortfeasors from committing torts on its premises which it had the right
and ability to control and prevent;
e. Pastazios owed Plaintiff a legal duty to exercise reasonable care so as to control
its employees, representatives and agents' actions and inactions while on
Pastazios' premises to prevent them from causing bodily injury or otherwise
harming others, including Plaintiff;
f. Pastazios owed Plaintiff a legal duty to follow the applicable legal standard of
care in maintaining its premises in a safe and secure condition and to inspect the
premises to ensure the safety of its occupants from foreseeable risks of harm;
g. .Pastazios owed Plaintiff a legal duty to take reasonable steps to protect Plaintiff
from unreasonable and foreseeable risks of harm-including risks of harm from
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE40F 16
SUPP APP 1116
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 247 of 258 PageID 2817
criminal or grossly negligent acts of third parties;
h. Pastazios owed Plaintiff a duty not to injure Plaintiff in a grossly negligent
manner or allow another to do so on Pastazios• premises when it knew, or
reasonably should have known of an unreasonable risk of harm to its invitees,
including Plaintiff;
t. Pastazios owed Plaintiff a legal duty to treat its invitees, including Plaintiff, in a
manner that would not unreasonably subject her to physical or mental bodily
injury, or other unreasonable and foreseeable risks of harm; and
j. In light of the risks of unreasonable harm present on April 26, 2011, the
foreseeability of such risks of harm, and the likelihood of bodily injury to
Plaintiff--weighed against the social utility of Pastazios' actions and inactions
and the minimal burden of Pastazios in guarding against such foreseeable and
unreasonable risks of harm, Pastazios owed Plaintiff a legal duty to use ordinary
care in the hiring of competent employees, a duty to reasonably train its
employees, and a duty to use ordinary care in supervising its employees.
2. On April 26, 2011, Pastazios breached each one of the duties set forth in
Paragraph 1, above. Further, on April 26, 2011, Pastazios negligently put Plaintiff in harm's
way; Pastazios negligently allowed tortfeasors to use Pastazios• premises and property as
instrumentalities in committing torts inflicted upon Plaintiff causing her serious bodily injury;
Pastazios failed to exercise ordinary care by allowing third parties to furnish Plaintiff with
excessive amounts of alcohol to the point where she was virtually unconscious and lacking the
ability to protect herself from unreasonable and foreseeable risks of serious bodily injury;
Pastazios failed to exercise ordinary care by negligently monitoring agents and third-parties on
its premises; Pastazios failed to exercise ordinary care by not taking reasonable steps to render
aid and care for Plaintiff until such time as she could reasonably be expected to be cared for by
herself or by others; Pastazios failed to exercise ordinary by not contacting a taxi, a friend, or
Plaintiffs parents who would be able to ensure that Plaintiff was taken out of harm's way when
she was clearly incapable of doing so herself due to the state Pastazios allowed her to be in prior
to leaving the premises; Pastazios failed to exercise ordinary care by negligently monitoring the
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 5 OF 16
SUPP APP 1117
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 248 of 258 PageID 2818
premises to ensure her safety and security when, under the circumstances existing at the time,
she was clearly within the zone of foreseeable and unreasonable risks of harm; Pastazios failed to
exercise ordinary care by negligently monitoring and controlling the conduct of its other
customers and invitees while they were on Pastazios' premises and/or under Pastazios' control,
and knew or had reason to know of the necessity of taking appropriate action to prevent
foreseeable and unreasonable risks of harm to Plaintiff; Pastazios failed to exercise ordinary care
by not controlling its employees, representatives and agents' actions and inactions while on
Pastazios' premises (regardless of whether said individuals were acting in the course and scope
of their employment with Pastazios) to prevent them from causing bodily injury to others,
including Plaintiff, when such risks were readily apparent under the circumstances existing at the
time; Pastazios failed to exercise ordinary care by not maintaining its premises in a safe and
secure condition and by not exercising ordinary care in inspecting the premises to ensure the
safety of its occupants, including Plaintiff, from foreseeable risks of harm; Pastazios failed to
exercise ordinary care by not taking reasonable steps to protect its invitees, including Plaintiff,
from unreasonable and foreseeable risks of harm-including risks of harm from the criminal or
grossly negligent acts of third parties; Pastazios failed to exercise ordinary care by not treating its
invitees, including Plaintiff, in a manner that would not unreasonably subject her to physical or
mental bodily injury, or other unreasonable and foreseeable risks of harm; and Pastazios failed to
exercise ordinary care by not hiring competent employees, by not reasonably training them, and
by not reasonably supervising them.
3. Pastazios' breaches set forth in Paragraph 2 above constitute gross negligence on
the part of Pastazios because, when viewed objectively from the standpoint of Pastazios at the
time of their occurrence, involved an extreme degree of risk, considering the probability and
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE60F16
SUPP APP 1118
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 249 of 258 PageID 2819
magnitude of the potential harm to others, including Plaintiff, and of which Pastazios had actual,
subjective awareness of the risk involved, but nevertheless proceeded with conscious
indifference to the rights, safety, or welfare of others, including Plaintiff.
4. Pastazios' breaches of its legal duties set forth in Paragraphs 1-2 above were a
proximate cause of serious bodily injuries to Plaintiff and the damages set forth in Paragraph 31,
below. Further, but for such breaches of Pastazios' legal duties, Plaintiff never would have
suffered the serious bodily injuries and damages set forth in Paragraph 31, below. Additionally,
Pastazios' breaches set forth in Paragraphs 1-2, above, were a substantial factor in causing
Plaintiff's damages and bodily injuries, without which such damages and bodily injury would not
have occurred. Under the circumstances that existed at the time, a restaurant operator of ordinary
prudence would have reasonably anticipated the dangers that Pastazios' negligent acts and
omissions created for others, including Plaintiff, as well as the general character of the damages
and bodily injuries Plaintiff suffered as a proximate cause of said negligence. As such, Plaintiffs
bodily injuries and the damages found in Paragraph 31 below, all arose out of Pastazios'
negligence on April 26, 2011.
5. Any alleged intentional or negligent acts of any other person or Defendant that
may have caused or contributed to cause Plaintiff's injuries did not act to extinguish Pastazios'
liability for its own negligence, do not constitute an "outside agency," and are not a new and
independent cause that would extinguish Pastazios' liability. Any purported acts or intervening
forces Pastazios alleged to have been a "new and independent cause" were foreseeable to
Pastazios under the circumstances that existed at the time and, as such, the chain of causation
flowing from Pastazios' negligence was continuous and unbroken.
6. All ofPiaintiffs bodily injuries and the damages awarded in Paragraph 31 below,
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 7 OF 16
SUPP APP 1119
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 250 of 258 PageID 2820
were a proximate cause and arose out of Pastazios' breaches of its legal duties owed to
Plaintiff-- without which, Plaintiff never would have been injured.
DRAM SHOP LIABILITY (DEFENDANT PASTAZIOS ONLY)
7. As of April 26, 2011, Pastazios held a valid Texas Alcoholic Beverage
Commission license for the sale, service or provision of alcoholic goods or products to its
customers and invitees.
8. On April 26, 2011, Pastazios provided alcohol products to Plaintiff on Pastazios'
premises while it was apparent to Pastazios that Plaintiff was obviously intoxicated. All of the
alcoholic products provided to and consumed by Plaintiff, on April 26, 20 11, occurred on
Pastazios' premises and were products that were sold, handled, distributed and/or disposed of by
Pastazios to the Plaintiff. As such, Pastazios was a "provider" pursuant to TEXAS ALCOHOLIC
BEVERAGE CODE § 2.02(b).
9. On April 26, 20 11, Pastazios sold, served, provided, or otherwise distributed
multiple alcoholic products to Plaintiff when, at the time, it was readily apparent to Pastazios that
Plaintiff was already obviously intoxicated to the extent that it was readily apparent that Plaintiff
presented a clear danger to herself and others.
10. Plaintiff's intoxication-as a result of the provision and/or distribution of
alcoholic products by Pastazios-was a proximate cause of Plaintiffs bodily injuries and the
damages awarded in Paragraph 31 below. But for Plaintiffs intoxication due to the negligence of
Pastazios, Plaintiff would not have suffered the serious bodily injuries and damages awarded in
Paragraph 31 below. Pastazios' provision and/or distribution of alcoholic products to Plaintiff
while she was obviously intoxicated was a substantial factor in bringing about the damages and
bodily injuries that Plaintiff sustained and without which no harm would have been incurred by
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE80F16
SUPP APP 1120
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 251 of 258 PageID 2821
Plaintiff. A restaurant of ordinary prudence should have anticipated the dangers that its
negligent acts created for others, including Plaintiff, and would reasonably anticipate the general
character of the bodily injury suffered by Plaintiff that arose out of such negligence. As such, on
April 26, 20 II, Pastazios violated Section 2.02(b) of the TEXAS ALCOHOL & BEVERAGE CODE,
and as a proximate cause of Pastazios' violation, Plaintiff sustained bodily injuries away from
the premises and the damages awarded in Paragraph 31, below.
11. Any alleged acts of any other person or other Defendant do not extinguish or
diminish any of Pastazios' liability for its own negligence, do not constitute an "outside agency,"
and are not a new and independent cause that would extinguish or diminish Pastazios' liability.
Any purported acts or intervening forces Pastazios alleges to be a "new and independent cause"
do not extinguish or diminish Pastazios' liability because such acts were foreseeable to Pastazios
under the circumstances that existed at the time, and the chain of causation flowing from
Pastazios' negligence was continuous and unbroken.
12. All of Plaintiffs bodily injuries and the damages awarded in Paragraph 31 below,
were proximately caused by, and arose out of, Pastazios' violations of Section 2.02(b) of the
TEXAS ALCOHOL & BEVERAGE CODE without which, Plaintiff never would have been injured.
NEGLIGENCE- PREMISES LIABILITY (DEFENDANT PASTAZIOS ONLY)
13. On April 26, 2011, Pastazios exercised actual and contractual control over the
premises, including the patio area where Plaintiff was sitting on the occurrence in question.
Plaintiff was not on a job interview with Pastazios at the time of the occurrence in question, but
rather was an invitee of Pastazios. As such, Pastazios owed Plaintiff a legal duty to avoid risks of
harm that are unreasonable and foreseeable. Pastazios also owed Plaintiff a legal duty to inspect
and make safe any dangerous conditions or situations on Pastazios' premises or give Plaintiff an
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE90F 16
SUPP APP 1121
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 252 of 258 PageID 2822
adequate warning of the dangerous conditions or situations. Based on the frequency, similarity,
proximity, recency, and publicity of prior crimes in the immediate vicinity of Pastazios, as well
as the general nature and characteristics of the premises and the surrounding circumstances, the
general nature of the harm inflicted on Plaintiff on April 26, 20 II was reasonably foreseeable to
Pastazios.
14. Pastazios breached its legal duties owed to Plaintiff set forth in Paragraph 13
above, by failing to exercise ordinary care by, and by failing to take any reasonable steps to
protect its invitees, including Plaintiff, from unreasonable and foreseeable risks of harm,
including risks of harm from the criminal or grossly negligent acts of third parties.
15. The breaches set forth in Paragraph 14 above, constitute gross negligence on the
part of Pastazios because, when viewed objectively from the standpoint of Pastazios at the time
of their occurrence, involved an extreme degree of risk, considering the probability and
magnitude of the potential harm to others, including Plaintiff, and of which Pastazios had actual,
subjective awareness of the risk involved, but nevertheless proceeded with conscious
indifference to the rights, safety, or welfare of others, including Plaintiff.
16. Pastazios' breaches of these legal duties were a proximate cause of serious bodily
injuries and damages to Plaintiff in the amounts awarded in Paragraph 31 below. But for these
breaches, Plaintiff never would have suffered serious bodily injuries and never would have
sustained the damages awarded to Plaintiff in Paragraph 31 below. Pastazios' acts and omissions
were a substantial factor in causing Plaintiffs serious bodily injuries and the damages awarded
to Plaintiff herein. Under the circumstances that existed at the time, a restaurant of ordinary
prudence would have reasonably anticipated the dangers Pastazios' negligent acts and omissions
created for others, including Plaintiff, as well as the general character of the damages and bodily
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 10 OF 16
SUPP APP 1122
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 253 of 258 PageID 2823
injuries Plaintiff suffered as a result of such negligence. As such, Plaintiff's bodily injuries and
the damages awarded to Plaintiff in Paragraph 31 below all arose out Pastazios' negligent acts
and omissions.
17. Any alleged acts of any other person or other Defendant do not extinguish or
diminish any of Pastazios' liability for its own negligence for premises liability, do not constitute
an "outside agency," and are not a new and independent cause that would extinguish or diminish
Pastazios' liability. Any purported acts or intervening forces Pastazios alleges to be a "new and
independent cause" do not extinguish or diminish Pastazios' premises liability because such acts
were foreseeable to Pastazios under the circumstances that existed at the time, and the chain of
causation flowing from Pastazios' negligence was continuous and unbroken.
FALSE IMPRISONMENT/DETENTION (DEFENDANT PASTAZIOS ONLY)
18. Without legal authority or justification, Pastazios negligently detained and/or
imprisoned Plaintiff without Plaintiff's consent and without the authority of law. Pastazios
accomplished the detainment and/or imprisonment of Plaintiff by virtue of providing her with
intoxicating products handled and/or distributed by Pastazios to Plaintiff to the point where
Plaintiff was virtually unconscious and/or incapable of freely moving herself from one place to
another. Pastazios' detention of Plaintiff was without Plaintiffs consent, and placed her in a
position where she could not exercise her will in going where she could otherwise lawfully go.
Pastazios' actions, combined with Plaintiff's vulnerabilities and the circumstances surrounding
these events, had the effect of negligently detaining Plaintiff in a manner that proximately caused
Plaintiff to suffer serious bodily injuries and the damages awarded in Paragraph 31 below, all of
which arose out of such detainment.
19. The false imprisonment and detainment committed by Pastazios was a proximate
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 11 OF 16
SUPP APP 1123
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 254 of 258 PageID 2824
cause of the serious bodily injury suffered by Plaintiff as well as all of the damages awarded to
Plaintiff in Paragraph 31 below. But for Pastazios' false imprisonment and detainment, Plaintiff
never would have sustained series bodily injuries and the damages awarded in Paragraph 31.
20. Any alleged acts of any other person or other Defendant do not extinguish or
diminish any of Pastazios' liability for false imprisonment and detainment, do not constitute an
"outside agency," and are not a new and independent cause that would extinguish or diminish
Pastazios' liability. Any purported acts or intervening forces Pastazios alleges to be a "new and
independent cause" do not extinguish or diminish Pastazios' liability for false imprisonment and
detainment because such acts were foreseeable to Pastazios under the circumstances that existed
at the time, and the chain of causation flowing from Pastazios' false imprisonment and
detainment was continuous and unbroken.
AsSAULT- THREAT OF BODILY INJURY {DEFENDANT DEARI, INDIVIDUALLY, ONLY)
21. On April 26, 20 II, Deari, individually, and while acting outside of the course and
scope of his employment with Pastazios, intentionally and/or knowingly threatened Plaintiff with
imminent bodily injury. Deari's threat of imminent bodily injury to Plaintiff caused Plaintiff to
be apprehensive, which was a foreseeable result ofDeari's actions.
22. Deari is liable for the threat of bodily injury committed against Plaintiff because
Deari committed the tortious acts himself and did so while he was not acting in the course and
scope of his employment with Pastazios, and while Deari was not acting in fulfillment of any of
his duties as an executive, officer or director of Pastazios.
23. Deari's threat of imminent bodily injury to Plaintiff was a cause of the damages
awarded to Plaintiff herein.
24. Deari's liability for assault was not a result of any actions or omissions made at
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 12 OF 16
SUPP APP 1124
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 255 of 258 PageID 2825
the direction of Pastazios, but rather resulted from Deari 's individual conduct that was separate
and distinct from Pastazios' negligent conduct.
ASSAULT (BATTERY)-BODILY INJURY AND OFFENSIVE CONTACT (DEFENDANT DEARI,
INDIVIDUALLY, ONLY)
25. On April26, 2011, Deari, individually, and while acting outside ofthe course and
scope of his employment with Pastazios, committed an aggravated assault of Plaintiff away from
Pastazios' premises in violation of TEX. PENAL CODE §§ 22.0 1. Deari, individually, intentionally,
knowingly, and/or recklessly made physical contact with Plaintiffs person causing bodily
injury-that is, physical pain, sickness, or impairments of Plaintiffs physical condition-and
Plaintiff did not, and could not, legally consent to the harmful physical contact.
26. Deari's violation of TEX. PENAL CODE §§ 22.01 was a cause of the damages
awarded to Plaintiff herein.
27. Deari violated TEX. PENAL CODE §§ 22.01 in his individual capacity while not
acting in the course and scope of his employment with Pastazios, and while not acting in
fulfillment of any of his duties as an executive, officer or director of Pastazios. Deari's liability
for assault and battery was not a result of any actions or omissions made at the direction of
Pastazios, but rather resulted from Deari's individual conduct that was separate and distinct from
Pastazios' negligent conduct.
SEXUAL ASSAULT- TEX. PENAL CODE§ 22.011 (DEFENDANT DEARI, INDIVIDUALLY, ONLY)
28. On April26, 2011, Deari, individually, and while acting outside of the course and
scope of his employment with Pastazios, sexually assaulted Plaintiff away from Pastazios'
premises in violation of TEX. PENAL CODE §§ 22.011. On April 26, 2011, Deari, individually,
intentionally, knowingly, and/or recklessly sexually assaulted Plaintiff, and Plaintiff did not, and
could not, legally consent to the sexual contact. Deari, individually, did so when Plaintiff had
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 13 OF 16
SUPP APP 1125
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 256 of 258 PageID 2826
not consented and when Deari knew Plaintiff was unconscious or physically unable to resist, and
did so while Deari knew Plaintiff was unaware that the sexual assault was occurring.
29. Deari's violation of TEX. PENAL CODE §§ 22.011 was a cause of the damages
awarded to Plaintiff herein.
30. Deari violated TEX. PENAL CODE §§ 22.011 in his individual capacity while not
acting in the course and scope of his employment with Pastazios, and while not acting in
fulfillment of any of his duties as an executive, officer or director of Pastazios. Deari's liability
for sexual assault was not a result of any actions or omissions made at the direction of Pastazios,
but rather resulted from Deari's individual conduct that was separate and distinct from Pastazios'
negligent conduct found above.
DAMAGES (EXCLUDING COURT COSTS AND PRE-JUDGMENT INTEREST)
31. Plaintiff sustained each of the following categories and amounts of damages,
which are recoverable under Texas law and are supported by a preponderance of the evidence:
a. Physical pain and mental anguish (past)= $2,000,000.00
b. Physical pain and mental anguish (future)= $5,000,000.00
c. Loss of earnings capacity (past) = $500.00
d. Loss of earnings capacity (future)= $1,300,000.00
e. Disfigurement (past) = $250,000.00
f. Disfigurement (future) = $500,000.00
g. Physical Impairment (past) = $2,000,000.00
h. Physical Impairment (future)= $5,000,000.00
1. Reasonable and necessary medical care expenses (past) = $6,836.83
J. Reasonable and necessary medical care expenses (future) = $375,000.00
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE 140F 16
SUPP APP 1126
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 257 of 258 PageID 2827
TOTAL= $16,432,336.83
32. Each category and amount of damage set forth in Paragraph 31 above is
recoverable by Plaintiff for each and every cause of action that is the subject of these Findings of
Facts and Conclusions of Law. Plaintiff is entitled to recover from Pastazios and Deari, jointly
and severally, each category and each amount of the actual damages set forth in Paragraph 31.
33. In addition to the damages set forth in Paragraph 31 above, Plaintiff shall have
and recover from Defendant Pastazios $2,500,000.00 in exemplary damages which the Court
finds is recoverable under Texas law and is supported by clear and convincing evidence
presented at trial.
34. In addition to the damages set forth in Paragraph 31 above, Plaintiff shall have
and recover from Defendant Deari $2,500,000.00 in exemplary damages which the Court fmds is
recoverable under Texas law and is supported by clear and convincing evidence presented at
trial;
PRE-JUDGMENT INTEREST, POST JUDGMENT INTEREST, AND COURT COSTS
35. Plaintiff is entitled to recover from Defendants, jointly and severally, pre-
judgment interest on the above referenced damages in the past in the amount of $478,804.59,
calculated as simple interest at a rate of five-percent (5%) per annum from April 24, 2013
through July 24, 2015 (821 days) plus an additional $583.20 per day in pre-judgment interest
from July 25,2015 until the day before this Final Judgment is signed.
36. Plaintiff is entitled to recover post judgment interest from Defendants, jointly and
severally, on all sums at the rate of 5% per annum, compounded annually, from and after the date
the Final Judgment is signed until it is satisfied in full.
FINDINGS OF FACT AND CONCLUSIONS OF LAW PAGE150F16
SUPP APP 1127
Case 3:13-cv-02553-P Document 64 Filed 10/31/15 Page 258 of 258 PageID 2828
37. Plaintiff shall have and recover all of her costs of court from Defendants, jointly
and severally.
38. To the extent necessary, each of these conclusions of law shall be treated as a
fmding of fact.
Signed on this the 7m day of August, 2015.
FINDINGS OF FACf AND CONCLUSIONS OF LAW PAGE160F16
SUPP APP 1128
Exhibit 6
SUPP APP 1129
U.S. Bankruptcy Court- Northern District of Texas Page 1 of 11
REFORM, EXHIBITS
U.S. Bankruptcy Court
Northern District of Texas (Dallas)
Bankruptcy Petition #: 14-34323-hdh13
Date filed: 09/02/2014
Assigned to: Harlin DeWayne Hale Date Plan Confirmed: 03/09/2015
Chapter 13 Plan confirmed: 03/09/2015
Voluntary 341 meeting: 10/20/2014
Asset Deadline for filing claims: 01120/2015
Debtor represented by Joyce W. Lindauer
Danny Deari Joyce W. Lindauer Attorney,
15750 Spectrum Drive #2211 PLLC
Addison, TX 75001 12720 Hillcrest Road
DALLAS-TX Suite 625
SSN I ITIN: xxx-xx-2928 Dallas, TX 75230
aka Ajredin Deari (972) 503-4033
Fax : (972) 503-4034
Email: joyce@joycelindauer.com
TERMINATED: 11/03/2014
Gregory Wayne Mitchell
The Mitchell Law Firm, L.P.
12720 Hillcrest Road
Suite 625
Dallas, TX 75230
972-463-8417
Fax: 972-432-7540
Email: greg@mitchellps.com
Trustee represented by Thomas Dwain Powers4
Thomas Powers 125 E. John Carpenter Frwy.,
125 E. John Carpenter Frwy., Suite 1100 Suite 1100
Irving, TX 75062-2288 Irving, TX 75062-2288
214-855-9200 (214) 855-9200
Fax: (214) 965-0758
Email: cmecf@dallasch 13 .com
U.S. Trustee
United States Trustee
1100 Commerce Street
Room 976
Dallas, TX 75242
214-767-8967
I Filing Date Docket Text
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U.S. Bankruptcy Court -Northern District of Texas Page 2 of 11
09/02/2014 l (13 pgs) Chapter 13 voluntary petition. Fee Amount $310. Filed by Danny Deari
(Lindauer, Joyce)
J (1 pg) Certificate of credit counseling dated 8/31/2014 . Filed by Debtor Danny Deari.
09/02/2014 (Lindauer, Joyce)
.1 (2 pgs) First Meeting of Creditors with 341(a) meeting to be held on 10/20/2014 at
09/02/2014 08:30AM at Dallas Ch13 Ofc. Proof of Claim due by 01/20/2015. (Admin,) (autoassign)
.2. (2 pgs) Notice of deficiency. Schedule A due 9/16/2014. Schedule B due 9/16/2014.
Schedule C due 9/16/2014. ScheduleD due 9/16/2014. Schedule E due 9/16/2014.
Schedule F due 9/16/2014. Schedule G due 9/16/2014. Schedule H due 9/16/2014.
Schedule I due 9/16/2014. Schedule J due 9/16/2014. Summary of Schedules and
Statistical Summary of Certain Liabilities and Related Data 28 USC sec. 159 due
9/16/2014. Statement of Financial Affairs due 9/16/2014.Statement oflncome/Means Test
Form due 9/16/2014. Chapter 13 Plan due by 9/16/2014. Employee Income Records due
09/03/2014 9116/2014. (Rueter, Karyn)
Receipt of filing fee for Voluntary petition (chapter 13)(14-34323-13) [misc,volp13a]
09/03/2014 ( 310.00). Receipt number 19561843, amount$ 310.00 (re: Doc# l). (U.S. Treasury)
§. (3 pgs) BNC certificate of mailing. (RE: related document(s).2. Notice of deficiency.
Schedule A due 9/16/2014. Schedule B due 9/16/2014. Schedule C due 9/16/2014.
ScheduleD due 9/16/2014. Schedule E due 9/16/2014. Schedule F due 9/16/2014.
Schedule G due 9/16/2014. Schedule H due 9/16/2014. Schedule I due 9/16/2014.
Schedule J due 9/16/2014. Summary of Schedules and Statistical Summary of Certain
Liabilities and Related Data 28 USC sec. 159 due 9/16/2014. Statement of Financial
Affairs due 9/16/2014.Statement oflncome/Means Test Form due 9/16/2014. Chapter 13
Plan due by 9/16/2014. Employee Income Records due 9/16/2014.) No. ofNotices: 1.
09/05/2014 Notice Date 09/05/2014. (Admin.)
1 (3 pgs) BNC certificate ofmailing- meeting of creditors. (RE: related document(sH
First Meeting of Creditors with 341(a) meeting to be held on 10/20/2014 at 08:30AM at
Dallas Ch13 Ofc. ProofofClaim due by 01/20/2015. (Admin,) (autoassign)) No. of
09/05/2014 Notices: 11. Notice Date 09/05/2014. (Admin.)
~ (2 pgs) Notice of Appearance and Request for Notice for Jeffrey R. Erler and Laura M
09/08/2014 Fontaine by Laura Marie Fontaine filed by Creditor Jane Doe. (Fontaine, Laura)
.2 (159 pgs; 16 docs) Motion for relief from stay Fee amount $176, Filed by Creditor
Jane Doe Objections due by 9/23/2014. (Attachments:# l Exhibit 1 #~Exhibit 2 # J
Exhibit 3 # .1 Exhibit 4 # .2. Exhibit 5 Part 1 of 2 # §. Exhibit 5 Part 2 of 2 # 1 Exhibit 6 # ~
Exhibit 7 # .2 Exhibit 8 # lQ Exhibit 9 # ll Exhibit 10 # 11. Exhibit 11 # ll Exhibit 12 # H
09/08/2014 Exhibit 13 # 1..2. Exhibit 14) (Fontaine, Laura)
lQ (8 pgs; 2 docs) Motion for expedited hearing(related documents .2 Motion for relief
from stay) Filed by Creditor Jane Doe (Attachments:# l Exhibit A- Declaration of Eric
09/08/2014 Policastro) (Fontaine, Laura)
Receipt of filing fee for Motion for relief from stay(14-34323-hdh13) [motion,mrlfsty]
09/08/2014 ( 176.00). Receipt number 19584606, amount$ 176.00 (re: Doc# .2). (U.S. Treasury)
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U.S. Bankruptcy Court- Northern District of Texas Page 3 of 11
09/09/2014 11 (3 pgs) Notice of hearing filed by Creditor Jane Doe (RE: related document(s)2
Motion for relief from stay Fee amount $176, Filed by Creditor Jane Doe Objections due
by 9/23/2014. (Attachments:# 1 Exhibit 1 # 2 Exhibit 2 # 3 Exhibit 3 # 4 Exhibit 4 # 5
Exhibit 5 Part 1 of 2 # 6 Exhibit 5 Part 2 of 2 # 7 Exhibit 6 # 8 Exhibit 7 # 9 Exhibit 8 # 10
Exhibit 9 # 11 Exhibit 10 # 12 Exhibit 11 # 13 Exhibit 12 # 14 Exhibit 13 # 15 Exhibit
14)). Hearing to be held on 9/22/2014 at 09:30AM Dallas Judge Hale Ctrm for 2,
(Fontaine, Laura)
ll (1 pg) Order granting motion for expedited hearing (Related Doc# J.Q)(document set
for hearing: 2 Motion for relief from stay) Entered on 9/11/2014. Hearing to be held on
09/1112014 9/22/2014 at 09:30AM Dallas Judge Hale Ctrm for 2. (Rielly, Bill)
ll (2 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)12
Order granting motion for expedited hearing (Related DocJ.Q)(document set for hearing: 2
Motion for relief from stay) Entered on 9/11/2014. Hearing to be held on 9/22/2014 at
09:30AM Dallas Judge Hale Ctrm for 2.,) No. ofNotices: 1. Notice Date 09/13/2014.
09/13/2014 (Admin.)
.H. (4 pgs; 2 docs) Motion to extend time to file schedules or new case deficiencies,
excluding matrix Filed by Debtor Danny Deari (Attachments: # 1 Matrix) (Lindauer,
09/16/2014 Joyce)
li (3 pgs) Witness and Exhibit List filed by Creditor Jane Doe (RE: related document(s)
09/17/2014 2 Motion for relief from stay Fee amount $176,). (Erler, Jeffrey)
.!§. (2 pgs) Witness and Exhibit List filed by Debtor Danny Deari (RE: related document
09/17/2014 (s)2 Motion for relief from stay Fee amount $176,). (Lindauer, Joyce)
l1 (18 pgs) Objection to (related document(s): 2 Motion for relief from stay Fee amount
$176, filed by Creditor Jane Doe)/Debtor's Objection to Motion for Relieffrom the
09/19/2014 Automatic Stay filed by Debtor Danny Deari. (Lindauer, Joyce)
_lli (1 pg) Order granting .H. Motion to extend time to file deficient documents. (Re:
related document(s) .2. Notice of deficiency) Chapter 13 Plan due by 9/26/2014 for .2,,
Employee Income Records due 9/26/2014 for .2., Schedule A due 9/26/2014 for .2., Schedule
B due 9/26/2014 for .2,, Schedule C due 9/26/2014 for .2,, Schedule D due 9/26/2014 for .2,,
Schedule E due 9/26/2014 for .2,, Schedule F due 9/26/2014 for .2,, Schedule G due
9/26/2014 for .2,, Schedule H due 9/26/2014 for .2,, Schedule I due 9/26/2014 for .2,,
Statement of Income/Means Test Form due 9/26/2014 for .2,, Statement of Financial Affairs
due 9/26/2014 for .2,, Summary of Schedules and Statistical Summary of Certain Liabilities
and Related Data 28 USC sec. 159 due 9/26/2014 for .2,, Entered on 9/19/2014. (Tello,
09/19/2014 Chris)
09/21/2014 12. (2 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)ll.
Order granting .H. Motion to extend time to file deficient documents. (Re: related
document(s) .2. Notice of deficiency) Chapter 13 Plan due by 9/26/2014 for .2., Employee
Income Records due 9/26/2014 for .2,, Schedule A due 9/26/2014 for .2,, Schedule B due
9/26/2014 for .2,, Schedule C due 9/26/2014 for .2,, ScheduleD due 9/26/2014 for .2,,
Schedule E due 9/26/20 14 for .2,, Schedule F due 9/26/2014 for .2., Schedule G due
9/26/2014 for .2,, Schedule H due 9/26/2014 for .2,, Schedule I due 9/26/2014 for .2,,
Statement of Income/Means Test Form due 9/26/2014 for .2,, Statement of Financial Affairs
due 9/26/20 14 for .2,, Summary of Schedules and Statistical Summary of Certain Liabilities
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U.S. Bankruptcy Court- Northern District of Texas Page 4 of 11
and Related Data 28 USC sec. 159 due 9/26/2014 for .2_, Entered on 9/19/2014.) No. of
Notices: 1. Notice Date 09/21/2014. (Admin.)
20 (1 pg) Court admitted exhibits date of hearing 9/22/2014. CREDITOR JANE DOE
EXHIBITS EXHIBITS 1-9, and 11-16 ADMITTED (EXHIBITS 3 AND 5 NOT FOR
THE TRUTH OF THE MATTERS ASSERTED THEREIN.) (RE: related document(s).2.
09/22/2014 Motion for relief from stay Filed by Creditor Jane Doe.) (Whittington, Nicole)
Hearing held on 9/22/2014. (RE: related document(s)2. Motion for relief from stay Fee
amount $176, Filed by Creditor Jane Doe ADVISEMENT (Baird, Dennis) (Entered:
09/22/2014 09/24/2014)
ll (2 pgs) Order granting motion for relief from stay by Creditor Jane Doe (related
09/23/2014 document# 2.) Entered on 9/23/2014. (Tello, Chris)
22 Request for transcript regarding a hearing held on 9/22/2014. The requested tum-
09/24/2014 around time is ordinary 30 day (Baird, Dennis)
23 (3 pgs) BNC certificate of mailing- PDF document. (RE: related document(s).ll
Order granting motion for relief from stay by Creditor Jane Doe (related document 2.)
09/25/2014 Entered on 9/23/2014.) No. ofNotices: 1. Notice Date 09/25/2014. (Admin.)
24 (20 pgs) Schedules A through J. Filed by Debtor Danny Deari (RE: related document
09/26/2014 (s)~ Notice of deficiency). (Lindauer, Joyce)
25 (7 pgs) Statement of financial affairs. Filed by Debtor Danny Deari (RE: related
09/26/2014 document(s).2. Notice of deficiency). (Lindauer, Joyce)
26 (8 pgs) Chapter 13 statement of current monthly and disposable income . Filed by
09/26/2014 Debtor Danny Deari (RE: related document(s).2. Notice of deficiency). (Lindauer, Joyce)
27 (13 pgs) Chapter 13 plan and motion for valuation dated: 9/2/2014 for 60 months with
09/26/2014 objection to claims filed by Debtor Danny Deari. (Lindauer, Joyce)
28 (2 pgs) Employee income records. Debtor is filing copies of pay stubs from 60 days
prior to petition date. Filed by Debtor Danny Deari (RE: related document(s).2. Notice of
09/29/2014 deficiency). (Lindauer, Joyce)
29 (5 pgs) Exhibit D with Amended petition filed for the following: To Include Alias and
Pending Bankruptcy for Pastazio's Pizza . filed by Debtor Danny Deari (RE: related
10/02/2014 document(s)l Voluntary petition (chapter 13)). (Lindauer, Joyce)
30 (1 pg) Disclosure of compensation of attorney for debtor (Amended). Filed by Debtor
10/03/2014 Danny Deari. (Lindauer, Joyce)
Jl (1 pg) Trustee's Notice of intent to dismiss case for failure to make the first payment
10/09/2014 due to the Trustee (Powers, Thomas)
10/14/2014 32 (2 pgs) INCORRECT ENTRY: WRONG EVENT CODE USED. SEE DOC.
35.Support/supplemental document(Summary ofSchedules) filed by Debtor Danny Deari
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U.S. Bankruptcy Court- Northern District of Texas Page 5 of 11
(RE: related document(s).2. Notice of deficiency, 24 Schedules). (Lindauer, Joyce)
MODIFIED text on 10/15/2014 (Rueter, Karyn).
33 (2 pgs) Trustee's Notice of hearing on debtor's final chapter 13 plan with Certificate of
Service Pre-Hearing conference set for 11/25/2014 at 8:30A.M at 125 E. John Carpenter
10/14/2014 Frwy, Suite 1100, Irving, Texas (Powers, Thomas)
34 (82 pgs) Transcript regarding Hearing Held 09/22114 RE: DEFENDANT'S MOTION
FOR RELIEF FROM STAY. THIS TRANSCRIPT WILL BE MADE
ELECTRON!CALLY AVAILABLE TO THE GENERAL PUBLIC 90 DAYS AFTER
THE DATE OF FILING. TRANSCRIPT RELEASE DATE IS 01/12/2015. Until that time
the transcript may be viewed at the Clerk's Office or a copy may be obtained from the
official court transcriber. Court Reporter/Transcriber eScribers, Telephone number 973-
406-2250. (RE: related document(s) Hearing held on 9/22/2014. (RE: related document(s)
2 Motion for relief from stay Fee amount $176, Filed by Creditor Jane Doe
ADVISEMENT). Transcript to be made available to the public on 01/12/2015. (Kurtzer,
10/14/2014 Benjamin)
35 (2 pgs) Summary of Schedules. Filed by Debtor Danny Deari . (Rueter, Karyn)
10/14/2014 (Entered: 10/15/2014)
36 (7 pgs) Statement of financial affairs (Amended). Filed by Debtor Danny Deari.
10/19/2014 (Lindauer, Joyce)
10/19/2014 37 (5 pgs) Amended Schedules: I J. Filed by Debtor Danny Deari. (Lindauer, Joyce)
10/19/2014 38 (7 pgs) Amended Schedules: B C. Filed by Debtor Danny Deari. (Lindauer, Joyce)
39 (6 pgs) INCORRECT ENTRY. FILER TO REFILE. Notice ofSubstitution of
Counsel filed by Debtor Danny Deari. (Mitchell, Gregory) Modified on 10/22/2014
10/20/2014 (Bibbs, P.).
40 (3 pgs) Continuance of meeting of creditors to 11/06/2014 at 9:00a.m. Meeting to be
10/2112014 held at 125 E. John Carpenter Frwy, Suite 1100, Irving, Texas (Powers, Thomas)
41 (6 pgs; 2 docs) Motion to substitute attorney Joyce Lindauer with Gregory W.
Mitchell Filed by Debtor Danny Deari (Attachments: # 1 Proposed Order) (Mitchell,
10/22/2014 Gregory)
42 (2 pgs) Trustee's Notice of intent to dismiss caseJor failure to Cooperate as
necessary to enable the Trustee to perform his duties under the Bankruptcy Code as
10/22/2014 required by Section 521(a)(3). (Powers, Thomas)
43 (2 pgs) Order granting motion to substitute attorney adding Gregory Wayne Mitchell
for Danny Deari, terminating Joyce W. Lindauer. (related document# ill Entered on
11/03/2014 11/3/2014. (Tello, Chris)
11/05/2014 44 (3 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)43
Order granting motion to substitute attorney adding Gregory Wayne Mitchell for Danny
Deari, terminating Joyce W. Lindauer. (related document ill Entered on 11/3/2014.) No.
ofNotices: 2. Notice Date 11/05/2014. (Admin.)
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U.S. Bankruptcy Court- Northern District of Texas Page 6 of 11
45 (3 pgs) Continuance of meeting of creditors to II/I3/20I4 at 9:00a.m. Meeting to be
11107/2014 held at I25 E. John Carpenter Frwy, Suite II 00, Irving, Texas (Powers, Thomas)
46 (2 pgs) Trustee's Notice of intent to dismiss caseJor failure to appear the 34I
11110/2014 Meeting of Creditors and/or to provide identification to the Trustee (Powers, Thomas)
47 (1 pg) Trustee's Notice of withdrawal of ofJor Failure to Cooperate with the Trustee
as necessary to enable the Trustee to perform his duties under the Bankruptcy Code as
required by Section 52 I (a)(3). filed by (RE: related document(s)42 Notice of intent to
11113/2014 dismiss case) (Powers, Thomas)
11114/2014 48 (3 pgs) Meeting of creditors chapter 13 (held) and concluded (Powers, Thomas)
49 (1 pg) Financial management course certificate filed by Trustee Thomas Powers.
11117/2014 (Powers, Thomas)
50 (5 pgs) Objection to confirmation of plan (RE: related document(s)27 Chapter 13
11118/2014 Plan) filed by Creditor Jane Doe. (Fontaine, Laura)
it (4 pgs) Notice of hearing on confirmation filed by Debtor Danny Deari (RE: related
document(s)27 Chapter 13 plan and motion for valuation dated: 9/2/2014 for 60 months
with objection to claims filed by Debtor Danny Deari.). Hearing to be held on 12116/2014
at 02:00PM Dallas Judge Hale Ctrm for 27, Confirmation hearing to be held on
11125/2014 12/16/2014 at 02:00PM at Dallas Judge Hale Ctrm. (Mitchell, Gregory)
52 (1 pg) Trustee's Notice of withdrawal of ofJor Failure to appear at the 34I meeting
ofcreditors and/or to provide identification to the Trustee filed by (RE: related document
11/26/2014 (s)46 Notice of intent to dismiss case) (Powers, Thomas)
53 (1 pg) Trustee's Notice of continuance of Confirmation set on Confirmation Docket.
Continued hearing to be held on I2/30/2014 at 8:30a.m. at I25 E. John Carpenter Frwy,
Suite II 00, Irving, Texas (RE: related document(s)33 Notice of confirmation hearing on
12/03/2014 final plan 13 (batch))
54 (13 pgs) Amended Schedules: B C G. Filed by Debtor Danny Deari. (Mitchell,
12/03/2014 Gregory)
55 (13 pgs) Changing an existing creditor on the matrix. Amended Schedules E. Filed by
12/03/2014 Debtor Danny Deari. (Mitchell, Gregory)
56 (16 pgs) Amended chapter 13 plan without objection to claims filed by Debtor Danny
12/03/2014 Deari (RE: related document(s)27 Chapter 13 Plan). (Mitchell, Gregory)
57 (7 pgs; 2 docs) Application to employ Samuel Johnson as Special Counsel Filed by
Debtor Danny Deari (Attachments: # 1 Exhibit A- Affidavit of Samuel Johnson)
12/04/2014 (Mitchell, Gregory)
59 (9 pgs) Adversary case 14-03151. Complaint by Jane Doe against Danny Deari. Fee
Amount $350. Nature(s) of suit: 68 (Dischargeability - 523(a)(6), willful and malicious
12/05/2014 injury). (Fontaine, Laura)
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U.S. Bankruptcy Court- Northern District of Texas Page 7 of 11
12/11/2014 60 (2 pgs) Witness and Exhibit List filed by Debtor Danny Deari (RE: related document
(s)27 Chapter 13 Plan, 50 Objection to confirmation of plan, 56 Chapter 13 Plan).
(Mitchell, Gregory)
.Ql (3 pgs) Witness and Exhibit List filed by Creditor Jane Doe (RE: related document(s)
12/12/2014 50 Objection to confirmation of plan). (Fontaine, Laura)
62 (2 pgs) Withdrawal ofObjection to Confirmation of Plan filed by Creditor Jane Doe
12/15/2014 (RE: related document(s)50 Objection to confirmation of plan). (Fontaine, Laura)
63 (2 pgs) Trustee's Objection to confirmation of Chapter 13 plan with Certificate of
12/17/2014 Service (Powers, Thomas)
64 (4 pgs) Certificate ofNo Objection filed by Debtor Danny Deari (RE: related
document(s)57 Application to employ Samuel Johnson as Special Counsel). (Mitchell,
12/31/2014 Gregory)
65 (2 pgs) Trustee's Notice of hearing on debtor's final chapter 13 plan with Certificate of
Service Pre-Hearing conference set for 2/26/15 at 8:30A.M at 125 E. John Carpenter
01/05/2015 Frwy, Suite 1100, Irving, Texas (Powers, Thomas)
66 (2 pgs) Trustee's motion to dismiss chapter 13 case for failure to Obtain Confirmation
and/or Reduce Attorney Fees. Pre-hearing conference to be held on 2/26/15 at 8:30A.M at
01/06/2015 125 E. John Carpenter Freeway Suite 1100 Irving Texas (Powers, Thomas)
67 (2 pgs) Order denying confirmation of chapter 13 plan Entered on 1/13/2015 (RE:
01/13/2015 related document(s)27 Chapter 13 Plan filed by Debtor Danny Deari). (Tello, Chris)
68 (3 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)67
Order denying confirmation of chapter 13 plan Entered on 1/13/2015 (RE: related
document(s)27 Chapter 13 Plan filed by Debtor Danny Deari).) No. ofNotices: 2. Notice
01115/2015 Date 01/15/2015. (Admin.) (Entered: 01/16/2015)
69 (2 pgs) Order granting application to employ Samuel Johnson of Johnson Law, PLLC
as Special Counsel for Danny Deari, debtor. (related document# 57) Entered on
01/21/2015 1/21/2015. (Tello, Chris)
70 (3 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)69
Order granting application to employ Samuel Johnson of Johnson Law, PLLC as Special
Counsel for Danny Deari, debtor. (related document 57) Entered on 1/21/2015.) No. of
01/23/2015 Notices: 3. Notice Date 01/23/2015. (Admin.)
11 (2 pgs) Notice of Appearance and Request for Notice by Century Surety Company by
Benjamin Warren Kadden filed by Interested Party mp Century Surety Company.
01/28/2015 (Kadden, Benjamin)
72 (6 pgs; 2 docs) Motion for leave to Proceed Without Local Counsel Filed by
Interested Party mp Century Surety Company Objections due by 2/23/2015. (Attachments:
01/28/2015 # 1 Proposed Order) (Kadden, Benjamin)
02/06/2015
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SUPP APP 1136
U.S. Bankruptcy Court- Northern District of Texas Page 8 of 11
73 (2 pgs) Order granting motion for leave to proceed without local counsel (related
document# 7JJ Entered on 2/6/2015. (Tello, Chris)
74 (23 pgs; 4 docs) INCORRECT ENTRY; WRONG EVENT CODE USED. ATTY TO
RE-FILE PLEADING. Motion for leave To File Formal Proof of Claim After Deadline
Filed by Creditor Johnson Broome, P.C. Objections due by 3/2/2015. (Attachments:# 1
Exhibit 1 #~Exhibit 2 # J Proposed Order) (Johnson, Samuel) Modified on 2/10/2015
02/06/2015 (Luna, G).
77 (23 pgs; 4 docs) Motion to file formal proof of claim after deadline Filed by Creditor
Johnson Broome, P.C. Objections due by 3/2/2015. (Attachments:# 1 Exhibit 1 # ~
02/06/2015 Exhibit 2 # J Proposed Order) (Brown, D.) (Entered: 02/19/2015)
75 (3 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)73
Order granting motion for leave to proceed without local counsel (related document ]JJ
02/08/2015 Entered on 2/6/2015.) No. ofNotices: 2. Notice Date 02/08/2015. (Admin.)
76 (2 pgs) Trustee's Amended Objection to confirmation of Chapter 13 plan with
02/09/2015 Certificate ofService (Powers, Thomas)
78 (2 pgs) Notice of Withdrawal filed by Creditor Johnson Broome, P.C. (RE: related
document(s)77 Motion to file formal proof of claim after deadline Filed by Creditor
Johnson Broome, P.C. Objections due by 3/2/2015. (Attachments:# 1 Exhibit 1 # 2
02/26/2015 Exhibit 2 # 3 Proposed Order) (Brown, D.)). (Johnson, Samuel)
79 (12 pgs; 4 docs) Application for compensation for Samuel Harris Johnson, Special
Counsel, Period: 12/3/2014 to 1/31/2015, Fee: $3165, Expenses: $37.27. Filed by Attorney
Samuel Harris Johnson Objections due by 3/13/2015. (Attachments:# 1 Exhibit Invoices#
02/27/2015 ~ Exhibit Fee Application Cover Sheet # J Proposed Order) (Johnson, Samuel)
80 (13 pgs; 2 docs) INCORRECT ENTRY: Incorrect event code used, see doc. 81 for
correction: Motion for relief from stay- agreed Filed by Interested Party mp Century
Surety Company (Attachments: # 1 Proposed Order) (Kadden, Benjamin) Modified on
03/05/2015 3/6/2015 (Brown, D.).
ll (13 pgs; 2 docs) Motion for relief from stay Fee amount $176, Filed by Interested
Party Century Surety Company Objections due by 3/19/2015. (Attachments:# 1 Proposed
03/05/2015 Order) (Brown, D.) (Entered: 03/06/2015)
82 (1 pg) Clerk's notice of fees due in the amount of $176.00 for Motion for relief from
stay filed by Century Surety Company. (RE: related document(s),ll Motion for relief from
stay Fee amount $176, Filed by Interested Party Century Surety Company Objections due
03/06/2015 by 3/19/2015. (Attachments:# 1 Proposed Order) (Brown, D.)) (Brown, D.)
83 (4 pgs) Order confirming chapter 13 plan Entered on 3/9/2015 (RE: related document
03/09/2015 (s)56 Chapter 13 Plan filed by Debtor Danny Deari). (Morales, D.)
03/09/2015 84 (2 pgs) Notice of hearing filed by Interested Party Century Surety Company (RE:
related document(s),ll Motion for relief from stay Fee amount $176, Filed by Interested
Party Century Surety Company Objections due by 3/19/2015. (Attachments:# 1 Proposed
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SUPP APP 1137
U.S. Bankruptcy Court- Northern District of Texas Page 9 of 11
Order) (Brown, D.)). Hearing to be held on 3/30/2015 at 10:30 AM Dallas Judge Hale
Ctrm for ll, (Kadden, Benjamin)
03/10/2015 Receipt of Lift Stay Filing Fee- $176.00 by BR. Receipt Number 334024. (admin)
85 (2 pgs) Trustee's Response opposed to (related document(s): 79 Application for
compensation for Samuel Harris Johnson, Special Counsel, Period: 12/3/2014 to
1/31/2015, Fee: $3165, Expenses: $37.27. filed by Spec. Counsel Samuel Johnson) filed
03/11/2015 by Trustee Thomas Powers. (Powers4, Thomas)
86 (2 pgs) Notice ofprehearing conference hearing. Prehearing conference to be held on
4/30/2015 at 8:30AM in the Dallas Ch. 13 Office. If unresolved at the prehearing
conference, a hearing will be held before the court as noted on the PDF document. filed by
Spec. Counsel Samuel Johnson (RE: related document(s)79 Application for compensation
for Samuel Harris Johnson, Special Counsel, Period: 12/3/2014 to 1/31/2015, Fee: $3165,
Expenses: $37.27. Filed by Attorney Samuel Harris Johnson Objections due by 3/13/2015.
(Attachments: # 1 Exhibit Invoices # 2 Exhibit Fee Application Cover Sheet# 3 Proposed
03/11/2015 Order)). (Johnson, Samuel)
87 (5 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)83
Order confirming chapter 13 plan Entered on 3/9/2015 (RE: related document(s)56
Chapter 13 Plan filed by Debtor Danny Deari). (Morales, D.)) No. of Notices: 1. Notice
03/11/2015 Date 03/11/2015. (Admin.)
Announcement of AGREED ORDER regarding hearing scheduled for 3/30/2015.
Agreed order to be uploaded by Benjamin Warren Kadden, filed by Interested Party
Century Surety Company, Trustee Thomas Powers (RE: related document(s)ll Motion for
relief from stay Fee amount $176, Filed by Interested Party Century Surety Company
Objections due by 3/19/2015. (Attachments:# 1 Proposed Order) (Brown, D.)). (Kadden,
03/22/2015 Benjamin)
88 (2 pgs) Agreed Order granting motion for relief from stay by Interested Party Century
04/10/2015 Surety Company (related document# ill Entered on 4/10/2015. (Rebecek, B)
89 (5 pgs) Trustee's recommendation concerning claims, objection to claims and plan
modification if required with COS. Pre-Hearing conference to be held on 6/25/2015 at 8:30
04/15/2015 A.M at 125 E. John Carpenter Frwy, Suite 1100, Irving, Texas. (Powers, Thomas)
Hearing held on 4/30/2015. (RE: related document(s)79 Application for compensation
for Samuel Harris Johnson, Special Counsel, Period: 12/3/2014 to 1/31/2015, Fee: $3165,
Expenses: $37.27. Filed by Attorney Samuel Harris Johnson) (ALLOWED; FEES TO BE
DIVIDED BETWEEN THIS CASE AND CHAPTER 11 CASE) (Adams-Williams, Erica)
04/30/2015 (Entered: 05/01/20 15)
90 (1 pg) Order granting application for compensation (related document# 1!l) granting
for Samuel Harris Johnson, fees awarded: $1582.50, expenses awarded: $18.63 Entered on
06/02/2015 6/2/2015. (Tello, Chris)
06/04/2015 91 (2 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)90
Order granting application for compensation (related document 1!l) granting for Samuel
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SUPP APP 1138
U.S. Bankruptcy Court- Northern District of Texas Page 10 of 11
Harris Johnson, fees awarded: $1582.50, expenses awarded: $18.63 Entered on 6/2/2015.)
No. ofNotices: 2. Notice Date 06/04/2015. (Admin.)
92 (2 pgs) Order on trustee's recommendations concerning claims, objection to claims
and plan modification (If required) Entered on 7/2/2015 (RE: related document(s)89
07/02/2015 Trustee's recommendation concerning claims/plan). (Tello, Chris)
93 (3 pgs) BNC certificate of mailing- PDF document. (RE: related document(s)92
Order on trustee's recommendations concerning claims, objection to claims and plan
modification (If required) Entered on 7/2/2015 (RE: related document(s)89 Trustee's
recommendation concerning claims/plan).) No. ofNotices: 1. Notice Date 07/04/2015.
07/04/2015 (Admin.)
94 (2 pgs) Trustee's notice of additional claims filed by JANE DOE (TT Clm 31)
08/07/2015 Objections due by 9/9/2015. (Powers, Thomas)
95 (12 pgs) Objection to (related document(s): 94 Trustee's notice of additional claims
09/09/2015 filed) filed by Creditor Jane Doe. (Fontaine, Laura)
96 (2 pgs) Objection to (related document(s): 94 Trustee's notice of additional claims
filed) 95 Jane Doe's Objection to Trustee's Notice ofProposed Treatment of Claim filed
09/09/2015 by Debtor Danny Deari. (Mitchell, Gregory)
97 (3 pgs) Reply to (related document(s): 95 Objection filed by Creditor Jane Doe) filed
09/10/2015 by Creditor Jane Doe. (Fontaine, Laura)
98 (1 pg) Notice ofwithdrawal of filed by (RE: related document(s)94 Trustee's notice
09/15/2015 of additional claims filed) (Powers, Thomas)
99 (3 pgs) Trustee's motion to dismiss chapter 13 case RE: Failure to provide tax return
The pre-hearing will be held on 10/29/2015 at 8:30A.M at 125 E. John Carpenter
Freeway Suite 1100, Irving, Texas. Any unresolved matter will be heard on 10/29/2015 at
2:00P.M Objections due 10/26/2015. Pre-hearing conference to be held on 10/29/2015 at
10/02/2015 8:30A.M at. (Powers, Thomas)
100 (1 pg) Trustee's Notice of withdrawal of ofTrustee's Motion to Dismiss for Failure
to Cooperate set on Motion to Dismiss re Tax Return on 10/29/2015 filed by (RE: related
document(s)99 Motion to dismiss case RE: Failure to provide tax return by 13 trustee with
11/05/2015 prehrg conf (batch)) (Powers, Thomas)
101 (115 pgs; 2 docs) Motion for relief from stay Fee amount $176, Filed by Creditor
Post Addison Circle Limited Partnership Objections due by 12/4/2015. (Attachments:# 1
11/20/2015 Exhibit Exhibits) (DApice, Peter)
102 (3 pgs) Notice of hearing on Motion ofPost Addison Circle Limited Partnership for
Relieffrom the Automatic Stay Pursuant to 11 U.S. C. 362(d) filed by Creditor Post
Addison Circle Limited Partnership (RE: related document(s) I 01 Motion for relief from
stay Fee amount $176, Filed by Creditor Post Addison Circle Limited Partnership
Objections due by 12/4/2015. (Attachments:# 1 Exhibit Exhibits)). Preliminary hearing to
11/20/2015 be held on 12/9/2015 at 01:30PM at Dallas Judge Hale Ctrm. (DApice, Peter)
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SUPP APP 1139
U.S. Bankruptcy Court- Northern District of Texas Page 11 of 11
11/20/2015 Receipt of filing fee for Motion for relief from stay(14-34323-hdh13) [motion,mrlfsty]
( 176.00). Receipt number 21460490, amount$ 176.00 (re: Doc# .!Ql). (U.S. Treasury)
103 (3 pgs) (Kadden, Benjamin) has withdrawn from the case filed by Interested Party
11/23/2015 Century Surety Company. (Kadden, Benjamin)
104 (3 pgs) Amended Notice of hearing filed by Creditor Post Addison Circle Limited
Partnership (RE: related document(s)lOl Motion for relief from stay Fee amount $176,
Filed by Creditor Post Addison Circle Limited Partnership Objections due by 12/4/2015.
(Attachments:# 1 Exhibit Exhibits)). Preliminary hearing to be held on 12/9/2015 at 01:30
11/24/2015 PM at Dallas Judge Hale Ctrm. (DApice, Peter)
I PACER Service Center
I Transaction Receipt
I 11/30/2015 12:35:11
PACER
Login: lwf0013:2661254:~ Client
Code:
199999.000001-10918
14-34323-hdhB Fil or Ent.
filed From: 11/16/2012 To:
11/30/2015 Doc From: 0
Search
Description: Docket Report Doc To: 99999999 Term:
Criteria:
included Headers: included
Format: html Page counts
for documents: included
Billable
Pages: 110 181l.OO I
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SUPP APP 1140
Exhibit 7
SUPP APP 1141
1
1 IN THE UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS (DALLAS)
2
3
) Case No. 14-34324-HDH-11
4 In re ) Dallas, Texas
)
5 PASTAZIOS PIZZA, INC., )
) November 24, 2015
6 Debtor. ) 9:01 AM
)
7 _______________________________)
8 TRANSCRIPT OF HEARING
[145] EXPEDITED MOTION TO ENFORCE CONFIRMED PLAN
9 BEFORE THE HONORABLE HARLIN D. HALE,
UNITED STATES BANKRUPTCY JUDGE
10
11
12
13
14
15
16
17
18
19
20
Transcription Services: eScribers
21 700 West 192nd Street
Suite #607
22 New York, NY 10040
(973) 406-2250
23
24 PROCEEDINGS RECORDED BY ELECTRONIC SOUND RECORDING.
25 TRANSCRIPT PRODUCED BY TRANSCRIPTION SERVICE.
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SUPP APP 1142
2
1 APPEARANCES:
2 For the Plan Trustee: DAVOR RUKAVINA, ESQ.
DEBORAH M. PERRY, ESQ.
3 THOMAS D. BERGHMAN, ESQ.
MUNSCH, HARDT, KOPF & HARR P.C.
4 500 North Akard Street
Suite 3800
5 Dallas, TX 75201
6
For Century Surety GREGORY G. HESSE, ESQ.
7 Company: JAMES W. BOWEN, ESQ.
HUNTON & WILLIAMS LLP
8 1445 Ross Avenue
Suite 3700
9 Dallas, TX 75202
10
For Jane Doe: TRICIA R. DELEON, ESQ.
11 LAURA M. FONTAINE, ESQ.
TREY H. CRAWFORD, ESQ.
12 MICHAEL GRUBER, ESQ.
GRUBER HURST ELROD JOHANSEN
13 HAIL SHANK LLP
1445 Ross Avenue
14 Suite 2500
Dallas, TX 75202
15
16
17
18
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SUPP APP 1143
Colloquy 3
1 THE CLERK: All rise.
2 THE COURT: Good morning. Please be seated. Thank
3 you very much.
4 I'll take appearances in Pastazios.
5 MR. RUKAVINA: Your Honor, good morning. Davor
6 Rukavina for the trustee. With me I have Ms. Deborah Perry
7 and Thomas Berghman. The trustee is also present.
8 THE COURT: Welcome.
9 MR. HESSE: Good morning, Your Honor. Greg Hesse,
10 and I've got my partner, James Bowen. We're here on behalf of
11 Century Surety Company.
12 THE COURT: Good morning.
13 MS. DELEON: Good morning, Your Honor. Tricia DeLeon
14 with the law firm of Gruber Hurst Elrod Johansen Hail Shank.
15 I've also got my partners here with me, Mr. Gruber, Mr.
16 Crawford, and Laura Fontaine.
17 THE COURT: Welcome to our court.
18 We spent a significant amount of time on this. Do
19 you want to make an opening statement or do you just want to
20 move into the record?
21 MR. HESSE: Your Honor, if I may approach -- if I may
22 ask the Court. In light of -- wait, let me again -- in light
23 of your order on our last motion for continuance that you
24 entered yesterday, that you want to focus narrowly on the
25 issue of whether the actions of Century violate the plan, I
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SUPP APP 1144
Colloquy 4
1 would suggest the following, because the concern that Century
2 has on this hearing today is that there's going to be a
3 full-blown evidentiary hearing on whether the plan went
4 effective and was substantially consummated, because one of
5 the issues that -- the fact issues on whether the plan was
6 substantially consummated is whether the trust was duly
7 formed, because that was the transaction that was
8 contemplated.
9 With regard to that, Century hasn't had an ample
10 opportunity to do discovery. And so we would object to this
11 hearing going forward on that standpoint. My suggestion, on
12 the other hand, to get to your narrow issue, would be to treat
13 Century's objection as, effectively, a motion for summary
14 judgment. We could rely upon the pleadings and the
15 transcripts that have been filed in this case, the schedules,
16 the plan, the order confirming the plan, and other pleadings,
17 as well as the notice of appeal and other pleadings that have
18 been filed in the Court of Appeals, which I think we can
19 identify specifically what they are in the notebooks. And
20 then you can decide whether making the assumption that the
21 plan was effective, and assuming the plan was substantially
22 consummated, whether those actions violated the plan. And
23 then we would reserve our rights to a full evidentiary
24 hearing, after having a chance to do full discovery, on
25 whether the trust was duly formed, that resulted in the plan
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SUPP APP 1145
Colloquy 5
1 going effective and the plan being substantially consummated.
2 That would be our suggestion on how to proceed today,
3 just on the motion for summary judgment, assuming, for
4 purposes of today only, that the plan went effective and was
5 substantially consummated.
6 THE COURT: Mr. Rukavina?
7 MR. RUKAVINA: Pardon me. Your Honor, we would
8 object to that. It is high time to put to bed or to put to
9 rest these issues about whether the plan was consummated,
10 whether there is a trust. The trustee sat for a deposition
11 yesterday. The trustee produced, I think, over 16,000 pages
12 of documents. Ms. Lindauer produced documents. Century has
13 known of this issue since our prior hearing, some three or
14 four weeks ago, when they alleged that the trust was not duly
15 formed. Century examined both Ms. Lindauer and Mr. Seidel on
16 that date, and we are prepared to go forward, with minimal
17 evidence, on the issue that is before Your Honor today with
18 respect to what Century is purporting to do. And I would ask
19 for a brief opening -- brief, because I understand that the
20 Court has spent a lot of time preparing for today.
21 THE COURT: We have. I will say you can make
22 whatever record you want to make. It's not my intention to do
23 by a motion a declaratory judgment, though, so be warned of
24 that. All right?
25 MR. RUKAVINA: Okay.
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SUPP APP 1146
Colloquy 6
1 THE COURT: You may proceed.
2 MR. HESSE: If I can understand then correctly, Your
3 Honor, then you're not going to make any findings that the
4 trust was duly formed?
5 THE COURT: It's not my intention to go into that.
6 That's done by declaratory judgment, not by motion.
7 MR. RUKAVINA: Your Honor, let me just cover a few
8 brief topics then, that we will go over today. The first one
9 is: what is Century trying to do? And really here I was
10 concerned, when we started filing this motion, that we were
11 overreacting, that perhaps Century was not in fact trying to
12 appeal for the trust.
13 Now, immediately we offered a stipulation on an
14 agreed order that clarified that, that Century was not trying
15 to appeal for the trust. We've offered that since; it has
16 been rejected. Century, in none of its objections before Your
17 Honor, has said, no, we're not trying to appeal for the trust.
18 Century has contested every motion to continue. And of course
19 Century's pleadings speak for themselves, before the appellate
20 court, where Century is, in fact, seeking relief for
21 Pastazios, relief for the trust.
22 So to the extent that there are any concerns about
23 what Century is trying to do, the Court can certainly ask Mr.
24 Hesse, Century can clarify, but I don't think we're wrong. I
25 don't think we've overreacted. Century's pleadings speak for
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SUPP APP 1147
Colloquy 7
1 themselves, and it has rejected every attempt at a compromise.
2 As I made it clear in my pleadings, we are not trying
3 to speak, in any way, to prevent Century today from appealing
4 in its own right, to the extent it has that right. I want
5 Your Honor to understand why Century is doing what it is
6 doing. Of course there's been a judgment; October 26th was
7 the appeal deadline. The trustee did not appeal. On November
8 10th, Century tries to intervene and tries to get an extension
9 of time to appeal. It filed its own extension motion late.
10 But Texas law does permit a carrier, in instances
11 such as these, to intervene in an appeal. The requirement,
12 however, is that the carrier must admit that the judgment is
13 binding upon it. This is the theory that Century has of
14 virtual representation. Century has made that argument before
15 the appellate court, but it has denied that the judgment is
16 binding upon it. Century wants to have its cake and eat it
17 too.
18 So Century, the only thing it can do, therefore, is
19 to appeal for the trust. And it's told you, in its response
20 filed yesterday, that according to its view of the policy, it
21 has the right to defend the insured. Never mind the
22 obligation to do that for the last two and a half years, which
23 it has not done, it is saying to Your Honor we have the right
24 to appeal for the insured, and never mind that the policy
25 doesn't define "suit" or "defense" in any which way whatsoever
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SUPP APP 1148
Colloquy 8
1 relating to an appeal.
2 So this is why Century is trying to hijack the
3 trust's rights, so that it can nominally pursue an appeal, in
4 its own name, without having to admit that the judgment and
5 the findings from Judge Ginsberg are binding upon it, and
6 somehow tried, therefore, to appeal in the name of the trust.
7 And then we'll talk about prejudice today, but the
8 prejudice will be manifest and obvious in that, amongst other
9 things. Someone other than the trustee, other than the
10 fiduciary, will be speaking for this trust. That someone will
11 be making decisions that, frankly, could lead to a larger
12 judgment, because there will be a cross-appeal, and because
13 some sixty million dollars was sought from the state court,
14 not twenty. That someone will make decisions as to what
15 issues will be appealed and pursued or not. That someone will
16 have a vested interest -- because they've sued us in front of
17 Judge Solis -- to channel that appeal in such a way as to
18 attack findings that go directly to coverage. That someone is
19 not a fiduciary, and it has no obligations to the trust. And
20 of course we'll talk about the language of the plan, the trust
21 agreement.
22 But we are asking the Court for three things today.
23 The first thing we're trying to understand, and we're asking
24 for a finding from this Court, is that Ms. Doe's claim has
25 been allowed pursuant to the terms of this plan. If her claim
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SUPP APP 1149
Colloquy 9
1 has been allowed, pursuant to the terms of this plan, then
2 really what Century wants to do is no longer of that much
3 significance to the trustee. The trustee needs to understand
4 whether Ms. Doe's claim has been allowed. And we will walk
5 Your Honor through the plan documents, and we believe that her
6 claim has been allowed. If her claim has not been allowed,
7 then we are requesting either a determination or a prohibition
8 from Your Honor to the effect that Century has no right or
9 ability to speak for the trust or to seek any judicial relief
10 for the trust.
11 And we will argue about the Rule 7001 implications.
12 I'll take that up at closing. But we are seeking, again,
13 limited relief today; to the effect that the Doe claim is
14 allowed as against the trust, we don't need any kind of
15 determination or declaratory relief here -- that it's allowed
16 as against the trust, and that Century has no ability, because
17 the trustee has the exclusive ability, pursuant to this
18 Court's order, in a plan confirmation in which Century
19 participated, to pursue any appeal of the Doe trust.
20 THE COURT: Thank you. Before Mr. Hesse, let's see
21 if Ms. DeLeon -- did you want to -- I know that Doe joined in.
22 Do you have anything? That way Mr. Hesse can address both of
23 you.
24 MS. DELEON: Thank you, Your Honor. Tricia DeLeon on
25 behalf of Jane Doe.
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SUPP APP 1150
Colloquy 10
1 Your Honor, we agree with the relief that the trustee
2 is seeking, specifically that the Jane Doe claim is allowed.
3 As the Court is aware, our firm is counsel for Ms. Doe, the
4 rape victim whose case was tried before the district court,
5 and thankfully resulted in justice for. And we appreciate
6 Your Honor's order, last night, denying the motion for a
7 continuance, because we think it properly sets the tone for
8 the very narrow scope of this hearing.
9 From our perspective, we don't believe any live
10 testimony or deposition testimony is needed from the 30(b)(6)
11 deposition that Century and the trustee took yesterday of Ms.
12 Fontaine, who represented our firm. Nor do we believe any
13 live testimony is needed today, simply because that testimony
14 is not going to bear or be relevant on this Court's
15 determination on if the plan or the confirmation order were
16 violated by Century in this case.
17 Ms. Fontaine made herself available for several hours
18 yesterday, and the trustee and Century did in fact depose her
19 for about an hour, so they had that opportunity.
20 We also believe that this Court has jurisdiction, of
21 course, to interpret its own orders, under Travelers Indemnity
22 Company v. Bailey, from the U.S. Supreme Court. But based on
23 some of the questions that Century's counsel asked our firm,
24 via Ms. Doe's counsel yesterday, we fear that Century's desire
25 of discovery, into irrelevant and pre-confirmation matters,
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SUPP APP 1151
Colloquy 11
1 could touch upon matters that would take this Court out of
2 jurisdiction. So therefore, we echo this Court's concern, and
3 agree that your order denying the motion for continuance,
4 stating that this hearing should be very narrow in scope, is
5 exactly what we're here to do, and of course to object if
6 there's any type of irrelevant testimony that's attempted to
7 be coming in today through Century's counsel, via either the
8 30(b)(6) deposition or live testimony of any of the witnesses
9 from Ms. Doe's counsel.
10 Thank you, Your Honor.
11 THE COURT: Thank you. Mr. Hesse?
12 MR. HESSE: Your Honor, I'll address the last
13 comments first. Since you're not going to take up the issue
14 of whether the trust was duly formed, then there's no need to
15 go into any of the questions that were raised at the
16 deposition yesterday. I dispute that it was done, because I
17 think actually the issues that were raised prior to March 30
18 would be relevant to that declaratory judgment action, but
19 since we're not going to be addressing those issues, that's
20 not going to be an issue.
21 Let me now address Mr. Rukavina's comment with regard
22 to the allowance of the Jane Doe claim.
23 THE COURT: Okay.
24 MR. HESSE: I'm not certain, candidly, Your Honor,
25 that you have jurisdiction to do that, in that, under
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SUPP APP 1152
Colloquy 12
1 28 U.S.C., Section 157(b)(2), Congress did not provide for
2 your jurisdiction, as an accommodation to the plaintiff's
3 party, for you to make determinations on the allowance of
4 personal injury claims. So I'm not sure that you have
5 jurisdiction to enter that order, number one.
6 Number two, I'm not sure that I have standing to
7 object to that order, because that is an issue that comes
8 pursuant to the trust agreement, and as we had a hearing on
9 November 3rd about that issue, and you -- and Mr. Rukavina was
10 standing right here, saying that my client was not scheduled,
11 didn't file a claim, was not a creditor, it did not have
12 standing, I thought I made a brilliant argument to say why we
13 might have standing. You disagreed, and you found that
14 Century did not have standing.
15 That being the case, I don't think we have standing
16 to object to it. And to the extent that you're going to make
17 a finding with regards to that, then I would ask that you
18 include in your order that it's not binding upon Century,
19 because it does not have standing to object to that. And I
20 think that would -- if that's agreeable, I believe that would
21 put that particular issue to bed.
22 We then get onto the issue of really what is going on
23 here today, which is, in the trustee's motion, it is not a
24 mere simple motion to enforce or interp -- enforce the terms
25 of a plan or a confirmation order. What the trustee is
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SUPP APP 1153
Colloquy 13
1 seeking is actually both a -- is an injunction. They're
2 asking the Court to enjoin Century from acting on its own
3 rights in the Court of Appeals.
4 The reason this is not your typical motion to enforce
5 is there are some provisions of this plan that are not typical
6 or what you would -- what I would actually -- would expect.
7 Most notably, the plan of reorganization that was confirmed --
8 you know, I should -- if I may, could I provide you with a
9 copy of our exhibits --
10 THE COURT: Sure.
11 MR. HESSE: -- so that you have them handy?
12 May I approach?
13 THE COURT: Thank you.
14 MR. HESSE: It would be -- now, these have not been
15 admitted yet, but I would ask the Court to take judicial
16 notice of Century's Exhibit A, which is the first plan of
17 reorganization that was filed. The plan of reorganization --
18 now, you can look at your own leisure. And I've looked and
19 I've scoured it, and I've been trying to find it, but it
20 doesn't exist. There is not a plan injunction. The debtor
21 did not receive a discharge. There is not a discharge
22 injunction. The discharge provision, Your Honor, is Section
23 10.01.
24 So under the terms of the plan, there is no
25 injunction that you're being asked to enforce. Rather, you're
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SUPP APP 1154
Colloquy 14
1 being asked to issue a new injunction, a new injunction
2 against Century to require it to comply with the terms of this
3 plan of reorganization. That requires an adversary
4 proceeding, Your Honor, under Rule 7001. Now, the provisions
5 of the plan do provide for the Court to retain jurisdiction to
6 issue injunctions, and that would be Section 13.07 of the
7 plan. But Section 13.07 of the plan does not alter the
8 procedural due process rights that a creditor -- or that --
9 excuse me, that -- we're not a creditor; I'm sorry -- that a
10 party would have in order to be subject to this Court's
11 jurisdiction for issuing an injunction. So the procedural due
12 process rights have not been altered. And similarly, there's
13 not a change in the substantive rights that any party would
14 have.
15 So adversary proceeding; they did not file an
16 adversary proceeding, which also requires service of process.
17 Century would file a motion to -- or has filed -- has included
18 in its pleading a request that the Court dismiss the motion
19 for failure to provide service of process. Under Fifth
20 Circuit law, under Zale, it's very clear that if the trustee
21 is seeking to enjoin a party, they have to go through the
22 adversary proceeding process. They have not done so.
23 So that's point number one: they're seeking a real
24 live injunction; they're not seeking to enforce or interpret
25 this injunction.
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SUPP APP 1155
Colloquy 15
1 Secondly, Your Honor, the plan's not binding upon
2 Century. First of all, I'll point out to you that, under
3 Section 1141, the Bankruptcy Code is very specific as to what
4 parties are bound by a plan of reorganization. Section 1141
5 specifically says that the plan shall "bind the debtor" --
6 that would be Ms. Lindauer's client -- "any entity issuing
7 securities under the plan" -- Century did not issue
8 securities -- "any entity acquiring property" -- that would be
9 the trust -- "any creditor" -- which is not Century -- "equity
10 security holder" -- which is not Century -- "or general
11 partner of the debtor". It's very specific.
12 I'll address the creditor issue. Again, Mr. Rukavina
13 stood here on November -- well, on October 28th, and I think
14 again on November 3rd, and told this Court: Century was not
15 scheduled, Century did not file a proof of claim, Century is
16 not a creditor. We agree. We agreed with him at the hearing,
17 and we've gotten in our -- and I think the Court can take
18 judicial notice of the schedules. Century was not listed as a
19 creditor. It was not even listed as a party to an executory
20 contract. You can look at the claims register; Century did
21 not file a proof of claim. So we're not a creditor, and so,
22 under 1141, we're not bound by the plan.
23 Now, interestingly, a couple of years ago, Judge
24 Houser had this exact issue come up, and I think this kind of
25 ties into a number of the other comments or requests from the
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SUPP APP 1156
Colloquy 16
1 trustee. And in the -- and this is cited in our pleadings, In
2 re: Vallecito Gas, which is 440 B.R. 457. Judge Houser had
3 the ability to -- or had the opportunity to address whether an
4 individual was bound by the confirmation order. In the
5 Vallecito Gas case, the individual, a gentleman by the name of
6 Pugh, was the representative of a creditor. Mr. Pugh is not
7 listed on the schedules. He did not file a proof of claim.
8 But he had notice of a plan. He had notice of a confirmation
9 order. And he also -- and under the terms of the plan that
10 was confirmed, the debtor sold a mineral interest free and
11 clear of all liens, claims and encumbrances. It just so
12 happened that Mr. Pugh owned an overriding royalty interest in
13 that same mineral lease.
14 The trustee tried to establish that Mr. Pugh is bound
15 by the terms of the plan because that -- it would avoid his
16 overriding royalty interest because he had notice of the plan,
17 he was on the creditors' list, and he didn't object or appeal
18 from the confirmation order. Judge Houser noted -- or said
19 that there was a dispute amongst the parties as to whether
20 Pugh actually had notice of the confirmation order. And she
21 thought that that was just a -- while there was a factual
22 dispute, she said it's simply immaterial to the motion. So
23 even though Pugh had notice, it was irrelevant. And the Court
24 agreed with Pugh that Section 1141 of the Bankruptcy Code
25 doesn't apply since Pugh, individually, was not a creditor of
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SUPP APP 1157
Colloquy 17
1 Vallecito.
2 It's very remarkably similar to this case, Your
3 Honor. Century is not a creditor. It was not listed on the
4 schedules. It did not file a proof of claim. It is not a
5 creditor.
6 Now, the trustee is going to stand up and say, well,
7 but Century's lawyer was at the confirmation hearing. Well,
8 Century's lawyer was at the confirmation hearing, if you look
9 at that transcript, because its motion for relief from the
10 automatic stay, in order to proceed with this declaratory
11 judgment action, was also heard that day. But the fact that
12 Century was at the -- would have knowledge of the plan and
13 confirmation order is really immaterial, because even if it
14 did have knowledge, Section 1141 doesn't bind it unless it's a
15 creditor.
16 Additionally, Your Honor, the very terms of the plan
17 provide that Century is not bound by it. And I direct Your
18 Honor to Section 10.02 of the plan. It's on page 16 of the
19 plan, Your Honor.
20 THE COURT: Of Exhibit 8?
21 MR. HESSE: Of Exhibit 8, yes.
22 THE COURT: Excuse me. I'm not sure my copy has
23 10.02 here.
24 MR. HESSE: It does not have --
25 THE COURT: I mean, I have 8, but I don't see 10.02
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SUPP APP 1158
Colloquy 18
1 in it.
2 MR. HESSE: You don't have page 16?
3 THE COURT: I do have page 16, but I don't -- did you
4 say 10.02?
5 MR. HESSE: 10.01 -- 10.02; I'm sorry. Are you
6 looking at Exhibit 8?
7 THE COURT: No.
8 MR. HESSE: The first amended plan.
9 THE COURT: I'm in 9.
10 MR. HESSE: Okay.
11 THE COURT: It was my bad. Hold on just a second.
12 What page now?
13 MR. HESSE: Page 16.
14 THE COURT: I have it now.
15 MR. HESSE: Section 10.02 provides: "The provision
16 of this plan, pursuant to the Bankruptcy Code, Section 1141,
17 shall bind Pastazios and all creditors, whether or not they
18 accept this plan." We've already gone through 1141, but to
19 reconfirm, Century is not Pastazios and Century is not a
20 creditor. So under the express terms of the plan of
21 reorganization, the plan is not binding upon Century. And I
22 think to the extent that, you know, we have this particular
23 provision, I think that deals with all the res judicata
24 arguments that the debtor has, that we're bound by the terms
25 of the plan. If the terms of the plan are binding, well,
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SUPP APP 1159
Colloquy 19
1 Section 10.02 also is specifically binding, but it's not
2 binding on Century, because it is not the debtor or a
3 creditor.
4 So I think that we can dispose of this motion fairly
5 quickly, Your Honor, by looking at the terms of the plan and
6 whether or not it is binding upon Century. And so if you're
7 looking at the injunctive provisions that the trustee is able
8 to show success on the merits, I don't believe they could even
9 show success on the merits based upon just the documents
10 itself, which, to a certain extent, Your Honor, goes to my
11 point that we could resolve this as a motion for summary
12 judgment, based upon just the pleadings that were filed.
13 Finally, Your Honor, with regard to whether the
14 actions in the Court of Appeals, whatever they are, the
15 pleadings are here; you can look at the pleadings. I mean,
16 we're filing on behalf of Century. We're trying to protect
17 Century's rights. One of the provisions that will come up in
18 the context of the Court of Appeals is the judgment that is
19 being appealed from is the judgment against Pastazios. If
20 we're going to go into the Court of Appeals to protect our own
21 rights, it's relating to that judgment. And so I don't know
22 how to really -- you know, we can't -- I cannot come up with a
23 way to fashion a stipulation, that would carve out anything
24 that would be satisfactory to Mr. Rukavina, that would also
25 provide -- or would allow Century to step in, protect its
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SUPP APP 1160
Colloquy 20
1 rights in the Court of Appeals, because the judgment in fact
2 is the judgment from the state court.
3 So consequently, Your Honor, I think that we can
4 dispense with this by noting that the plan doesn't bind us
5 based upon its express terms and based on the express terms of
6 1141. Additionally, there's not an injunction that is here
7 that you're seeking to be enforced, but they're actually
8 asking the Court to issue a new injunction which requires an
9 adversary proceeding, after notice, and a full opportunity for
10 discovery and a hearing. And since your Court already said
11 we're not going to make a determination as to whether the
12 trust was formed, that really dispenses with a lot of the
13 evidence that would have been at issue.
14 Thank you, Your Honor.
15 THE COURT: Thank you, Mr. Hesse.
16 You may call your first witness, Mr. Rukavina.
17 MR. RUKAVINA: Before that, Your Honor, I'd ask to
18 admit certain exhibits that I hope are of no controversy.
19 THE COURT: Okay.
20 MR. RUKAVINA: And if we can look at my exhibit list,
21 it would be exhibits -- first it would be Exhibits A through
22 N, as in Nancy, which are documents filed of record with this
23 Court. So I move for A through N, Your Honor.
24 MR. HESSE: No objection for A through N, Your Honor.
25 (Documents were hereby received into evidence as Debtor's
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SUPP APP 1161
Colloquy 21
1 Exhibits A through N, as of this date.)
2 THE COURT: A through N admitted.
3 MR. RUKAVINA: Then also what I hope is going to be
4 noncontroversial, YY, ZZ, AAA, BBB, CCC, DDD, all the way
5 through KKK, again, filings before the appeal court and Judge
6 Solis and the state court judgment.
7 MR. HESSE: Your Honor, we object to Exhibit YY, and
8 that's the pleading in the state court action. I don't
9 believe it has any relevance today.
10 MR. RUKAVINA: I'll remove YY.
11 THE COURT: Any problem with all but YY on the range
12 from -- the range was from YY through KK.
13 MR. HESSE: Through KK?
14 MR. BOWEN: KKK, Your Honor.
15 THE COURT: Or KKK. Sorry.
16 MR. HESSE: No objection to ZZ. Sorry.
17 MR. BOWEN: No objection to BBB, CCC, or DDD.
18 Was there anything else, Mr. Rukavina, that I missed?
19 MR. RUKAVINA: Yes, the last page, EEE through KKK.
20 And I apologize about the numbering. It's not the clearest.
21 MS. DELEON: And AAA; I don't think that was --
22 THE COURT: AAA?
23 MR. BOWEN: Yes, AAA.
24 THE COURT: And I don't think you said one way or on
25 AAA, which is the findings of the state court.
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SUPP APP 1162
Colloquy 22
1 MR. BOWEN: Sorry, Your Honor. I'm struggling a bit
2 here.
3 THE COURT: It's okay.
4 MR. BOWEN: Yes, Your Honor. No. No objection to
5 AAA.
6 Tell me again; I'm sorry. Mr. Rukavina?
7 MR. RUKAVINA: Sure. So EEE through KKK.
8 MR. BOWAN: No objection to EEE, FFF -- correct me if
9 I'm doing something wrong -- GGG, HHH, III, JJJ, or KKK.
10 THE COURT: Then ZZ through KKK -- is that right?
11 MR. RUKAVINA: Yes, Your Honor.
12 THE COURT: -- are admitted.
13 (Documents were hereby received into evidence as Debtor's
14 Exhibits ZZ through KKK, as of this date.)
15 MR. RUKAVINA: Your Honor, I will call --
16 MR. HESSE: Your Honor, while we're going through
17 exhibits, why don't we go ahead and also include O --
18 MR. RUKAVINA: You're on my list?
19 MR. HESSE: I'm on your list: O, P --
20 THE COURT: Hold on just a second, Mr. Hesse. Let me
21 catch up with you. All right, O.
22 MR. HESSE: O, P, Q, R, S, T, and V.
23 MR. RUKAVINA: Your Honor, no objection, except I
24 don't think we have R. I don't think we were able to get it
25 on time.
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SUPP APP 1163
Colloquy 23
1 MR. HESSE: R would be --
2 MR. RUKAVINA: R is blank; we were not able to get
3 that transcript.
4 MR. HESSE: Your Honor, R would be Century's Exhibit
5 52.
6 MR. RUKAVINA: If counsel's representing that's the
7 same, then no objection to Century 52.
8 MR. HESSE: Century 52 is the transcript of hearing
9 on November 3, 2015 on the motion to clarify trust agreement.
10 THE COURT: R, though, I think is the October 28th
11 transcript.
12 MR. HESSE: Oh, Your Honor, that would be Century
13 Exhibit 49, transcript of hearing of motion for leave,
14 trustee's expedited motion to clarify trust agreement, October
15 28th, 2005, 9 a.m.
16 THE COURT: Okay. Mr. Rukavina, the exhibits that
17 have been listed you're okay with? They're on your list?
18 MR. RUKAVINA: Okay. I have no problem with that,
19 but here's -- I have no problem with my -- I believe it
20 started at O. I have no problem with my O through V. I'm
21 telling Your Honor that there is no R. R is a 2013
22 transcript.
23 THE COURT: Yeah. So we will --
24 MR. RUKAVINA: Mr. Hesse was referring to the 2015
25 transcript. So again, we were not able to get all of the --
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SUPP APP 1164
Colloquy 24
1 MR. HESSE: No -- no, that would be -- that would
2 make no sense, because that's document number 142 in a
3 bankruptcy court. That has to be a 2015.
4 MR. RUKAVINA: Yeah, you're probably correct about
5 that.
6 MR. HESSE: And so I think the 2013 is a
7 typographical error. That would be Century's Exhibit -- what
8 did I say?
9 THE COURT: 49, I think.
10 MR. HESSE: 49.
11 MR. RUKAVINA: No objection to Century 49, Your
12 Honor.
13 THE COURT: Okay. Century 49 is in.
14 (Document was hereby received into evidence as Century's
15 Exhibit 49, as of this date.)
16 THE COURT: And O, P, Q, S, T, V of the trustee are
17 in.
18 (Documents was hereby received into evidence as Trustee's
19 Exhibits O, P, Q, S, T, V, as of this date.)
20 MR. RUKAVINA: Your Honor, I'll call Trey Crawford
21 for purpose of authentication, and I hope I can proffer his
22 testimony.
23 THE COURT: Okay.
24 MR. RUKAVINA: It's Exhibit QQ.
25 MR. BOWEN: Your Honor, we have no objection to
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SUPP APP 1165
Colloquy 25
1 authenticity. Our objection to QQ is just relevance. It's a
2 piece of discovery from the state court action, and we don't
3 believe it has any relevance today, Your Honor.
4 THE COURT: Response on relevance?
5 MR. RUKAVINA: I'll make the relevance -- I'd ask the
6 Court to carry the relevance objection.
7 THE COURT: Okay.
8 MR. RUKAVINA: I was going to call Mr. Crawford only
9 to authenticate the document.
10 THE COURT: Okay. Mr. Crawford?
11 MR. RUKAVINA: May I proffer his testimony?
12 (Witness sworn)
13 THE COURT: You may be seated.
14 Yeah, you can proffer and then be subject to cross-
15 examination.
16 MR. RUKAVINA: Okay. If you'll look at QQ while I'm
17 proffering your testimony, please.
18 THE COURT: Let me switch books just a minute.
19 MR. RUKAVINA: It's in volume 1.
20 Your Honor, if called to testify, Mr. Crawford would
21 testify that he was lead counsel for Ms. Doe in the underlying
22 state court lawsuit. Exhibit QQ is a true and correct copy of
23 certain disclosures served upon Mr. Crawford and his firm by
24 insurance defense counsel hired for Pastazios Pizza at that
25 time, prior to Century denying coverage and denying a defense.
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SUPP APP 1166
Colloquy 26
1 And that would close his direct proffer.
2 THE COURT: Any questions of this witness?
3 MR. BOWEN: You're finished with this witness
4 completely?
5 MR. RUKAVINA: Yes.
6 MR. BOWEN: No questions, Your Honor.
7 THE COURT: You want to make your relevance
8 objection?
9 MR. BOWEN: I do assert the relevance objection to QQ
10 just because it's an unsworn piece of discovery in the state
11 court lawsuit. I can't imagine how it has any relevance to
12 the questions the Court's being asked to address today.
13 THE COURT: Mr. Rukavina, I think you addressed this
14 a little bit in one of your pleadings, but go ahead.
15 MR. RUKAVINA: Your Honor, it is Century that is
16 arguing that there is no prejudice to the trust by proceeding
17 as it has in the appeal. We will show Your Honor that when
18 Century controlled anything to do in this lawsuit, their
19 counsel, their chosen counsel chose to answer discovery in
20 such a way as to give them an excuse to deny coverage. That
21 goes to the heart of the reason why we're here today, the
22 heart of why this Court should not allow someone else to speak
23 for this trust
24 THE COURT: Anything else on the relevance objection?
25 MR. BOWEN: Your Honor, I don't understand -- the
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SUPP APP 1167
Seidel - Direct 27
1 question today is whether the Court is going to enforce the
2 plan and make us file something in the Court of Appeals. So
3 yes, we assert the relevance objection. I have nothing
4 further to say.
5 THE COURT: QQ is admitted.
6 (Certain disclosures served upon Mr. Crawford were hereby
7 received into evidence as Debtor's Exhibit QQ, as of this
8 date.)
9 MR. RUKAVINA: Your Honor, I have nothing further for
10 Mr. Crawford.
11 THE COURT: You did a good job, Mr. Crawford.
12 MR. CRAWFORD: Thank you. I even wore contacts.
13 MR. RUKAVINA: Your Honor, I'll call Mr. Seidel.
14 THE COURT: Mr. Seidel?
15 (Witness sworn)
16 THE COURT: You may be seated.
17 DIRECT EXAMINATION
18 BY MR. RUKAVINA:
19 Q. Sir, if you'll please identify yourself for the record.
20 A. Yes, sir. My name is Scott Seidel.
21 Q. Okay. Do you know Mr. Hesse from before?
22 A. Yes.
23 Q. How so?
24 A. He had called me with regard to a fee application for his
25 firm in a case that I'd hired his firm in to be -- when I was
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SUPP APP 1168
Seidel - Direct 28
1 the trustee.
2 Q. What case was that?
3 A. It was called Tagnet (ph.).
4 Q. And was he with Hunton & Williams?
5 A. Yes.
6 Q. And did they do a lot of work?
7 A. Yeah, I paid him hundreds of thousands of dollars.
8 Q. All right. So --
9 A. Paid the firm.
10 Q. -- Hunton is your former lawyer?
11 A. Yes, Your Honor -- yes, sir.
12 Q. And what does it feel like today having Hunton examine --
13 MR. HESSE: I'm going to object to relevance, Your
14 Honor.
15 THE COURT: Relevance?
16 MR. RUKAVINA: Your Honor, it's again that his former
17 counsel is now going after him, purporting to add for the
18 trust benefit in the Court of Appeals, again, to the prejudice
19 issues.
20 THE COURT: Um-hum. Sustained.
21 MR. RUKAVINA: Okay.
22 Q. If you'll turn to Exhibit M, Mr. Seidel?
23 A. Yes.
24 Q. This is the order confirming the plan?
25 A. Yes.
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SUPP APP 1169
Seidel - Direct 29
1 Q. Okay. If you'll turn to page 3, the first ordered
2 paragraph "defines creditor trust agreement", do you see that,
3 sir?
4 A. Yes, sir.
5 Q. Have you signed a creditor trust agreement --
6 A. Yes, sir.
7 Q. -- with Pastazios?
8 A. Yes, sir.
9 MR. HESSE: Your Honor, we're not trying this issue
10 today, so I would object to this being relevant. We'll
11 stipulate that Mr. Seidel will testify that he signed the
12 trust agreement and that they're -- for purposes of today's
13 hearing, that the plan is effective, and that it's
14 substantively consolidated, and that the trust -- and just so
15 we -- that we're not -- only for purposes of today.
16 THE COURT: Well, the question was just whether he
17 had signed. Overruled.
18 Q. And if we go a page further, you'll see that there's a
19 provision on page 4 about the debtor paying 50,000 dollars to
20 reacquire equity in the reorganized Pastazios Pizza. Do you
21 see that, sir?
22 A. Yes, sir.
23 Q. Was that 50,000 dollars paid?
24 A. Yes, sir, finally.
25 Q. Okay. Approximately what time?
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SUPP APP 1170
Seidel - Direct 30
1 A. In May.
2 Q. Okay. And Exhibit M, it's already been admitted, but
3 just if you'll confirm for the Court that that is the trust
4 agreement that Mr. Deari and you signed?
5 A. Yes, sir, it is.
6 Q. Okay. Now, are you familiar with the Jane Doe litigation
7 and the judgment entered in January -- I'm sorry, in July of
8 this year?
9 A. Yes, sir.
10 Q. And how so?
11 A. I was involved. I was at the litigation. I spoke with
12 my counsel that I employed in the matter, and was there for
13 not every minute of the trial but for the vast majority and
14 for the decision that was made by the judge.
15 Q. Okay. And did you request Century to provide a defense
16 against that claim?
17 A. Yes, sir.
18 Q. And did Century -- how did Century respond?
19 A. They refused.
20 Q. What did you do then to defend against that claim?
21 A. I hired counsel.
22 Q. Who did you hire?
23 A. Chen Dawson (ph.).
24 Q. And what did you have that counsel do?
25 A. Anything and everything they could to defeat the claim.
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SUPP APP 1171
Seidel - Direct 31
1 Q. You were trying to get a zero claim against the trust?
2 A. I was trying to get a zero claim against the trust.
3 Q. In your opinion, did they do everything that they could
4 have?
5 A. Yes, sir, and the judge in the state court even commented
6 they had done a -- a good job.
7 Q. Did we seek any kind of continuance from Judge Ginsberg
8 prior to proceeding?
9 A. Yes, sir.
10 Q. What did he say?
11 A. He said that he never says never, but in this instance,
12 the Jane Doe suit, there was 99.9 percent chance there would
13 not be a continuance; that matter had been pending too long.
14 A. And ultimately a judgment was entered against the trust,
15 correct?
16 A. Yes, sir.
17 Q. Were you surprised?
18 A. I was surprised by the amount, yes, sir.
19 Q. Were you surprised about the liability?
20 A. Yes, sir.
21 Q. Very briefly, did Mr. Deari admit to getting Ms. Doe
22 drunk?
23 A. Yes.
24 MR. BOWEN: Objection, Your Honor. Hearsay.
25 Relevance.
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SUPP APP 1172
Seidel - Direct 32
1 MR. RUKAVINA: Your Honor, we'll let the findings of
2 fact speak for themselves. The question goes to what is going
3 on with the appeal, so I do think that there is some relevance
4 to the trustee's decision making. But I heard Your Honor
5 yesterday, in his order, say that this is going to be a narrow
6 hearing today, and so I'm just going to ask for some guidance
7 from the Court. I really -- I agree that the discussions with
8 Century that were had about whether to fund an appeal or not
9 are not relevant for today. It's only to the extent that
10 Century makes them relevant. So if Your Honor will apply the
11 goose and gander rule, I don't need to ask these questions.
12 THE COURT: I will.
13 Q. What was the appeal deadline?
14 A. October 26th.
15 Q. Did you appeal?
16 A. No, sir.
17 Q. Now, are you familiar with Century's pleadings, as they
18 filed in the appeal court, seeking leave to appeal and seeking
19 to intervene to appeal?
20 A. Yes.
21 Q. Okay. And do you have a problem with what Century was
22 trying to do in the appeals court?
23 A. Yes.
24 Q. And why do you have a problem with that?
25 A. Well, because they're speaking on behalf of Pastazios in
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SUPP APP 1173
Seidel - Direct 33
1 that appeal process, and I think it's confusing. And Century
2 obviously is answerable only to itself and only has its
3 motivations at heart, rather than a trustee of a trust that
4 has fiduciary duties to creditors, et cetera.
5 Q. How long have you been a bankruptcy trustee?
6 A. Many years, twenty years.
7 Q. Approximately how many bankruptcy estates have you
8 administered?
9 A. Thousands.
10 Q. Can you administer a bankruptcy estate or a
11 post-confirmation estate when someone else is purporting to
12 act for you?
13 A. No.
14 Q. Have you ever seen such a thing before?
15 A. No, but it was a tremendously unusual circumstance, so I
16 thought it was necessary to bring this to the Court's
17 attention. You have an insurance company denying coverage yet
18 trying to wrestle away and assert appeal -- appellate rights
19 for the debtor.
20 Q. When did Century first become interested, to your
21 knowledge, and what all was going on with the lawsuit?
22 A. Once we contacted them and made them aware of the large
23 judgment that was entered; otherwise they ignored this
24 completely.
25 Q. Now, who's the fiduciary in this case?
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SUPP APP 1174
Seidel - Direct 34
1 A. Me.
2 Q. What do you understand your duties to be and to who?
3 A. My duties are to my creditors, and narrow fiduciary
4 duties.
5 Q. And to the -- to the Court, with some oversight?
6 A. Yes.
7 Q. Okay. Does Century have any duties, to your knowledge,
8 fiduciary or otherwise, to this Court or to any of your
9 beneficiaries?
10 A. Absolutely not.
11 Q. Now, if you'll look at Exhibit QQ, and if you'll look at
12 the third page, in particular. Do you see the answer to
13 request number three?
14 A. I do.
15 Q. Okay. And it asks Pastazios to state the factual basis
16 of your claim. Was Pastazios making a claim in that lawsuit?
17 A. Not that I recall.
18 Q. Do you have any idea for why an attorney would even
19 answer this request?
20 A. No.
21 Q. Do you have any concern about how this request was
22 answered by the insurance counsel hired for Pastazios by
23 Century?
24 A. Yes, it appears to be geared to vitiate coverage.
25 Q. Because if it's not the result of negligence, then it's
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SUPP APP 1175
Seidel - Direct 35
1 the result of intentional, which is excluded, correct?
2 MR. BOWEN: Objection. Leading, Your Honor.
3 THE COURT: Sustained.
4 Q. Why is it geared towards excluding coverage?
5 A. Because of the negligence issue you mentioned. And if
6 it's intentional then there would be no coverage.
7 Q. And if you look at response -- a little bit later,
8 response number 7, "Please disclose any insuring agreements of
9 which you are aware". You see the answer is, "Defendants will
10 supplement".
11 A. Yes.
12 Q. Do you see that? Does that cause you any concern, the
13 nondisclosure of the insurance policy?
14 A. Yes, it does.
15 Q. Okay. Does this Exhibit QQ relate, in any way, to your
16 concerns about what Century is trying to do before the
17 appellate court?
18 A. It does. It -- to me, it shows the motivations and the
19 way that they will act in an appeal to vitiate coverage and
20 not in the best interests of creditors of the estate,
21 obviously.
22 Q. Okay. And will they have an opportunity to do so if
23 they're appealing for the trust?
24 A. I believe so.
25 Q. Do you think they have a motive to do so?
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SUPP APP 1176
Seidel - Direct 36
1 A. I believe they have a strong motive to do so.
2 Q. Are we engaged with other litigation with Century right
3 now anywhere regarding coverage?
4 A. Yes.
5 Q. And where is that?
6 A. Federal district court.
7 Q. Judge Solis?
8 A. Judge Solis.
9 Q. And how would you characterize that litigation?
10 A. Tremendously contentious.
11 Q. Okay. Now, how much money did Ms. Doe seek from Judge
12 Ginsberg at the state court trial -- or not how much money;
13 what size of judgment did she ask for?
14 A. They -- they were asking -- is that what you're saying?
15 Q. Yes.
16 A. That they were -- I think they were asking for sixty
17 million dollars.
18 Q. And ultimately a judge awarded some twenty million
19 dollars; it goes up and down depending --
20 A. Yes, Your Honor -- yes, sir, twenty -- twenty-ish.
21 Q. Now, did you discuss with counsel for Ms. Doe, prior to
22 making a decision whether to appeal or not, the potential that
23 you might appeal?
24 A. Yes.
25 Q. Okay. Was there any federal cross-appeal made?
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SUPP APP 1177
Seidel - Direct 37
1 A. Yes.
2 Q. Okay. Does that give you any concern about allowing
3 Century to appeal for the trust?
4 A. Yes, it could expose the trust to greater damages and
5 expense and delay, obviously.
6 Q. Because of the potential for a cross-appeal?
7 A. Yes.
8 Q. Okay. Any other issues that -- so we've identified
9 concern that Century will be motivated by its self-interest.
10 We've identified the potential that their appeal could go
11 haywire and actually have a higher liability against the
12 trust. We've identified the concern that you're the fiduciary
13 and that Century has no obligation to this Court or anyone.
14 Any other concerns about what Century's trying to do with the
15 appeals court?
16 A. No.
17 Q. Let me ask you this: how long will an appeal last?
18 A. I don't -- it could last forever, I mean, years. The
19 delay that I mentioned earlier.
20 Q. Is a a remand a potential?
21 A. Remand is a potential, and then they could bring it back,
22 and then we've got more expense starting over, and the trust
23 doesn't have any funds to speak of. We've got 40 -- 30,
24 40,000 dollars. We can't afford another trial.
25 Q. And how much of that 30 or 40,000 dollars is geared
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SUPP APP 1178
Seidel - Direct 38
1 towards paying what's owed Chen Dawson?
2 A. A portion.
3 Q. Okay. And have you paid my firm anything?
4 A. No, I haven't paid your firm one penny.
5 Q. Have you paid yourself anything?
6 A. No, of course not.
7 Q. So if a remand happens, who's going to pay for --
8 A. There's no money.
9 Q. Not to mention the years of delay.
10 A. Yes.
11 Q. Okay. Now, can you see your role as an effective
12 fiduciary and trustee in this case being compatible with
13 Century speaking for the trust on appeal?
14 A. No.
15 Q. Would you have any control over what Century might do?
16 A. No, I wouldn't.
17 Q. And who would face the potential liability if something
18 went haywire with what Century was doing?
19 A. Conceivably, me.
20 Q. Has Century offered, in any way, to indemnify you,
21 personally, or your counsel, or the trust?
22 A. No, sir.
23 Q. Okay. As far as the allowance of Ms. Doe's claim, just
24 so I understand, the appeal deadline has run and you did not
25 appeal?
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SUPP APP 1179
Seidel - Direct 39
1 A. Correct.
2 Q. And are you asking the Court to find that her claim is
3 allowed?
4 A. Yes, sir.
5 Q. And why are you asking that?
6 A. So that we can know where everyone lies in terms of
7 rights, et cetera, duties.
8 MR. RUKAVINA: Your Honor, I'll pass the witness.
9 Thank you.
10 THE WITNESS: Yes.
11 THE COURT: Does debtor's counsel have any questions
12 of the witness?
13 MS. DELEON: No, Your Honor.
14 THE COURT: I think it makes sense for both of you to
15 go before Century goes.
16 MR. HESSE: Thank you, Your Honor.
17 THE COURT: Your turn.
18 MR. BOWEN: Your Honor, before I begin asking
19 questions I want to see if we can get some stipulations on
20 pre-admitting some of our exhibits. The list is a lot shorter
21 now, Your Honor, in light of the Court's ruling yesterday, so
22 what we're offering is Exhibits 58, 59, 60, 61, 67, 33, 47,
23 11.
24 UNIDENTIFIED SPEAKER: Hold on. One moment.
25 MR. BOWEN: 47, 11. 68 and 42.
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SUPP APP 1180
Seidel - Direct 40
1 THE COURT: Let me switch books.
2 MR. BOWEN: It's going to take me a bit, Your Honor.
3 MR. RUKAVINA: Let me start with the easy ones.
4 THE COURT: All right. Let me switch books just for
5 a minute.
6 UNIDENTIFIED SPEAKER: Is there another book?
7 MR. RUKAVINA: Your Honor, may I?
8 THE COURT: Um-hum.
9 MR. RUKAVINA: Your Honor, we have no objection to
10 Century's 58, 59, 60, 61, 67 or 68. Let me just take a look
11 at 68 real quick to make sure that's the executed one. Yes,
12 it is. It is. Yeah, it is. I'll stick it on the last page.
13 It is.
14 Now, Your Honor, 42, 47, 33, and 11 go to issues
15 which I believe Your Honor is excluding from consideration
16 today. And if those are going to come in then all of mine
17 need to come in, and I need to be able to go ask the trustee
18 some more questions. These are communications regarding the
19 purpose of the Trust, the conduct of the potential appeal. So
20 I would object to those based on the scope of this hearing as
21 Your Honor has phrased it.
22 MR. BOWEN: May I respond, Your Honor?
23 THE COURT: You may.
24 MR. BOWEN: I'm going to start with 33. You
25 understand I'm doing this out of order.
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SUPP APP 1181
Seidel - Direct 41
1 THE COURT: All right. Let me get to 33.
2 MR. BOWEN: I mean, it might make more sense if we
3 carried this, but, I mean, we'll explain it to the Court.
4 The witness was asked about why he chose not to
5 appeal. Exhibit 33 is his request asking Century to pay his
6 appeal.
7 MR. RUKAVINA: Your Honor, I don't recall asking Mr.
8 Seidel why he chose not to appeal. I recall asking him did he
9 appeal.
10 MR. BOWEN: Well, he also asked him, Your Honor, if
11 there was a concern the judgement would get larger and delay
12 and those kind of things, so --
13 MR. RUKAVINA: Well, Your Honor, that relates not to
14 his decision not to appeal. That relates to his decision to
15 contest Century's attempt to appeal.
16 MR. BOWEN: Also, Your Honor, in Exhibit 33 the Trust
17 states, and this is from Munsch, Hardt. This would be Mr.
18 Seidel's lawyer. It states:
19 "Not only does the Trust request that Century fund an
20 appeal but also that the Trust believes there may be valid
21 appellate points."
22 MR. RUKAVINA: Your Honor, again, I am prepared to
23 respond to all of this, but then I need to include additional
24 exhibits, and I need to ask Mr. Seidel additional questions.
25 THE COURT: Why don't we take the other three
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SUPP APP 1182
Seidel - Direct 42
1 exhibits that are still outstanding? That's 47, 11 and 42.
2 MR. BOWEN: Okay. Turning to 47, Your Honor, 47 is a
3 response to 33 some months later. It's from counsel Hunton &
4 Williams for Century, and it attaches a stipulation that
5 Century's offering to enter into, in which Century agrees to
6 pay for an appeal. The trustee would agree to appeal.
7 Trustee alone would select qualified and appropriate counsel,
8 and trustee would control the appeal, and that the trustee
9 would not waive any coverage rights.
10 So, I believe, Your Honor, this goes also directly to
11 Mr. Seidel's testimony about how he didn't appeal because he
12 was afraid the judgment was going to get larger and that it
13 would cause delay and expense. And he was worried about
14 expense.
15 The fact is, Your Honor, that Century, at his
16 request, offered to pay for the appeal and acceded to every
17 one of his demands.
18 THE COURT: Ms. Rukavina?
19 MR. RUKAVINA: Well, Your Honor, there's two sides to
20 every story, and I think that counsel -- I would like this
21 exhibit to come in. I would like Your Honor to know what
22 happened. I think Mr. Seidel would like Your Honor to know
23 what happened. We have no cause for concern before Your Honor
24 or any judge that what we did was absolutely correct and that
25 Century was negotiating with us in bad faith.
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SUPP APP 1183
Seidel - Direct 43
1 I want all this to come in. It's up to Your Honor.
2 So long as, if it comes in, I get a chance to ask Mr. Seidel
3 about this.
4 THE COURT: I'll admit the exhibits, and you can have
5 a second pass at him and take an opportunity to offer to it.
6 MR. RUKAVINA: Thank you, Your Honor.
7 THE COURT: Just for the record, I guess I'll just
8 say in the end 58, 59, 60, 61, 67, 33, 47, 11, 68 and 42 are
9 now in.
10 (Notice of appeal filed by Century in the court of appeals was
11 hereby received into evidence as Century's Exhibit 58, as of
12 this date.)
13 (Motion to intervene filed by Century in the court of appeals
14 was hereby received into evidence as Century's Exhibit 59, as
15 of this date.)
16 (Motion for extension filed by Century in the court of appeals
17 was hereby received into evidence as Century's Exhibit 60, as
18 of this date.)
19 (Supplement filed by Century in the court of appeals was
20 hereby received into evidence as Century's Exhibit 61, as of
21 this date.)
22 (Response filed on behalf of Mr. Seidel in the court of
23 appeals objecting to Century's efforts to intervene was hereby
24 received into evidence as Century's Exhibit 67, as of this
25 date.)
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SUPP APP 1184
Seidel - Cross 44
1 (Letter sent to Century by Mr. Seidel's lawyers shortly after
2 judgment was entered in the Doe action was hereby received
3 into evidence as Century's Exhibit 33, as of this date.)
4 (Letter from Hunton & Williams to Mr. Seidel's counsel was
5 hereby received into evidence as Century's Exhibit 47, as of
6 this date.)
7 (Creditor trust agreement was hereby received into evidence as
8 Century's Exhibit 68, as of this date.)
9 (Document was hereby received into evidence as Century's
10 Exhibit 42, as of this date.)
11 MR. RUKAVINA: Your Honor, we haven't discussed 11.
12 Just one second, please.
13 THE COURT: Oh, I'm sorry. I thought you were saying
14 for the rest of it -- you said 11 --
15 MR. RUKAVINA: No, that's fine. 11 is the same. I
16 would give the same responses I did to the other ones.
17 THE COURT: All right.
18 MR. RUKAVINA: Is 11 admitted?
19 THE COURT: You may proceed. 11 is in.
20 (E-mail exchange between Mr. Seidel and Mr. Erler from
21 February, 2015 was hereby received into evidence as Century's
22 Exhibit 11, as of this date.)
23 CROSS-EXAMINATION
24 BY MR. BOWEN:
25 Q. Mr. Seidel?
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SUPP APP 1185
Seidel - Cross 45
1 A. Yes, sir.
2 Q. If I understand correctly, you have no objection in this
3 court to Century appealing in its own name. You just don't
4 want there to be any confusion that Century is appealing for
5 you. Is that a correct summary?
6 A. That's fair.
7 Q. Okay. You have a witness notebook there in front of you?
8 A. I do now.
9 Q. Would you please look at Exhibit 58? Exhibit 58 is the
10 notice of appeal that Century filed in the court of appeals.
11 Isn't that correct?
12 A. Yes, sir.
13 Q. It states very plainly that it's filed on behalf of
14 Century Surety Company. Right?
15 A. Yes.
16 Q. There's no indication, hint or any type of implication
17 that Century is acting with your permission or in your stead,
18 right?
19 A. It says Century.
20 Q. Well, it also does not say that --
21 A. It does not say.
22 Q. -- that Century is appealing for you, right?
23 A. Correct.
24 Q. If you'd look at Exhibit 59, please.
25 A. Yes, sir.
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SUPP APP 1186
Seidel - Cross 46
1 Q. This is Century's motion to intervene filed in the
2 appellate court, right?
3 A. Yes.
4 Q. If I turn you -- turn to the page 1 -- she doesn't have a
5 number on it, but it, not surprising, is the one before page
6 2.
7 A. Yes.
8 Q. Okay. And it states right there at the top that it's
9 being filed by Century Surety Company. Right?
10 A. It does.
11 Q. Does not state that it's being filed by Century Surety
12 Company for you or with your permission. Right?
13 A. Yes.
14 Q. And, if you would, turn to page 6. You see on paragraph
15 13 there the sentence that begins with the word "however"?
16 "However, the trustee later refused to authorize an
17 appeal, even though Century had agreed to its stated terms
18 under a full reservation of right."
19 I'm not asking you whether you agree with that whole
20 statement, but wouldn't you agree that it's plainly apparent
21 from this document that Century filed in the court of appeals
22 that you oppose -- that you chose not to appeal on behalf of
23 the Trust?
24 A. It says that.
25 Q. I'm sorry?
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SUPP APP 1187
Seidel - Cross 47
1 A. It says that the trustee refused to authorize the appeal.
2 Q. Okay. Exhibit 60. This is the motion for extension of
3 time that Century filed in the court of appeals.
4 A. Yes.
5 Q. It states again on page 1 that it's being filed by
6 Century Surety Company. No indication that it's being filed
7 by you or with your permission. Right?
8 A. Correct.
9 Q. Again, if you'd turn to page 6. Paragraph 11, same
10 sentence from the other document. Painfully apparent
11 that -- from Century's papers filed in the court of appeals
12 that you do not -- you have not chosen to appeal the judgment.
13 Right?
14 A. It says the same sentence, trustee refused to authorize
15 this -- the appeal.
16 Q. Exhibit 61. This is a supplement that Century filed in
17 the court of appeals. Let me ask you first, are Exhibit 58,
18 59, 60, and 61, are they all the documents that Century has
19 filed in the court of appeals to date?
20 A. My understanding. I'm not positive.
21 Q. Okay.
22 A. If you say so, I believe you.
23 Q. Turn to the page, page 1 on this one as well.
24 A. Yes, sir.
25 Q. It plainly states it's being filed by Century Surety
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SUPP APP 1188
Seidel - Cross 48
1 Company, right?
2 A. It says Century Surety Company.
3 Q. Doesn't say anything about filing it with your permission
4 or on your behalf, right?
5 A. Correct.
6 Q. Now, Exhibit 67. This is a response that your lawyers
7 filed on your behalf in the court of appeals objecting to
8 Century's efforts to intervene. Right?
9 A. Yes, sir.
10 Q. Now, you would agree with me, wouldn't you, sir, that
11 there's absolutely no confusion or could be absolutely no
12 confusion in the court of appeals as to whether or not you
13 chose to appeal this judgment?
14 A. This makes it -- this response of the trustee obviously
15 alerts anyone to that fact.
16 Q. Yes. And it makes it painfully obvious that you object
17 in the court of appeals to Century being able to intervene in
18 the appeal, right?
19 A. Yes.
20 Q. And that's an issue that's joined right now in the Dallas
21 Court of Appeals.
22 A. My understanding. Yes, sir.
23 Q. Now, you'd agree, sir, that one of your jobs as trustee
24 is to defend contested claims?
25 A. Yes.
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SUPP APP 1189
Seidel - Cross 49
1 Q. Now, you made the decision, if I understand your prior
2 testimony, not to appeal this twenty million dollar judgment.
3 Right?
4 A. Yes.
5 Q. And that is true even though you believed that there were
6 valid appeal points. Right?
7 A. No.
8 Q. If you'd look at Exhibit 33, please. Exhibit 33 is a
9 letter that your lawyers sent to Century shortly after the
10 judgment was entered in the Doe action, right?
11 A. Yes.
12 Q. In the next to the last paragraph on page 2, first,
13 you're requesting Century to provide for an appeal.
14 A. Yes.
15 Q. That's right?
16 A. Yes.
17 Q. And in the next sentence you're saying the trustee
18 believes that there may be valid appeal points. Right?
19 A. It says there may be valid appeal points.
20 Q. And that's a true statement, right? You believe there
21 may be valid appeal points.
22 A. There may be valid appeal points. You have a twenty-one
23 million dollar judgment. There may be valid appellate.
24 Q. And obtaining a reversal of that judgment against the
25 Trust, that twenty million dollar judgment, that'd be a
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SUPP APP 1190
Seidel - Cross 50
1 positive thing, wouldn't it?
2 A. Yes.
3 Q. Okay.
4 A. If you can assure me that that's the only thing that can
5 happen here.
6 Q. Well, what Century has asked -- is going to ask the Court
7 to do, as far as you understand it, is to get the judgment
8 reversed. Right?
9 MR. HESSE: Objection, Your Honor. That's
10 speculation. How could this man known what Century will ask
11 in the future? objection
12 MR. BOWEN: Fair enough. I withdraw that question,
13 Your Honor.
14 THE COURT: Okay.
15 Q. Now, you testified that, I believe, if I heard you
16 correctly, you were concerned about a remand and maybe it had
17 to be tried again.
18 A. That is a concern.
19 Q. Okay. Now, you understand, sir, don't you, that before
20 there could be a remand there would have to be a reversal of
21 this twenty million dollar judgment, right?
22 A. Yes.
23 Q. Okay. And in the event of a remand, your concern is that
24 it would be tried again. Right?
25 A. It would be. Yes.
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SUPP APP 1191
Seidel - Cross 51
1 Q. How much did you pay the law firm you hired to try this
2 lawsuit?
3 A. I believe it was twenty-five.
4 Q. Twenty-five thousand dollars?
5 A. Thousand. Right. A lot less than twenty million.
6 Q. A whole lot less than twenty million dollars, right?
7 A. Yes, sir.
8 Q. Now, if Century were allowed to appeal this judgment, it
9 wouldn't cost you a dime, would it?
10 MR. HESSE: Objection. Speculation.
11 THE COURT: Overruled.
12 A. If Century were allowed, yeah, it would not. It should
13 not cost me any money.
14 Q. If Century were allowed to appeal would it, as far as you
15 know, jeopardize any of your coverage arguments that you're
16 making in the Dallas Federal District Court?
17 A. Could you repeat that question? I'm sorry.
18 Q. Fine. If Century were allowed to appeal --
19 A. Yes.
20 Q. -- without your consent, without your agreeing, would it,
21 as far as you know, jeopardize any of your coverage arguments
22 in the Dallas Federal District Court
23 A. I'm not sure of that.
24 THE COURT: If we could -- I know you're -- this is a
25 critical area, but if we could take just a short recess? We
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SUPP APP 1192
Seidel - Cross 52
1 have two matters on our 10 o'clock docket that --
2 MR. BOWEN: Okay.
3 THE COURT: -- that one's telephonic and one is
4 short. I think both are short. Y'all could leave the
5 courtroom if you want to for, I would think, less than ten
6 minutes, all right?
7 MR. BOWEN: All right.
8 THE COURT: Mr. Seidel, during the recess do not
9 speak with anyone about your testimony, including your
10 attorneys. Do you understand that?
11 THE WITNESS: Yes, Your Honor.
12 THE COURT: Okay. We'll do a CourtCall for the 10
13 o'clock, and if y'all could just be back in a few minutes.
14 (Recess from 10:01 a.m. until 10:17 a.m.)
15 THE COURT: Sorry about that.
16 MR. BOWEN: Oh. We're not the only case on the
17 Court's docket, are we?
18 THE COURT: Ready?
19 MR. BOWEN: I am, Your Honor.
20 THE COURT: You may proceed. Wait. One unusual
21 move, I couldn't see Mr. Rukavina, he's so tall. But he's
22 back there.
23 You may proceed.
24 BY MR. BOWEN:
25 Q. Mr. Seidel.
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SUPP APP 1193
Seidel - Cross 53
1 A. Yes, sir.
2 Q. After you requested Century to pay for your appeal and
3 told them that you believe there may be meritorious grounds,
4 if I understand correctly, there was a period of several weeks
5 there where the parties went back and forth and discussed that
6 topic. Right?
7 A. It would -- yes. Many, many times.
8 Q. Okay. And if you'd look at Exhibit 47, please?
9 A. 47. I have it.
10 Q. Just to put this in context, this is a letter from Hunton
11 & Williams to your counsel talking about that issue of whether
12 or not you're going to appeal. Right?
13 A. Yes, sir.
14 Q. And this is after, I want to say, three months of
15 discussions on the topic?
16 A. Yes, sir.
17 Q. And this is on the appellate deadline. Right?
18 A. Yes, sir. .
19 Q. Okay. And then attached to that is a stipulation. Just
20 so we're clear. This is a stipulation that counsel for
21 Century wrote up and sent to you for your agreement that sets
22 forth the terms under which they were offering to fund the
23 appeal if you would appeal the judgment. Right?
24 A. And at 5 o'clock on the deadline date Century sent us
25 this proposal that didn't incorporate all our demands.
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SUPP APP 1194
Seidel - Cross 54
1 Q. Okay. You gave your deposition yesterday, right?
2 A. I did.
3 Q. And would you agree with me that your decision not to
4 appeal had nothing to do with the time of day that this letter
5 came in. Is that a fair statement?
6 A. That's a fair statement.
7 Q. All right. I mean, if it had come in on the 25th or at 8
8 a.m. on the 26th, your decision not to appeal would have been
9 the same. Right?
10 A. Yeah. Under these circumstances.
11 Q. Okay. And if you look at the stipulation -- I want to
12 make sure it's clear what Century's willing to do -- point 1,
13 Century's offering -- part of Century's offer is that you'll
14 pursue an appeal of this twenty million dollar judgment on
15 behalf of the Trust under a full reservation of your rights.
16 Do you see that, point 1?
17 A. I do.
18 Q. Point 2, Century agreed to be the sole source of funds.
19 They were going to pay one hundred percent of the costs of the
20 appeal. Right?
21 A. Right.
22 Q. Point 3, you would accept Century's offer to fund the
23 appeal under a full reservation of its rights. Right?
24 A. That's what it says.
25 Q. So basically everybody's going to keep their powder dry.
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SUPP APP 1195
Seidel - Cross 55
1 They're going to argue -- everybody's going to keep their
2 arguments that they have at the time, argue about it later.
3 Right?
4 A. I don't know about that.
5 Q. Well, that's what they're offering. Both sides offer
6 under a full reservation of rights.
7 A. That's what -- that --
8 Q. That's the point, right?
9 A. It says full reservation of rights.
10 Q. Goes on to say that you, and you alone, will get to
11 select qualified and appropriate independent appellate
12 counsel. Right?
13 A. It says that.
14 Q. In point 5, trustee and independent appellate counsel
15 will direct the appeal. So you would get the chance of not
16 only picking counsel but telling them what arguments to make
17 and what arguments not to make on appeal. Right?
18 A. It says direct the appeal.
19 Q. Solely up to you. Right?
20 A. It says direct appeal. Yes, sir.
21 Q. So if you chose -- if it were your wish to tell them to
22 argue only reverse and render points as opposed to reverse and
23 remand points, that'd be something that you could control.
24 Right?
25 A. Yes.
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SUPP APP 1196
Seidel - Cross 56
1 Q. If it was your desire to have them not attack specific
2 findings of fact that you thought were so important, something
3 you could have controlled, right?
4 A. It says "direct the appeal", yes.
5 Q. All right. You're familiar with the Gruber Hurst law
6 firm, right?
7 A. Yes, sir.
8 Q. Gruber Hurst is the law firm who obtained the twenty
9 million dollar judgment against Pastazios?
10 A. Yes, sir.
11 Q. Gruber Hurst is the law firm who brought you in as
12 trustee.
13 A. Yes. That's fair. I mean, they interviewed me.
14 Q. Gruber Hurst is the one --
15 A. The judge is the one that brought me in as trustee, in
16 other words.
17 Q. Gruber Hurst is the one who first identified you and
18 brought you into this case, right?
19 A. Yes.
20 Q. Isn't it true that three days before you made your
21 decision not to appeal Gruber Hurst threatened to sue you if
22 you filed a notice of appeal?
23 A. I get threatened all the time, but yes, they did, and --
24 Q. Look at Exhibit 43, please. The top of page 2.
25 "If the trustee appeals the state court" --
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SUPP APP 1197
Seidel - Cross 57
1 A. I'm sorry. I lost you.
2 Q. All right. Top of page 2, the first full sentence. It
3 starts with the word --
4 A. On what exhibit?
5 Q. Oh.
6 A. I thought you said 43.
7 Q. It is 43.
8 A. 43.
9 Q. Page 2.
10 A. Yes. The letter from Gruber.
11 Q. Right. Page 2.
12 A. Okay.
13 Q. Top of the page.
14 "If the trustee appeals the state court judgment he would
15 be breaching his fiduciary duties to the Trust beneficiaries,
16 including Ms. Doe."
17 See that?
18 A. I see that.
19 Q. So on the one hand, you have Century offering to pay for
20 the appeal. You reserve your rights, and you get to choose to
21 direct the appeal. On the other hand, you have the firm who
22 brought you into this thing threatening to sue you if you do
23 appeal. Right?
24 A. Yes. I get threatened all the time. I don't pay
25 attention to it.
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SUPP APP 1198
Seidel - Cross 58
1 Q. You didn't answer my question, sir.
2 A. Um-hum.
3 Q. Is it correct to say that Gruber Hurst brought you into
4 this bankruptcy proceeding, before you were ever appointed
5 trustee, for the purpose of suing Century, as opposed to
6 defending the claims that they were bringing against
7 Pastazios?
8 A. No, sir.
9 MR. HESSE: Objection, Your Honor. That would be
10 speculation.
11 MS. DELEON: I'll join the objection.
12 THE COURT: Sustained.
13 Q. If you would look at Exhibit 11, please, sir. This is an
14 e-mail exchange between you and Jeff Erler at Gruber Hurst way
15 back in February of this year. Is that right?
16 A. Yes.
17 Q. It's before you were appointed trustee. Is that correct?
18 A. Yes.
19 Q. It was months before Gruber Hurst was able to obtain a
20 judgment against Pastazios. Right?
21 A. Yes.
22 Q. So as you understood it at the time, after you got your
23 hands around it, Gruber Hurst's client was a claimant, was a
24 proposed creditor of the estate, bankruptcy estate. Right?
25 A. Yes, sir.
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SUPP APP 1199
Seidel - Cross 59
1 Q. And the first e-mail that Gruber Hurst sent to you on
2 February 18th is Mr. Erler saying we anticipate appointing a
3 litigation trustee, and he'd like to visit with you
4 potentially about serving in that role. You see that?
5 A. I see it.
6 Q. Then you asked him for information on that a couple of
7 days later if she could run your conflicts.
8 A. Yes, sir.
9 Q. And his response to you is the primary litigation target
10 for the litigation trust is Century Surety Company. Right?
11 A. It says that. Yes, sir.
12 Q. So before you were ever hired and appointed, Gruber Hurst
13 contacted you, brought you on to sue Century to cover a
14 judgment that they planned to get against Pastazios. That sum
15 it up?
16 A. No. The way I take this is that there's a potential that
17 there's a claim. If things go the way that it may go, Century
18 may be an adverse party, and so that's what I was running a
19 conflict check on.
20 Q. Well, they don't tell you Jane Doe's name. Right?
21 A. Right.
22 Q. She's clearly an adverse party at that point. She's
23 their client, right?
24 A. Correct.
25 Q. They don't say your initial adverse party will be Jane
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SUPP APP 1200
Seidel - Cross 60
1 Doe, do they?
2 A. They do not.
3 Q. But that was the reality of the situation. When you were
4 hired your first job was to defend Jane Doe's claims against
5 Pastazios. Right?
6 A. Yes.
7 Q. And it's your job as a trustee.
8 A. Yes.
9 Q. Right? Now, --
10 A. I did that.
11 Q. Exhibit 68, sir.
12 A. Yes.
13 Q. Now that's the creditor trust agreement that you talked
14 about earlier.
15 A. Hold on a second. Okay.
16 Q. And this is the one that was signed. Right?
17 A. Yes.
18 Q. And you didn't have anything to do with drafting this,
19 did you?
20 A. I did not, sir.
21 Q. All right. But you do understand that this trust
22 agreement includes the concept of a trust advisory board.
23 Right?
24 A. Yes. We've talked about that at length.
25 Q. Okay. And then we also talked about -- and if you'd turn
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SUPP APP 1201
Seidel - Cross 61
1 to page 17 of it, there's a blank as to who the trust advisory
2 board is to be. Right?
3 A. Right. We've been --
4 MR. RUKAVINA: Your Honor, I object to relevance
5 grounds. And hear me out for a moment.
6 This is the second time now that Century comes to
7 Your Honor and says that there are standing issues with this
8 Trust, but we shouldn't try them today, so don't make a
9 finding, Judge. And then they go into evidence on this. So
10 either they can play by the rules and interject the issue, and
11 Your Honor can make a ruling, and we'll live by it, or this
12 has no relevance to today's hearing.
13 THE COURT: Response on relevance?
14 MR. BOWEN: Your Honor, make no mistake about it.
15 What's going on today is they're asking the Court help them,
16 essentially, uphold this judgment. And this document requires
17 Mr. Seidel to only move forward under the guidance and review
18 of a trust advisory board that was never appointed.
19 The obvious fact from looking at this is that the
20 idea in this situation is to have an independent third-party
21 professional serve on the trust advisory board. What the
22 evidence is going to show in a minute is that Godwin Gruber,
23 Jeff Erler, the same man who hired him to be trustee,
24 considered himself to be the sole member of this trust
25 advisory board.
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SUPP APP 1202
Seidel - Cross 62
1 So what the evidence is going to show is if it worked
2 out the way Godwin Gruber wanted, Godwin Gruber would have
3 been the plaintiff, sued Pastazios, and the sole member of the
4 advisory board overseeing and guiding the trustee, who had the
5 right to fire the trustee. I believe that's plainly relevant
6 to their efforts today to try to interfere with Century's
7 appeal of this judgment.
8 THE COURT: Help me on how it's relevant on the
9 narrow issue that's in front of the Court today.
10 MR. BOWEN: Well, Your Honor, I believe they've come
11 into this court and they've essentially asked the Court -- the
12 Court's not considering whether the plan's valid. I
13 understand that. What they're asking the Court to do is,
14 essentially, I believe, enter an injunction either stopping
15 Century from or limiting Century's rights on appeal or forcing
16 Century to file something that says it does not seek this. It
17 does not move for the benefit of the trustee.
18 The trustee's filed this motion asking for that
19 relief. And he's self-interested. He gets five percent of
20 the recovery. And this was all prewired by the Gruber Hurst
21 law firm.
22 THE COURT: Mr. Rukavina?
23 MR. RUKAVINA: Your Honor, again I have no problem
24 trying that fully and fairly, but then Century can't say oh,
25 and, Judge, whatever your ruling, it's not binding on us.
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SUPP APP 1203
Seidel - Cross 63
1 THE COURT: Sustained on relevance.
2 MR. BOWEN: All right. I'm going to ask a question,
3 and I'm not sure if this was covered by your objection.
4 BY MR. BOWEN:
5 Q. Am I correct, sir, that whenever you made the decision
6 not to appeal you were not acting under the guidance and
7 supervision of a Trust or trust advisory board that's in this
8 agreement approved by the Court?
9 MR. RUKAVINA: Your Honor, I would object to
10 relevance, to legal conclusion, and also mischaracterizing
11 what happened. There was no trust advisory board. Moreover,
12 the trust agreement doesn't require him to consult with the
13 trust advisory board regarding the Doe claim.
14 THE COURT: Sustained on relevance.
15 Q. You are going to recover five percent of whatever
16 judgment you get against Century, right? You personally.
17 A. I will recover five percent of any dollars I touch, which
18 at this point is de minimis, and we've spent hundreds of
19 thousands of dollars.
20 Q. Right. But if you get a twenty million dollar judgment
21 against Century, based on this twenty million dollar judgment
22 that you have against you, you get five percent of that.
23 A. If twenty million dollars comes into the Trust, I would
24 get five percent.
25 Q. Okay.
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SUPP APP 1204
Seidel - Redirect 64
1 MR. BOWEN: I pass the witness, Your Honor.
2 THE COURT: Mr. Rukavina?
3 REDIRECT EXAMINATION
4 BY MR. RUKAVINA:
5 Q. Has your desire or hope for a commission motivated any
6 single action that you have taken in this --
7 A. Absolutely not. It's disgusting that that's even being
8 asserted.
9 Q. And if you had defeated the Doe claim in front of Judge
10 Ginsberg that means zero dollars, would you have been paid a
11 lick in this case?
12 A. I would have gotten 5 percent on 50,000 dollars, and I've
13 had a little time in the case, and that'd be it.
14 Q. So in --
15 A. But the fifty --
16 Q. So in --
17 A. This five percent commission is not driving what I'm
18 doing here.
19 Q. In fact, you were jeopardizing your own commission by
20 litigating the Doe claim in front of Judge Ginsberg.
21 A. Absolutely, but that's what trustees do.
22 Q. Now, you were asked about this Exhibit 11. You don't
23 have to look at it again. But did Mr. Erler ever tell you not
24 to contest the Doe claim?
25 A. No, sir, he did not.
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SUPP APP 1205
Seidel - Redirect 65
1 Q. Did Mr. Erler ever try to influence on how you would
2 contest the Doe claim?
3 A. No, sir, he did not.
4 Q. Other than Exhibit 43, which we'll get to in a moment,
5 did Gruber Hurst ever give you any input on how you should
6 defend the Doe claim on behalf of the Trust?
7 A. No.
8 Q. With respect to Exhibit 43, the one where they allege
9 that you're breaching your fiduciary duty if you appeal, did
10 you have me go do something about this?
11 A. I had you slap him down.
12 Q. And were they slapped down?
13 A. They were slapped down.
14 Q. Did you consider it in your decision --
15 THE COURT: Is that a legal term, Mr. Seidel?
16 THE WITNESS: It's a legal term, Your Honor.
17 Q. Did you consider their threat in this letter in any way,
18 shape or form in ultimately deciding not to appeal?
19 A. No. I was threatened by both sides in this matter no
20 matter what I did. Century said I would vitiate coverage if
21 we did this or didn't do that. Jane Doe said they'd sue me if
22 I did this or didn't do that. That rolls off my back.
23 Q. Mr. Seidel, why don't we look at their motion to
24 intervene, please, that counsel asked you about in my
25 exhibits? It is going to be DDD, Davor, Davor, Davor. The
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SUPP APP 1206
Seidel - Redirect 66
1 Davor cube.
2 A. Must be a good one.
3 THE COURT: Did you say triple D?
4 MR. RUKAVINA: Triple D as in David, Your Honor.
5 A. DDD. I have it, sir.
6 Q. Go back to that page 1, which doesn't have a page number
7 on it.
8 A. Okay.
9 Q. Do you see where it talks about Pastazios and Century
10 will suffer prejudice if Century is not permitted to intervene
11 and pursue reversal of the final judgment against Pastazios?
12 A. You keep using the name Pastazios, our debtor.
13 Q. And on page 7 -- if we go to page 7, paragraph 15,
14 "With the deadline to file a notice of appeal having
15 passed, Century is now compelled to participate in the appeal
16 in order to protect Pastazios' interest".
17 Is that what it says?
18 A. That's what it says, sir.
19 Q. And if we go to page 8 and 9.
20 "Without Century's participation in this appeal Pastazios
21 will face joint and several liability that is incompatible
22 with Texas law."
23 Do you see that?
24 A. I see that, and that's what it says, sir.
25 Q. And on page 9,
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SUPP APP 1207
Seidel - Redirect 67
1 "If the improper judgment against Pastazios stands,
2 Pastazios will suffer extreme prejudice."
3 Do you see that?
4 A. I see that, and that's what it says, Pastazios.
5 Q. Who gets to decide whether the Trust suffers prejudice or
6 not?
7 A. I do.
8 Q. Who gets to decide who controls the defense of the Doe
9 claim?
10 A. I do.
11 Q. If you go to page 12 it talks about how it would be
12 inequitable to allow the Doe judgment, et cetera, et cetera.
13 Then it says,
14 "Such a result will prejudice Pastazios while increasing
15 the trustee's potential compensation, which raises the
16 question of whether the trustee has a conflict of interest."
17 Do you see that?
18 A. I see that.
19 Q. On page 17, if we go forward on page 17, where it begins
20 with "On the other hand", "Pastazios would suffer prejudice if
21 Century does not appeal".
22 Do you see that?
23 A. I see -- that's exactly what it says.
24 Q. And finally, it talks about, in the middle of the
25 paragraph or the page there,
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SUPP APP 1208
Seidel - Redirect 68
1 "Century's intervention under these circumstances will
2 serve to protect Pastazios."
3 A. Pastazios.
4 Q. So do you feel like we're being unreasonable, or that
5 we're just way out there in cuckoo land by reading this to be
6 an appeal for Pastazios?
7 A. No, I don't. And I think this is a tremendously unusual
8 circumstance, and I think we were compelled to bring this to
9 the Court's attention, and that's what we're doing.
10 Q. Yes. Have we asked Century to clarify that it is not
11 seeking appellate relief for the Trust?
12 A. Yes. A very simple one sentence would do it.
13 Q. Has Century ever given us anything like that?
14 A. Not to my knowledge. In fact, they refused.
15 Q. Okay. Do you have any explanation for why they would
16 refuse to give you that if they were not, in fact, trying to
17 appeal for the Trust?
18 A. I don't.
19 Q. Okay. Now, I'm going to take you through some other
20 documents, and I'm going to try to be brief, so we're not
21 going to go through all of them.
22 A. Okay.
23 Q. But we're going to study my exhibits this time. Okay?
24 A. Yes, sir.
25 Q. Exhibit Z, as in zebra. This is the same July 14th
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SUPP APP 1209
Seidel - Redirect 69
1 document that counsel had you look at where you notified
2 Century of the judgment --
3 A. Right.
4 Q. -- and requested a defense.
5 A. Right.
6 Q. Here. Now let's go to Exhibit AA.
7 A. AA. I'm with you.
8 MR. RUKAVINA: I'll move to admit Exhibit AA, Your
9 Honor. It's my letter. I can authenticate it.
10 MR. BOWEN: I thought it had already been admitted,
11 but there's no objection.
12 THE COURT: AA is in.
13 (Mr. Rukavina's letter was hereby received into evidence as
14 Trustee's Exhibit AA, as of this date.)
15 Q. Now, you'll see that I'm writing there a paragraph that
16 says,
17 "As an initial matter, let me make clear that we will
18 provide all reasonable cooperation to Century concerning a
19 potential appeal."
20 A. Yes.
21 Q. "As we previously informed you, the trustee lacks the
22 resources to prosecute an appeal."
23 Were both of those sentences true and correct?
24 A. Yes, sir.
25 Q. Do you believe that we provided all reasonable
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SUPP APP 1210
Seidel - Redirect 70
1 cooperation to Century concerning an appeal?
2 A. Yes.
3 Q. Is it true that the Trust lacked the funds to prosecute
4 an appeal?
5 A. Yes.
6 Q. How much would an appellate lawyer have cost the Trust?
7 A. Anywhere from 30 to 100,00 dollars.
8 Q. And did the --
9 A. Probably more.
10 Q. Did the Trust have those funds?
11 A. No.
12 Q. Okay. Now we'll skip a couple of these others to try to
13 focus on what's relevant for today. And go to Exhibit DD,
14 David, David. This a letter sent by Century to you? Have you
15 seen this letter before?
16 A. I see DD, the letter to Davor.
17 Q. Yes.
18 A. I've seen it.
19 Q. Okay. And it says right there,
20 "Century Surety Company has decided to participate in the
21 ongoing defense of Pastazios, the insured, subject to a full
22 reservation of rights of all coverage issue."
23 Do you see that?
24 A. I do.
25 Q. Okay. "This will be subject to the reservation of rights
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SUPP APP 1211
Seidel - Redirect 71
1 previously sent and a supplemental reservation of rights to be
2 supplied later."
3 Do you see that?
4 A. I see that.
5 Q. Anywhere in there does Century talk about funding an
6 appeal?
7 A. No.
8 Q. Did you have any problem with Century reserving its
9 rights on the coverage issues? That means that Century would
10 say notwithstanding our funding for you, we deny coverage and
11 reserve all of our rights to litigate coverage. Would you
12 have any problem with that?
13 A. Yes.
14 Q. What problems did you have?
15 A. Well, not -- with the reservation of rights we're okay.
16 Q. Okay. So, in other words, you didn't have a problem with
17 Century reserving --
18 A. Not with the reservation of rights.
19 Q. What problem did you have?
20 A. What I had -- what one of the lawyers at your firm
21 pointed out is we had to be --
22 MR. BOWEN: Objection, Your Honor. Hearsay.
23 THE COURT: Sustained on that.
24 MR. RUKAVINA: Don't talk about what --
25 THE WITNESS: Okay. I'm done.
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SUPP APP 1212
Seidel - Redirect 72
1 MR. RUKAVINA: -- what someone told you.
2 Q. What problem did you personally have with respect to what
3 Century was talking about?
4 A. What we had to make sure here is that we weren't allowing
5 Century to escape liability for previous breaches and/or
6 revive any rights and obligations by virtue of getting this
7 appeal done.
8 Q. Do you have an understanding of what a duty to cooperate
9 is in the insurance world?
10 A. A vague one.
11 Q. What is your understanding?
12 A. That Century can, kind of, call the shots on what's being
13 appealed and appellate points, et cetera.
14 Q. Okay. And was it your position that that duty existed or
15 didn't exist any longer as of this time?
16 A. Yes. That they had breached, and so their duty had
17 lapsed or evaporated.
18 Q. And is that the duty that you were worried about reviving
19 if Century now --
20 A. Yes.
21 Q. -- funded an appeal?
22 A. Very much. Very much so, because I was
23 worried -- concerned that they would try to vitiate coverage.
24 MR. RUKAVINA: Okay. Your Honor, I'll move to admit
25 DD.
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SUPP APP 1213
Seidel - Redirect 73
1 MR. BOWEN: No objection, Your Honor.
2 THE COURT: DD's in.
3 (Letter from Century Surety Company to Mr. Seidel was hereby
4 received into evidence as Trustee's Exhibit DD, as of this
5 date.)
6 Q. Now, let's go to Exhibit EE.
7 MR. RUKAVINA: Again, this is a letter from me, which
8 I'll authenticate and I'll ask to admit. Edward, Edward.
9 MR. BOWEN: No objection, Your Honor.
10 THE COURT: EE is in.
11 (Letter from Mr. Rukavina to Century Surety Company was hereby
12 received into evidence as Trustee's Exhibit EE, as of this
13 date.)
14 Q. Now, the judge can read this letter for himself, but
15 explain to me what prompted us to send this letter to Century?
16 A. It was -- time was running out. We had a month or so to
17 either appeal or not appeal, and we'd been playing around with
18 this. So we wanted a definitive agreement, which had the
19 offer that the trustee could accept for Century to fund an
20 appeal.
21 Q. Okay.
22 A. And this articulated the require --
23 Q. And you gave Century two alternative offers. Correct?
24 A. Correct.
25 Q. And the first one speaks for itself. It's just Century
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SUPP APP 1214
Seidel - Redirect 74
1 admits liability and can do what it wants on the appeal. Did
2 Century accept that offer?
3 A. No. They've always denied liability, which is such an
4 interesting thing that we're all here.
5 Q. The second offer contains five conditions. And the judge
6 can read them for himself, but explain to the judge the point
7 of these five conditions.
8 A. We had to be extremely cautious that we were not
9 prejudicing creditors' rights with regard to any ability to
10 recover. So what we were doing was putting that all in
11 writing and getting it all down so that if there was a funding
12 of an appeal there was to be no tricks. There was to be no
13 revival of rights, duties, et cetera. We were just going to
14 do an appeal.
15 Q. With your independent counsel?
16 A. With my independent counsel.
17 Q. And you alone would make the determination?
18 A. Only me.
19 Q. And then point one, I think, is the key, that the
20 trustee's agreement would in no way revise any alleged
21 obligation under the policy or law, including any alleged duty
22 to cooperate with Century.
23 Now, if there was a duty to cooperate, and Century wanted
24 the appeal pursued in a particular way, and you said no, I
25 don't want to do that, were you concerned about what the
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SUPP APP 1215
Seidel - Redirect 75
1 result would be?
2 A. Yes. I was concerned that they could control the trustee
3 of the Trust on those issues.
4 Q. And if you didn't do what they want then they'd say no
5 coverage.
6 A. That's exactly right.
7 Q. Okay. And the last sentence of this paragraph reads,
8 "The Rule 11 agreement would also contain provisions
9 agreeable to the trustee that Century would want to protect
10 its position and ensure that it is not prejudiced."
11 What was the point of that?
12 A. It's a two-way deal. I understand that they have to
13 protect themselves too, so we put that sentence in there.
14 Q. Okay. Prior to October 26th, the letter that counsel
15 asked you about, did Century ever send us a proposed
16 agreement?
17 A. No, they never did.
18 Q. Okay. Now, we can again skip some of these. I do want
19 to talk to you about Exhibit HH, but actually I want to talk
20 to you about it with respect to Century's Exhibit 38. Do you
21 have Century's Exhibit 38 anywhere handy?
22 A. Yeah, I can find it.
23 Q. Century's Exhibit 38 includes a memorandum to Mr. Meyer
24 Acentury (ph.) from Charlie Frazier, Century's appellate
25 counsel.
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SUPP APP 1216
Seidel - Redirect 76
1 A. Yes.
2 Q. Did you review this memorandum?
3 A. I did.
4 Q. And in this memorandum Century's appellate lawyer is
5 providing several possibilities on how the judgment could be
6 attacked. Correct?
7 A. Correct.
8 Q. What is, in your opinion, the result on coverage if any
9 of these five potential attacks are made?
10 A. To be --
11 MR. BOWEN: Objection, Your Honor. Lacks foundation.
12 THE COURT: Response?
13 MR. RUKAVINA: Your Honor, it's just his opinion.
14 THE COURT: Overruled. Goes to the weight to give
15 it.
16 A. Could be harmed.
17 Q. Do you believe that these five appellate points were
18 geared more towards denial of coverage than a reversal of the
19 judgment?
20 A. I do.
21 Q. Okay. Now let's go back to my exhibits, please.
22 A. Yes, sir.
23 Q. And we'll go to Exhibit KK.
24 MR. RUKAVINA: This is my letter. I can authenticate
25 it. I move to admit Exhibit KK.
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SUPP APP 1217
Seidel - Redirect 77
1 MR. BOWEN: No objection, Your Honor.
2 THE COURT: KK is in.
3 (Letter from Mr. Rukavina was hereby received into evidence as
4 Trustee's Exhibit KK, as of this date.)
5 Q. This is three days before the appeal deadline, correct?
6 A. Three days before the appeal deadline.
7 Q. Okay. And we still -- we write that we are confused by
8 your letter. Were we confused?
9 A. We were totally confused. We didn't know what they're
10 doing.
11 Q. So ultimately in this letter we conclude if Century has a
12 firm offer to make and to avoid any confusion, the trustee
13 requests that Century promptly send a proposed Rule 11
14 agreement that would contain the definitive terms of Century's
15 proposal. The trustee will be available all weekend to review
16 and consider the same.
17 What was the point of sending that communication?
18 A. You -- time was out. We had to make a call now.
19 Q. This was a Friday?
20 A. This was a Friday.
21 Q. Were you and I available all weekend?
22 A. We made ourselves. We weren't, but we made ourselves.
23 Q. And did we conclude Century should not rely on or
24 interpret this letter to suggest that the trustee will appeal.
25 Do you see that?
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SUPP APP 1218
Seidel - Redirect 78
1 A. I see that.
2 Q. Had you made a decision by then to appeal or not?
3 A. I had not.
4 Q. Okay. LL is the same document. I apologize. MM is the
5 same document that counsel asked you to looked at.
6 A. The Rule 11 agreement?
7 Q. No. Hold on. I'm wrong about that. I apologize. There
8 were two October 26th letters. Let's go to NN, Nancy, Nancy.
9 This is the same that counsel had you look at. Let's just
10 look at it here, because we don't have to shuffle binders that
11 way.
12 A. Okay.
13 Q. Three days later, after this letter -- was that the first
14 time that Century sent a proposed document?
15 A. Yes.
16 Q. Okay. And what time did we get that?
17 A. It was 5 o'clock. People had left the offices for the
18 day.
19 Q. And this is the appeal deadline itself?
20 A. This is the deadline.
21 Q. Did you ignore this letter, or did you do anything about
22 it?
23 A. I absolutely didn't. We scrambled every -- we found
24 people out at dinner, interrupted dinners and things. At 7
25 o'clock at night we got four lawyers on the phone talking
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SUPP APP 1219
Seidel - Redirect 79
1 about this.
2 Q. Did you consider the stipulation attached here too to be
3 a proposed defendant of the document?
4 A. I did not.
5 Q. Why?
6 A. Because it has this footnote about an agreement where
7 they're going to --
8 Q. Read that footnote on the first page of the letter, sir.
9 A. Footnote on page 1 says,
10 "We can continue working on the stipulation language
11 after the notice of appeal is filed."
12 Q. And how did you view that?
13 A. I took that as an agreement to agree in the future that
14 if we can come to an agreement, which --
15 Q. And do you have --
16 A. It's been -- that's --
17 Q. -- an understanding as to whether an agreement to agree
18 is enforceable?
19 A. It's -- not when I was in law school.
20 Q. Was the stipulation signed?
21 A. It was not signed.
22 Q. Was that a concern for you?
23 A. Yes, it was, because now I would -- they would have me
24 sign it, and be binding on me but not on them.
25 Q. Okay. And let's look at point 6 of their proposed
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SUPP APP 1220
Seidel - Redirect 80
1 stipulation.
2 A. Yes, sir.
3 Q. And let's read this, and I'm going to interject little by
4 little, and I'm going to ask you questions. So bear with me.
5 A. Yes, sir.
6 Q. So "Century and PPI Creditor Trust each fully reserve and
7 retain their respective rights, if any, under the Century
8 insurance policy at issue in this action and any potentially
9 applicable law."
10 No problems there, right?
11 A. Right.
12 Q. "This agreement will in no way modify or revise any
13 alleged duty or obligation under the policy or law."
14 Exactly what you want, right?
15 A. Yup.
16 Q. "As it exists on the date of this agreement, October 26,
17 2015."
18 Do you recall that?
19 A. I had a tremendous problem with that?
20 Q. Why?
21 A. Because on October 27th if they funded then everything is
22 off. All bets are off, and we're right back. We're stepping
23 right into the trap we were so concerned about.
24 Q. Do you feel like you were being set up?
25 A. I do.
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SUPP APP 1221
Seidel - Redirect 81
1 Q. Can you think of any reason why they would insert that
2 date there other than to revive the duty to cooperate on
3 October 27th?
4 A. No.
5 Q. After you've gone through this experience with Century,
6 do you have a view as to whether you believe that they were
7 negotiating with you in good faith or not?
8 A. I do have such a view.
9 Q. And what is your view?
10 A. I do not believe they were negotiating in good faith.
11 Q. And does that view also color your desire that they not
12 control a potential appeal on behalf of the Trust?
13 A. Yes.
14 Q. And do you have any doubt that they will channel that
15 appeal, as their lawyers' memorandum to you says, to destroy
16 coverage?
17 A. I have no doubt.
18 Q. What is the largest asset, if only asset of this estate?
19 A. It's the ability to recover from Century at this point.
20 Q. And do you intend to prosecute that for the benefit of
21 your beneficiaries?
22 A. Yes, sir.
23 MR. RUKAVINA: Pass the witness.
24 THE COURT: Recross?
25 MR. BOWEN: Yes, Your Honor. Thank you.
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SUPP APP 1222
Seidel - Recross 82
1 RECROSS-EXAMINATION
2 BY MR. BOWEN:
3 Q. I don't want to go back through it, sir, but you spoke
4 about some of the passages in the papers that we filed in the
5 court of appeals say extreme prejudice and judgment, reversal
6 of the judgment would benefit the Trust. Remember going
7 through that?
8 A. A little bit. Yes, sir.
9 Q. Isn't it true that a twenty million dollar judgment
10 against you is extreme prejudice?
11 A. Twenty million dollar judgment is a big judgment, yes.
12 Q. Yes. And wouldn't you agree that obtaining the reversal
13 of a twenty million dollar judgment is to your benefit, to a
14 judgment debtor's benefit?
15 A. To have no judgment there would be a benefit to the Trust
16 by virtue of not having that obligation.
17 Q. Okay. You mentioned this issue about revising a duty or
18 some such like that.
19 A. Yes, sir.
20 Q. Is it your testimony that your decision not to appeal
21 this twenty million dollar judgment was based, at least in
22 part, on an effort to preserve insurance coverage?
23 A. There was many aspects that went into the decision.
24 Q. But one of them, was it based on preserving coverage
25 arguments, right?
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SUPP APP 1223
Seidel - Recross 83
1 A. Well, you had -- you had to protect any potential
2 recovery for the Trust, and if that is insurance proceeds then
3 it is insurance proceeds.
4 Q. My question is was one of the reasons -- I understand
5 your testimony there were more than one -- was one of the
6 reasons why you decided not to appeal was based on your desire
7 to not run into coverage problems in the federal district
8 court?
9 A. What was it -- not to revive any duties to cooperate, et
10 cetera.
11 Q. On coverage. Yes, sir?
12 A. Yeah, on coverage so that --
13 Q. I'm sorry. Were you finished?
14 A. So that this Century couldn't be directing any of the
15 appeal, et cetera.
16 Q. Now, I don't know if you recall this, but you've listed a
17 number of reasons why you chose not to appeal. Not one of the
18 reasons why you chose not to appeal was based on the merits of
19 the appeal, was it?
20 A. Century made it easy. We never had to reach that,
21 because they wouldn't get to the deal.
22 Q. Sir, my question is of all the things you considered
23 about whether or not to appeal, none of them was based on
24 whether or not an appeal had merit.
25 A. No, I wouldn't say that's true.
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SUPP APP 1224
Seidel - Recross 84
1 Q. Did you analyze the merits of the appeal?
2 A. I spoke with -- I spoke with counsel concerning the
3 potentials of an appeal.
4 Q. Now, you saw the memo that Mr. Charlie Frazier, the
5 appellate counsel hired by Century, raised about possible
6 arguments that could be made on appeal, right?
7 A. Yes, sir.
8 Q. Now, if you controlled counsel in the appeal, you could
9 instruct counsel what arguments to make, what arguments not to
10 make, right?
11 A. That's correct.
12 Q. You testified about how this stipulation came in from
13 Century at 5 o'clock in the afternoon, right?
14 A. Yes.
15 Q. Now, I want to make sure that we're clear on this. Does
16 it make a -- did it make a difference in your decision to
17 appeal whether it came in at 5 o'clock or 8 a.m. or the day
18 before? It wasn't a matter of timing, was it?
19 A. It shows their callousness with regard to all this. But
20 in terms of where you --
21 Q. I'm not asking you whether they were callous or not, sir.
22 A. Right.
23 Q. I'm asking you whether -- you made a decision after
24 receiving that stipu --
25 A. I --
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SUPP APP 1225
Seidel - Recross 85
1 Q. Let me finish please.
2 A. Yes, sir.
3 Q. You made a decision after receiving that stipulation not
4 to appeal?
5 A. Correct.
6 Q. It wasn't because you ran out of time?
7 A. Correct.
8 Q. You could have gotten an appeal filed in the next seven
9 hours if you wanted to, right?
10 A. Correct.
11 Q. You could have filed a notice of appeal, if for no other
12 reason, to preserve the appellate court's jurisdiction, and
13 just withdrawn it later, right?
14 A. I don't know about withdrawing it later, if there was
15 going to be cross appeals, and I don't know if you can just
16 withdraw it once a cross-appeal is --
17 Q. Okay. Well, you certainly could have -- you know for a
18 fact, you could have filed a notice of appeal if for no other
19 reason, to preserve the appellate jurisdiction, right?
20 A. I could have.
21 Q. Well, let me ask you this. Did you ever look into the
22 possibility of whether there was a period, say, of fifteen
23 days, after October 26th, where you still could have filed a
24 notice of appeal with the permission of the appellate court?
25 A. I'm not sure about that, sir.
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SUPP APP 1226
Seidel - Recross 86
1 Q. You never looked into that possibility, did you?
2 A. I talked to my lawyers. They said --
3 Q. Did you ever look into that possibility, sir?
4 A. Of whether there was additional time after October 26th?
5 Q. Yeah, whether you could have, in fact, perfected an
6 appeal up to November 10th, with the approval of the Court of
7 Appeals. Is that something you analyzed or looked into back
8 on October 26th?
9 A. It was discussed. I discussed it with my lawyers.
10 Q. Okay. So even though -- did you understand at the time
11 that there was a mechanism by which you possibly could get
12 another fifteen days to appeal?
13 A. I'm not sure I did.
14 Q. All right.
15 MR. BOWEN: Pass the witness, Your Honor.
16 THE COURT: Any other questions of your witness?
17 MR. RUKAVINA: A few follow-up, Your Honor.
18 I forgot to move to admit Century Exhibit 38. That's
19 the letter with the memorandum from lawyers. I'd ask to admit
20 Exhibit 38 right now.
21 MR. BOWEN: No objection.
22 THE COURT: Century 38 is admitted.
23 (Letter with memorandum from lawyers was hereby received into
24 evidence as Century's Exhibit 38, as of this date.)
25 REDIRECT EXAMINATION
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SUPP APP 1227
Seidel - Redirect 87
1 BY MR. RUKAVINA:
2 Q. There was this question of timing. Approximately what
3 time did you round up your lawyers on the evening of October
4 26th to discuss Century's proposal?
5 A. I think by the time we got all the lawyers on the
6 conference call, it was 7 o'clock that night.
7 Q. Was that a --
8 A. People were out to dinner. People were at various
9 places.
10 Q. Was that a short or a long call?
11 A. It was a long call.
12 Q. By that time, how much time had gone by while you were
13 discussing with Century the potential mechanism of an appeal?
14 A. A month.
15 Q. Was there any point in responding at 8 p.m. that night?
16 A. Not that I could see.
17 Q. Okay. You concluded that they were not negotiating in
18 good faith?
19 A. That's what we decided.
20 Q. Did you ever have the wherewithal, or did you ever retain
21 an appellate counsel to give you a thorough analysis of
22 whether there were meritorious grounds for appeal?
23 A. This estate had no funds to do that. I can't spend all
24 the money on this. There's a few dollars left, but that's for
25 creditors. I can't spend it all on lawyers.
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SUPP APP 1228
Seidel - Redirect 88
1 Q. So any discussion about the merits of an appeal is
2 largely academic?
3 A. Yes.
4 Q. Do you make it a practice to file a court document just
5 to unfile it later?
6 A. No, I do not.
7 Q. Is that something that you would consider doing, just to
8 preserve an appellate court's jurisdiction when you have no
9 ability to fund that?
10 A. I don't play games like that, no.
11 MR. RUKAVINA: Thank you.
12 THE COURT: Any other questions of this witness?
13 MR. BOWEN: No further questions, Your Honor.
14 THE COURT: You may step down, Mr. Seidel. Thank
15 you.
16 THE WITNESS: Thank you, Your Honor.
17 MR. RUKAVINA: Your Honor, we have no further
18 evidence, and we're prepared for argument.
19 THE COURT: All right. Let's see. Does Doe have any
20 evidence?
21 MS. DELEON: No, we do not, Your Honor.
22 THE COURT: Okay, Mr. Hesse?
23 MR. HESSE: No, we do not, Your Honor.
24 THE COURT: All right. Why don't we take about a
25 five-minute recess for y'all to visit among yourselves and get
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SUPP APP 1229
Colloquy 89
1 your thoughts together. How much time do you think you need
2 in closing?
3 MR. RUKAVINA: I think ten minutes, Your Honor.
4 THE COURT: Okay. And will Doe have a closing
5 argument also?
6 MS. DELEON: We may. It depends.
7 THE COURT: Okay. You match their time --
8 MR. HESSE: I could match that --
9 THE COURT: -- Mr. Hesse. Yes.
10 MR. HESSE: -- thank you.
11 THE COURT: All right. We'll be in recess for about
12 five minutes.
13 (Recess from 10:56 a.m. until 11:02 a.m.)
14 THE CLERK: All rise.
15 THE COURT: Please be seated, thank you.
16 MR. HESSE: I guess they capitulated. I'll go get
17 them.
18 THE COURT: Mr. Hesse, you do some of your best work
19 when nobody's here. You better do it.
20 Ready?
21 MR. RUKAVINA: I apologize, Your Honor.
22 THE COURT: Not a problem. Not a problem.
23 I'm not going to hold everybody to the minute, but do
24 try to conclude by noon, just because we have to get the
25 Chapter 13 docketed and prepare for that over the lunch hour.
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SUPP APP 1230
Colloquy 90
1 MR. RUKAVINA: Your Honor, I guess sometimes when you
2 live a hot and heavy and fast-moving case in front of multiple
3 courts, you might not see the forest for the trees, or you
4 might not see the tree for the forest, depending on your
5 perspective and your native language.
6 And I hope Your Honor doesn't think that we're just
7 here whining. You're our home court; you're the one that we
8 owe our duties to. And what should be a routine coverage
9 action has exploded. And the reason why it's exploded, in our
10 humble view, is that Century is doing everything it can to
11 undermine what this Court did in April.
12 Now, we're not here today to have the final and
13 definitive trial on whether the plan is necessarily binding,
14 but shame on anyone for telling Your Honor that they can file
15 motions before you, have hearings before you, have a plan
16 served on them, and that what Your Honor ruled is not binding,
17 nah, nah, nah, nah, nah, nah.
18 Shame on anyone for coming to any court and accusing
19 a judge of entering a sham plan. Shame on anyone for accusing
20 Judge Ginsberg, who orally ruled that defense counsel did an
21 exceptional job, and that these were the first -- the worst
22 facts he'd ever seen, for alleging that he entered a sham
23 judgement.
24 Shame on anyone for alleging that the trustee here is
25 conspiring for personal monetary benefit, especially when that
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SUPP APP 1231
Colloquy 91
1 someone rejected Stowers demand after Stowers demand, and
2 could have settled this case for peanuts, and left its insured
3 out to hang and dry for years, and only got upset or only got
4 involved after the judgment came down.
5 I don't envy Ms. Doe her position. Here was a
6 pizzeria that had some value, and here was the man who raped
7 her, in charge of that pizzeria. What does a creditor do?
8 Liquidate the pizzeria, convert the case and get nothing from
9 that business? Well, that's not in her interest. Does she
10 negotiate a confirmed plan where the man who raped her and
11 gave her herpes is in charge of her recovery? Of course not.
12 She negotiates a plan that puts an independent third-
13 party trustee in there to act for the benefit of everyone,
14 knowing that that trustee is very likely to defend against her
15 claim and put her to the test of her claim. And of course, as
16 by far the largest creditor, she has input on who the trustee
17 will be. And of course the trustee's compensated on a
18 commission.
19 None of this is unknown, none of this is secret, none
20 of this is outside the ordinary course of Chapter 11
21 confirmation. None of this is nefarious. We come to you,
22 again, open kimono.
23 We come to you, saying, Judge, we don't know what's
24 going on anymore. We need someone to say, stop; respect my
25 orders. Don't interfere with your trustee. Don't take trust
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SUPP APP 1232
Colloquy 92
1 assets. We've come here, open kimono, prepared for whatever
2 Your Honor will rule. Certainly, today is not the end, nor is
3 it the beginning of the end. I guess, as Churchill says,
4 maybe it's the end of the beginning.
5 But they can't even tell Your Honor that, yes or no,
6 we are or we're not appealing for this trust. No, they play
7 word games. They take the trustee through documents. They
8 can't even look at Your Honor, in full candor, and say, you
9 know what, Judge? There really is no dispute. We're not
10 seeking appeal relief for the trust. Boom. Mr. Rukavina's
11 motion is gone. Thank you, gentlemen. I'll see you in the
12 court of appeals. Have a good day.
13 Nor they can come and tell Your Honor, actually, we
14 are seeking relief for the trust, and we're entitled to do so,
15 and here's why. They're playing a game and they're hiding
16 their true intentions. And those true intentions are most
17 revealed by Exhibit QQ.
18 And I will have a talk with that lawyer. I will have
19 a talk with that lawyer under oath, and I will ask him, how
20 dare you answer a discovery request that you don't have to
21 even respond to in such a way as to kill coverage? And I will
22 have a talk with their appellate lawyer, who sent me that
23 memorandum. And I will get all their documents about why each
24 of those appeal points is geared towards killing coverage.
25 So the trustee, like any trustee, is in a very
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SUPP APP 1233
Colloquy 93
1 strange position, like in any case. On the one hand, he has
2 to litigate against Ms. Doe, but on the other hand, he has to
3 preserve trust assets for the benefit of everyone. And the
4 trustee simply was not going to let himself get set up.
5 If Century funded the appeal with a reservation of
6 rights, with no prejudice, then the result would have been
7 that there would be no prejudice to Century. The result would
8 have been that the duty to cooperate would have been revived.
9 Now, does the trustee have a problem with cooperating with
10 Century? Of course not.
11 What the trustee has a problem with is Century either
12 using that duty to cooperate to insist on how the trustee -- a
13 fiduciary, who is charged by this plan with making independent
14 decisions -- guides the appeal, or Century would say, hey,
15 trustee, you're not doing what we want. Breach of duty to
16 cooperate, breach of policy, goodbye, there goes your dollars,
17 there goes your recovery for your beneficiaries. It was as
18 simple as that.
19 And if Century had, in good faith, tried to have a
20 good faith appeal without tying the trustee's hand, we
21 wouldn't be here right now. Another situation, Judge, of
22 Century's own making. And now Century, when it didn't get its
23 way there, is trying to appeal for the benefit of this trust.
24 Some of these procedural questions, I guess, we don't
25 have to decide today, definitively, whether Century is bound
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SUPP APP 1234
Colloquy 94
1 by the provisions of this plan. I will note, and Your Honor
2 has the pleadings, that Century has alleged that it's not,
3 that Century has alleged that the assignment of the policy to
4 the trust is void, that Century has alleged that the plan is a
5 sham designed to enrich the trustee.
6 All of these issues are before Judge Solis. We have
7 asked Judge Solis to indicate whether we should go to Your
8 Honor on those issues or whether Judge Solis will rule on
9 them, and hopefully, Judge Solis will give us some guidance.
10 We don't have to decide that today.
11 But I ask Your Honor a simple question, a very, very
12 simple analogy: pretend we're just in a plain Chapter 7 case,
13 and a stranger to the bankruptcy -- no, not a creditor to the
14 bankruptcy -- goes and takes a bar of gold from the estate,
15 something that you have in rem jurisdiction for. Is Your
16 Honor powerless to do anything about that? Or Your Honor
17 learns that someone's about to go steal that bar of gold. Is
18 Your Honor powerless to do something about that?
19 This is no different. Your Honor doesn't have to
20 decide, necessarily, whether the plan is binding on Century or
21 not to see that an outsider, a stranger, is usurping rights
22 that this Court ordered be exclusive to the trustee. And I do
23 not believe that Your Honor is powerless about that. I find
24 it impossible to believe that Your Honor has no power to grant
25 the trustee some relief.
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SUPP APP 1235
Colloquy 95
1 On the Rule 7001 issue, it's always an issue, and
2 it's always a problem. And in this case, the problem is
3 magnified by the fact that we have an existing lawsuit in
4 front of Judge Solis. Should I really have filed another
5 lawsuit? Maybe I should have. Maybe I will. But I believe
6 that I have a duty to minimize burden on the courts.
7 I provided immediate service on Century. They took
8 extensive discovery. We're here today. Your Honor certainly
9 has the ability to sua sponte convert this into an adversary
10 proceeding, and Your Honor can apply the four elements of an
11 injunction: the irreparable injury, the likelihood of
12 success, the no injury to Century, and the public interest,
13 which certainly supports, I think, this Court's intention,
14 even if not literal order, be complied with.
15 I've walked Your Honor, in my motion, through the
16 governing plan and trust agreement provisions. I'm not going
17 to repeat that. Your Honor said that you worked on this. I
18 believe Your Honor has.
19 There is no injunction in this plan. Good God, I
20 wish there were. I would have put one in there. Okay,
21 there's no injunction in this plan. But Your Honor said, Mr.
22 Seidel, you're my trustee. You have the sole
23 authority -- exclusive authority -- to litigate contested
24 claims. You have exclusive authority over trust assets, which
25 are included as the -- which are defined so as to include
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SUPP APP 1236
Colloquy 96
1 cause of action, which is defined so as to include any
2 litigation right, not just affirmative or offensive rights.
3 And Your Honor said no one can claim an interest in the trust
4 assets or trust revs, which Century is doing.
5 I'm not asking Your Honor to do any mental
6 gymnastics. I'm not asking Your Honor to go out on a limb.
7 I'm asking Your Honor to look at it and say, okay, I gave the
8 trustee this exclusive authority; Century is invading that
9 exclusive authority. You can do that today. And I'm hoping
10 Your Honor will then also say, Century, stop.
11 I'm also asking that the Court decide whether the
12 Jane Doe claim is allowed, because the appeal deadlines have
13 run.
14 THE COURT: Now, how does that help you or what does
15 that do for the trustee?
16 MR. RUKAVINA: It makes it clear that -- that really
17 resolves everything, because then, Century can go and do what
18 it wants before the court of appeals, subject to objections,
19 and we no longer have to worry that what Century is doing is
20 vitiating the provisions of the plan that govern the allowance
21 of claims. In other words, it basically means that we no
22 longer have to be terrified about Century doing something up
23 there that's going to somehow come back and prejudice us as
24 the trust.
25 And Century says, well, Judge, we don't have a
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SUPP APP 1237
Colloquy 97
1 problem with that, but don't make it binding on us. At some
2 point, Your Honor, I say put your foot down and say to
3 Century: stop having these hearings, stop taking discovery,
4 stop asking questions, stop going way out afield on what's
5 really before me, or live with the consequences. Your Honor
6 doesn't have to decide whether such a finding is binding or
7 not on Century. That can be adjudicated or looked at in the
8 future. But I think that everyone benefits, especially the
9 trustee, by having some certainty on that.
10 The plan could not be clearer: the appellate
11 deadline has expired. Now, Mr. Deari did appeal. I need to
12 mention that to you. However, Texas law is black and white,
13 and I can send you the case law -- I have it here
14 somewhere -- that even if Mr. Deari succeeds on his appeal,
15 it's not going to reverse the judgment as against us. There
16 are some exceptions that wouldn't apply. So it's not
17 technically correct that there has been no appeal filed, but
18 the trustee has not appealed, and the deadline for a trustee
19 to appeal under any circumstance, including that fifteen-day
20 possibility to appeal later, has passed.
21 And on the issue of 157(b)(5), Congress is clear that
22 Your Honor cannot liquidate a personal injury claim, but
23 Congress is also clear that only Your Honor can allow that
24 claim. So Your Honor ordered that the liquidation of it would
25 happen in state court, as it did, but it's still always to the
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SUPP APP 1238
Colloquy 98
1 bankruptcy court under 502(b) to allow or disallow a claim.
2 And Your Honor has predetermined how this claim will
3 be allowed. It has been allowed. It has already been
4 allowed. And that finding really would help everyone as we
5 proceed forward in this litigation, so that they can protect
6 whatever rights they think they have without having -- without
7 us having to always be paranoid about that they're trying to
8 somehow scramble the eggs or do away with the plan that Your
9 Honor confirmed.
10 As your trustee, how do we do our job when someone
11 else is appealing for the trust? Who are we answerable to?
12 Who takes the consequences? Thank you, Judge.
13 THE COURT: You get to go last, too.
14 Ms. DeLeon.
15 MS. DELEON: Your Honor, we won't have a closing
16 today, thank you.
17 THE COURT: Okay. I assume you're still in favor of
18 having your client claim be deemed allowed, is that right?
19 MS. DELEON: Correct, Your Honor.
20 THE COURT: Okay.
21 MR. HESSE: Your Honor, after Mr. Rukavina's
22 argument, I'm not sure what we're doing here. They can say
23 that we're not -- that you -- they don't want you to -- that
24 there's no injunction in the plan, so we're really not seeking
25 to enforce the injunction -- an injunction that's there. So
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SUPP APP 1239
Colloquy 99
1 we're not seeking to enforce that particular provision of the
2 plan.
3 If I understood correctly, there was a concession
4 that you don't have to find that the plan is binding upon
5 Century, so I'm not sure what we're doing here. So there's a
6 re -- I guess a reque -- I'm not sure what we're being
7 requested to enjoin from doing. If they want to allow -- I
8 mean, candidly, if you really want to play the game as to how
9 the bankruptcy rules work, if I'm not mistaken -- and I'll
10 point Your Honor to Century Exhibit 6, which is the claims
11 register -- a copy of the claims register, Jane Doe filed an
12 amended proof of claim around August 6th in 2015 in the amount
13 of 19,417,625. There is no pending objection to it, so
14 really, it's allowed as filed at this point in time. So I'm
15 not sure that we really even need an order that it's allowed.
16 But that's fine.
17 But I guess more to the point, to the extent that we
18 wanted to come in and object to the claim, you've already
19 found that we don't have standing, and that we don't have
20 standing to object to it. So to the extent that you want to
21 enter an order that it's allowed, I think it has to also be
22 noted, because that order is going to be taken somewhere else,
23 that Century does not have standing to object to it. The
24 natural consequence of that, it's not binding upon Century
25 because we wouldn't have the ability to say yay or nay about
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SUPP APP 1240
Colloquy 100
1 it.
2 And so I guess if that's what we're going to do and
3 that resolves everything, we can just get up and leave, but
4 I'm not sure that that's really -- I'm not sure that's really
5 what they're wanting.
6 I -- the question as to why we wouldn't enter into a
7 one-pa -- a one-sentence stipulation in the court of appeals?
8 It's really, I think, if you read through the -- if you think
9 about it, Century intervenes on -- to protect its own rights.
10 It is seeking a reversal of the judgment that was entered at
11 the state court. The court of appeals will either allow us to
12 do that or they won't.
13 Pastazios, through the trustee, has already made it
14 abundantly clear that they don't consent to it, but if Century
15 is successful on its appeal, one thing will happen -- it will
16 result in a reversal of the judgment. Just the way it is.
17 That's just the way it is. And so there's really no way to
18 freight -- to put together a one-line stipulation that says
19 we're not doing anything on behalf of Pastazios, because it's
20 the judgments that's there. We're taking the actions on
21 behalf of Cen -- of Century, but the effect of which is going
22 to be a reversal -- it would be a reversal of the judgment or
23 affirmation of the judgment, either one.
24 I think one thing should be also abundantly clear, is
25 that since the trustee has not appealed or participated in the
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SUPP APP 1241
Colloquy 101
1 appeal, that allowing Century to go forward will make it
2 abundantly clear that there is no waiver by the trustee of any
3 of its rights. So to the extent that there's a concern of a
4 waiver by allowing Century to go forward, I think that that's
5 very abundantly been resolved that they are not waiving any
6 rights that they have. They've not agreed to anything. I
7 don't think there's any con -- I don't think there's any way
8 to argue that.
9 But going back to the -- kind of the technical
10 things, if they're asking for an injunction against Century,
11 we have procedural infirmities. We didn't -- they didn't
12 initiate an adversary proceeding, they didn't serve us with
13 process. This is not a motion to enforce, there's not a plan
14 injunction. The plan -- and I'm with Mr. Rukavina, had I
15 drafted this plan, there'd be a plan injunction.
16 Candidly, if I had drafted this plan, there'd be a
17 better section 10.002 to make it clear as to who it's binding
18 on it and who it's not binding on it, but that would've also
19 provided people with notice. The notice that was given to
20 Century is that it's not binding upon it because it's not a
21 creditor. It's not scheduled, it didn't file a proof of
22 claim. Everyone agrees it's not a creditor. So if the plan's
23 not binding on it, there's no injunction that we're violating.
24 I'm not sure what we're -- what you're being asked to enforce.
25 And that's, I guess, where my -- my problem I have
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SUPP APP 1242
Colloquy 102
1 from a real theoretical standpoint. I'm also not sure I
2 understand what the issue with regard to harm is, that we'd
3 have to prove under an injunction. As the evidence has come
4 out, they have asked Century to participate in an appeal.
5 They are -- they said -- they advised us that they thought
6 there were valid appellate points. For whatever reason,
7 couldn't come to an agreement as to the terms on the appeal,
8 but they did ask us to step in, so I'm not sure what the harm
9 is for us stepping in after they've decided to waive their
10 appeal rights.
11 And I think -- and it's something I'm going to note
12 here, from a -- from a personal standpoint: I am not -- a
13 number of these -- I'm not -- I didn't -- I wasn't the one who
14 came in here and asked for the hearing. I think I asked two
15 or three times that we continue it so we would have a chance
16 to fully handle the issue.
17 THE COURT: We were working on one, and --
18 MR. HESSE: I kept saying --
19 THE COURT: -- thought you'd filed a third one.
20 MR. HESSE: I can -- and I apologize. I apologize
21 for that, Your Honor.
22 THE COURT: No, no, no. We weren't offended at all
23 by that --
24 MR. HESSE: But --
25 THE COURT: -- you're just representing your client.
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SUPP APP 1243
Colloquy 103
1 MR. HESSE: This was done on seven days' notice over
2 my objection before it was even filed and requested. And so
3 you'll have to forgive us for thinking that there's an attempt
4 to shove something down our throats. And that we're -- we
5 should be given a chance to present our -- preserve and
6 present our case, and preserve and present our rights.
7 This is not my motion. I'm not the one who keeps
8 coming back to court. But these are the -- these are the
9 motions that are being filed by the trustee, which minds can
10 differ as to whether they're well-founded or not, or the basis
11 that they are arguing are justified. But I'm not the one who
12 keeps coming back to court.
13 We have a bigger case up in the federal district
14 court. There's concerns by both sides, I think, that there
15 are things that are going -- being done in other courts that
16 are going to effect that, and I think that's the concern that
17 everybody has.
18 But I don't believe that what they're asking for you
19 to do is allowed under the plan documents. And as a
20 consequence, we would request that you deny the motion.
21 THE COURT: Thank you, Mr. Hesse.
22 Mr. Rukavina, you get to go last.
23 MR. RUKAVINA: Will Century appeal the liability
24 number and argue that twenty million is too much; four million
25 is reasonable? Will Century argue that, yes, the debtor was
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SUPP APP 1244
Colloquy 104
1 negligent, but the finding of punitive damages is wrong, and
2 therefore judgment should be less? Or will Century argue that
3 some of the findings of fact supported by the evidence should
4 be set aside? Those findings of fact that prove that this
5 claim was always within the policy?
6 Century will have every motivation to steer the
7 appeal in such a way as to use the exclusions in the
8 policy -- criminality, for example, superseding cause,
9 whatever those exclusions may be -- to attack the findings
10 that go to those, so that we get no coverage, no defense
11 costs, and they couldn't care about the size of the judgment
12 against the trust. That's cynical. And we've shown you that
13 a clever insurance defense lawyer serving two masters knows
14 what they're doing, and that's what they're going to do here.
15 And Your Honor appointed an independent fiduciary,
16 answerable to Your Honor precisely to ensure that everyone's
17 rights are properly protected and preserved. That's all we're
18 trying to do.
19 THE COURT: Thank you. I know this is important to
20 everyone. We won't stop to write something up. We'll give
21 you a ruling as soon as we can. We'll set up a CourtCall and
22 have everyone, then, call back in for their CourtCall. But it
23 won't be today, obviously. We'll be in recess.
24 THE CLERK: All rise.
25 (Whereupon these proceedings were concluded at 11:24 AM)
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SUPP APP 1245
105
1
2 I N D E X
3
4 WITNESSES: DIRECT CROSS REDIRECT RECROSS
5 FOR THE DEBTOR:
6 Scott M. Seidel 27 44 64, 87 82
7
8 EXHIBITS: DESCRIPTION I.D. EVID
9 For the Debtor:
10 A - N Documents 20
11 ZZ - KKK Documents 22
12 QQ Certain disclosures served 27
13 upon Mr. Crawford
14
15 For Century:
16 49 Document 24
17 58 Notice of appeal filed by 43
18 Century in the court of
19 appeals
20 59 Motion to intervene filed by 43
21 Century in the court of
22 appeals
23 60 Motion for extension filed by 43
24 Century in the court of
25 appeals
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SUPP APP 1246
106
1 61 Supplement filed by Century in 44
2 the court of appeals
3 67 Response filed on behalf of 43
4 Mr. Seidel in the court of
5 appeals objecting to Century's
6 efforts to intervene
7 33 Letter sent to Century by Mr. 44
8 Seidel's lawyers shortly after
9 47 Letter from Hunton & Williams 44
10 to Mr. Seidel's counsel
11 judgment was entered in the
12 Doe action
13 68 Creditor trust agreement 44
14 42 Document 44
15 11 E-mail exchange between Mr. 44
16 Seidel and Mr. Erler from
17 February, 2015
18 38 Letter with memorandum from 86
19 lawyers
20
21
22
23
24
25
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SUPP APP 1247
107
1
2 For the Trustee:
3 O, P, Q, Documents 24
4 S, T, V
5 AA Mr. Rukavina's letter 69
6 DD Letter from Century Surety 72
7 Company to Mr. Seidel
8 EE Letter from Mr. Rukavina to 73
9 Century Surety Company
10 KK Letter from Mr. Rukavina 76
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
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SUPP APP 1248
108
1
2 C E R T I F I C A T I O N
3
4 I, Sharona Shapiro, the court approved transcriber,
5 do hereby certify the foregoing is a true and correct
6 transcript from the official electronic sound recording of the
7 proceedings in the above-entitled matter.
8
9
10 November 25, 2015
11 ______________________________ _________________
12 SHARONA SHAPIRO DATE
13 AAERT Certified Electronic Transcriber CET**D 492
14
15
16
17
18
19
20
21
22
23
24
25
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SUPP APP 1249
Exhibit 8
SUPP APP 1250
Case 14-34324-hdh11 Doc 133 Filed 11/02/15 Entered 11/02/15 11:29:12 Page 1 of 7
Davor Rukavina, Esq.
Texas Bar No. 24030781
Thomas D. Berghman, Esq.
Texas Bar No. 24082683
MUNSCH HARDT KOPF & HARR, P.C.
3800 Ross Tower
500 North Akard
Dallas, Texas 75201
Telephone: (214) 855-7500
Facsimile: (214) 978-4346
COUNSEL FOR
SCOTT M. SEIDEL, TRUSTEE
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
In re: §
§ CASE NO. 14-34324-hdh-11
PASTAZIOS PIZZA, INC.. §
§ (Chapter 1)
Debtor. §
§
TRUSTEE’S REPLY IN SUPPORT OF
MOTION TO CLARIFY TRUST AGREEMENT
TO THE HONORABLE HARLIN D. HALE, U.S. BANKRUPTCY JUDGE:
COMES NOW, Scott M. Seidel (the “Trustee”), the duly appointed trustee of the
Pastazios Pizza, Inc. Creditors Trust (the “Trust”), and files this his Reply (the “Reply”) in
support of his Expedited Motion to Clarify Trust Agreement (the “Motion”) and in reply to the
Amended Objection of Century Surety Company to Trustee’s Expedited Motion to Clarify Trust
Agreement (the “Objection”), filed by Century Surety Company (“Century”), respectfully stating
as follows:
I. CENTURY’S LACK OF STANDING
1. Century lacks standing to assert its Objection because it lacks standing regarding
any matter involving the “governance” of the Trust, as Century itself phrases the issue.
Generally, constitutional standing requires that a party has suffered some actual or threatened
TRUSTEE’S REPLY IN SUPPORT OF MOTION TO CLARIFY TRUST AGREEMENT—Page 1
SUPP APP 1251
Case 14-34324-hdh11 Doc 133 Filed 11/02/15 Entered 11/02/15 11:29:12 Page 2 of 7
injury, which can be fairly traced to the challenged action, and which is likely to be redressed by
a favorable decision. Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 542 (1986). More
specifically, in the bankruptcy context, one has standing under the “person aggrieved” test if he
is “directly and adversely affected pecuniarily by the order of the bankruptcy court.” Gibbs &
Bruns LLP v. Coho Energy Inc. (In the Matter of Coho Energy Inc.), 395 F.3d 198, 203 (5th Cir.
2004).
2. Century is not scheduled as a creditor, and Century never filed a proof of claim.
Century is not a beneficiary of the Trust. The Motion seeks relief concerning solely an internal
governance matter between the Trust and its beneficiaries, of no interest, pecuniary or otherwise,
to Century. Moreover, Century did not vote on the confirmed plan, so any alleged deviance from
the terms of the confirmed plan does not affect any right on which Century may have relied. In
short, there is no “challenged action” affecting Century which can be redressed by a “favorable
decision,” and there is no “direct” and “adverse” “pecuniary interest” of Century affected by the
Motion. There is nothing but an attempt by Century to interject itself into matters of no concern
to it, for the clear and sole purpose of somehow bolstering its litigation position in the pending
coverage action; in other words, to divert attention from its own gross breaches of its duties and
its multi-million dollar liability by meddling in the internal governance of its litigation adversary.
3. Furthermore, even if Century was a “party-in-interest” in the Bankruptcy Case,
that does not confer standing on every issue. The Trust is a postconfirmation entity, and
different rules apply in the postconfirmation world. Without being in any way, shape, or form a
beneficiary of the Trust, Century simply has no role or say in its governance. Century bears the
burden of proving its standing. See, e.g., Croft v. Texas, 562 F.3d 735, 746 (5th Cir. 2009). This
it has not done, and this it cannot do.
TRUSTEE’S REPLY IN SUPPORT OF MOTION TO CLARIFY TRUST AGREEMENT—Page 2
SUPP APP 1252
Case 14-34324-hdh11 Doc 133 Filed 11/02/15 Entered 11/02/15 11:29:12 Page 3 of 7
II. SUBSTANTIVE REPLY
4. Substantively, Century confuses the issue by alleging that the Motion seeks a
modification of the Confirmed Plan, which the Trustee lacks standing to seek and which the
Court lacks authority to grant. The issue is not one of modification. The Trustee is not asking
this Court to rewrite something previously written. Rather, the Trustee is asking the Court to
either compel the necessary parties (the Debtor and Ms. Doe) to do what they were supposed to
have done (by filling in blanks), or the Court is asking the Court to find waiver of certain
provisions because they were never effectuated. Neither of these avenues is novel and neither
should be of any controversy, given that the Court’s intervention is frequently requested even
after confirmation because certain parties do not do what they were supposed to do, or because a
debtor or plan proponent does not effectuate a provision of a confirmed plan. The question is
therefore one of enforcement or waiver; not modification. There is no question that this Court
has full authority over the issue, see 11 U.S.C. § 1142, that the Trustee has standing to file the
Motion because the plan documents say so, and because the Trustee, as much as anyone, is
entitled to clarification and certainly as to what his responsibilities are.
5. As between the two remedies—enforcement or waiver—both the Debtor and Ms.
Doe support the conclusion of waiver. These were the two parties who negotiated the Confirmed
Plan. Ms. Doe is the 99% Trust beneficiary. As the Court will hear, one additional sizable plan
beneficiary also supports waiver, while the Trustee continues to attempt to contact the remaining
Trust beneficiaries, who have very small claims as compared to the others. Insofar as a plan and
trust document are contracts, and parties are generally free to waive protections afforded to them
under a contact, and are generally free to amend their contract, the Trustee submits that this
Court should follow the expressed wishes of the parties to the contract in finding waiver.
TRUSTEE’S REPLY IN SUPPORT OF MOTION TO CLARIFY TRUST AGREEMENT—Page 3
SUPP APP 1253
Case 14-34324-hdh11 Doc 133 Filed 11/02/15 Entered 11/02/15 11:29:12 Page 4 of 7
III. NO UNREASONABLE DELAY
6. Century alleges that the Trustee delayed in seeking appropriate relief. To the
extent that the Trustee delayed, the delay was caused first and foremost by his belief that there
was a fully filled-in trust agreement that had simply not been provided to him. He has been in
communications with the key parties for some time on that issue, being at times informed that
there was such an agreement but that it could not be located. It must be remembered that the
Trustee came in after the fact and of necessity had to rely on the work of others concerning the
finalization of the trust’s governance. The Trustee reasonably waited, rather than rushing to this
Court, until it finally became clear that there was no signed agreement with blanks filled-in, at
which point he sought and obtained a consensual resolution of the issues. At the same time, the
Trustee was forced to “hit the ground running” on two fast-moving cases, including one that was
going to trial in a matter of weeks (and after weeks of delay as the Debtor sought the $50,000.00
in funding required by the Confirmed Plan). In other words, there were more pressing issues at
that time. And, with mediation with Century only concluding on October 20, 2015, the Trustee
had good reason to believe that all outstanding issues would be resolved by agreement without
the need to burden the Trust with the costs of the Motion, or this Court with holding a potentially
unnecessary hearing. The Court can note that the Motion was filed only two (2) days after the
failed mediation.
7. With respect to Munsch Hardt, for example, Century would have this Court
believe that the Trustee somehow hid that fact from everyone even as he unreasonably delayed.
Yet, at the confirmation hearing, the Debtor informed the Court that the Trustee had retained
insurance counsel, although the name “Munsch Hardt” was not mentioned. On June 8, 2015, the
undersigned appeared as counsel for the Trustee before the State Court, at which Ms. Doe was
present. The undersigned informed the State Court that the Trustee was in the process of
TRUSTEE’S REPLY IN SUPPORT OF MOTION TO CLARIFY TRUST AGREEMENT—Page 4
SUPP APP 1254
Case 14-34324-hdh11 Doc 133 Filed 11/02/15 Entered 11/02/15 11:29:12 Page 5 of 7
retaining substitute trial counsel. On June 12, 2015, the Trustee filed his motion in the coverage
action to substitute in for the Debtor. Ms. Doe—the beneficiary who apparently should have
been on the trust advisory board—therefore knew immediately that the Trustee had retained
Munsch Hardt as insurance coverage counsel, and separate state court trial counsel. Ms. Doe
made no objection.
8. Perhaps most importantly, even if there has been delay, it has not been prejudicial.
It has certainly not been prejudicial to Century, unless Century believes that the Trustee having
qualified counsel to represent the Trust against Century rises to the level of legal prejudice.
After all, that is what Century really aims at through its Objection.
9. With respect to Century’s argument concerning nunc pro tunc relief, the Trustee
has used that term in the Motion to easily convey the relief requested, but that relief is not nunc
pro tunc in the usual way seen in bankruptcy cases. If the parties never filled in a blank or
constituted the trust advisory board, then again it is a question of waiver and not one of seeking
relief after the fact. If the parties are now compelled to fill in the blank, the Trust agreement says
nothing of timing. In other words, the Trust agreement nowhere provides that the Trust will have
counsel only after the blank is filled in or approval from the non-existent trust advisory board is
obtained. The blank can be filled in now, or the trust advisory board can make a decision in the
nature of ratification, without in any way affecting any work or compensation provided or
incurred prior to such action.
IV. MISCELLANEOUS CONTEMPTUOUS ARGUMENTS
10. Century alleges multiple other things, of no relevance to the Motion. Some are
flat incorrect, such as Century’s statement that the Trustee informed Century that “valid appeal
points existed,” while others concerning alleged collusion between the Trustee and Ms. Doe are
without any basis in fact, are made without any reasonable investigation, and are actually proven
TRUSTEE’S REPLY IN SUPPORT OF MOTION TO CLARIFY TRUST AGREEMENT—Page 5
SUPP APP 1255
Case 14-34324-hdh11 Doc 133 Filed 11/02/15 Entered 11/02/15 11:29:12 Page 6 of 7
false by the clear record. It is worth noting that Century did nothing to protect its insured at trial.
If Century had had its way, the Debtor and the Trust would have been wholly unrepresented at
that trial (no doubt then using that as some defense to coverage). It was the Trustee, who took a
sizable portion of the meager funds of the Trust, who retained defense counsel. That counsel did
his job effectively and professionally, and the State Court disagreed with his position. That is
what Century now refers to as “collusion,” again diverting attention from the simple fact that it
was Century who denied its insured a defense and that it was the Trustee, who took money from
the creditors of the Trust, to provide that defense.
11. Century makes more serious and contemptuous arguments, however, in the nature
of a collateral attack on the Confirmed Plan. Century at all times had actual notice of the
Confirmed Plan and the confirmation hearing, even appearing at the hearing. Century did not
object. Yet Century now argues that the transfer of the underlying policy to the Trust is void as
it violates an anti-assignment provision; that the Trustee has a conflict of interest with respect to
the Trust; that the Trust represents a form of collusion designed to enrich the Trustee; and that
the Trust and underlying documents have somehow prejudiced Century’s rights. In fact, Century
has sought leave in the coverage action to make precisely these kinds of arguments, again to
divert attention from its own gross breaches of its duties.
12. All of these arguments are nothing but an attempt to collaterally attack this
Court’s orders, binding on Century pursuant to 11 U.S.C. § 1141. The Trustee has previously
cautioned Century against making such contemptuous arguments. The Trustee takes such
arguments most seriously, and he will vigorously defend the Trust against such baseless,
contemptuous, after-the-fact arguments. The Trustee will seek all available remedies, including
fees and expenses for having to defend the Trust against these arguments.
TRUSTEE’S REPLY IN SUPPORT OF MOTION TO CLARIFY TRUST AGREEMENT—Page 6
SUPP APP 1256
Case 14-34324-hdh11 Doc 133 Filed 11/02/15 Entered 11/02/15 11:29:12 Page 7 of 7
V. PRAYER
WHEREFORE, PREMISES CONSIDERED, the Trustee respectfully requests that the
Court strike the Objection based on a lack of standing, and that the Court grant the Trustee the
relief requested in the Motion.
RESPECTFULLY SUBMITTED this 2d day of November, 2015.
MUNSCH HARDT KOPF & HARR, P.C.
By: /s/ Davor Rukavina
Davor Rukavina, Esq.
Texas Bar No. 24030781
Thomas D. Berghman, Esq.
Texas Bar No. 24082683
3800 Ross Tower
500 N. Akard Street
Dallas, Texas 75201
Telephone: (214) 855-7500
Facsimile: (214) 855-4346
COUNSEL FOR SCOTT M. SEIDEL,
TRUSTEE
CERTIFICATE OF SERVICE
The undersigned hereby certifies that, on this the 2d day of November, 2015, true and
correct copies of this document were electronically served by the Court’s ECF system on parties
entitled to notice thereof, including on counsel for Century.
By: /s/ Davor Rukavina
Davor Rukavina, Esq.
TRUSTEE’S REPLY IN SUPPORT OF MOTION TO CLARIFY TRUST AGREEMENT—Page 7
MHDocs 6644150_1 13229.3
SUPP APP 1257
Exhibit 9
SUPP APP 1258
Case 14-34324-hdh11 Doc 171 Filed 11/23/15 Entered 11/23/15 16:38:19 Page 1 of 2
U.S. BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
ENTERED
TAWANA C. MARSHALL, CLERK
THE DATE OF ENTRY IS
ON THE COURT'S DOCKET
The following constitutes the ruling of the court and has the force and effect therein described.
Signed November 23, 2015
United States Bankruptcy Judge
______________________________________________________________________
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
In re: §
§ Case No. 14-34324-hdh11
Pastazios Pizza, Inc., § Chapter 11
§
Debtor. §
ORDER DENYING CENTURY SURETY
COMPANY’S MOTION FOR CONTINUANCE
On November 23, 2015, Century Surety Company (“Century”) filed a motion1 to continue
the hearing on the Trustee’s Expedited Motion to Enforce Plan and Confirmation Order Against
Century Surety Company [Docket No. 145] (the “Motion to Enforce”). Scott M. Seidel, the trustee
of the Pastazios Pizza, Inc. Creditor Trust (the “Trustee” of the “Trust”) filed an objection to the
1
Century Surety Company’s Motion for Continuance of Expedited Hearing on Trustee’s Motion to Enforce Plan and
Confirmation Order Against Century or, in the Alternative, Request for Status Conference [Docket No. 163] (the
“Motion to Continue”).
1
SUPP APP 1259
Case 14-34324-hdh11 Doc 171 Filed 11/23/15 Entered 11/23/15 16:38:19 Page 2 of 2
Motion to Continue,2 and Century filed a reply.3 The hearing on the Motion to Enforce is currently
set for November 24, 2015 (the “Hearing”). The Motion to Enforce seeks compliance with the
above-captioned debtor’s confirmed plan of reorganization (the “Plan”), which the Trustee claims
Century is violating in its filings with a state appellate court.
Century seeks a continuance of the Hearing, in large part, because it claims the need to
depose all of the witnesses listed by the Trustee for the Hearing. The Court notes, as the Trustee
points out in his objection, that four of the witnesses are listed to authenticate exhibits. It would
not be necessary for Century to depose such witnesses. This Court further notes that the allegations
in the Motion to Enforce are that Century has violated certain parts of the Plan and the confirmation
order in this case. The Court does not expect a lot of testimony at the Hearing, as a comparison of
what Century has filed in the state appellate court with this Court’s orders and the Plan, will not
require a great deal of testimony.
In their pleadings regarding the continuance, both sides seem to intend to draw this Court
into a larger dispute about matters that may be before the state appellate court or the United States
District Court. This Court intends to address the narrow inquiry of whether the confirmed Plan
and this Court’s orders have been violated by Century’s filings in the state appellate court.
Accordingly, the Motion to Continue will be denied. The parties should be prepared to put on a
straightforward case as to whether the actions of Century violate the Plan or this Court’s
confirmation order.
IT IS THEREFORE ORDERED that the Motion to Continue is denied.
###END OF ORDER###
2
Docket No. 166.
3
Docket No. 167.
2
SUPP APP 1260
Dated: December 4, 2015 Respectfully submitted,
/s/ Charles T. Frazier, Jr.
State Bar No. 07403100
cfrazier@adjtlaw.com
ALEXANDER DUBOSE JEFFERSON &
TOWNSEND LLP
4925 Greenville Avenue, Suite 510
Dallas, Texas 75206-4026
Telephone: (214) 369-2358
Telecopier: (214) 369-2359
Roger D. Townsend
State Bar No. 20167600
rtownsend@adjtlaw.com
ALEXANDER DUBOSE JEFFERSON &
TOWNSEND LLP
1844 Harvard Street
Houston, Texas 77008
Telephone: (713) 523-2358
Telecopier: (713) 522-4553
Dana Livingston
State Bar No. 12437420
dlivingston@adjtlaw.com
ALEXANDER DUBOSE JEFFERSON &
TOWNSEND LLP
515 Congress Avenue, Suite 2350
Austin, Texas 78701
Telephone: (512) 482-9300
Telecopier: (512) 482-9303
COUNSEL FOR INTERVENOR/
APPELLANT IN INTERVENTION
CENTURY SURETY COMPANY
SUPPLEMENTAL APPENDIX IN SUPPORT OF CENTURY’S REPLIES TO THE TRUSTEE’S AND JANE DOE’S
RESPONSES TO MOTIONS TO INTERVENE AND FOR EXTENSION OF TIME TO FILE NOTICE OF APPEAL Page 1261
CERTIFICATE OF SERVICE
I certify that the foregoing document was electronically filed with the Clerk
of the Court using the electronic case filing system of the Court which will send
notification of such filing to the following counsel of record on December 4, 2015.
Gregory W. Mitchell Michael W. Huddleston
greg@mitchellps.com mhuddleston@munsch.com
THE MITCHELL LAW FIRM, L.P. J. Stephen Gibson
12720 Hillcrest Road, Suite 625 sgibson@munsch.com
Dallas, Texas 75230 Thomas D. Berghman
(972) 463-8417 tberghman@munsch.com
(972) 432-7540 Fax MUNSCH, HARDT, KOPF & HARR, P.C.
Attorneys for Ajredin “Danny” Deari 500 North Akard Street, Suite 3800
Tom “Trey” Crawford III Dallas, Texas 75201
tcrawford@ghjhlaw.com (214) 855-7500
GRUBER HURST ELROD JOHANSEN (214) 855-7584 Fax
HAIL SHANK LLP
1445 Ross Avenue, Suite 2500 Royce West
Dallas, Texas 75202 royce.w@westllp.com
(214) 855-6866 Veretta Frazier
(214) 855-6808 Fax veretta.f@westllp.com
Attorneys for Jane Doe WEST & ASSOCIATES, L.L.P.
P.O. Box 3960
Y.W. Peter Chen Dallas, Texas 75208-1260
peter@chendotson.com (214) 941-1881
CHEN DOTSON PLLC (214) 941-1399 Fax
10455 N. Central Expressway Jeffrey S. Levinger
Suite 109-348 jlevinger@levingerpc.com
Dallas, Texas 75231 LEVINGER PC
(972) 251-2436 1445 Ross Avenue, Suite 2500
(972) 476-1080 Fax Dallas, Texas 75202
Attorneys for Pastazios Pizza, Inc. (214) 855-6817
(214) 855-6808 Fax
Attorneys for Trustee
/s/ Charles T. Frazier, Jr.
Charles T. Frazier, Jr.
SUPPLEMENTAL APPENDIX IN SUPPORT OF CENTURY’S REPLIES TO THE TRUSTEE’S AND JANE DOE’S
RESPONSES TO MOTIONS TO INTERVENE AND FOR EXTENSION OF TIME TO FILE NOTICE OF APPEAL Page 1262