Back to the Basics: The Civil Case

Let's take a look at the Civil Case currently pending in the Northern District of Texas: 

On July 9, 2010 Freestone (the "Plaintiff") filed a lawsuit in the United States District Court for the Northern District of Texas, Dallas Division, Civil Action Number 3:10-cv-01349-O against Lawrence Shultz, Environmental Services and Support, Inc. (“ESSI”), David Feuerborn and Thomas Jennings (the "Defendants").  The Plaintiff is alleging that the Defendants committed "fraud by nondisclosure, the common law tort of conversion by pretext and swindling, deceptive trade practices, common law fraud and fraud by misrepresentation/statutory fraud."

On August 3, 2010 documents were filed with the Court to show that all of the Defendants had been served.  The documents indicate that the Defendants (and members of their families or live in companions) tried to avoid service by either denying their identities, or claiming a false identity.  (The service documents can be read on PACER under Pages 81-88.)

On August 19, 2010 a Stipulation was filed with the Court by Neil C. Evans, esq. who is representing all Defendants in the Civil Case.  (Note: He is also David Feuerborn's attorney in the Criminal Case.  Evans has also filed documents on behalf of Tom Jennings in the Criminal Case.)  The Stipulation states, "all Defendants will file their responsive pleadings to the Complaint in this action by Thursday, August 19, 2010" (Civil Case, Stipulation to Set Deadline for Filing Response to Complaint by all Defendants. Page #101, Paragraph 1).  Further it states that, "all Defendants waive any objection to process service" (Civil Case, Stipulation to Set Deadline for Filing Response to Complaint by all Defendants. Page #101, Paragraph 2).  (Note:  A response to the Complaint has never been filed by the Defendants.)

On August 19, 2010 the Defendants filed a "Notice of Motion and Motion to Dismiss  for Lack of Personal Jurisdiction" with the Court.  The Defendant's main argument is that "the Defendants lack the requisite contacts with the state of Texas" (Civil Case, Notice of Motion and Motion to Dismiss  for Lack of Personal Jurisdiction. Page #91, Paragraph 1).

On September 9, 2010 the Plaintiff filed a Response to the Defendant's Motion to Dismiss.  This Response states the Plaintiff's belief that jurisdiction is proper in the Northern District of Texas, because (i) Lawrence Shultz was working as a finder and consultant for Feuerborn and Jennings and made multiple unsolicited calls to a consultant working for the Plaintiff in order to pitch their solvent and structure a deal, (ii) Feuerborn and Shultz called and sent multiple emails to the Plaintiff before and after the Stock Purchase Agreement was signed, (iii) Jennings made multiple calls to the Plaintiff, (iv) Feuerborn and Shultz made multiple visits to both Houston and Dallas where the fraud occurred and the aforesaid misrepresentations were made to the Plaintiff and others, and (v) Feuerborn made business cards with the Plaintiff's address.  (Civil Case, Plaintiff's Response and Brief in Opposition to Defendant's Motion to Dismiss for Lack of Personal Jurisdiction (Docket #10). Pages #106-115)  The Response goes into further detail, but those are the main points I noticed.

The parties are now awaiting a ruling from the Judge hearing the Civil Case.


-ESS Investor