Appendix — Legg v. Smith
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Supreme Court, US
FILED
DEC 21 1998
No. 90-646 ~~ JOSEPH F. SPANIOL, UR,
SLERK
+ ee
a
IN THE
Supreme Court of the United States
OcTOBER TERM 1990
IN THE MATTER OF UNITED
) MARKETS INTERNATIONAL, INC., Debtor
R. Davip LEGG,
Petitioner
vs.
W. Steve Smith, Trustee,
Respondent
APPENDIX TO
BRIEF IN OPPOSITION TO PETITION
FOR A WRIT OF CERTIORARI TO
fHE UNITED STATES COURT OF %
APPEALS FOR THE FIFTH CIRCUIT
W. Steve SMITH agtonion
ee HaALt & PRIMM, a.
7000 Texas Commerce Tower
Houston, Texas 77002
713/221-3935
Counsel of Record
Attorney for Respondent,
W. Steve SMITH, Trustee
a-i
TABLE OF CONTENTS
APPENDIX A
Order Appointing Trustee (dated February 27, 1985) ...
APPENDIX B
Order for Relief and Appointment of A Trustee (dated
ie iil es on ing 5d wewarde tu sea aus
APPENDIX C
Notice of Appeal (to District Court related to Order for
tes Bo bat ovat akan abit dacedad¥erneorn eve.
APPENDIX D
Order of District Court dated July 7, 1988 (related to
ake ee So oie ae i oe ak
APPENDIX E
Notice of Appeal (to Fifth Circuit related to Order for
Ee are re a ens oa sick hE ER RADON T EEOC EER 8
APPENDIX F
Opinion of Fifth Circuit Court of Appeals dated Decem-
ber 2, 1988 (related to Order for Relief)............
APPENDIX G
Memorandum and Order of District Court dated
March 7, 1990 (related to sanctions) ...............
APPENDIX H
Order of District Court dated September 27, 1990
Commeeels GO Gletier Gir TUGTEGE) 6c ccc ccc ceocves
APPENDIX I
Ura wid ba 6 bc ke ed odd es 66 RKA ORS Oe
APPENDIX J
Answer of R. David Legg to Trustee’s Original Com-
plaint (Adversary No. 85-0375-H1) ................
First Amended Answer of R. David Legg to Trustee’s
a rep ee eae herman
PAGE
B-|
E-1
APPENDIX K
Order of Bankruptcy Court dated May 11, 1988 (for
accounting in Adv. No. 85-0375-H1) ....... 6.65055.
APPENDIX L
Application for Temporary Restraining Order Pursuant to
ale GD) sco dccccavidecccenpudetentsceeeds:
APPENDIX M
Order of District Court dated July 21, 1988 ...........
APPENDIX N
Motion Requesting Stay of Execution of Judgment
Pending Hearing to Set Bond Or Security; Request for
Expedited Hearing On Sanctions ...............45.
APPENDIX O
ee Sn a Ea a ere TY “py yeeyny epee
APPENDIX P
Final Judgment of District Court dated November 9,
1989 (imposing constructive trust) ...........65005.
Opinion on Affirmance of the Bankruptcy Judgment ....
APPENDIX Q
Motion for Reconsideration Pursuant to Rule 59 and
60(A) Federal Rules of Civil Procedure ............
Notice of Appeal ........cccccccccscccccccsesvesess
APPENDIX R
Order Authorizing Sale Free and Clear of Bankruptcy
Court Dated December 6, 1988.............. sevens
APPENDIX S
Agreed Order of Bankruptcy Court dated
Jame 16, 19GB: onic ccs Svea ee eee odes res
PAGE
K-|
L-!
R-1
APPENDIX A
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN Re: )
UNITED MARKETS
INTERNATIONAL, INC.
Debtor, CASE
Essam Opsaip, et al. No. 85-00872-H2-5
Movants, DISTRICT COURT
VS. CASE
No. MBH-85-150
UNITED MARKETS
INTERNATIONAL, INC.
Respondent.
ORDER APPOINTING TRUSTEE
The Motion to Appoint Trustee or, in the Alternative, an
Examiner, filed by Essam Obaid and Obaid & Almulla Construc-
tion Company, Ltd. (“OBALCO”) having come on for consider-
ation before the Court, the proper notice thereof having been
given, and a hearing having been held thereon on February 19 and
20, 1985, at which hearing were present and participating counsel
for Movants and for Respondent, the Court finds, based upon
testimony and evidence presented at such hearing, that the
appointment of a trustee for the estate of United Markets Inter-
national, Inc. (“UMI”), pursuant to Section 1104 of the Bank-
ruptcy Code, would be in the best interests of the creditors and
the estate of UMI for the reasons that:
(1) there has been a sufficient showing of fraud, dis-
honesty, incompetence and gross mismanagement of the
affairs of UMI; and
A-2
(2) the principal asset of UMI may be a cause or
causes of action against R. David Legg, the president and
sole shareholder of UMI, for, inter alia, monies transferred
to him or on his behalf from UMI; and it is accordingly,
ORDERED that W. Steve Smith be, and he hereby is,
appointed trustee of UMI pursuant to Section 1104 of the
Bankruptcy Code, and it is further
ORDERED that the trustee secure a bond pursuant to
Section 322 of the Bankruptcy Code in the amount of $11,000.00
and evidence of the same be filed with this Court, and it is further
ORDERED that Movants, Essam Obaid and Obaid &
Almulla Construction Company, Ltd., shall pay into the registry
of this Court, upon further order of this Court, such amounts as
shall be necessary to compensate reasonably the trustee for his
services performed in this case and to compensate such profes-
sionals as may hereafter be employed by the trustee pursuant to
further order of this Court, and it is further
ORDERED that such payments, to the extent not repaid to
Movants, shail be first priority administrative expenses as de-
scribed in Section 507(a)(1) of the Bankruptcy Code allowed
under Section 503(b) of the Bankruptcy Code, and it is further
ORDERED that each of the trustee and such professionals
shall be entitled to receive compensation from such funds only in
the event there are insufficient assets in the estate to satisfy his
application for compensation which has been approved by the
Court and to the extent consistent with Sections 326, 327, 328,
330 and 504 of the Bankruptcy Code.
DATED: February 27th, 1985.
CAROLYN DINEEN RANDALL
UNITED STATES Circuit JUDGE
sitting by designation
sd ian aaa aaainiiiaiia ee
APPENDIX B
UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN Re:
UNITED MARKETS CASE
INTERNATIONAL, INC. No. 85-00872-H2-5
Debtor
ORDER FOR RELIEF AND
APPOINTMENT OF A TRUSTEE
Came on for consideration the Involuntary Case: Creditors’
Petition (the “Petition’”) filed on February 7, 1985, against the
above-named Debtor, and the Consent to Entry of Order for
Relief and Appointment of a Trustee signed by United Markets
International, Inc. (“UMI”), and there being sufficient grounds
for the relief sought in the Petition, it is accordingly
ORDERED that an Order for Relief under Chapter 11 of
Title 11 of the United States Code is hereby granted with respect
to UMI, and it is further
ORDERED that W. Steve Smith be, and hereby is, contin-
ued as trustee of UMI, having been appointed as Trustee on
February 27. 1985 by order of this Court pursuant to Section 1104
of the Bankruptcy Code.
DATED: - March 28, 1985.
/s/_ R. F. WHELESS Jr.
R. F. Wheless Jr.
United States Bankruptcy Judge
APPENDIX C
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN Re: Y
Unitepo MARKETS CASE
INTERNATIONAL, INC. No. 85-00872-H2-5
Debtor
NOTICE OF APPEAL
United Markets International, Inc., alleged debtor, hereinaf-
ter appellant, appeals to the district court from the final Order for
Relief entered in the above referenced matter on the 28th day of
March, 1985. Appellant will show that said order was a “fraud
upon the court” as defined in Rule 60(b), of the Federal Rules of
Civil Procedure, and that no time limit is imposed for an appeal
under such circumstances.
Appellant would show that the Court did not have subject
matter jurisdiction to enter said Order, and that no time limit is
imposed for asserting a claim of failure of jurisdiction.
Appellant would have said Order for Relief, and any and all
actions taken pursuant thereto, declared null and void.
Appellant would show that it is entitled to damages, and
remittitur of all funds and/or property wrongfully received and/or
appropriated as a result of this present proceeding and all pro-
ceedings relating thereto.
C-2
The parties to the Order appealed from, their names and
addresses, and/or the names and addresses of their respective
attorneys are as follows:
|. Attorneys for Essam Obaid, Obaid & Almullah
Construction Company:
Hutcheson & Grundy
3300 Citicorp Center
1200 Smith Street
Houston, Texas 77002
~)
Attorney for W. Steve Smith, Trustee:
Barbara Rodgers
Woodard, Hall & Primm
4700 Texas Commerce Tower
Houston, Texas 77002
” 3. Rex Supply Company:
3715 Harrisburg
Houston, Texas 77003
4. Vasco Equipment:
501 N. Shepard
Houston, Texas 77007
5. Alltransport:
1520 Texas
Houston, Texas 77002
C-3
6. Kewaunee Scientific Equipment Co.:
505 E. North Belt
Houston, Texas 77060
Dated: May 5, 1988.
Respectfully submitted,
__J/s/__R. Davip Leca |
R. David Legg
Attorney at Law
3000 Smith Street
Houston, Texas 77006
713/521-9797
Federal Admissions No. 1414
Attorney for Appellant
C-4
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing
Notice of Appeal was served upon all parties named in the
attached List of Service on the Sth day of May, 1988, by placing
same in the United States Mail, postage prepaid.
/s/ R. Davip LEGG
R. David Legg
Debtor —
United Markets International, Inc.
5858 Westheimer, Suite 103
Houston, Texas 77051
Debtor's Attorney —
Ronald J. Sommers
2302 Fannin, The Gibraltar Bldg.
Houston, Texas 77002
Priority Creditors — First Class Mail
Internal Revenue Service
3223 Briarpark
Houston, Texas 77042
Texas Employment Commission
P. O. Box 2908
Austin, Texas 78769
All Secured Creditors
None
C-5
Twenty Largest Unsecured Creditors — First Class Mail
American Express
P. O. Box 13764
Phoenix, Arizona 85002-3764
DHL Airways, Inc.
Central Region
P. O. Box 38465
Houston, Texas 77238-8465
Federal Express Corporation
P. O. Box 727 Dept. A
Memphis, Tennessee 38194
General Motors Acceptance Corporation
7141 Office City Drive
Houston, Texas 77087
Vasco Automotive Equipment Warehouse Company, Inc.
501 N. Shepard Drive
Houston, Texas 77007
WAF/RMH Office I Joint Venture
Brazos Management Company
5858 Westheimer, Suite 503
Houston, Texas 77057
Warren, Gonham & Lamont, Inc.
210 South Street
Boston, Massachusetts 02111
Western Union Telegraph Co.
427 S. LaSalle Street
Chicago, Illinois 60605
Clyde Wilson International Investigative and
Securities Service
1506 Upland
Houston, Texas
C-6
Attorney for Creditors — First Class Mail
Robert G. Richardson
3300 Citicorp Center
1200 Smith Street
Houston, Texas 77002
Equity Security Holder — First Class Mail
R. David Legg
101 Westcott, Suite 1201
Houston, Texas 77007
Gerald P. DeNisco
5177 Richmond, Suite 1050
Houston, Texas 77056
Parties Requesting Notice — First Class Mail
Pete Sandoval
Heard, Goggan, Blair, Williams & Harrison
3150 Citicorp Center
1200 Smith Street
Houston, Texas 77002
Hancock & Lippert
5858 Westheimer, Suite 104
Houston, Texas 77057
Hannah Niday Flowers
P. O. Box 66464
Houston, Texas 77006
Houston Fire & Safety Equipment Company
85555 W. Monroe Rd.
Houston, Texas 77061
Kewaunee Scientific Equipment Corporation
P. O. Box 95973
Chicago, Illinois 60694
C-7
Pitney Bowes
P. O. Box 38390
Louisville, KY 40233-8390
RCA Service Company
P. O. Box 7780-1274
Philadelphia, PA 19182
Red Hot Documentation Consultants
P. O. Box 74109]
Houston, Texas 77274-109]
Southwestern Bell Telephone
3100 Main, Room 207
Houston, Texas 77002
The Stephens Company
P. O. Box 14516
Houston, Texas 77221-4516
TMC/America, Inc.
3301 Airport Freeway, Ste. 222
Bedford, Texas 7602]
TMC of Houston
4801 Woodway, Suite 160 W.
Houston, Texas 77056
APPENDIX D
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
CIVIL ACTION
No. H-88-1706
BANKRUPTCY
No. 85-00872-H2-5
IN RE:
UNITED MARKETS
INTERNATIONAL, INC.
ORDER
In adjudicating a bankruptcy appeal this Court must make
an independent assessment of its jurisdiction. See City of Miami
v. Interstate Commerce Commission, 669 F2d 219, 221 (Sth Cir.
1982). Having made such a determination, the Court DIS-
MISSES this appeal for want of jurisdiction.
Pursuant to Bankruptcy Rule 8002, a notice of appeal must
be filed within 10 days of entry of the appealable order. Failure to
follow Rule 8002 mandates dismissal of the appeal. Matter of
Bad Bubba Racing Products, 609 F.2d 815 (Sth Cir. 1980).
Appellant filed his notice of appeal on May 5, 1988. He seeks to
appeal an order for relief signed March 28, 1985, and entered on
April 2, 1985. The notice of appeal is not timely and this appeal
must be dismissed.
Appellant argues that the appeal is timely because the
March 28, 1985, order was a fraud upon the Court and this appeal
is made pursuant to Fed. R. Civ. P. 60(b) . He also argues that
the bankruptcy court lacked subject matter jurisdiction to enter
the March 28, 1985, order.
A Rule 60 (b) motion can not be used to escape the time
limits for appeal. United States v. 329.73 Acres of Land, 695 F.2d
922, 925-6 (Sth Cir. 1983). The purpose of a 60 (b) motion is to
D-2
allow the trial judge to reconsider a matter to correct obvious
errors and perhaps obviate an appeal. Fackelman v. Bell, 564
F.2d 734, 736 (Sth Cir. 1977). It is not a substitute for an appeal.
Id. at 735. Appellant cannot bring this appeal pursuant to Rule
60(b). The Court also notes that an examination of the record
shows no fraud on the Court took place.
It is clear that the bankruptcy court has subject matter
jurisdiction over the case which is now on appeal. 28 U.S.C.
§ 1334(a); see also 28 U.S.C. §§ 151, 157. Appellant argues that
the bankruptcy court lacked subject matter jurisdiction to enter
the March 28 order because a trial is required before entry of the
March 28 agreed order. The failure to hold a trial does not
deprive the Court of jurisdiction and must be raised on timely
appeal, not three years after the appeal time has run. See Vallely
v. Northern Fire & Marine Insurance Co., 254 U.S. 348, 353
(1920).
The bankruptcy court had the authority to enter the
March 28, 1985, order. 11 U.S. § 303 (h); Bankr. Rule 1013.
UMI’s attorney entered into an agreed order consenting to the
bankruptcy proceedings. R. at 34.' Under Section 303(h) Judge
Wheless properly entered the March 28 order without delay.
Appellant waited over three years before filing his notice of
appeal. He is barred by the doctrines of laches and estoppel from
now asserting that the March 28, 1985, order of relief is void.
Citation Cycle Company v. York, 693 F.2d 691 (7th Cir. 1982).
For these reasons the Court must dismiss this appeal. Tem-
norary Restraining Order DENIED fer want of jurisdiction.
' The affidavit of David Unger indicates that Mr. Legg consented to
entry of the March 28 order. Even if there is a dispute regarding
consent, a purty is bound by the acts of his attorney. Callip v. Harris
County Child Welfare, 757 F.2d 1513, 1522 (Sth Cir. 1985). Appe-
lant cannot complain on appeal regarding the absence of his consent.
D-3
APPEAL DISMISSED.
Done at Houston, Texas, this 7th day of July, 1988.
/s/ NORMAN W. BLACK
Norman W. Black
United States District Judge
APPENDIX E
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
CIVIL ACTION
—— aes No. H-88-1706
— — aa ‘ BANKRUPTCY
NTERNATIONAL, INC. No. 85-00872-H2-5
NOTICE OF APPEAL
UNITED MARKETS INTERNATIONAL, INC., Appel-
lant, appeals to the Fifth Circuit Court of Appeals from a final
order of the U.S. District Court, Southern District of Texas,
Houston Division.
Appellant would show that a trial is a necessary prerequisite
to the entry of an order pursuant to 11 USC 303(h); further
without such a mandated trial, any subsequent order is void.
Appellant would further show that subject matter jurisdic-
tion cannot be conferred by agreement, consent, waiver, collusion
or estoppel.
Appellant would further show that lack of subject matter
jurisdiction is an issue that may be raised at any time.
Appellant would further show that an action to set aside a
void order may be had at any time.
Appellant would further show that there was committed a
fraud upon the court, and that an appeal may be had in such a
circumstance without regard to limitations.
E-2
The parties to the judgement appealed from, and/or their
attorneys of record are:
1. W. Steve Smith
Woodard, Hall & Primm
4700 Texas Commerce Tower
Houston, Texas 77002
ed
Hutcheson & Grundy
3300 Citicorp Center
1200 Smith Street
Houston, Texas 77002
Respectfully submitted,
/s/ R. Davip LEGG
R. David Legg
Attorney at Law
3000 Smith Street
Houston, Texas 77005
Federal Admissions No. 1414
Attorney For Appellant
UNITED MARKETS
INTERNATIONAL, INC.
APPENDIX F
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 88-2721
Summary Calendar
IN THe MATTER OF UNITED
MARKETS INTERNATIONAL, INC., Debtor
UNITED MARKETS INTERNATIONAL, INC.,
Appellant,
VS.
EssamM OBalIbD, OBAID & ALMULLA CONSTRUCTION
Company, Ltp., and W. Steve Smitn, Trustee,
Appellees.
APPEAL FROM THE UNITED STATES
DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
(CA-H-88- 1706)
(December 2, 1988)
Before RUBIN, REAVLEY, and JONES, Circuit Judges.
PER CURIAM:*
Over three years after the bankruptcy court entered an order
for relief in an involuntary petition initiated against United
Markets International, Inc., that company’s president, Legg, filed,
* Local Rule 47.5 provides: “The publication of opinions that have no
precedential value and merely decide particular cases on the basis of
well-settled principles of law imposes needless expense on the public
and burdens on the legal profession.” Pursuant to that Rule, the court
has determined that this opinion should not be published.
F-2
in May, 1988, an appeal of that order. Although the debtor at
first contested the involuntary petition, his attorney signed a
pleading admitting many of its allegations and setting the stage
for entry of an agreed order for relief in April 1985.
Appellant’s essential contention is that this agreement to
enter an order for relief was made without his knowledge or
approval and constituted a fraud on the court. Legg asserts that,
notwithstanding a statement to the contrary submitted by his
then-attorney subject to penalties of perjury, he did not withdraw
his objection to the involuntary petition. Now, after having
dogged the trustee for three years and lost a lawsuit to the trustee
for misappropriation of corporate funds, Legg wants to relitigate
the propriety of the involuntary bankruptcy.
This position is untenable. As the district court found,
Bankruptcy Rule 8002 requires an appeal from a bankruptcy
court order to be filed within ten days of its entry. Suffice it to say
this period expired long before May 1988.
Legg next asserts that he seeks relief under Federal Rule of
Civil Procedure 60(b). That rule plainly does not apply to this
case. Rule 60(b) is designed to seek relief from the court which
rendered the judgment or order complained of, and not from
another court. Banker's Mortgage Company v. United States, 423
F.2d 73, 78 (Sth Cir. 1970). The bankruptcy court entered the
order for relief, not the district court, hence the district court
could not entertain a Rule 60(b) motion. Further, the district
court has jurisdiction over bankruptcy court orders in two ways
following the enactment of 28 U.S.C. § 158(a) in 1984. The
district court must hear appeals from all final orders, judgments or
decrees of the bankruptcy court, and it may, by leave, hear
interlocutory appeals. Congress simply did not provide district
courts the free-wheeling ability to remedy “fraud” in bankruptcy
court orders that Legg seeks by filing a motion under Rule 60(b).
F-3
The district court properly held, therefore, that because Lege’s
appeal was untimely, it was without jurisdiction to entertain it.
We would also observe that Legg’s arguments supporting his
belated appeal to the district court are so obviously without merit
that we must warn him of the possibility that sanctions may be
incurred if he pursues the filing of further frivolous pleadings or
appeals in this Court. See, e.g, 28 U.S.C. § 1927: FRAP 38.
The judgment of the district court is AFFIRMED.
APPENDIX G
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
) CIVIL ACTION
— No. H-89-3093
UNITED MARKETS CHAPTER 11
INTERNATIONAL, INC. BKCY. No.
Pe ae 85-00872-H2-5
ADVERSARY
} No. 85-0932
MEMORANDUM AND ORDER
Appellant, R. David Legg, pro se, purportedly on behalf of
United Markets International, Inc. (“UMI”), has appealed a
final order issued on June 23, 1989 by Bankruptcy Judge Wheless
imposing sanctions in excess of $63,000 on Appellant. It is this
order from which he appeals even though his brief contains other,
unrelated issues.
One such issue concerns Judge Wheless’ final Order of
Relief dated March 28, 1985. That order was granted to the
creditors of UMI who petitioned the court for an involuntary
Chapter 11 proceeding. The record shows that Mr. David Unger,
Appellant’s attorney at the time, consented to the bankruptcy
court’s order with the knowledge and acquiescence of Appellant.
Appellee’s Exhibit C, p. 19. Trustee W. Steve Smith, appointed
to the Estate of UMI pursuant to 11 U.S.C. § 1104, remains
active in that position.
Since the final Order of Relief was entered Appellant Legg
has filed two suits in federal district court and a plethora of
actions in both the district and bankruptcy courts in an attempt to
circumvent Judge Wheless’s Order of Relief. As early as Janu-
ary 22, 1986 Judge Wheless, in his dismissal of one of the suits
G-2
removed to his court, admonished Appellant and his counsel for
bringing meritless claims. He threatened to impose sanctions if
they continued to pursue such claims. Appellant’s Exhibit 8a.
However, this did not dampen the enthusiasm of Appellant
Legg who continued to plague the Court with additional causes of
action. On May 5, 1988 Appellant filed an appeal of the
March 28, 1985 final Order of Relief, which was dismissed on
July 7, 1988 by District Court Judge Norman Black for being
untimely. Bankruptcy Rule 8002. The Fifth Circuit Court of
Appeals affirmed on December 2, 1988. Again, Appellant Legg
was admonished for his meritless claim and was threatened with
sanctions. Appellee’s Exhibit B6. A second District Court suit,
this one including RICO allegations, was dismissed by Judge
David Hittner on December 12, 1988.
On June 23, 1989, Judge Wheless ordered Appellant Legg to
pay approximately $63,000 in sanctions pursuant to Fed. R. Civ.
P. 11 and Bankruptcy Rule 9011. Appellant’s motion for new
trial was denied and this appeal followed.
Appellant’s Arguments
1. The Original Order for Relief was a legal nullity. This
argument has already been decided by this Court and the Fifth
Circuit Court of Appeals and therefore will not be addressed.
2. Removal of Adversary Proceeding No. 85-0932 was
wrongful because the bankruptcy court lacked jurisdiction. After
careful review of the record, this Court finds that the bankruptcy
court had jurisdiction over Appellant’s adversary proceeding pur-
suant to 28 U.S.C. § 157(a).
3. A bankruptcy judge has no jurisdiction to award sanc-
tions; and appellant, as litigant, is not a proper party for assess-
ment of sanctions. Bankruptcy Rule 9011 incorporated Fed. R.
G-3
Civ. P. 11 and permits a bankruptcy judge to sanction an attorney,
the represented party, or both, as deemed appropriate.
4. The sanctions are punitive, and not rehabilitative; and
appellees conduct increased fees. Bankruptcy Rule 9011 states
that the court
shall impose ... an appropriate sanction which may include
(emphasis added) an order to pay to the other party or
parties the amount of the reasonable expenses incurred
because of the filing of the document, including a reasonable
attorney’s fee.
It is clear from a reading of Rule 9011 that other charges may be
assessed against a party in addition to attorney’s fees and ex-
penses, e.g. punitive fees. Further, there is no indication from
either Bankruptcy Rule 9011 nor Rule 11, Fed. R. Civ. P. that
rehabilitation is the sole purpose of sanctions. However, it is
apparent from the record that the sanctions imposed on Appellant
were an accumulation of the attorneys’ fees expended by the
Appellees in the numerous meritless actions instigated by Appel-
lant. These fees have been well-documented by Appellees.
5. Judge Wheless’s Order is too vague to support an award
of sanctions. The records of in re: United Markets International,
Inc. are replete with evidence supporting a sanctions order.
6. Trustee abandoned claims against OBALCO, thereby
rendering MOOT sanctions against Appellant for bringing suit
against Appellees. This argument is factually untrue, as Trustee
Smith has sued OBALCO in Adversary Proceeding No. 87-0866
which is now pending in the United States Bankruptcy Court.
For the reasons stated above, it is ORDERED that Appel-
lant’s request for an oral hearing is DENIED. It is further
ORDERED that the Order of the United States Bankruptcy
Court imposing sanctions and signed June 23, 1989 is AF-
FIRMED. It is further
G-4
ORDERED that there being no further pending dispute in
this case, the appeal is DISMISSED.
Signed this 7th day of March, 1990 at Houston, Texas.
/s/ NORMAN W. BLACK
Norman W. Black
United States District Judge
APPENDIX H
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Davip LEGG, )
Plaintiff
ve. CIVIL ACTION
UNITED MARKET No. H-90-716
INTERNATIONAL, INC.,
Defendant. |
ORDER
The order of the Bankruptcy Court denying Appellant’s
Rule 60(b) motion is affirmed.
David R. Legg, president of Market International Inc.,
(“MCI”) is appealing an order of the Bankruptcy Court. On
March 28, 1985, the Bankruptcy Court entered an order for relief
from an involuntary bankruptcy petition and designated Steve
Smith as trustee for the company. David Unger, MCI’s attorney
at the time of the involuntary petition, had agreed to the terms of
the order.
In May 1987, Legg, unsatisfied with the Bankruptcy Court’s
ruling and with Unger’s actions, filed a Rule 60(b) motion in the
District Court to attack the Bankruptcy Court’s order for relief.
Legg argued that the Bankruptcy Court lacked jurisdiction to
enter the order of relief and that Unger lacked the authority to
consent to the order. In addition, Legg argued that the actions
constituted fraud on the Court.
This Court dismissed Legg’s appeal holding that the Bank-
ruptcy Court had jurisdiction over the case; that a valid order had
H-2
been issued in 1985; that laches and estoppel barred Legg’s appeal
and that the appeal was not timely.
The Fifth Circuit affirmed the District Court’s holding and
admonished Legg to refrain from further attempts to escape the
Bankruptcy Court’s order in the following language:
We also observe that Legg’s arguments supporting his
belated appeal to the district court are so obviously without
merit that we must warn him of the possibility that sanctions
may be incurred if he pursues the filing of further frivolous
pleadings or appeals in this Court.
Undeterred by the Court’s warning, Legg filed a Motion to
Vacate Void Order under Rule 60(b) again, but this time in the
Bankruptcy Court. Legg was thus trying to bring his appeal of the
i985 order in the proper forum. The Bankruptcy Court dismissed
his appeal, denied Legg’s motion for reconsideration, and affirmed
the validity of the 1985 order.
Legg’s present appeal to the District Court contains essen-
tially the same arguments as those previously raised before this
Court. Legg’s argument now has one additional wrinkle. Legg
contends that, because his Rule 60(b) motion is the proper
procedural attack on the 1985 order and the Bankruptcy Court
refused to allow an adversary hearing on the validity of that order,
his appeal is now properly before the District Court.
While applauding Legg’s creativity, the court finds no merit
to his argument. This Court now affirms the Bankruptcy Court’s
1985 order once again and denies Appellant’s motion for sum-
mary judgment. In addition, in light of the Fifth Circuit’s
admonishment and the history of the case, the Court finds that
Legg’s second attempted appeal is frivolous. It is further
ORDERED that Appellant’s Motion to Strike is DENIED.
It is further
H-3
ORDERED that Appellant’s Original Motion to Supple-
ment the Record is GRANTED with regard to all items listed on
pages 2 & 3 of the motion. The motion is DENIED with regard
to item #2 on page 4 of the motion, the letter from Hutcheson &
Grundy. It is further
ORDERED that Appellant’s Second Motion to Supplement
is GRANTED with regard to item #1, a copy of the transcript of
a Preliminary Heaing in the Bankruptcy case, and the motion is
DENIED with regard to item #2, the series of newspaper
articles.
Signed this 27th day of September, 1990 at Houston, Texas.
/s/ NORMAN W. BLACK
Norman W. Black
United States District Judge
se
~ pererhigie senaneel Si a” I OS SER
APPENDIX I
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: 7
UNITED MARKETS C.A. H-89-3093
INTERNATIONAL, INC. CASE No. 85-00872-H2-5
R. Davip LEGG, et al. >
Plaintiffs CHAPTER 11
Essam Opalb, et al. ADVERSARY No. 85-0932
Defendants |
NOTICE OF APPEAL
Notice is hereby given that R. David Legg, Appellant below,
hereby appeals to the United States Court of Appeals for the
Fifth Circuit from the final order denying Appellant Legg’s
Motion for Reconsideration, entered in this action on the 26th day
of October, 1990, as well as any and all interlocutory orders
entered pursuant thereto. Parties to this appeal requiring notice,
their last known addresses and/or addresses of their respective
counsel are as follows:
Parties notified by R. David Legg:
TIMOTHY WENTWORTH THOMAS T. HUTCHESON
W. STEVE SMITH HUTCHESON & GRUNDY
WOODARD, HALL & PRIMM, P.C. 3300 CITICORP CENTER
7000 TEXAS COMMERCE TOWER 1200 SMITH STREET
HOUSTON, TEXAS 77002 HOUSTON, TEXAS 77002
ROBERT FINLEY ESSAM OBAID
ATTORNEY AT LAW 3 ALLBERT GOS
707 TRAVIS, SUITE 1700 GENEVA 1206 SWITZERLAND
HOUSTON, TEXAS 77002
OBAID & ALMULLA CONSTRUCTION CO., LTD.
KHALIL AWAD P.O. BOX 15467
P.O. BOX 59 RIYADH, SAUDI ARABIA
DUBAI, UNITED ARAB EMIRATES
DATED: NOVEMBER 26, 1990.
Respectfully submitted,
/s/_ R. Davip LEGG
R. David Legg, Pro Se
15415 Katy Frwy., Suite 205
Houston, Texas 77094
713/578-8829, Fed.Adm.No.1414
APPENDIX J
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN Re: 7
UNITED MARKETS
INTERNATIONAL, INC.
Debtor
W. Steve Smirn, Trustee, ae CASE No. 85-00872-H2-5
Plaintiff |
VS.
R. Davip LeGG, BANCTEXAS ADVERSARY No. 85-0375-H|
Nortu SIDE
HOUSTON and
HENRY HWANG,
Defendant |
ANSWER OF R. DAVID LEGG
TO TRUSTEE’S ORIGINAL COMPLAINT
TO THE HONORABLE UNITED STATES BANKRUPTCY
JUDGE:
Comes now, R. DAVID LEGG, (Legg) Defendant in the
above styled and numbered adversary proceeding and files his
Answer to Trustee’s Original Complaint, and in support thereof
would respectfully show the Court as follows:
1. In response to Paragraph | of the Trustee’s Com-
plaint, Legg neither admits nor denies the allegations con-
tained therein.
2. In response to Paragraph 2 of the Trustee’s Com-
plaint, Legg admits the allegations contained therein.
3. In response to Paragraph 3 of the Trustee’s Com-
plaint, Legg admits that he was the President and sole
stockholder of United Markets International, Inc. Legg
J-2
further admits that United Markets International, Inc. pur-
chased all the stock of Bayou Bend Realty, Inc. and that
Bayou Bend purchased real property described as Unit
No. 1201, Bayou Bend Towers, Houston, Harris County,
Texas. Legg specifically denies all remaining allegations
contained in Paragraph 3 of Trustee’s Complaint.
4. In response to Paragraph 4 of Trustee’s Complaint,
Legg admits that BancTexas Northeast Houston advanced
Bayou Bend the THREE HUNDRED THOUSAND
($300,000.00) DOLLARS cash down payment and that
Bayou Bend executed its note therefor. Legg specifically
denies all remaining allegations contained in Paragraph 4 of
Trustee’s Complaint.
5. In response to Paragraph 5 of the Trustee’s Com-
plaint, Legg specifically denies the allegations contained
therein.
6. In response to Paragraph 6 of the Trustee’s Com-
plaint, Legg specifically denies the allegations contained
therein.
7. In response to Paragraph 7 of the Trustee’s Com-
plaint, Legg specifically denies that the application of the
Certificates of Deposit were violative of the automatic stay
provisions of the Bankruptcy Code. Legg further specifically
denies that the same constituted a fraud upon anyone, and
further responds that Trustee has failed to allege fraud or
fraudulent conduct with the degree of particularity required
by Rule 9(b), Federal Rules of Civil Procedure.
8. In response to Paragraph 8 of Trustee’s Complaint,
Legg specifically denies the allegations contained therein.
9. In response to Paragraph 9 of the Trustee’s Com-
plaint, Legg specifically denies the allegations contained
therein.
J-3
10. In response to Paragraph 10 of the Trustee’s Com-
plaint, Legg specifically denies the allegations contained
therein.
11. In response to Paragraph |1 of the Trustee’s Com-
plaint, Legg specifically denies the allegations contained
therein.
12. In response to Paragraph 12 of the Trustee’s Com-
plaint, Legg specifically denies the allegations contained
therein.
13. Answering further, Legg moves that Trustee be
required to clarify his request for relief contained in the
complaint to conform to the allegations contained therein.
Trustee has alleged in his complaint in Paragraph 6 that the
property should be considered as property of the Debtor or
Alternatively that the property be impressed with a resulting
and/or constructive trust for the monies used to purchase
same. However, in the prayer for relief the Trustee appears
to be asking for both the property and the money used to
purchase it, an inconsistent and untenable request.
14. Answering further, Legg would show that the real
property in issue described in Trustee’s Original Complaint
as Unit No. 1201, Bayou Bend Towers, Houston, Harris
County, Texas is now and has been at all times pertinent
herein the homestead of Defendant Legg. As such home-
stead the same is exempt from forced sale pursuant to
Article 3832 of the Revised Civil Statutes of the State of
Texas and U.S. Bankruptcy Code § 522(b)(2)(A), 11
U.S.C. § 522.
J-4
WHEREFORE, PREMISES CONSIDERED, Legg prays
that this Court deny the relief requested in the Trustee’s Original
Complaint with respect to all claims against Legg, that Trustee be
directed to amend his complaint to plead any allegations of fraud
with particularity, to conform his prayer for relief to the allega-
tions of the complaint, to declare the property in issue to be the
homestead of Legg and therefore not subject to this action, and
for such other and further relief to which Legg may be justly
entitled.
Respectfully submitted,
Law offices of
GERALD P. DE NISCO, P.C.
By /s/ GERALD P. DENisco
Gerald P. DeNisco
5177 Richmond, Suite 1050
Houston, Texas 77056
(713) 961-5292
Texas State Bar No. 05655500
Attorneys for Defendant
J-5
CERTIFICATE OF SERVICE
I hereby certify and declare that a true and correct copy of
the above and foregoing Answer of R. David Legg to Trustee’s
Original Complaint was mailed to all interested parties and/or
counsel of record, by CERTIFIED MAIL — RETURN RE-
CEIPT REQUESTED on this day of 1985.
Mr. W. Steve Smith, Mr. Juan Csillagi,
Trustee President
WOODARD, HALL & BancTexas-North Side
PRIMM Houston
4700 Texas Commerce P. O. Box 4418
Tower Houston, Texas 77210
Houston, Texas 77002
/s/ GERALD P. DE Nisco
Gerald P. De Nisco
J-6
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: )
UNITED MARKETS
INTERNATIONAL, INC.
_ Debtor
W. Steve SMitH, Trustee, CASE No. 85-00872-H2-5
Plaintiff (Chapter 11)
VS.
R. Davip LEGG and
H. C. HWANG &
PARTNERS, INC.,
ADVERSARY No. 85-0375-H1
Defendants )
FIRST AMENDED ANSWER OF R. DAVID LEGG
TO TRUSTEE’S ORIGINAL COMPLAINT
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, R. DAVID LEGG, (LEGG) Defendant
in the above styled and numbered adversary proceeding and files
this his First Amended Answer to Trustee’s Original Complaint,
and in support thereof would respectfully show the Court as
follows:
1. In response to Paragraph of the Trustee’s Com-
plaint, LEGG neither admits nor denies the allegations
contained therein.
2. In response to Paragraph 2 of the Trustee’s Com-
plaint, LEGG admits the allegations contained therein.
3. In response to Paragraph 3 of the Trustee’s Com-
plaint, LEGG admits that he was the President and sole
stockholder of United Markets International, Inc. LEGG
further admits that United Markets International, Inc. in-
J-7
tended to purchase all of the stock of Bayou Bend Realty,
Inc., as a subsidiary, and that Bayou Bend purchased real
property described as Unit No. 1201, Bayou Bend Towers,
Houston, Harris County, Texas. LEGG specifically denies
all remaining allegations contained in Paragraph 3 of Trus-
tee’s Complaint.
4. In response to Paragraph 4 of Trustee’s Complaint,
LEGG admits that BancTexas Northeast Houston advanced
Bayou Bend the THREE HUNDRED THOUSAND
($300,000.00) DOLLARS cash down payment and that
Bayou Bend executed its note therefor. LEGG specifically
denies all remaining allegations contained in Paragraph 4 of
Trustee’s Complaint.
5. In response to Paragraph 5 of the Trustee’s Com-
plaint, LEGG specifically denies the allegations contained
therein.
- 6. In response to Paragraph 6 of the Trustee’s Com-
plaint, LEGG specifically denies the allegations contained
therein.
7. In response to Paragraph 7 of the Trustee’s Com-
plaint, LEGG specifically denies that the application of the
Certificates of Deposit were violative of the automatic stay
provisions of the Bankruptcy Code. LEGG further specifi-
cally denies that the same constitute a fraud upon anyone,
and further responds that Trustee has failed to allege fraud or
fraudulent conduct with the degree of particularity required
by Rule 9(b), Federal Rules of Civil Procedure.
8. In response to Paragraph 8 of Trustee’s Complaint,
LEGG specifically denies the allegations contained therein.
9. In response to Paragraph 9 of the Trustee’s Com-
plaint, LEGG specifically denies the allegations contained
therein.
J-8
10. In response to Paragraph 10 of the Trustee’s Com-
plaint, LEGG specifically denies the allegations contained
therein.
11. In response to Paragraph 11 of the Trustee’s Com-
plaint, LEGG specifically denies the allegations contained
therein.
12. In response to Paragraph 12 of the Trustee’s Com-
plaint, LEGG specifically denies the allegations contained
therein.
13. Answering further, LEGG moves that Trustee be
required to clarify his request for relief contained in the
complaint to conform to the allegations contained therein.
Trustee has alleged in his complaint in Paragraph 6 that the
property should be considered as property of the Debtor or
Alternatively that the property be impressed with a resulting
and/or constructive trust for the monies used to purchase
same. However, in the prayer for relief the Trustee appears
to be asking for both the property and the money used to
purchase it, an inconsistent and untenable request.
14. Answering further, LEGG would show that the
real property in issue described in Trustee’s Original Com-
plaint as Unit No. 1201, Bayou Bend Towers, Houston,
Harris County, Texas is now' and has been at all times
pertinent herein the homestead of Defendant LEGG. As
such homestead the same is exempt from forced sale pursu-
ant to Article 3832 of the Revised Civil Statutes of the State
of Texas and U.S. Bankruptcy Code § 522(b)(2)(A), 1!
U.S.C § 522.
15. Answering further, LEGG would show that he was
the sole stockholder of United Markets International, Inc.,
and was thus entitled to distributions of profit earned by said
corporation. Defendant LEGG would show that the Three
J-9
Hundred Thousand ($300,000.00) Dollars held in Certifi-
cates of Deposit No. 8723 and No. 8533 at the Bank, was
identified as profit. Defendant LEGG would further show
that it was his intent to declare said amount to be a dividend
but was unable to due to the involuntary bankruptcy.
16. Answering further, LEGG would show that the
petitioning creditors in the involuntary bankruptcy were not
proper creditors of the estate. As such, LEGG would show
that the primary purpose of said proceedings were to hinder,
delay or completely stop work on the contract.
17. Answering further, LEGG would show that as a
result of the involuntary bankruptcy proceeding a trustee was
appointed to manage the corporation, and said trustee is
W. Steve Smith. Defendant LEGG would show that the
trustee comes to this Court of equity with unclean hands in
that he has failed to comply with the responsibilities and
duties of a trustee in failing to pursue all causes’ of actions of
the estate or to protect all of its interest.
J-10
WHEREFORE, PREMISES CONSIDERED, LEGG
prays that this Court deny the relief requested in the Trustee’s
original Complaint with respect to all claims against LEGG, that
Trustee be directed to amend his complaint to plead any allega-
tions of fraud with particularity, to conform his prayer for relief to
the allegations of the complaint, to declare the property in issue to
be the homestead of LEGG and therefore not subject to this
action, and for such other and further relief to which LEGG may
be justly entitled.
Respectfully submitted,
Law Offices of
GERALD P. DE NISCO, P.C.
By Mario L. VASQUEZ
Gerald P. De Nisco
Mario L. Vasquez
5177 Richmond,
Suite 1050
Houston, Texas 77056
(713) 961-5292
Texas State Bar
No. 05655500
Attorneys for R. DAVID
LEGG
Of Counsel:
Mario L. Vasquez
Law Offices of Gerald P. De Nisco, P.C.
5177 Richmond, Suite 1050
Houston, Texas 77056
(713) 961-5292
J-11
CERTIFICATE OF SERVICE
I hereby certify and declare that a true and correct copy of
the above and foregoing FIRST AMENDED ANSWER OF
R. DAVID LEGG to Trustee’s Original Complaint was delivered
to all interested parties and/or counsel of record, by Messenger on
this, the Sth day of May, 1987.
Barbara M. Rogers Kevin H. Bell
WOODARD, HALL SINGLETON, SINGLETON
& PRIMM & COOKSEY
4700 Texas Commerce 1950 First Western Bank Bldg.
Tower 1300 Main Street
Houston, Texas 77002 Houston, Texas 77002
/s/_ Mario L. VASQUEZ
Mario L. Vasquez
APPENDIX K
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: }
UNITED MARKETS
INTERNATIONAL, INC.
Debtor CASE No. 85-00872-H2-5
W. Steve Situ, Trustee, > i
Plaintiff ADVERSARY No. 85-0375-H1
V.
R. Davip LEGG and
H. C. HWANG PARTNERS, INC.
ORDER
Came on for consideration the request of W. Steve Smith,
Trustee in the above-referenced adversary to require R. David
Legg to provide an accounting of funds received from United
Markets International, Inc. It is therefore
ORDERED, that R. David Legg by and hereby is ordered
and directed to deliver to W. Steve Smith, Trustee, 4700 Texas
Commerce Tower, Houston, Texas 77002, a written detailed
accounting of the receipt and disbursement of any and all funds
received, transferred or otherwise removed from United Markets
International, Inc. as salary, dividend, loan, payment for services
rendered, legal or otherwise, said accounting to include dates,
amounts, purpose of transfer or receipt of funds and eventual use
of those funds; and it is further
ORDERED that R. David Legg identify and account to the
Trustee for all unpaid taxes and maintenance fees on the
condominium.
K-2
Such information is to be provided on or before June 21,
1988.
SIGNED this 11th day of May, 1988.
/s/__R. F. WHELEss, JR.
R. F. Wheless, Jr.
U. S. Bankruptcy Judge
APPENDIX L
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
R. Davip Lea,
Appellant CIVIL ACTION
V.
W. Steve SMITH, No. H-88-2293
Appellee
APPLICATION FOR TEMPORARY
RESTRAINING ORDER
PURSUANT TO RULE 65(B)
COMES NOW R. DAVID LEGG, Appellant in the above
styled and numbered cause, and respectfully requests that this
Honorable Court, pursuant to Rule 65(b) of the Federal Rules of
Civil Procedure, issue a Temporary Restraining Order, restraining
the imposition of a constructive trust upon, foreclosure or judicial
sale of, or any interference whatsoever with Appellant’s right to
peaceful possession of his homestead whose legal description is
Unit 1201, Bayou Bend Towers, 101 Westcott, Houston, Texas
77007.
Appellant further requests that this Temporary Restraining
Order be entered pending a hearing and determination of Appel-
lant’s request for a Preliminary Injunction upon the grounds that
immediate and irreparable injury, loss and damage will result to
Appellant before a hearing can be held thereon.
Respectfuliy submitted,
/s/_ R. Davip LEGG
R. David Legg
Attorney at Law
3000 Smith Street
Houston, Texas 77006
713/521-9797
Federal Admissions No. 1414
PRO SE
/
,
heen
L-2
AFFIDAVIT
BEFORE ME, THE UNDERSIGNED AUTHORITY did on
this date personally appear R. David Legg, known by me to be a
credible person, who did depose and state under oath as follows:
“My name is R. David Legg. I am an attorney licensed to practice
by the State Bar of Texas, and admitted before the United States
District Court for the Southern District of Texas, and the Fifth
Circuit Court of Appeals.
| am the sole owner of United Markets International, Inc., UMI, a
Texas corporation involved in a bankruptcy proceeding which |
have alleged to be fraudulent. Further, | am the owner of Unit
1201, Bayou Bend Towers, a condominium which is my residence,
and which I claim as my homestead under the laws of the State of
Texas.
An involuntary bankruptcy petition was filed against UMI on
February 7, 1985 by two petitioners, Essam Obaid, (Obaid), and
the Obaid and Almullah Construction Co. (OBALCO). At the
time of filing, UMI was a solvent company having over Four
Million Dollars in assets. The claims of Obaid and OBALCO were
false and fraudulent, and their petition was timely controverted.
On March 28, 1985, an Order for Relief was entered against UMI
without a trial or hearing. A collusive consent decree was entered
by counsel for UMI without the knowledge. approval or consent of
their client.
An appeal is presently pending before the Fifth Circuit Court of
Appeals to set aside and vacate the void Order for Relief.
An adversary proceeding was brought by W. Steve Smith, Trustee
alleging the homestead of R. David Legg to be an asset of the
estate of the alleged debtor, UMI. Judgement in favor of Smith
was entered May 11, 1988. This judgement is under appeal before
this Honorable Court.
Urgent client matters require my absence from the country for a
period of approximately two weeks. During the course of this trip,
I shall be meeting with business associates abroad to discuss the
possibility of their assistance in posting a bond or security, in the
event such is required to stay execution of the above judgement
pending appeal. I am fearful that Trustee Smith may attempt to
L-3
levy against my homestead in my absence, causing me and my
family immediate and irreparable harm.
I urgently request that any such actions be restrained pending my
return, and a hearing on the setting of a bond pending appea!.”
FURTHER AFFIANT SAYETH NOT.
SWORN TO AND SUBSCRIBED before me, the under-
signed authority, this 21st day of July, 1988.
/s/_ R. Davip LEGG
R. David Legg
/s/ PuHyLiis K. LAMBERT
Phyllis K. Lambert
Notary Public
APPENDIX M
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: 1
ee copcciebgee BANKRUPTCY CASE
hac s vanaia aaa No. 85-00872-H2-5
Debtor.
W. Steve Smitn, Trustee, CIVIL ACTION
vs. No. H-88-2293
R. Davip LEGG, et al., )
ORDER
R. David Legg’s application for a temporary restraining order
is denied. Identical relief was denied by Judge Black on July 7,
1988, in Civil Action No. H-88-1706. Any further duplicitous
attempts to circumvent orders on unit 1201 at Bayou Bend
Towers will result in the imposition of sanctions under Rule 11.
Signed on July 21, 1988, at Houston, Texas.
/s/_ LYNN N. HUGHES
Lynn N. Hughes
United States District Judge
ee ee ee Cee eenee C
APPENDIX N
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
RK. Davip LEGG,
Appellant
Vv. > C.A. No. H-88-2293
W. Steve SMITH,
Appellee }
MOTION REQUESTING STAY OF EXECUTION
OF JUDGEMENT PENDING HEARING
TO SET BOND OR SECURITY;
REQUEST FOR EXPEDITED HEARING ON SANCTIONS
COMES NOW R. DAVID LEGG, Appellant herein and
files this, his Motion Requesting Stay of Execution of Judgement
Pending Hearing to Set Bond or Security; Request for Expedited
Hearing on Sanctions, and would respectfully demonstrate to the
Court as follows:
1. Appellant has timely filed an appeal from a final
order entered relating to a proceeding under Title 11 USC,
pursuant to 28 USC 158(a).
2. Appellant hereby seeks a stay of said judgement in
Adversary Proceeding 85-0375, appeal of which is currently
under review by this Honorable Court, pending a hearing on
supersedeas bond, or such security, if any, as the Court may
order. Appellant would request that an expedited hearing be
held on this matter at the earliest practicable time.
3. Pursuant to Rule 8, Federal Rules of Appellate
Procedure, Appellant has filed this present Motion with this
N-2
Court, as it would not be practicable to seek relief from the
bankruptcy court. Appellant has filed a Motion to Recuse
requesting that the Honorable U.S. Bankruptcy Judge, R. F.
Wheless Jr. recuse himself in said matter pursuant to 28
USC 455. A copy of said Motion to Recuse is attached
herewith. Appellant has no reasonable expectation that the
relief sought would be granted by the Honorable Judge
Wheless. In virtually every instance, Appellant’s Motions
filed before the Honorable Judge Wheless have been ig-
nored, or summarily dismissed without hearing. For over
three years, said Court has ignored Appellant’s claims of
fraud, conversion of property of the estate, and gross mis-
management of the estate by Trustee Smith. Appellant has
been threatened with “criminal contempt,” and has been
sanctioned, as a result of causes of action brought by counsel
for Appellant — even though he had no role in the prepara-
tion or filing of said causes of action. As a result, Appellant
has reason to question the impartiality of the Honorable
Judge Wheless, and would expect any relief sought by
Appellant to be denied.
4. Appellant had previously filed an appeal of the order
for relief entered in the main bankruptcy case, 85-00872.
This appeal was assigned to the Honorable U. S. District
Judge Norman W. Black. The relief sought in said appeal
would have vacated all judgements entered with regard to
said bankruptcy proceeding. Appellant sought an injunction
of enforcement of the judgement presently under appeal on
that ground. Judge Black took the matter under advisement,
then subsequently determined a lack of subject matter juris-
diction, and declined to consider the appeal or to grant the
requested restraining order. Appellant seeks injunctive relief
from this Honorable Court, as the judgement appealed from
is now before this Court. The injunctive relief sought is for
Ae a nt Ac A eee ee
N-3
the limited purpose, and limited period of time necessary to
set an appropriate bond pending appeal.
5. Appellant has been admonished by this Honorable
Court for filing an Application for Temporary Restraining
Order, pending the setting of a bond, and warned that any
subsequent similar attempt would be sanctioned. Appeilant
is at a loss to understand why his actions are deemed
offensive, as this is the only Court from which Appellant can
request the relief sought. Appellant would respectfully
request of this Honorable Court an expedited hearing on
Appellant’s conduct that may be subject to sanction. As to
all his actions, heretofore and hereafter, Appellant has and
will continue to make reasonable enquiry, and will exercise
due diligence and best judgement as to the applicability of
existing relevant law, while vigorously defending his rights to
the extent permitted by law.
6. With reference to the matter at hand, Appellant
would respectfully show the Court as follows:
11 USC 54] states “(a) The commencement of a
case under 301, 302 or 303 creates an estate. Such
estate is comprised of all the following property, wher-
ever located and by whomever held: (1) Except as
provided in subsections (b) and (c)(2) of this section,
all legal or equitable interests of the debtor in property
as of the commencement of the case.”
At the commencement of the bankruptcy case
related to the matter under review by this Court, among
the property of the estate was; (a) A Six Million Three
Hundred Ninety-four Thousand Dollar /rrevocable Let-
ter of Credit to which the alleged debtor was the sole
beneficiary, under which approximately Two Million
Seven Hundred Thousand Dollars remained undrawn
and to the benefit of the sole beneficiary. (b) Two
N-4
special deposit accounts containing an aggregate of
approximately One Million Three Hundred Thousand
Dollars, to which the alleged debtor was a joint party.
7. In over three and a half years, only two pre-petition,
undisputed creditors have filed proofs of claim. The amounts are
negligible, and were current invoices at the time of the filing of
the fraudulent involuntary petition. Appellant will show this as
clear and undisputable evidence that the alleged debtor was
solvent, that the bankruptcy proceeding is a fraud.
8. For over three and a half years, Trustee of the estate of
the alleged debtor has refused to convene a single meeting of
creditors. Not one single meeting of creditors has been held to
date, an extraordinary violation of 11 USC 341(a), which re-
quires that the Trustee convene a meeting of creditors “within a
reasonable time after the order for relief.” Bankruptcy Rule 2003
provides a definition of a reasonable time as being “not less than
20 nor more than 40 days after the order for relief.” It is now
more than three and a half years after the order for relief.
9. Atno time in over three and a half years have the original
two fraudulent petitioning creditors, who converted over Four
Million Dollars of property of the estate, been required to appear
before the bankruptcy court to defend their disputed fraudulent
claims. Objections to said claims have been made, and an
adversary proceeding is pending on this matter before the honora-
ble U.S. Bankruptcy Judge R. F. Wheless.
woe Reman a
a ARS crc nds Aone
N-5
10. Should this Honorable Court decline to set a hearing on
the posting of a bond or security, Appellant would respectfully
request that the Court set the amount of said bond, and that said
amount be set at no more than $20,000.00. This amount exceeds
the amount of pre-petition, undisputed proofs of claim presently
on file in Bankruptcy Case No. 85-00872. To impose upon
Appellant a bond or security so greatly in excess of any legitimate
claims against the alleged debtor’s estate would be inequitable
and unjust.
Respectfully submitted,
/s/_ R. Davip LEGG
R. David Legg
Attorney at Law
3000 Smith Street
Houston, Texas 77006
713/521-9797
Federal Admissions No.1414
N-6
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing
Motion Requesting Stay of Execution of Judgement Pending
Hearing to Set Bond or Security; Request for Expedited Hearing
on sanctions has been served upon all counsel in this matter, this
22nd day of July, 1988.
Respectfully submitted,
/s/_ R. Davip LEGG
R. David Legg
APPENDIX O
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
) CASE No. 85-00872-H2-5
CHAPTER 11
IN RE: ADVERSARY
, No. 85-0375-HL
and ADVERSARY
No. 87-0866
and ADVERSARY
No. 85-0932
UNITED MARKETS
INTERNATIONAL INC.
MOTION TO RECUSE
TO THE HONORABLE U.S. BANKRUPTCY JUDGE:
COMES NOW R. David Legg, Movant and files this
Motion to Recuse, and in support thereof would respectfully
show:
28 U.S.C. sec. 455 provides therein as follows:
(a) Any Justice, Judge, or Magistrate of the
United States shall disqualify himself in any proceeding
in which his impartiality might reasonably be
questioned.
(b) He shall also disqualify himself in the follow-
ing circumstances
(1) Where he has a personal bias or prejudice
concerning a party...
In connection with the above matters, the Honorable
R.F. Wheless Jr. has exhibited such a lack of impartiality, as well
as bias and prejudice in his conduct of the above referenced
O-2
matters, and all proceedings related to Case No. 85-00872-H2-5.
In support of this contention, Movant would cite the following:
(a) On March 28, 1985, Judge Wheless did deny
United Markets International, Inc. (UMI), its rights to a
trial on the merits, by the entry of an order for Relief,
without a hearing on the controverted involuntary petition
filed against UMI. This unwarranted action was highly
prejudicial as to Movant, and did destroy his company, UMI.
Further, said action was an abdication and abnegation of
judicial responsibility by Judge Wheless, and did in fact
constitute a fraud upon his own Court. Ensminger v. Powers,
108 U.S. 292, 2 S. Ct. 643, 27 L. Ed. 732 (1883).
(b) On January 22, 1986, Judge Wheless did threaten
Movant personally, by a handwritten addendum to an order
dismissing a cause of action brought by Movant's counsel in
the United States District Court, stating “if the same is
refiled without the permission of this Court the plaintiff and
his attorney may be certified for criminal contempt”. Such a
threat was abusive with regard to Movant, who had no role in
the preparation or filing of the offending cause of action.
Further, “Where actions of parties charged with criminal
contempt were not committed in presence of Court, criminal
contempt would be inappropriate under 28 U.S.C sec. 1481.
Frankford Trust Co. v. Allanof, (1983 ED Pa.), 29 B.R. 407.
Said threat was illustrative of the bias and prejudice of Judge
Wheless toward Movant.
(c) On September 3, 1986, Movant was personally
sanctioned by Judge Wheless, for the actions of Movant's
counsel in filing the above mentioned cause of action,
through Movant was merely a party to a pleading prepared
by Movant's counsel — without his participation; without his
Signature to same. Movant, as a litigant, was sanctioned.
Movant's counsel of record in said matter was not.
’
O-3
(d) In his Findings of Fact and Conclusions of Law
signed May 11, 1988, Judge Wheless did therein state “This
Court does not accept Mr. Legg’s credibility in connection
with this matter’, thereby callously disregarding Movant’s
testimony made under oath. Movant is an officer of this
Court, a licensed and practicing attorney at law, a former
staff member of several Members of the United States
Congress, including the former President Pro Tempore of the
United States,” a former adjunct professor of law, and has
never suffered such a slight to his personal and professional
integrity as was inferred by Judge Wheless.
Movant alleges all of the above actions of Judge Wheless
illustrate his bias, prejudice and lack of impartiality towards
Movant. Such actions exceed the requirements of 28 U.S.C.
sec. 455, mandating disqualification. In U.S. v. Miranne, (Sth
Cir. 1982), 688 F.2d 980, cert. denied 103 S. Ct. 736, 459 US.
1109, 74 L. Ed. 959, it was held, “Under this section, actual
demonstrated prejudice need not exist in order for the judge to be
required to recuse himself.” The facts presented herein clearly
warrant Judge Wheless’ recusal.
O-4
WHEREFORE, Movant respectfully requests that the Hon-
orable Judge R. F. Wheless, Jr. recuse and disqualify himself
from further involvement with Case No., 85-00872-H2-S and all
adversary proceedings related thereto, and that a successor Judge
be named and all related files, hearings, motions, etc. be trans-
ferred accordingly.
Respectfully submitted,
/s/_ R. Davip LEGG
R. David Legg
Attorney at Law
3000 Smith Street
Houston, Texas 77006
713/521-9797
Federal Admissions No.1414
PRO SE
APPENDIX P
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN Re: !
c
UNITED MARKETS CIVIL ACTION
No. H-88-2293
INTERNATIONAL, INC.,
W. Steve Smitn, Trustee, ADVERSARY
vs. No. 85-1375-H1
R. Davip LEGG, AND
H. C. HWANG & PARTNERS,
INC.
BANKRUPTCY CASE
No. 85-00872-H2-1
FINAL JUDGMENT
The judgment of the bankruptcy court is affirmed.
It is adjudged that:
1. The estate of United Markets International, Inc., by
its Trustee, W. Steve Smith, is granted a constructive trust
on Unit No. 1201, Bayou Bend Towers, Volume 117, page
24, Condominium Records, Harris County, Texas, to the
extent of $300,000.00, plus interest at 10% per year from
February 5, 1985, to today, with the constructive trust being
subject to the lien of H. C. Hwang & Partners, Inc.; the
principal and prejudgment interest shall bear postjudgment
interest at 7.90% per year.
2. R. David Legg shall deliver possession of Unit No.
1201, Bayou Bend Towers, by May 30, 1988, to the Trustee
W. Steve Smith for the benefit of the Estate including all ©
fixtures and improvements in the unit;
P-2
3. H. C. Hwang & Partners, Inc., is prohibited from
foreclosure under |1 U.S.C. § 362 unless the stay should lift;
and
4. All issues about fraudulent transfer, preference, un-
paid tax, maintenance fee, or other claim against R. David
Legg not expressly addressed in this judgment will be deter-
mined separately.
This is a final judgment.
Signed on November 9, 1989, at Houston, Texas.
/s/_ LYNN N. HUGHES
Lynn N. Hughes
Uni 2d States District Judge
Dende neon & add nedletls “
RT a Oe aR
P-3
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN Re: re ) CIVIL ACTION
UNITED MARKETS No. H-88-2293
INTERNATIONAL, INC., ,
W. Steve Situ, Trustee, ADVERSARY
- No. 85-1375-H!
R. Davip LEGG and
H. C. HWANG & PARTNERS,
INC.
BANKRUPTCY CASE
No. 85-00872-H2-1
OPINION ON AFFIRMANCE OF THE
BANKRUPTCY JUDGMENT
The appellants’ emergency motion to vacate judgment on
appeal for failure to join indispensable parties will be denied.
The insufficiency of evidence point of error cannot be ruled
on by this court because the appellant did not submit the record;
therefore, the findings of fact and conclusions of law of the trial
court will stand.
The appellant seriously misunderstands the indispensable
party rule which is not applicable here because no other party’s
interests were either decreased or diminished by the occasion of
this lawsuit and its judgment.
The constructive trust will be affirmed. There is a quibble
about the use of the term “first.” The constructive trust is
subordinate to Hwang's lien whejher that lien was the first or the
fifteenth. Even if the language causes confusion, it is surplusage;
otherwise, the order will stand.
Signed on November 9, 1989, at Houston, Texas.
/s/ LYNN N. HUGHES
Lynn N. Hughes
United States District Judge
i
a
APPENDIX Q
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: :
UNITED MARKETS
INTERNATIONAL, INC. CIVIL ACTION
W. Steve Smitn, Trustee No. H-88-2293
Vs ,
ADVERSARY
R. DAvip LEGG and NO. 85-0375-H1
H. C. HWANG & PARTNERS,
INC. }
MOTION FOR RECONSIDERATION
PURSUANT TO RULE 59 AND 60(A)
FEDERAL RULES OF CIVIL PROCEDURE
R. DAVID LEGG, Appellant moves for reconsideration of
this Honorable Court’s Opinion on Affirmance of the Bankruptcy
Judgment and Final Judgment in the above referenced matter,
and would respectfully show as follows:
1. The United States Supreme Court most recently
held, in its decision pronounced June 23, 1989, in Cause No.
87-1716, styled Granfinanciara, S.A. et al., Petitioners v.
Paul C. Nordberg, Creditor Trustee for the Estate of Chase &
Sanborn Corporation, Etc., that an action by a trustee in
bankruptcy, alleging a fraudulent conveyance against a party
who has not filed a claim against the estate, is an action in
law, not in equity, and the right to a trial by jury is protected
and ensured by the Seventh Amendment to the United
States Constitution. Appellant Legg had not filed a claim
against the estate in this proceeding, and was entitled to a
Q-2
trial by jury on the contested allegations asserted by the
trustee below.
. See Affidavit of Legg attached as Exhibit “A.”
6
2. The Supreme Court in Granfinanciara, supra, ex-
pressly stated, at p. 21 of the slip opinion;
There can be little doubt that fraudulent conveyance
actions by bankruptcy trustees — suits which, we said in
Schoenthal v. Irving Trust Co., 28 U.S. at 94-95 (cita-
tion omitted), “constitute no part of the proceedings in
bankruptcy but concern controversies arising out of it”
— are quintessentially suits at common law that more
nearly resemble state-law contract claims brought by a
bankrupt corporation to augment the bankruptcy estate
than they do creditors’ hierarchically ordered claims to a
pro rata share of the bankruptcy res. See Gibson 1022-
1025. They therefore appear matters of private rather
than public right.
The Court further states at p. 23 of the slip opinion:
Citing Schoenthal v. Irving Trust Co., supra, approv-
ingly, we expressly stated that, if petitioner had not
submitted a claim to the bankruptcy court, the trustee
could have recovered the preference only by a plenary
action, and that petitioner would have been entitled to a
jury trial if the trustee had brought the action in federal
court.
The Trustee’s Original Complaint was therefore fatally
defective, brought before a court without jurisdiction to hear
a plenary action. Having defined a fraudulent conveyance as
a “private right,” the Court stated that “if that right neither
belongs to nor exists against the Federal Government, then it
must be adjudicated by an Article III] court.” Supra, p. 20.
3. A challenge to subject matter jurisdiction may be
made at any time. American Fire & Casualty Co. v. Finn,
(1951) 341 USS. 6.
A ch sah Aka %
Q-3
4. The absence of the record is not material to consid-
eration of the threshold questions of jurisdiction raised
above.
5. A copy of the record was provided to the Court, and
was subsequently supplemented. See attached Exhibit “B.”
Apparently its absence is due to inadvertent clerical error. A
true and correct complete copy will be prepared and provided
without delay.
WHEREFORE, PREMISES CONSIDERED, Movant
prays that this Honorable Court reconsider its opinion on Affirm-
ance of the Bankruptcy Judgment and Final Judgment; that, upon
reconsideration, the Court vacate the judgment below for want of
jurisdiction, and dismiss Trustee’s Original Complaint, pursuant
to 12(b)(1), Fed. R. Civ. P.
Respectfully submitted,
/s/_ R. Davip LEGG
R. David Legg
Attorney at Law
15415 Katy Freeway
Suite 10]
Houston, Texas 77094
713/578-8829
Federal Admissions No. 1414
PRO SE
Q-4
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing
was sent to opposing counsel this 29th day of November, 1989.
/s/_ R. Davip LEGG
R. David Legg
Q-5
EXHIBIT “A”
STATE OF TEXAS
County OF HARRIS
AFFIDAVIT
Before me, the undersigned authority, on this day did appear
R. David Legg, known to me to be a credible person, who after
being duly sworn, did depose and state:
My name is R. David Legg. I am a defendant in Adversary
No. 85-0375-H1 in bankruptcy Main Case No. 85-00872-H2-S.
Trustee’s Original Complaint alleging fraudulent conveyance
of my homestead was filed in the Spring of 1985. Trial of the
Adversary was held before the Hon. R. F. Wheless, Jr., United
States Bankruptcy Judge, concluding February 4, 1988. Judg-
ment was pronounced on May 11, 1988.
At no time relevant to said proceeding, had I filed a claim
against the estate in Case No. 85-00872-H2-5.
Further Affiant sayeth not.
SIGNED this 29th day of November, 1989.
/s/ R. Davip LEGG
R. David Legg
SWORN AND SUBSCRIBED before me, the undersigned
authority this 29th day of November, 1989.
/s/ DorotHuy L. SANDERS
Dorothy L. Sanders
Notary Public
Q-6
EXHIBIT “B”
R. Davip LEGG
ATTopney at Law
3000 Smith
Houston. Texas 77006
713/521-9797
July 22, 1988
Office of the Clerk
United States Bankruptcy Court
515 Rusk Avenue
Houston, Texas 77002
Attn: Bankruptcy Appeals Clerk, Ms. Mary Perales
Re: Bankruptcy Appeal H-88-2293, Adversary Proceeding
85-0375; Bankruptcy Case 85-00872, Chapter 11; Supplement of
Designation of Record
Ms. Perales,
With regard to the above referenced bankruptcy appeal, now
pending before the Honorable Judge Lynn N. Hughes, I would
like to supplement the record previously designated.
I request that a complete transcript of the hearing on
Adversary Proceeding 85-0375, heard before the Honorable
Judge Wheless on January 29, February 3 and 4, 1988, be
furnished the District Court, by all exhibits. A portion of this
transcript has been completed and is presently on file, the remain-
der has been ordered and is presently being transcribed.
A related appeal has recently been concluded, Civil Action
$8-1706, before the Honorable Judge Black. I would request that
those items in the attached designation in said appeal now be
furnished to Judge Hughes’ court.
Q-7
Please don’t hesitate to contact me should you have any
questions regarding this matter.
Thank you for your assistance.
Very truly yours,
/s/ RR. Davip LEGG
R. David Legg
Q-8
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN Re: )
UNITED MARKETS
INTERNATIONAL, INZ., CIVIL ACTION
W. Steve Smitt:, Trustee, No. H-88-2293
vs
ADVERSARY
R. Davip LeGG and No. 85-0375-H!
H. C. HWANG & PARTNERS,
INC. }
NOTICE OF APPEAL
R. DAVID LEGG, Appellant, appeals to the Fifth Circuit
Court of Appeals from a Final Judgment of the U.S. District
Court, Southern District of Texas, Houston Division, entered
November 14, 1989, affirming the decision of the bankruptcy
court. A motion for reconsideration was timely filed, and the
same was denied by the district court, said denial being entered in
this action on January 11, 1990. This appeal is timely filed.
Appellant would show that a constructive trust may not be
imposed upon a homestead, and that any attempt at such imposi-
tion is null and void.
Appellant would further show that there was no jurisdictional
basis for trial of this matter by a United States Bankruptcy Judge,
that any resulting judgment was thus null and void, and that-by
failing to address this fatal jurisdictional issue, the district court
ruling affirming the trial judge is in error and warrants reversal.
Appellant would further show that Appellant had a right to
trial by jury in this matter as recently propounded by the United
States Supreme Court, and that by failing to address this argu-
ment, the district court erred, warranting reversal of its judgment.
\
Q-9
Appellant would further show that the district court erred in
failing to grant de novo review of this matter, and that the
Findings of Fact and Conclusions of Law propounded by the
bankruptcy court are null and void.
Appellant would further show that the Order for Relief in the
main bankruptcy case 85-00872-H2-5 from which Adversary no.
85-0375 flows is null and void, and that any subsequent judgment
emanating from the initial void order is likewise null and void and
subject to collateral attack. The District Court erred in refusing
to address this issue.
The parties to the final order appealed from, their names and
addresses, and/or the names and addresses of their respective
attorneys are as follows:
Ms. Barbara M. Rogers Mr. Kevin Bell, Atty.
Woodard, Hall & Primm, Singleton & Cooksey, Attys.
Pil 1600 Smith, Ste. 4500
7000 Texas Commerce Houston, Texas 77002
Tower
Houston, Texas 77002
Dated: February 9, 1990.
Respectfully submitted,
/s/ R. Davip LEGG
R. David Legg
15415 Katy Freeway
Ste. 101
Houston, Texas 77094
(713) 578-8829
Fed. Adm No. 1414
APPENDIX R
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE:
UNITED MARKETS
INTERNATIONAL, INC.,
Debtor. CIVIL ACTION
W. Steve Smitn, Trustee, No. 85-00872-H2-5
vs.
R. Davip LeGG and
H. C. HWANG & PARTNERS,
INC. }
ADV. No. 85-0375-H1
ORDER AUTHORIZING SALE FREE AND CLEAR
At Houston came on for hearing the Motion For Authority
To Sell Free and Clear filed by W. Steve Smith, Trustee herein,
and R. David Legg having filed an opposition to such Motion, and
the Court having considered the evidence presented and the
arguments of counsel, and determining that the Motion should be
in all respects granted, it is therefore
ORDERED that W. Steve Smith, Trustee for the Estate of
United Markets International, Inc., is hereby authorized to sell
Unit 1201 of Bayou Bend Towers, 101 Westcott, Houston, Harris
County, Texas, for the cash price of $275,000,00 to Mr. Gideon
G. Agar (pursuant to contract dated November 3, 1958) and that
any interest that any party might claim in the subject condomin-
R-2
ium be attached to the net proceeds from said sale, said claims
including but not being limited to:
1. Lien in favor of H. C. Hwang & Partners, Inc.
securing a promissory note in the original principal sum of
$115,000.00;
2. Lien filed August 2, 1988, in favor of The Bayou
Bend Towers Council of Co-owners, in the amount of
$15,475.95:
3. Lien filed August 26, 1987, in favor of West Pub-
lishing Company against R. David Legg in the amount of
$2,727.40;
4. Lien filed August 31, 1987, in favor of The Bayou
Bend Towers Council of Co-owners, in the amount of
$17,622.83;
5. Lien filed August 24, 1988, in favor of Matthew
Bender & Company, Inc. in the amount of $1,558-88;
6. Federal lien filed on October 26, 1988, against
Robert David Legg in the amount of $7,722.01;
7. State Tax Lien filed on July 15, 1985, in favor of
Comptroller of Public Accounts, State of Texas, in the
amount of $64.02;
8. Claims asserted by R. David Legg in Adversary
Proceeding No. 85-0375-HI in the United States Bankruptcy
Court of the Southern District of Texas;
9. Claims asserted by any party in the lawsuit styled
R. David Legg vs. Lackshin & Nathan, et al., Docket
No. 88-54225, in the 127th Judicial District Court of Harris
County, Texas; and
R-3
10. Claims of R. David Legg that are asserted in the
Notice of Lis Pendens filed on August 5, 1988, by R. David
Legg, a copy of which is attached hereto as Exhibit “A.”
it is further
ORDERED that all of the claims and interests that all
parties might have against the net proceeds of the sale of this
property are not approved herein, but are subject to determination
in the appropriate forum and proceeding prior to disbursement of
the net proceeds from the sale of Unit 1201, Bayou Bend Towers,
Houston, Harris County, Texas; it is further
ORDERED that unless the time is shortened for cause, sign
this Order and its effect is conditioned upon the Trustee giving 20
days written notice to West Publishing Company, Matthew
Bender Publishing Company and the I.R.S., and giving each of
these creditors the opportunity to object or request a hearing. If
none is requested then the full effect of this Order shall mature.
Dated: December 6, 1988
/s/ R. F. WHELEsSS, Jr.
R. F. Wheless, Jr.
United States Bankruptcy Judge
STATE OF TEXAS |
SS
CouNTy OF HARRIS
NOTICE OF LIS PENDENS
Notice is hereby given that in the United States District
Court for the Southern District of Texas, Houston Division, there
is pending a Civil Action entitled R. David Legg vs. W. Steve
Smith, Trustee. By that suit R. David Legg asserts that certain
property is his homestead under the laws of the State of Texas,
and is exempt from the claims of creditors. Legg asserts the
invalidity of any claims of said property being property of an
estate of an alleged debtor entitled United Markets International,
Inc., said estate being administered by W. Steve Smith, Trustee.
Further notice is hereby given that there is pending before
the United States Court of Appeals for the Fifth Circuit, an
appellate cause of action No. 88-2721 entitled United Markets
International vs. Essam Obaid et al. In this action, appellant
asserts as void an Order in bankruptcy entering an Order for
Relief, and asserts as void the appointment of W. Steve Smith as
Trustee.
The property in question with regard to these proceedings is
described as:
UNIT NUMBER 1201, BAYOU BEND TOWERS,
HOUSTON, HARRIS COUNTY, TEXAS.
The return of said property to its rightful owner of record,
R. David Legg is sought in both said proceedings.
R-5
Signed this Sth day of August, 1988.
/s/_R. Davip LEGG
R. David Legg
Attorney for United Markets
International, Inc., and Pro
Se Counsel for R. David Legg
STATE OF TEXAS
SS
County OF HARRIS
BEFORE ME, the undersigned authority personally ap-
peared R. David Legg, Attorney for United Markets Interna-
tional, Inc., and Pro Se Counsel for R. David Legg, known to me
to be the person whose name is subscribed to the foregoing
instrument and acknowledged to me that he executed the same
for the purposes and consideration therein expressed.
GIVEN under my hand and seal of office this Sth day of
August, 1988.
/s/ CAROL WADE WILSON
Carol Wade Wilson
Notary Public in and for the
State of TEXAS
My commission expires: Carol Wade Wilson
12-31-88 eked
(print name)
Return to:
R. David Legg
Attorney at Law
3000 Smith Street
Houston, Texas 77006
- Pes yim pone aamanal
, PRB it a a aca aes
APPENDIX S
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
“HOUSTON DIVISION
IN RE: )
UNITED MARKETS
INTERNATIONAL, INC.,
Debtor.
W. Steve Smith, Trustee,
Movant
¥.
Bayou BEND Towers Coun-
cit oF Co-Owners, H. C.
HWANG & PARTNERS, INC.,
DANIEL, MANN, JGHNSON &
MENDENHALL, SINGLETON &
CooKxsey, ASIAN AMERICAN
NATIONAL BANK, INTERNAL
REVENUE SERVICE, MATTHEW
BENDER & Co., INC., AND
West PUBLISHING Co.
Respondents )
CASE No. 85-00872-H2-11
CHAPTER 11
CONTESTED
MATTER
AGREED ORDER
Came on this date for hearing in the above-entitled and
numbered cause the following described matters:
1. Trustee’s Motion to Determine Interest in Proceeds;
2. H.C. Hwang & Partners’ Motion to Compel Distri-
bution of Proceeds;
3. Daniel, Mann, Johnson & Mendenhall’s Motion to
Compel Distribution of Proceeds;
S-2
4. Bayou Bend Towers’ Counsel of Co-owner’s Motion
for Allowance of First Priority Claim;
5. Asian American National Bank’s Motion to Inter-
vene in H. C. Hwang & Partners’ Motion to Compe! Distri-
bution of Proceeds; and
6. Application for Payment of Administrative
Expenses.
The Court, after reviewing the various motions, responses and
pleadings, and after the presentation of evidence and arguments
of counsel, finds that the Internal Revenue Service, Matthew
Bender & Co., Inc. and West Publishing Co. did not respond to
assert an interest in the proceeds that are the subject of the
Trustee’s Motion to Determine Interest in Proceeds and that the
other parties to the various motions are in agreement that pursu-
ant to its Order granting the Trustee authority to sell the condo-
minium commonly known as Unit 1201 of Bayou Bend Towers,
Houston Texas, free and clear of liens; that such sale closed on
January 30, 1989 and resulted in net cash pre-eeds in the sum of
$225,311.06, together with accrued interest, which funds are
currently in the possession of the Trustee, W. Steve Smith; and
that the cash proceeds should be distributed to the respective
parties in the sums which follow. It is therefore,
ORDERED that distribution of the cash proceeds on deposit
with this Court be as follows:
1. The sum of $46,500.00 to the Trustee, W. Steve
Smith;
2. The sum of $157,500.00 to H. C. Hwang & Partners,
Inc., by virtue of its valid first lien, to be distributed in the
respective sums and following priority:
(a) $17,500.00 to Daniel, Mann, Johnson &
Mendenhall;
S-3
(b) $30,000.00 to Singleton & Cooksey; and
(c) $110,000.00 to Asian American National Bank:
3. The sum of $24,000.00 to Bayou Bend Towers’
Council of Co-Owners;
4. Any sums remaining after payment of the foregoing
shall be paid to the Trustee, W. Steve Smith; it is further
ORDERED that the Internal Revenue Service, Matthew
Bender & Co., Inc. and West Publishing Co. have no interest in
the subject proceeds.
SIGNED this 18th day of June, 1989.
/s/_ R. F. WHeELEssS, Jr.
R. F. Wheless, Jr.
Judge Presiding
APPROVED AS TO FORM AND SUBSTANCE:
SINGLETON & COOKSEY WOODARD, HALL &
PRIMM, P.C.
By: Kevin H. Bett By: BARBARA M. RoGers
Kevin H. Bell Barbara M. Rogers
Admissions I.D. No. 2610 Admissions I.D. No. 1845
Randall L. Brim Timothy L. Wentworth
Admissions 1.D. No. 8723 Admissions I.D. No. 945]
1600 Smith, Suite 3100 7000 Texas Commerce
Houston, Texas 77002 Tower
(713) 651-0175 Houston, Texas 77002
(713) 221-3800
Attorneys for Attorneys for
H. C. Hwang & Partners, Inc. W. Steve Smith, Trustee
and Singleton & Cooksey
/s/_ W. Steve Smit
W. Steve Smith, Trustee
R. C. HWANG & PARTNERS,
INC.
By: H. C. HWANG
H. C. Hwang
President
SCOTT, DOUGLASS
& LUTON
By: Louis K. BONTIAN
Louis K. Bontian
Admissions I.D. No. 8300
4300 NCNB Center
700 Louisiana
Houston, Texas 77002
(713) 228-6337
Attorneys for
Daniel, Mann Johnson
& Mendenhall
DANIEL, MANN, JOHNSON
& MENDENHALL
By:
Name:
Title:
S-4
O'CONNOR, WISNER,
CRAIG & YOUNG, P.C.
By: LAWRENCE AveRY YOUNG
Lawrence Avery Young
Admission I.D. No. 2539
2603 Augusta, Suite 800
Houston, Texas 77057
(713) 266-3311
Attorneys for
Asian American National
Bank
ASIAN AMERICAN
NATIONAL BANK
By:
Name:
Title:
BuTLER, LANGFORD, EWALT
& Hairey, P.C.
By: Lori E. ALDERSON
Lori £. Alderson
Admissions I.D. No. 117
5718 Westheimer, Suite 1600
Houston, Texas 77057
(713) 780-4135
Attorneys for
Bayou Bend Towers’
Council of Co-Owners
Bayou BEND Towers’
COUNSEL OF Co-OWNERS
By: J. H. JONES
J. H. Jones
President
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.