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Trial Update: Day One

Today was slated for jury selection, but the Court moved much more quickly than expected.  I’m informed that witnesses were heard after lunch.  Richard Davis took the stand sometime around 5PM.

Tomorrow, due to elections, the Court will not be in session.  Trial will resume on Wednesday.

The trial picked up some coverage in the Los Angeles Times and the Charleston, SC Post and Courier.

UPDATE (Tuesday, November 4):  The Charleston Post and Courier has coverage of the first day of trial. From the article:

“[Trademark Properties and Richard Davis] did everything we were supposed to do, and Richard Davis was credited as creator of the show,” [Frank Cisa, attorney for Trademark] said.

Cisa said A&E executives “did everything they were supposed to do — except pay.”

He told the 12 jurors that Davis is entitled to a multimillion-dollar award.

Charleston attorney Richard Farrier, who represents A&E, began his opening arguments with the phrase, “No way.”

He said Davis was asked if he had any “deals” with A&E when Davis began working with a competing network, TLC.

“He, in writing, confirmed he had no deals,” Farrier said.

He said A&E would never agree to such an arrangement, that even superstar comedienne Tina Fey couldn’t swing a 50-50 split.

“We would never make that deal. The suggestion we would is, frankly, absurd,” Farrier said. “It’s preposterous.”

He asked the jury why someone would appear on national television for free and then answered his own question. Davis, Farrier said, “in effect, got an hour-long infomercial.”

He told jurors that their job is much like the A&E program, “CSI: Miami.”

“What we’re doing today is CSI: Charleston,” he said. “And CSI: Charleston is about contract scene investigation.”


Trademark v A&E Trial Begins November 5

According to the most recent information on the docketing system, jury selection and trial in Trademark v. A&E is expected to begin on Wednesday, November 5, 2008.  You are cordially invited to attend.  The Charleston Federal Courthouse is located at 85 Broad Street in Charleston, South Carolina 29401.  For more information, the Clerk’s phone number is (843) 579-1401.  Arrive before 8:30 to get a good seat.

The Honorable C. Weston Houck will preside over the trial.  There are still a number of dispositive motions which were improperly sealed by A&E in order to prevent the public from viewing them, but some new documents have been filed since the last trial update.  The most important of these are A&E’s motion in limine to prevent Trademark from using their damages expert, Mark Halloran, at trial.  Mr. Halloran initially represented Trademark’s damages as 50% of the net revenues that A&E has earned from the television show “Flip This House”.  At a later date, after receiving discovery materials that A&E failed to produce until after his deposition, he did some research to determine that if a show like “Flip This House” makes it four seasons on TV, it will make it for fifteen.  This would, of course, significantly increase the amount of money owed to Trademark if, in fact, the Jury finds in their favor.  The Judge has determined that the jury should not hear Mr. Halloran’s opinions.

The parties seem to be in general agreement over the net revenues from the show, and the main dispute at this point is whether there was an actual agreement between Trademark and A&E that Trademark would receive 50% of the net revenues.  The jury will decide this and several other questions after reviewing the evidence at trial.

For those curious about the excluded witness, you may wish to review the transcript of the October 16, 2008 hearing and the Order GRANTING A&E’s Motion.  There are also various documents relating to Jury selection and instruction.

  • Docket as of October 30, 2008
  • 09/11/2008 #95 NOTICE of Bar Meeting: set for 10/14/2008 10:00 AM in Charleston Courtroom #4, U. S. Court House, 85 Broad St, Charleston before Honorable C Weston Houck.
  • 10/22/2008 #108 OFFICIAL TRANSCRIPT of Proceedings Motion hearing held on 10-16-08, before Judge C. Weston Houck. Court Reporter/Transcriber Debra Potocki, Telephone number 843-723-####. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Parties have 7 calendar days from the filing of the transcript to file with the court a Notice of Intent to Request Redaction.. Redaction Request due 11/12/2008. Redacted Transcript Deadline set for 11/24/2008. Release of Transcript Restriction set for 1/20/2009.
  • 10/24/2008 #110 STIPULATION Dismissing Plaintiffs’ Promissory Estoppel Claim by Trademark Properties Inc, Richard C Davis, A&E Television Networks.
  • 10/24/2008 #112 Defendant’s Deposition Designations RULE 26(a)(3)PRETRIAL DISCLOSURES by A&E Television Networks. Objections to PreTrial Disclosures due by 11/10/2008.
  • 10/27/2008 #113 Proposed Voir Dire by A&E Television Networks.
  • 10/27/2008 #114 Proposed Jury Instructions by A&E Television Networks
  • 10/28/2008 #116 ORDER granting 98 Sealed Motion Signed by Honorable C Weston Houck on October 28, 2008.
  • 10/29/2008 #117 Proposed Jury Instructions by A&E Television Networks.

While I will be attempting to get copies of the trial transcripts, I will be unable to attend the trial.  Several of our regular visitors, however, have promised to share updates with me as the trial progresses.  I also have not had the time necessary to intervene and request that the Court unseal those documents which were inappropriately restricted. 

Good luck to everyone involved.


It’s Lovely! I’ll Take It!

Courtesy of MetaFilter, I’d like to point you to It’s Lovely! I’ll Take It!, a blog which points out poorly chosen photos in MLS listings. 

Remember, it’s always important to put your best foot forward when marketing your property. 


Trademark v A&E Update – July 2008

It has been some time since I last updated you on the status of the Trademark vs A&E litigation taking place in the US District Court in Charleston, SC. 

During this time, discovery has been taking place, with Judge Houck offering reasonable extensions of deadlines for the parties.  A&E expressed difficulty in obtaining discovery from Trademark, but the proablems appear to have been resolved.  There is no indication that mediation took place, though the parties did at least attempt to arrange same. 

The case is moving toward trial.  Discovery has been closed.  Motions were due on July 10, and jury selection is to be done by November 3.  Motions for summary judgment were filed by A&E and Departure Films on the 10th. The motions and their exhibits, however, were filed under seal.  Your humble webmaster will effort a copy of these documents as soon as possible.  As dispositive motions, these records should be available to the public.

Trademark did not file motions of their own, but will file their responses to the pending motions by July 28. 

New Documents:

  • Docket as of July 13, 2008
  • 11/30/2007 #71 MOTION to Compel Discovery Responses of Plaintiffs/Counterclaim Defendants and Memorandum in Support Thereof by Departure Films & A&E Television Networks
    • Exhibit A – Plaintiff’s Discovery Responses dated 11/8/06 and 12/27/06
    • Exhibit B – Plaintiff’s Supplemental Discovery Responses dated 03/2007
    • Exhibit C – 3/22/07 Letter from Richard Farrier to Frank Cisa
    • Exhibit D – 4/19/07 E-Mail from Richard Farrier to Frank Cisa
    • Exhibit E – 6/21/07 Letter from Richard Farrier to Frank Cisa
    • Exhibit F – 10/31/07 E-Mail from Robert Jordan to Frank Cisa
  • 12/19/2007 #72 ORDER denying Motion for Reconsideration; denying Motion for More Definite Statement on 12/19/07
  • 02/07/2008 #75 THIRD AMENDED SCHEDULING ORDER ADR Statement due by 3/14/2008, Amended Pleadings due by 3/14/2008, Discovery due by 3/14/2008, Motions due by 4/14/2008, Case ready for trial not later than 6/2/2008.
  • 03/14/2008 #77 ADR STATEMENT/CERTIFICATION by A&E Television Networks
  • 03/14/2008 #78 ADR STATEMENT/CERTIFICATION by Departure Films
  • 03/14/2008 #79 MOTION for Extension of Time to Complete Discovery or, in the Alternative, Motion to Compel by Departure Films, A&E Television Networks. Response to Motion due by 4/1/2008
    • Exhibit A– Materials Noticing Deposition of Mark Halloran
    • Exhibit B– Excerpts from 1/24/08 Deposition of Richard C. Davis
    • Exhibit C– Materials Noticing 2/20/08 Deposition of William Campbell
    • Exhibit D– Materials Noticing 3/21/08 Deposition of William Campbell
    • Exhibit E– 2/27/08 Email from Billy Campbell to Nelson Mullins
    • Exhibit F– 1/21/08 Letter from Thomas Whaley to Robert Jordan
    • Exhibit G– 1/31/08 Letter from Richard Farrier to Frank Cisa
    • Exhibit H– 1/14/08 Letter from Frank Cisa to Robert Jordan
    • Exhibit I– 1/28/08 Email from Frank Cisa to Robert Jordan
    • Exhibit J– 1/29/08 Subpoenas and Letters from Robert Jordan to Sprint Nextel and NuVox Communications
    • Exhibit K– Second Set of Interrogatories of Defendants/Counterclaim Plaintiff to Plaintiffs/Counterclaim Defendants
    • Exhibit L– 3/12/08 Email from Robert Jordan to Frank Cisa with proposed Fourth Amended Scheduling Order
  • 04/10/2008 #82 TRANSCRIPT (Unredacted) of telephone conference held on 4-1-08 before Judge C. Weston Houck
  • 06/27/2008 #85 FOURTH AMENDED SCHEDULING ORDER: Discovery is closed, Motions due by 7/10/2008, Jury Selection Deadline 11/3/2008.
  • 07/10/2008 #87 SEALED MOTION by A&E Television Networks. Response to Motion due by 7/28/2008
    • Exhibit #1 Memo in Support of Motion for Partial Summary Judgment
    • Exhibit #2 Affidavit Declaration of Nancy Dubuc
    • Exhibit #3 Affidavit Declaration of Andrew Lemaire
    • No proposed order
  • 07/10/2008 #88 SEALED MOTION by Departure Films. Response to Motion due by 7/28/2008
    • Exhibit #1 Memo in Support in Support of Motion for Summary Judgment
    • Exhibit #2 Affidavit Declaration of Max Weissman
    • No proposed order
  • 07/10/2008 #89 Sealed Document.
  • 07/10/2008 #90 Sealed Document.
    • Exhibit A- Excerpts from 3/8/07 Davis Deposition
    • Exhibit B- Excerpts from 3/9/07 Davis Deposition
    • Exhibit C- Excerpts from 1/24/08 Davis Deposition
    • Exhibit D- Excerpts from 3/16/07 Alexander Deposition
    • Exhibit E- Excerpts from 6/19/08 Halloran Deposition
    • Exhibit F- Amended Complaint
    • Exhibit G- Plaintiff’s Memorandum in Opposition to Defendants’ Motion for Summary Judgment
    • Exhibit H- Transcript of 6/6/07 Hearing
    • Exhibit I- Fourth Amended Scheduling Order
    • Exhibit J- Halloran Expert Report
    • Exhibit K- 12/19/07 Order

As mentioned above, I will be working to obtain copies of the sealed documents (including #87, 88, 89, and 90) in the coming days.


Armando Montelongo Relocates to California?

Armando Montelongo frequently tells viewers that in 2001, he grew tired of being unemployed, living in his in-law’s garage in Southern California.  He and his wife borrowed $1000, packed up the car, and coasted into San Antonio on their last tank of gas, where he negotiated two months of free rent and sold all his furniture to buy groceries.

If the reports I’m receiving are to to be believed, he’s now back in California.  The California housing market can’t be an easy place for a flipper with the current state of lending, but with home prices on the decline in some markets, the move might produce interesting results. 

At the moment, I have very little information about the progress of his Theft of Services case in Texas – for failure to pay Reliance Appraisal Services for their work.  We’re working on collecting additional information on this matter.

We are unable to determine whether Montelongo is still associated with A&E’s Flip This House after this move, but will continue to report as this story develops.


Trademark v A&E Moving Slowly

As often happens in litigation, the Trademark Properties lawsuit is moving along slowly.  On July 17, the Court set a number of deadlines:

  • Plaintiffs ID of Expert Witness due by 9/13/2007
  • Defendants ID of Expert Witnesses Due by 10/13/2007
  • Amended Pleadings due by 11/13/2007
  • Discovery due by 11/13/2007
  • Motions due by 12/13/2007
  • Jury Selection Deadline 2/13/2008

The docket doesn’t reflect any filings that designate experts in this case.  Discovery, of course, is not filed with the Court.  It looks as if there won’t be much activity on the case until we start approaching the motions deadline, and it is entirely possible that the parties will seek a new scheduling order at that time.

There have been a few documents filed, dealing with the results of the summary judgment hearing.  They are:

  • TRANSCRIPT of Summary Judgment Motion Hearing held on June 6, 2007 before Judge C. Weston Houck.
  • MOTION for Reconsideration by Departure Films.
  • MOTION for More Definite Statement for Clarification by A&E Television Networks.
  • RESPONSE in Opposition re MOTION for More Definite Statement for Clarification, MOTION for Reconsideration.
  • FIRST AMENDED SCHEDULING ORDER


Montelongo Foreclosure and Court Activity

It appears that Armando Montelongo experienced difficulty with some recent financing from VCH Funding Corporation.  Montelongo’s company, Mandoman Management, Inc., fought off August 7, 2007, foreclosures on four separate properties by obtaining a temporary restraining order, allowing Montelongo the time necessary to line up alternate financing.  The restraining orders ended on August 21, 2007.  The cases now indicate that they have been terminated.  Neither Montelongo’s Attorney nor VCH Funding have returned calls requesting comment.

You can view the court documents to learn more.

Stopping the foreclosures, if alternate funding can be obtained, is an very smart move.  Same allows the lender to receive cash instead of properties, and allows the owner to continue forward with efforts to sell the properties for a profit.  An important lesson to be learned in the current real estate market is that owners should communicate with their lenders when business is not going as planned.  Often, lenders are willing to work with a borrower, or will at least delay action if the borrower presents a solid plan that benefits all parties. 

Additionally, public records searches have uncovered additional foreclosures and civil cases, all of which may be of interest to our readers.  Due to the high cost of copying, some of the civil cases only include dockets, and some foreclosures do not include deeds or trust and acquisition deeds.

Properties:

1139 Lombrano Trustee Sale
114 Repose Deed of Trust
114 Repose Trustee Sale
114 Repose Warranty Deed
131 Bristol Deed of Trust
131 Bristol Trustee Sale
131 Bristol Warranty Deed
1410 Thorain Trustee Sale
1419 Woodlawn Trustee Sale
158 Ballard Deed of Trust
158 Ballard Trustee Sale
158 Ballard Warranty Deed
238 Basswood Deed of Trust
238 Basswood Trustee Sale
238 Basswood Warranty Deed
254 St Francis Deed of Trust
254 St Francis Trustee Sale
254 St Francis Warranty Deed
3123 Hicks Trustee Sale
Camada Trustee Sale
Colina Moderena Trustee Sale
Devoto Trustee Sale
F Street Trustee Sale
Gardina Trustee Sale
Gibbs Sprawl Trustee Sale
Jefferson Trustee Sale
Kashmuir Trustee Sale
Lennon Trustee Sale
Pleasure Park Trustee Sale
Rivas Trustee Sale
Rose Trustee Sale
Rosewood Trustee Sale
San Carlos Trustee Sale
San Eduardo Trustee Sale
Topeka Trustee Sale
Weidner Trustee Sale
Winnepeg Trustee Sale

Civil Cases:

Allison, et al v Armando Montelongo LTD, et al
Bexar County, et al v Montelongo Acquisitions Inc, et al
Escalante, et al v Montelongo Developments LLC, et al
Montelongo v Waring Investments, Inc.
Olsen, et al v Montelongo Inc, et al
Summers v Armando Montelongo, et al

Thus far, the producers of Flip This House have been unwilling to show viewers less than successful results.  As the market declines, property flippers across the country are suddenly finding that they’ve overbuilt, overpaid, or overestimated demand in their areas.  Now is a perfect opportunity for A&E to show the bad, as well as the good.

Failure can often be more educational than success.


David Montelongo Sued By Investor

The San Antionio Express-News Reports:

The lawsuit, brought by David Escalante of California, alleges that he gave David Montelongo and his company, Montelongo Developments LLC, $5,000 in earnest money and $500 in option money for a 17 percent share in a 14,000-square-foot retail development on a 4-acre tract in Schertz.

The deal was outlined in a partnership agreement that Montelongo drafted, the lawsuit alleges.

The lawsuit claims that Montelongo used the money to put the land under contract, but never signed the partnership agreement.

Montelongo told Escalante he had decided to pursue the deal with a different party, claims Todd Prins, the San Antonio lawyer representing Escalante in the suit.

Montelongo never returned the earnest money, Prins said.

Escalante and his investment company, Pres Estate LLC, are seeking “our share of the deal,” Prins said.

“We’re not seeking anything else than what was agreed to in the beginning,” he said, adding that Montelongo could buy his clients out of the partnership agreement.

Read the entire story for additional details.  FlipThisLawsuit will post the complaint and other documents as soon as we can obtain them from the courthouse.

[Hat tip to the numerous people who submitted the article to us.]


Texas State Architecture Students not paid by A&E, Montelongo

The Texas State University Star reports:

A&E falls short on agreement with students, faculty member 

A group of former Texas State students and a faculty member are disappointed after working with the A&E television show “Flip This House.”

The show “Flip This House” with Armando Montelongo of Montelongo House Buyers Inc. of San Antonio, produced an episode during the fall 2006 semester in conjunction with a Texas State Architectural Design 3 class.

Montelongo planned to enlist the help of the undergraduate class to “flip” an empty lot at Smith Lane in San Marcos, and construct nine buildings with four condominium units in each structure, all the while maximizing the return on his investment.

The students were instructed to form teams and develop site diagrams for the project. Montelongo planned to judge the team’s work and choose a winner at the end of the show. The winner’s diagrams were then to be implemented by Montelongo at the site.

“The winning team composed of six students was promised a cash prize of $500 per student,” Carpenter said. “The show was filmed, the winning team was announced in a board room scene and a check was presented to the students. The students later found out that the check was only a prop and could not be deposited.”

Read the full article at the Texas State University Star. Hat tip to Steve in Texas for finding this article.


Mike Voss Reviews Armando Montelongo’s E-book

Frequent visitior, Mike Voss, offers the following review of Armando Montelongo’s e-books to readers of Flip This Lawsuit.  Please note, Flip This Lawsuit has not reviewed the e-books, and the opinions expressed in the review are not necessarily those of Flip This Lawsuit.

You can view the entire review by clicking the title above.

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