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GARY K. HAAK, Pro Se
41414 N. Hudson Trail
Anthem, Arizona 85086
Defendant
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IN THE UNITED STATES DISTRICT COURT
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FOR THE DISTRICT OF ARIZONA
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Terry Dishon and Luci Dishon, husband and
wife,
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Case No.: 2:16-cv-04069-ROS
DEFENDANT GARY K. HAAK’S
MOTION FOR SUMMARY JUDGMENT
Plaintiffs,
vs.
Connie R. Gorham and Gary K. Haak,
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Defendants.
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Defendant Gary Haak (“Haak”) appearing “pro se”, pursuant to Rule 56(c) of the Federal
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Rules of Civil Procedure (“F.R.C.P.”) files Defendant Gary K. Haak’s Motion for Summary
Judgment and moves the Court for an order granting summary judgment in his favor and against
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Plaintiffs for their claims for a declaratory judgment and breach of contract as there are no triable
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issues of material fact remaining and he is entitled as a matter of law.
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This Motion is supported by the accompanying Memorandum of Points and Authorities,
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Defendant Haak’s Separate Statement of Undisputed Facts, the Declaration of Gary K. Haak and
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supporting exhibits, and he incorporates by reference herein all the documents previously filed in
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this case.
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MEMORANDUM OF POINTS AND AUTHORITIES
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I.
INTRODUCTION
On November 23, 2016, Plaintiffs filed their Complaint and First Amended Complaint
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under 28 U.S.C. 1332 and 2201(a) for a declaratory judgment against Defendants, Connie
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Gorham and Gary K. Haak for breach of contract of the Rule 11 Mediation Agreement and
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Bankruptcy Settlement Agreement obtained in Digerati Technology, Inc.’s Chapter 11
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bankruptcy proceeding filed in the U. S. Bankruptcy Court for the Southern District of Texas.
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Specifically, that Defendants Gorham and Haak made verbal threats to Plaintiffs and
demanded payment to the estate of Dave Gorham and are barred pursuant to the mutual release
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in the Agreements. However, Plaintiffs filed their Second Amended Complaint to include
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Defendant Haak as being a party to the Agreements which requires that he consented and agreed
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by signing neither of which occurred. Further, Defendant’s evidence makes clear that
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Plaintiffs’ were barred from including him in the Agreements due to the conflicting and false
representations that he was President of Waste Deep, Inc. and also the “reported” owner of
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Oleum Capital, L.L.C.
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II.
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STATEMENT OF FACTS
In February 2011, Defendant Haak was introduced by his business associate, Dave
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Gorham, to the Dishons who owned Dishon Disposal, Inc., a company that specialized in the
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treatment and disposal of oil field waste products in Williston, North Dakota. [DSOF#1].
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The Dishons hired Defendant Haak to work with Dave Gorham for MCI Partners,
L.L.C., their company that served as the management company overseeing the daily operations
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of Dishon Disposal. Specifically, he was hired as Vice President to oversee the water treatment
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system which they had recently purchased operating as Perfect Circle Water System.[DSOF#2].
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In November 2012 the Dishons informed Defendant Haak they were going to sell
Dishon Disposal Inc. with Hurley Enterprises, Inc. to Digerati Technologies through a reverse
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merger acquisition which would the company to sell stock on the public exchange. [DSOF#3].
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At that same time, Dishons owned Perfect Circle Water Systems, L.L.C. and Black Ink
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Financial L.L.C. which was owned by Terry Dishon’s separate business Riverfront Capital
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L.L.C. and were not merged with Digerati. [DSOF#4].
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On November 26, 2012, at Luci Dishon and Terry Dunkin insistence Defendant signed
the Plan of Reorganization as President of Waste Deep, Inc. so that merger acquisition could be
concluded with Digerati Technologies Inc. [DSOF#5].
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However, on, or about December 30, 2012, without Defendant Haak’s knowledge or
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consent he was as listed as the “reported” owner of Oleum Capital, L.L.C., a Montana limited
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liability company registered by Scott Hepford and Terry Dunkin on the SEC Form 3 filed with
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the Securities Exchange Commission and issued 40,600,000 shares of Digerati’s commons
stock (60% ownership). [DSOF#6].
Thereafter, Oleum Capital, L.L.C. and Digerati Technologies caused to be litigation over
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the control and ownership of Digerati and had been Dave Gorham and the Dishons plan to take
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over acquire the majority stock and take control of Digerati. [DSOF#7].
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On May 6, 2013, Digerati Technologies, Waste Deep, Inc., Oleum Capital, MCI
Partners, L.L.C., Dishons and Hurleys entered into a Mutual Release Agreement to end the
litigation. [DSOF#8].
In May 2013 Digerati Technologies, Dishons, Hurleys, and MCI Partners, L.L.C. signed
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a Group Retention Agreement with Christian, Smith & Jewell LLP for their legal representation
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in the adversary proceedings and bankruptcy. [DSOF#9]. The Agreement confirmed all
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communications between Attorneys and Clients would be conducted through a steering
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committee (“Steering Committee”) which included initial members Art Smith, Luci Dishon and
Terry Dunken.
On May 30, 2013, Digerati Technologies, Inc. filed a Chapter 11 Voluntary Petition in
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the United States Bankruptcy Court for the Southern District of Texas listing Dishons and
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Hurleys as “Allowed Secured Claims”. [DSOF#10].
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On September 18, 2013, Digerati (Debtors) filed an Application to Compromise
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Controversy and attached Settlement Agreement with the terms of the sale of the companies in
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Doc. #281. [DSOF#11].
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On September 27, 2013 Debtors filed an Amended Application to Compromise
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Controversy and Amended Settlement Agreement which changed the sale provisions in Doc.
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#312. [DSOF#12].
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On October 18, 2013, the Court set a hearing on the Application to Compromise
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Controversy (#312) and Chapter 11 Plan of Reorganization (#313) for December 11, 2013.
[DSOF#13].
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Scott Hepford filed a Proof of Claim asserting ownership of MCI Partners [DSOF#14].
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On November 7, 2013, the Court ordered the Dishons to produce their quick book files.
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[DSOF#15].
On November 13, 2013, the Court ordered that Dishons be held in contempt for failing
to produce the ordered financial records. [DSOF#16].
On November 15, 2013, Luci Dishon confirmed in her deposition that Defendant Haak
was not listed as a party on the Settlement Agreement (#312). In addition, Luci Dishon perjured
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herself stating Dishons did not own MCI Partners or Perfect Circle Water Systems. [DSOF#17].
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On December 19, 213 the Bankruptcy Court issued an injunction pursuant to 11 U.S.C.
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105(a) against Christian Smith & Jewell from collecting any further legal fees from Hurley and
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Dishon to facilitate the reorganization. Luci Dishon admitted that Dishons and Hurleys were
paying all of the attorneys’ fees to Christian Smith & Jewell so that they “would not get sued.”
[DSOF#18].
On December 2, 2013 Dave Gorham testified in his deposition that he believed the
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Dishons should be responsible for payment of all the attorneys’ fees since everything was done
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for them and that confirmed that MCI was paying CS&J attorneys’ fees when the injunction
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was issued against Dishons and Hurleys. Dave Gorham also admitted that there could be SEC
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violations due to the reverse merger. [DSOF#19].
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Further, Terry Dunkin confirmed in his deposition testimony in the adversarial case of
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Rhodes Holdings v. Gorham on May 28, 2013 that had Defendant Haak sign as President of
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Waste Deep on November 26, 2012. However, he stated Haak was not a member of Oleum and
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he instructed Plaintiffs to use Defendant Haak on Form 3 filed with the SEC. [DSOF#20].
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On January 14, 2014, the Court held a hearing and the Debtor announced the parties
entered into a settlement and noted on the Docket entry of the Order Approving Compromise
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under Doc #673 and Doc #312 as Exhibit A (Bankruptcy Settlement Agreement) and Exhibit B
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(Rule 11 Mediation Settlement Agreement). However, the Rule 11 Mediation Agreement was
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not filed. [DSOF#21].
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Plaintiffs’ Complaint attached as Exhibit the Bankruptcy Settlement Agreement that was
filed and the Rule 11 Mediation Agreement which was not filed or entered with the Court.
Further, the Bankruptcy Settlement Agreement stated:
“WHEREAS, the Debtor entered into an Agreement and Plan of Reorganization by and
among Digerati Technologies, Inc., Waste Deep, Inc., and the Securityholders of Waste
Deep, Inc. ("Waste Deep") which is dated November 15, 2012. The Agreement and Plan
of Reorganization contemplated shares to be issued in a new entity. Waste Deep, and
that the Series E Preferred Stock in the Debtor would be transferred to the person or
persons designated by Waste Deep. It also contemplated stock purchase agreements
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between Waste Deep and the shareholders of Hurley Enterprises, Inc. and Dishon
Disposal, Inc. (the "Transaction");
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This provision shows that Waste Deep, Inc. was included in the Settlement Agreement
but is unenforceable unsigned. [DSOF#22].
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III.
STANDARD FOR REVIEW
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The Federal Rules of Civil Procedure 56(c) provides that summary judgment is
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appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file,
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together with the affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.” The United States
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Supreme Court has explained that Rule 56(c) “authorizes summary judgment ‘only where the
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moving party is entitled to judgment as a matter of law, where it is quite clear what the truth is,
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.. (and where) no genuine issue remains for trial . . . (for) the purpose of the rule is not to cut
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litigants off from their right of trial by jury if they really have issues to try.’” Poller v. Columbia
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Broad. Sys., Inc., 368 U.S. 464, 467 (1962) (quoting Sartor v. Arkansas Natural Gas Corp., 321
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U.S. 620, 627 (1944)). In other words, if there is a genuine dispute as to a material fact, then
summary judgment should not be granted.
The party seeking summary judgment carries the initial burden of “demonstrat[ing] the
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absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
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When a court determines whether a genuine issue of material fact exists, the court must view
the evidence “in the light most favorable to the opposing party.” Adickes v. S.H. Kress & Co.,
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398 U.S. 144, 157 (1970). The Court’s role is not “to weigh the evidence and determine the
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truth of the matter but to determine whether there is a genuine issue for trial.” Anderson v.
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Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). See 60 Ivy St. Corp. v. R.C. Alexander, 822
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F.2d 1432, 1435-36 (6th Cir. 1987) (stating “[t]he judge’s function at the point of summary
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judgment is limited to determining whether sufficient evidence has been presented to make the
issue a proper jury question, and not to judge the evidence and make findings of fact”). A
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factual dispute is “genuine” when “the evidence is such that a reasonable jury could return a
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verdict for the nonmoving party.” Anderson, 477 U.S. at 248. Thus, if a court finds that the
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evidence, when taken in a light most favorable to the nonmoving party, presents a genuine
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question of material fact, then the court should deny the moving party’s motion for summary
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judgment.
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IV.
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ARGUMENT
A settlement agreement is "legally binding if its terms are sufficiently definite to enable
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a court to understand the parties' obligations." Fort Worth Indep. Sch. Dist. v. City of Fort
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Worth, 22 S.W.3d 831, 846 (Tex. 2000). The "primary concern when interpreting a contract is
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to ascertain and give effect to the intent of the parties as it is expressed in the contract." Seagull
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Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). To achieve this
objective, the court examines "the entire writing in an effort to harmonize and give effect to all
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the contract's provisions so that none will be rendered meaningless." Valence Operating Co. v.
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Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). No single provision taken alone should be given
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controlling effect; "rather, all the provisions must be considered with reference to the whole
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instrument." Coker, 650 S.W.2d at 393. The settlement agreement at issue here was entered into
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in Texas, and Texas law applies when determining the validity of the agreement. See Omni
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Video, 60 F.3d at 232. In Texas, "[s]ettlement agreements are governed by the law of
contracts." Schriver v. Tex. Dep't. of Transp., 293 S.W.3d 846, 851 (Tex. App. 2009). A valid
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contract contains five elements: "(1) an offer; (2) acceptance; (3) meeting of the minds; (4) each
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party's consent to the terms; and (5) execution and delivery of the contract with the intent that it
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be mutual and binding." Cessna Aircraft Co. v. Aircraft Network, L.L.C., 213 S.W.3d 455, 465
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(Tex. App. 2006). It is clear in this case that none of the these apply to Defendant Haak and
testimony from Plaintiff confirms it was intentional that he not be part of the Agreements. It is
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well settled that a district court has the equitable power to enforce summarily an agreement to
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settle a case pending before it.
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The Rule 11 Mediation Agreement is governed by the law of the State of Texas and Tex.
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R. Civ. P. 11 provides threshold requirements that apply to all settlement agreements. Padilla v.
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LaFrance, 907 S.W.2d 454, 460 (Tex. 1995) (citing Kennedy v. Hyde, 682 S.W.2d 525, 528
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(Tex. 1984) ("Rule 11 is a minimum requirement for enforcement of all agreements concerning
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pending suits, including, but not limited to, agreed judgments.")); Roeglin v. Daves, 83 S.W.3d
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326, 330 (Tex.App.-Austin 2002, pet. denied). Thus, "compliance with Rule 11 is a general
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prerequisite for any judgment enforcing an agreement touching a pending suit." Kennedy, 682
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S.W.2d at 529. It is undisputed that Defendant Haak did not sign the Agreement. See Ebner v.
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First State Bank, 27 S.W.3d 287, 297 (Tex.App.-Austin 2000, pet. denied) (indicating Rule 11
agreement may be signed by party or party's attorney). In this case, although the Court docket
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references the Mediation Agreement as an Exhibit in the Order Approving the Compromise the
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actual Rule 11 Mediation Agreement was not electronically filed and does not satisfy Rule 11's
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filing requirement. See Padilla, 907 S.W.2d at 461 (holding that Rule 11 filing requirement is
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satisfied so long as agreement is filed before party seeks to enforce it); Southwestern Bell Tel.
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Co. v. Perez, 904 S.W.2d 817, 822 (Tex.App.-San Antonio 1995, no writ) (holding that
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attaching agreement to pleadings meets Rule 11's filing requirement). The Agreement does not
satisfy all elements of Rule 11 and even if it had Plaintiff is barred from enforcing against
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Defendant Haak because of the conflicting representations would nullify the entire reverse
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merger acquisition and constitute fraud.
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Therefore, because it is an undisputed fact that Defendant was not a named party to the
Settlement Agreements the Court should granted summary judgment as a matter of law.
. WHEREFORE, Defendants moves the Court to enter summary judgment in his favor
and against Plaintiffs and for such other and further relief as it deems appropriate.
DATED this 11th day of March, 2019.
/s/ Gary K. Haak
GARY K. HAAK, Pro Se
Defendant
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CERTIFICATE OF SERVICE
I hereby certify that on April 11, 2019, I personally caused a copy of the foregoing
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Defendants’ Response to Plaintiffs’ Motion for Leave to File Second Amended Complaint to be
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electronically filed with the Clerk and a copy e-served on Plaintiffs to:
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Josh M. Snell
JONES SKELTON HOCHULI
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004
Attorneys for Plaintiffs Terry Dishon and Luci Dishon
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/s/ Gary K. Haak
GARY K. HAAK, Pro Se
Defendant
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