Bandit Lawyers Erick Delarue and James Pope Challenged in Ali Choudri’s Foreclosure Defense

Defendant TIG Romspen US Master Mortgage LP (“Romspen”) files this emergency motion (the “Motion”) pursuant to Texas Rule of Civil Procedure 680 (“Rule 680”) to dissolve the Ex-Parte Temporary Restraining Order (the “TRO”) signed and entered on September 30, 2024, and to deny any further injunctive relief sought by Plaintiff Galleria Loop Note Holder, LLC (“Plaintiff”) against Romspen including, without limitation, ordering that any future request for injunctive relief against Romspen requires notice to Romspen and its counsel with an opportunity to be heard.

This Motion is supported by the Declaration of Kyle Hirsch (the “Declaration”) filed concurrently herewith.

Romspen requests that the Court consider this Motion on October 10, 2024, at 11:00 a.m.

– the date and time presently set for the return hearing on the TRO.

See Rule 680.

A copy of the TRO as delivered to Romspen is attached as Exhibit A; and accompanying this Motion is a proposed order.

INTRODUCTION

The TRO should have never been entered.1 Plaintiff’s petition alleges false and misleading facts in support of its application.

The Texas Court of Appeals has already determined that the September 2019 foreclosure sale, through which Plaintiff acquired title to the subject property and granted Romspen its lien, was a valid sale.

Plaintiff’s contention that the September 2019 foreclosure sale was defective – and thus Romspen has no valid lien to enforce – fails.

And even if true (which it clearly is not), it would not warrant injunctive relief because a foreclosure of an invalid lien would be ineffective, or at best would convey title subject to Plaintiff’s (falsely) alleged senior liens.

The false allegation that Plaintiff lacked notice of the sale is defeated by evidence of actual notice timely delivered to Plaintiff, its lawyers, and its principal (guarantor).

Plaintiff also filed this case improperly.

There is an existing case between these parties, and any request for relief should have been pursued in the earlier-filed and pending case.

Romspen is entitled to dissolution of the TRO and denial of any further injunctive relief because Plaintiff lacks any basis for such relief.

Romspen is entitled to an order restricting Plaintiff from seeking any further injunctive relief against Romspen, in this or any other Court, on an ex parte basis.

1           Romspen contends the TRO was ineffective in the first place because it was signed after effective removal to the Southern District of Texas federal court. Upon remand, to Romspen’s knowledge, Plaintiff has not renewed its request for temporary injunctive relief. However, because this Motion seeks dissolution and denial of temporary injunctive relief, with prejudice to Plaintiff seeking future injunctive relief ex parte, Romspen believes this Court has standing and this issue is ripe for a ruling.

Romspen does not consent to any further delays – the TRO can and should be immediately dissolved, any further injunctive relief denied, and restrictions placed on Plaintiff so Plaintiff cannot continue to interfere with Romspen’s legitimate exercise of its rights and remedies.

Romspen reserves its right to address any other issues raised in the Petition at the appropriate time including, without limitation, through a motion to dismiss under Rule 91a;

to seek recovery of fees unnecessarily incurred by the filing of the baseless Petition;

to seek sanctions;

and

for any other relief to which Romspen may be entitled.

FACTUAL BACKGROUND

1.                  This is the fourth meritless action in this district initiated by Plaintiff seeking, through immediate ex parte means, to stop Romspen from properly enforcing a years-defaulted loan through a power of sale under a deed of trust encumbering the property located at 1001 West Loop South, Houston, Texas (the “Property”).

2.                  Plaintiff filed its first action, which included an ex parte request for injunctive relief to stop a properly-noticed non-judicial sale of the Property, in June 2023 throgh attorney James Q. Pope (Harris County, Case No. 2023-34460, the “First Action”).

Plaintiff sought ex parte relief and gave no notice to Romspen’s counsel despite Mr. Pope and Plaintiff’s sole member and manager, Ali Choudhri, having actual knowledge that Romspen was represented by counsel at the time.

In good faith, Romspen agreed to a consensual resolution of the litigation under an executed agreement that Plaintiff immediately breached.

3.                  Plaintiff filed its second action in November 2023 through Mr. Pope (Harris County, Case No. 2023-77323, the “Second Action”), again requesting ex parte injunctive relief and giving no notice to Romspens’ counsel.

After achieving the intended goal of obstructing Romspen’s legitimate foreclosure efforts, Plaintiff non-suited the action late the night prior to the return hearing, after Romspen’s counsel and witnesses had already traveled to Houston.

4.                  Romspen filed its own action in Harris County on December 8, 2023 (Harris County, Case No. 2023-84714, the “Romspen Action”), naming Plaintiff and Choudhri as defendants and seeking damages for breaches of contract (the underlying loan documents) and conversion; specific performance; and the appointment of a receiver.

The Romspen Action remains pending.

5.                  Plaintiff filed its third action on February 5, 2024, by Mr. DeLaRue (Harris County, Case No. 2024-07456, the “Third Action”), again requesting ex parte relief providing no notice to Romspen even though Plaintiff (Mr. Choudhri) had actual knowledge that undersigned counsel continued to represent Romspen and notwithstanding the pending Romspen Case.

The judge denied Plaintiff’s ex parte request to enjoin the trustee’s sale scheduled for the next day.

On February 6, 2024, just before the trustee’s sale commenced, an affiliate also controlled by Mr. Choudhri (1001 WL, LLC) to whom Plaintiff transferred title to the Property days earlier, filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Western District of Texas, Austin Division (In re 1001 WL, LLC, Case No. 24-10119-smr, the “Bankruptcy Case”).2

The filing of the Bankruptcy Case triggered the automatic stay, preventing Romspen

2           See, e.g., Findings of Fact and Conclusions of Law and Order Granting in Part and Denying in Part TIG Romspen US Master Mortgage LP’s Motion for Summary Judgment (ECF. No. 28) (the “Bankruptcy Court Findings”), USBC, WD Tex, Austin Division (the “Bankruptcy Court”), Adversary Proceeding No. 24-01010-SMR (the “Adversary Proceeding”), para. 36. A copy of the Bankruptcy Court Findings is attached to Exhibit B, the Hirsch Declaration supporting this Motion (“Hirsch Decl.”), as Exhibit 3. Romspen asks that this Court take judicial notice of the Bankruptcy Court Findings.

from proceeding with its scheduled non-judicial trustee’s sale of the Property.3

Mr. DeLaRue never served the petition, and never provided notice to Romspen or undersigned counsel of the Third Action, and Mr. Choudhri never disclosed the Third Action to Romspen or its counsel.

6.                  Plaintiff, through Mr. DeLaRue, filed this fourth case on Sunday night, September 29, but not accepted until Monday, September 30 – the day immediately prior to an October 1, 2024, foreclosure sale.

Again, notwithstanding Plaintiff’s actual knowledge (through Mr. Choudhri) that Romspen has been represented by undersigned counsel since July 2023, and has been actively involved in the 1001 WL, LLC bankruptcy case including obtaining stay relief to foreclose, defeating plan confirmation, and successfully objecting to Plaintiff’s claim, Plaintiff once more ambushed Romspen by filing suit and seeking ex parte relief without any attempt to notify or confer with Romspen or its counsel in advance.

Also, Plaintiff improperly filed this new case notwithstanding the pending Romspen Case.

7.                  The pattern of failing to provide notice of newly-filed litigation on the eve of (or day of) a properly-noticed non-judicial foreclosure sale and seeking injunctive relief on an ex parte basis is especially abusive given that notice of sales scheduled for November 2023, February 2024, July 2024, August 2024, September 2024, and October 2024 was timely and properly given Plaintiff, Mr. Choudhri, Mr. Pope, and others through undersigned counsel.4

8.                  The reason Plaintiff elects to ambush Romspen is simple – the allegations in Plaintiff’s petitions are false or, at best, misleading.

9.                  Plaintiff seeks to enjoin Romspen’s trustee’s sale on two grounds.

A.                 False Allegation Regarding September 2019 Foreclosure and Liens.

3           As explained below, the bankruptcy court has modified the stay to permit Romspen to proceed with the sale of the Property.

4           Hirsch Decl., Exs. 5a-5e, 8.

10.              First, the Petition falsely alleges that Plaintiff’s acquisition of the Property through a September 3, 2019 foreclosure sale was invalid, and therefore the deed of trust given to Romspen and recorded after the foreclosure sale on September 5, 2019 (the deed of trust Romspen is attempting to foreclose) is invalid. Petition, at ¶¶ 9-10.

11.              Plaintiff knows, and any level of due diligence would reveal, that this allegation is false.

12.              To put this allegation into context, Plaintiff’s sole member and manager, Mr. Choudhri, owned and controlled the Property prior to September 3, 2019, through 1001 WL, LLC (the debtor in the Bankruptcy Case).5

The Property was, prior to September 3, 2019, encumbered by two senior liens in favor of MidFirst Bank, as well as several junior liens that Choudhri permitted to encumber the Property.6

Choudhri desired to strip away all liens by purchasing the MidFirst Bank notes and foreclosing the MidFirst Bank senior liens.7

Romspen agreed to fund Choudhri’s purchase, but required security in exchange.8

Accordingly, Plaintiff was formed to

(i) accept a short-term (one year) loan from Romspen in the original principal amount of $18,500,000 to fund the acquisition of the MidFirst Bank debt and liens;

(ii) foreclose the MidFirst Bank liens;

(iii) take free and clear title to the Property;

and

(iv) grant Romspen a lien that would enjoy senior priority as a result of the MidFirst Bank lien foreclosure.9

That is exactly what occurred; as of the September 3, 2019, foreclosure sale, Plaintiff took title to the property free and clear; and upon

5           See, e.g., Bankruptcy Court Findings, paras. 9, 11, 17-18.

6           See id., para. 19 & n.4.

7           See id., para. 22.

8           See id.

9           See id., para. 23.

recording its deed of trust on September 5, 2019, Romspen had a valid, senior-priority lien encumbering the Property.10

13.              One of the extinguished junior lienholders, George Lee,11 filed suit (Harris County, Case No. 2020-12442) challenging Choudhri’s efforts to acquire the MidFirst debt and liens and subsequent foreclosure that extinguished Mr. Lee’s junior lien.

Mr. Lee alleged, among other things, that Choudhri operated through alter-egos and that Plaintiff’s acquisition of the Property by foreclosure was ineffective.12

Plaintiff vigorously contested and opposed Lee’s contentions, and actively argued that the September 2019 foreclosure sale was valid.13

Romspen intervened in the action to argue that Plaintiff’s acquisition was valid.14

Plaintiff acquiesced to and benefitted from Romspen’s argument, and the trial court granted Romspen’s summary judgment motion finding as a matter of law that Plaintiff held valid title to the Property.15

Mr. Lee appealed to the Texas Court of Appeals, Division One (Case No. 01-22-0160-CV).

Plaintiff participated in the appeal, defending the lower court’s ruling.16

In a Memorandum Decision entered in August 2023 (the “Appellate Decision”),17 the Texas Court of Appeals affirmed the lower court’s ruling and

10    See id., paras. 24-25.

11  Mr. Lee is named as a defendant in this suit.

There is not a single allegation in the petition relating to Mr. Lee, other than noting he is a Texas citizen and that he holds a third lien position in the property.

See Petition, paras. 4, 26.

Romspen disputes Mr. Lee holds any valid lien, and believes Mr. Lee was named improperly by Plaintiff solely to prevent Romspen from removing this case to federal court on diversity grounds.

12         See Bankruptcy Court Findings, paras. 27-30.

13         See id., para. 31.

14         See id., para. 32.

15         See id.

16         See id., para. 33.

17         See id. A copy of the Appellate Decision is attached to the Hirsch Decl. as Exhibit 1. Romspen asks that this Court take judicial notice of the Appellate Decision.

found the trustee’s deed validly transferred title to Plaintiff.

Appellate Decision, at 1, 31.

The Appellate Decision is final and no longer subject to any appeals.

14.              After Plaintiff failed to perform under its loan obligations owed to Romspen, including failing to repay the loan when it matured, Plaintiff and Romspen entered into several agreements whereby Romspen conditionally agreed to forbear from enforcing its rights and remedies.

In each of those agreements, executed by Choudhri on behalf of Plaintiff in May 2021, May 2022, November 2022, July 2023, and August 2023,

Plaintiff unequivocally and unconditionally

(i) reaffirmed the obligations owed to Romspen;

(ii) verified and affirmed the validity, enforceability, and senior priority of Romspen’s liens;

(iii) verified the absence of any defense or offset against the indebtedness or the liens securing the indebtedness owed to Romspen;

and

(iv) released Romspen from any and all claims or defenses, of any nature whatsoever, that could be asserted by Plaintiff (collectively, the “Admissions”).18

15.              To escape foreclosure and further obstruct Romspen, Plaintiff transferred the Property to 1001 WL, LLC in January 2024. Choudhri signed the Special Warranty Deed on behalf of Plaintiff. 19 After Plaintiff failed to obtain injunctive relief in the Third Action, 1001 WL, LLC initiated the Bankruptcy Case.20 Under Choudhri’s control and at Choudhri’s direction, 1001 WL, LLC commenced an adversary proceeding challenging the validity of the Romspen lien on the basis that the September 2019 foreclosure sale was defective and, thus, Plaintiff could not have granted Romspen its liens – the very same allegation raised in this action. The bankruptcy court

18         See , e.g., Hirsch Decl., Ex. 2a, §§ 3, 7(b), 8(c), 8(p); Ex. 2b, §§ 3, 7(b), 8(c), 8(p); Ex. 2c, §§ 1, 6, 7, 11, 13, 15; Ex. 2d, §§ 7 & 8; Ex. 2e, §§ 7 & 8.

19         See Bankruptcy Court Findings, para. 35; Hirsch Decl., Ex. 9. Romspen asks that this Court take judicial notice of the Special Warranty Deed, which is a matter of public record.

20         See Bankruptcy Court Findings, para. 37.

granted Romspen’s summary judgment motion, finding that the issue had already been determined as a matter of law through the Appellate Decision and that 1001 WL, LLC, as Plaintiff’s successor also controlled by Choudhri, was bound by the decision.21

16.              All of this was decided well prior to Plaintiff filing this action, and supports dissolving the TRO based on Plaintiff’s false allegation of a “defective” foreclosure sale in September 2019.

B.   False Allegation Regarding Lack of Notice.

17.              The second false basis asserted in the petition for obtaining injunctive relief against Romspen is lack of notice.

18.              Romspen had obtained stay relief from the Bankruptcy Court in order to post and pursue a non-judicial sale as early as July 2024.22 Romspen, in fact, posted for and issued proper notice to Plaintiff, Choudhri, and various other lawyers and individuals (including Mr. Pope) in advance of the July sale.23 The bankruptcy judge modified his order to allow more time to decide the adversary proceeding, allowing Romspen to post and pursue a non-judicial sale only as early as August 2024.24 Romspen cancelled the July sale, and posted for and issued notice to Plaintiff, Choudhri, and others (including Mr. Pope) in advance of the August sale.25 The bankruptcy judge modified his order again to permit an opportunity for 1001 WL, LLC to confirm a plan, allowing Romspen to post and pursue a non-judicial sale only as early as September 2024.26 Romspen

21         See id., generally.

22         See Hirsch Decl., Ex. 4a. Romspen asks that the Court take judicial notice.

23         See id.., Ex. 5c.

24         See id.., Ex. 4b. Romspen asks that the Court take judicial notice.

25         See id.., Ex. 5d.

26         See id.., Ex. 4c. Romspen asks that the Court take judicial notice.

cancelled the August sale, and posted for and issued notice to Plaintiff, Choudhri, and others (including Mr. Pope) in advance of the September sale. 27

The bankruptcy judge once more modified his order, this time so he could consider and rule on whether to confirm the proposed plan, allowing Romspen to post and pursue a non-judicial sale only as early as October 2024.28

Romspen cancelled the September sale.

On September 10, 2024, Romspen caused a Notice of Substitute Trustee’s Sale to be posted and recorded in the county records (FRCL-2024-4895), and mailed the Notice via certified mail with a cover letter to Plaintiff and Choudhri (copying others (including Mr. Pope) by email), providing actual notice of the October 1, 2024, trustee’s sale.29

19.              Romspen did not send a copy of the notice on September 10 to Mr. DeLaRue, because Romspen had no knowledge that Mr. DeLaRue represented Plaintiff – the Third Action was never served on Romspen.

20.              But clearly, Plaintiff, its principal Choudhri, and Plaintiff’s lawyer30 had actual notice of the sale, and Romspen complied with the statutory notice provisions.

The TRO should be dissolved inasmuch as it is based on the false allegation that Romspen failed to provide proper notice of the October 1, 2024, sale in accordance with statute.

C.   Refusal to Rectify False and/or Misleading Allegations.

21.              After learning about the petition and the allegations therein, Romspen, through its counsel, sent to Mr. DeLaRue via email on September 30, 2024, a copy of the Appellate Decision, the Bankruptcy Court Findings, the email transmittal containing the Recorded Notice of Substitute

27         See id.., Ex. 5e.

28         See id.., Ex. 4d. Romspen asks that the Court take judicial notice.

29         See id.., Ex. 8.

30         Mr. Pope filed a motion in the Bankruptcy Case on September 12, 2024 on behalf of Plaintiff (ECF 500).

See id.., Ex. 6.

Romspen asks that the Court take judicial notice.

Trustee’s Sale and accompanying cover letter, and copies of the certified mail receipts reflecting mailing.31

With this information, Romspen informed Mr. DeLaRue that the petition and ex parte request for TRO contained false and misleading information, and offered an opportunity for Mr. DeLaRue to withdraw the petition.32

To date, Mr. DeLaRue has not responded – and has not withdrawn the petition.

D. Removal to Federal Court.

22.              When Romspen learned that the Court had set a hearing on Plaintiff’s request for TRO, its counsel contacted chambers attempting to participate in the hearing. Romspen was unable to reach chambers.

23.              At 1:06pm on September 30, 2024, Romspen filed notice of its removal of this case to the United States District Court for the Southern District of Texas.

24.              At 1:22pm, this Court signed the TRO.

LEGAL ARGUMENT

25.              Pursuant to Rule 680, Romspen moves to dissolve the TRO and for the Court to deny any further injunctive relief in Plaintiff’s favor because Plaintiff cannot establish a substantial likelihood of success on the merits on any of its asserted claims, or that such relief is equitable.

Moreover, given the history between the parties and Plaintiff’s repeated bad faith in seeking relief, dissolution and denial of injunctive relief should be with prejudice or, at least, should be limited to require proper notice to Romspen and an opportunity to be heard prior to restraining or enjoining Romspen in any way.

31         See id.., Exs. 7 & 8.

32         See id.

26.              “To obtain a TRO, the movant must establish entitlement to a preliminary injunction,” because “a TRO is a highly accelerated and temporary form of preliminary injunctive relief.”

Hill v. Chester White Rec. Ass’n, 2021 WL 5446511, at *4 (N.D. Tex. Nov. 18, 2021) (internal citations and quotations omitted).

A.                 Plaintiff Cannot Succeed on Its Claims.
27.              A movant seeking injunctive relief must show it has a probable right to the relief it seeks. See Abbott v. Anti-Defamation League Austin, Sw., & Texoma Regions, 610 S.W.3d 911, 916-17 (Tex. 2020); Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002); Walling v. Metcalf, 863 S.W.3d 56, 58 (Tex. 1993).

While not necessary to prove it will ultimately win, an applicant must show it has standing and that it is likely to succeed on the merits of the action.

Abbott v. Anti-Defamation League Austin, Sw., & Texoma Regions, 610 S.W.3d 911, 916-17 (Tex. 2020);

DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 686 (Tex. 1990);

Southwestern Bell Tel. Co. v. Public Util Comm’n, 571 S.W.2d 503, 506 (Tex. 1978);

Walling v. Metcalf, 863 S.W.3d 56, 58 (Tex. 1993).

28.              Plaintiff’s petition is premised on false allegations that have no chance as success.

29.              Plaintiff argues that Romspen cannot enforce its deed of trust recorded on September 5, 2019, because Plaintiff did not hold valid title at the time.

The September 2019 foreclosure sale has been resolved in favor of finding the sale was valid and conveyed title to Plaintiff.

Plaintiff was a party to the George Lee lawsuit and actively advocated in favor of that result.

Like 1001 WL, LLC’s failed attempt to “rewrite the script” in the Adversary Proceeding, Plaintiff is estopped from taking a contrary position now that it is convenient to do so.33

33         See Bankruptcy Court Findings, paras. 42-56 (judicial estoppel), 57-64 (quasi-estoppel).

30.              Plaintiff argues lack of notice.

As demonstrated, Romspen satisfied the notice provisions by delivering 21 days prior to the October 1, 2024, sale to each obligor (Plaintiff and Choudhri), as well as their lawyers:

(i) a letter describing the defaults and referencing earlier notices and Bankruptcy Court orders authorizing Romspen to proceed with the sale;

and

(ii) including the recorded and posted Notice of Substitute Trustee’s Sale containing all information required under the statute.

B.                 Plaintiff Cannot Establish Imminent, Irreparable Harm for which It Lacks an Adequate Remedy at Law.

31.              A petition for temporary injunction must plead injury by showing harm is imminent, injury is irreparable if the injunctive relief is not granted, and there is no other adequate legal remedy.

Henry v. Cox, 483 S.W.3d 119, 137 (Tex.App.—Houston [1st Dist.] 2015).

Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002);

Town of Palm Valley v. Johnson, 87 S.W.3d 110, 111 (Tex. 2001).

An injury is considered irreparable if it cannot be adequately compensated in monetary damages or it cannot be measured by any pecuniary standard.

Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002).

32.              Assuming, for purposes of this Motion only, that Plaintiff’s allegations are true, then any Romspen foreclosure does not harm Plaintiff at all.

33.              For example, if the September 2019 foreclosure sale did not result in Plaintiff acquiring title to the Property, and Plaintiff lacked title to grant Romspen a deed of trust, then a foreclosure sale would simply be ineffective as a matter of law.

But even if effective, based on Plaintiff’s position, the Romspen foreclosure would not foreclose the earlier 2012 and 2014 Midfirst Bank liens, which are senior in priority to the 2019 Romspen deed of trust.

Thus, Romspen would simply take title to the Property (from 1001 WL, LLC) subject to Plaintiff’s prior and senior liens.

Plaintiff is in the exact same position – it suffers no harm whatsoever.

C.                 Equity Requires Dissolution of the TRO and Denial of Injunctive Relief, With Predudice.

34.              “The principles governing courts of equity govern injunction proceedings if not in conflict with this chapter or other law.”

Tex. Civ. Prac. & Rem. Code Sec. 65.001.

The equities of this case warrant dissolution of the TRO.

35.              Plaintiff has failed to pay and to perform as agreed since maturity of the Note and subject to numerous subsequent agreements. Romspen has given Plaintiff ample opportunty to cure its defaults; has agreed to conditionally modify the payment or performance obligations due to Romspen; and has refrained from exercising its legal rights and remedies so the Plaintiff could rectify its contract breaches. In return, Plaintiff has interfered with, delayed, and obstructed Romspen’s enforcement rights.

36.              Further, Plaintiff has abused the court system, serially filing new cases and obtaining ex parte relief when notice should have been given and the underlying facts were false and/or misleading. This case is the fourth such example.

37.              Plaintiff also transferred the Property to its affiliate, 1001 WL, LLC, and then filed for bankruptcy protection. Romspen acted prompty and effectively in the 1001 WL, LLC case to obtain stay relief. Plaintiff has participated in the bankruptcy case, but is now resorting to its same, abusive litigation tactics.

38.              Not only did Plaintiff seek relief without notice despite having actual notice of Romspen’s counsel, Plaintiff filed this case knowing of an existing case pending in Harris County, between these parties, on the same subject matter.

Upon information and belief, Plaintiff purposefully ignored the Romspen Case’s existence in an attempt to secure a favorable ruling from an unsuspecting judge.

39.              Romspen therefore asks that this Court dissolve the TRO and deny any injunctive relief in Plaintiff’s favor, with prejudice to Plaintiff seeking any further injunctive relief against Romspen on an ex parte basis in this or any other forum.

Romspen’s counsel is known, there are pending cases available to seek relief, and there is no justifiable reason to seek any injunctive relief without providing notice to Romspen or its counsel.

If Plaintiff is able to convince a court of competent jurisdiction that it satisfies the elements for injunctive relief, after giving Romspen fair notice and an opportunity to be heard, Romspen can take such action as it deems appropriate at that time.

But Plaintiff should not be permitted to continue seeking ex parte relief as it has done time and time again, to Romspen’s detriment.

PRAYER FOR RELIEF

40.              Plaintiff cannot satisfy its burden under any scenario because it has pursued relief based on false allegations. Equity supports dissolving the TRO, and doing so with prejudice to Plaintiff seeking any further injunctive relief against Romspen on an ex parte basis in this or any other forum. Romspen is entitled to such other and further relief as the Court deems just and proper under the circumstances.

Dated: October 7, 2024                              Respectfully submitted,

BRYAN CAVE LEIGHTON PAISNER LLP
/s/ Kyle S. Hirsch

Kyle S. Hirsch

Texas Bar No. 24117262

Justin D. Hanna
Texas Bar No. 24095726

The Dallas Arts Tower
2200 Ross Avenue, Suite 4200W
Dallas, Texas 75201
Telephone:          (214) 721-8000
Facsimile:           (214) 721-8100
Email: kyle.hirsch@bclplaw.com
Email: justin.hanna@bclplaw.com

ATTORNEYS FOR TIG ROMSPEN US MASTER MORTGAGE LP

Defendant TIG Romspen US Master Mortgage LP (“Romspen”) moves for sanctions against

Plaintiff Galleria Loop Note Holder, LLC (“GLNH”);

its attorneys, Erick DeLaRue and Mary Daughtrey and the Law Firm of Erick DeLaRue;

and

Dward Darjean.

Romspen asks that each of the foregoing be responsible, jointly and severally, for paying Romspen’s reasonable expenses and attorneys’ fees plus all costs for inconvenience, harassment, and out-of-pocket expenses pursuant to Texas Civil Practice and Remedies Code Section 10.001 et seq. and Tex. R. Civ. P. 13.

Given the nature of the conduct, Romspen further asks that the petition be stricken, and any injunctive relief sought by GLNH be denied with prejudice.

In support of this Motion, Romspen would show as follows:

FACTUAL BACKGROUND

1. This is the fourth meritless action in this district initiated by GLNH seeking, through immediate ex parte means, to stop Romspen from properly enforcing a years-defaulted loan through a power of sale under a deed of trust encumbering the property located at 1001 West Loop South, Houston, Texas (the “Property”).

2. GLNH filed the first action which included an ex parte request for injunctive relief to stop a properly-noticed non-judicial sale of the Property, in June 2023 by attorney James Q. Pope (Harris County, Case No. 2023-34460, the “First Action”).

Romspen removed to federal court.

Mr. Darjean filed the Jurat in support of the First Action petition.

Mr. Pope and GLNH’s sole member and manager, Ali Choudhri, had actual knowledge that Romspen was represented by counsel at the time, yet GLNH declined to provide any notice seeking ex parte relief relying on misleading allegations affirmed by Mr. Darjean’s Jurat.

In good faith, Romspen agreed to a consensual resolution of the litigation under an executed agreement that GLNH immediately breached.

3. GLNH filed the second action in November 2023 through Mr. Pope (Harris County, Case No. 2023-77323, the “Second Action”),

again requesting ex parte injunctive relief despite Mr. Pope and Mr. Choudhri having actual knowledge that undersigned counsel represented Romspen.

Mr. Darjean filed the declaration in support of the Second Action petition, which again included false and/or misleading allegations.

After achieving the intended goal of obstructing Romspen’s legitimate foreclosure efforts, GLNH non-suited the action late the night prior to the return hearing, after Romspen’s counsel and witnesses had already traveled to Houston.

4. In an attempt to defeat this file-and-nonsuit pattern, Romspen filed its own action in Harris County on December 8, 2023 (Harris County, Case No. 2023-84714, the “Romspen Action”), naming Plaintiff and Choudhri as defendants and seeking damages for breaches of contract (the underlying loan documents) and conversion; specific performance; and the appointment of a receiver.

The Romspen Action remains pending.

5. Notwithstanding the pending Romspen Action, GLNH filed the third action on February 5, 2024 through attorney Erick DeLaRue (Harris County, Case No. 2024-07456, the “Third Action”),

again requesting ex parte relief providing no notice to Romspen even though GLNH (Mr. Choudhri) had actual knowledge that undersigned counsel continued to represent Romspen. Mr. Darjean signed the declaration in support of the Third Action petition, which again included false and/or misleading allegations.

The judge denied GLNH’s ex parte request to enjoin the trustee’s sale scheduled for the next day.

On February 6, 2024, just before the trustee’s sale commenced, an affiliate also controlled by Mr. Choudhri (1001 WL, LLC) to whom GLNH transferred title to the Property days earlier filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Western District of Texas, Austin Division (In re 1001 WL, LLC, Case No. 24-10119-smr, the “Bankruptcy Case”). 1

The filing of the Bankruptcy Case triggered the automatic stay, preventing Romspen from proceeding with its scheduled non-judicial trustee’s sale of the Property. 2

Mr. DeLaRue never served the petition, and never provided notice to Romspen or undersigned counsel of the Third Action, and Mr. Choudhri never disclosed the Third Action to Romspen or its counsel.

6. GLNH, though Mr. DeLaRue, filed this fourth case on Sunday night, September 29, but not accepted until Monday, September 30 – the day immediately prior to an October 1, 2024, foreclosure sale.

Mr. Darjean filed the declaration in support of the petition, which again includes false and/or misleading allegations. Again, notwithstanding GLNH’s actual knowledge (through Mr. Choudhri) that Romspen has been represented by undersigned counsel since July 2023, and has been actively involved in the 1001 WL, LLC bankruptcy case including obtaining

1 See, e.g., Findings of Fact and Conclusions of Law and Order Granting in Part and Denying in Part TIG Romspen US Master Mortgage LP’s Motion for Summary Judgment (ECF. No. 28) (the “Bankruptcy Court Findings”), USBC, WD Tex, Austin Division (the “Bankruptcy Court”), Adversary Proceeding No. 24-01010-SMR (the “Adversary Proceeding”), para. 36.

A copy of the Bankruptcy Court Findings is attached as Exhibit 3 to the Hirsch Declaration (“Hirsch Decl.”), which accompanies this Motion as Exhibit A. Romspen asks that this Court take judicial notice of the Bankruptcy Court Findings.

2 As explained below, the bankruptcy court has modified the stay to permit Romspen to proceed with the sale of the Property.

stay relief to foreclose, defeating plan confirmation, and successfully objecting to GLNH’s claim, GLNH once more ambushed Romspen by filing suit and seeking ex parte relief without any attempt to notify or confer with Romspen or its counsel in advance.

7. The pattern of failing to provide notice of newly-filed litigation on the eve of (or day of) a properly-noticed non-judicial foreclosure sale and seeking injunctive relief on an ex parte basis is especially abusive given that notice of each sale has been timely and properly issued through undersigned counsel.3

8. Furthermore, after GLNH non-suited the Second Action, Romspen the Romspen Action.

Rather than seeking relief, on notice, in the existing and pending Romspen Action, GLNH elected to file the Third Action and this action, seeking relief on a last-minute, no-notice, surprise basis to take unfair advantage of the ex parte injunctive relief provisions under Texas law.

9. The reason GLNH has not given Romspen or its counsel notice is simple – the allegations in the GLNH petitions are patently false or, at best, misleading.

10. In this case, GLNH seeks to enjoin the sale on two grounds.

A. False Allegation Regarding September 2019 Foreclosure and Liens.

11. First, the Petition falsely alleges that GLNH’s acquisition of the Property through a September 3, 2019 foreclosure sale was invalid, and therefore the deed of trust given to Romspen and recorded after the foreclosure sale on September 5, 2019 (the deed of trust Romspen is attempting to foreclose) is invalid. Petition, at ¶¶ 9-10.

12. GLNH knows, and any level of due diligence would reveal, that this allegation is false.

3 Hirsch Decl., Exs. 5a-5e, 8.

13. To put this allegation into context, GLNH’s sole member and manager, Mr. Choudhri, owned and controlled the Property prior to September 3, 2019, through 1001 WL, LLC (the debtor in the Bankruptcy Case). 4

The Property was, prior to September 3, 2019, encumbered by two senior liens in favor of MidFirst Bank, as well as several junior liens that Choudhri permitted to encumber the Property. 5

Choudhri desired to strip away all liens by purchasing the MidFirst Bank notes and foreclosing the MidFirst Bank senior liens. 6

Romspen agreed to fund Choudhri’s purchase, but required security in exchange. 7 Accordingly, GLNH was formed to

(i) accept a short-term (one year) loan from Romspen in the original principal amount of $18,500,000 to fund the acquisition of the MidFirst Bank debt and liens;

(ii) foreclose the MidFirst Bank liens;

(iii) take free and clear title to the Property;

and

(iv) grant Romspen a lien that would enjoy senior priority as a result of the MidFirst Bank lien foreclosure. 8

That is exactly what occurred; as of the September 3, 2019, foreclosure sale, GLNH took title to the property free and clear; and upon recording its deed of trust on September 5, 2019, Romspen had a valid, senior-priority lien encumbering the Property.9
14.

One of the extinguished junior lienholders, George Lee,10 filed suit (Harris County, Case No. 2020-12442) challenging Choudhri’s efforts to acquire the MidFirst debt and liens and

4 See, e.g., Bankruptcy Court Findings, paras. 9, 11, 17-18.

5 See id., para. 19 & n.4.

6 See id., para. 22.

7 See id.

8 See id., para. 23.

9 See id., paras. 24-25.

10 Mr. Lee is named as a defendant in this suit. There is not a single allegation in the petition relating to Mr. Lee, other than noting he is a Texas citizen and (inaccurately) that he holds a third lien position in the Property. See Petition, paras. 4, 26. Romspen believes Mr. Lee was named improperly by GLNH solely to prevent Romspen from removing this case to federal court on diversity grounds.

subsequent foreclosure that extinguished Mr. Lee’s junior lien.

Mr. Lee alleged, among other things, that Choudhri operated through alter-egos and that GLNH’s acquisition of the Property by foreclosure was ineffective. 11

GLNH vigorously contested and opposed Lee’s contentions, and actively argued that the September 2019 foreclosure sale was valid.12

Romspen intervened in the action to argue that GLNH’s acquisition was valid. 13

GLNH acquiesced to and benefitted from Romspen’s argument, and the trial court granted Romspen’s summary judgment motion finding as a matter of law that GLNH held valid title to the Property. 14

Mr. Lee appealed to the Texas Court of Appeals, Division One (Case No. 01-22-0160-CV).

GLNH participated in the appeal, defending the lower court’s ruling. 15

In a Memorandum Decision entered in August 2023 (the “Appellate Decision”),16 the Texas Court of Appeals affirmed the lower court’s ruling and found the trustee’s deed validly transferred title to GLNH. Appellate Decision, at 1, 31.

The Appellate Decision is final and no longer subject to any appeals.

15. After GLNH failed to perform under its loan obligations owed to Romspen, including failing to repay the loan when it matured, GLNH and Romspen entered into several agreements whereby Romspen conditionally agreed to forbear from enforcing its rights and remedies. In each of those agreements, executed by Choudhri on behalf of GLNH in May 2021,

11 See Bankruptcy Court Findings, paras. 27-30.

12 See id., para. 31.

13 See id., para. 32.

14 See id.

15 See id., para. 33.

16 A copy of the Appellate Decision is attached to the Hirsch Decl. as Exhibit 1. Romspen asks that this Court take judicial notice of the Appellate Decision.

May 2022, November 2022, July 2023, and August 2023, GLNH unequivocally and unconditionally, among other things:

(i) reaffirmed the obligations owed to Romspen;

(ii) verified and affirmed the validity, enforceability, and senior priority of Romspen’s liens;

(iii) verified the absence of any defense or offset against the indebtedness or the liens securing the indebtedness owed to Romspen;

and

(iv) released Romspen from any and all claims or defenses, of any nature whatsoever, that could be asserted by GLNH (collectively, the “Admissions”). 17

16. To escape foreclosure and further obstruct Romspen, GLNH transferred the Property to 1001 WL, LLC in January 2024.

Choudhri signed the Special Warranty Deed on behalf of GLNH. 18

After GLNH failed to obtain injunctive relief in the Third Action, 1001 WL, LLC initiated the Bankruptcy Case. 19

Under Choudhri’s control and at Choudhri’s direction, 1001 WL, LLC commenced an adversary proceeding challenging the validity of the Romspen lien on the basis that the September 2019 foreclosure sale was defective and, thus, GLNH could not have granted Romspen its liens – the very same allegation raised in this action.

The bankruptcy court granted Romspen’s summary judgment motion, finding that the issue had already been determined as a matter of law through the Appellate Decision and that 1001 WL, LLC, as GLNH’s successor also controlled by Choudhri, was bound by the decision. 20

17. All of this was decided well prior to GLNH filing this action. Notwithstanding, Mr. DeLaRue signed the petition, and Mr. Darjean signed the declaration in support of the petition,

17 See, e.g., Hirsch Decl., Ex. 2a, §§ 3, 7(b), 8(c), 8(p); Ex. 2b, §§ 3, 7(b), 8(c), 8(p); Ex. 2c, §§ 1, 6, 7, 11, 13, 15; Ex. 2d, §§ 7 & 8; Ex. 2e, §§ 7 & 8.

18 See Bankruptcy Court Findings, para. 35; Hirsch Decl., Ex. 11.

19 See Bankruptcy Court Findings, para. 37.

20 See id., generally.

falsely alleging that the September 2019 foreclosure sale was defective and that the Romspen liens were invalid because GLNH did not own the Property.

B. False Allegation Regarding Lack of Notice.

18. The second false basis asserted in the petition for obtaining injunctive relief against Romspen is lack of notice.

19. Romspen had obtained stay relief from the Bankruptcy Court in order to post and pursue a non-judicial sale as early as July 2024. 21 Romspen, in fact, posted for and issued proper notice to GLNH, Choudhri, and various other lawyers and individuals (including Mr. Pope) in advance of the July sale. 22

The bankruptcy judge modified his order to allow more time to decide the adversary proceeding, allowing Romspen to post and pursue a non-judicial sale only as early as August 2024. 23

Romspen cancelled the July sale, and posted for and issued notice to GLNH, Choudhri, and others (including Mr. Pope) in advance of the August sale. 24

The bankruptcy judge modified his order again to permit an opportunity for 1001 WL, LLC to confirm a plan, allowing Romspen to post and pursue a non-judicial sale only as early as September 2024. 25

Romspen cancelled the August sale, and posted for and issued notice to GLNH, Choudhri, and others (including Mr. Pope) in advance of the September sale. 26

The bankruptcy judge once more modified his order, this time so he could consider and rule on whether to confirm the proposed

21 See Hirsch Decl., Ex. 4a. Romspen asks that the Court take judicial notice.

22 See id., Ex. 5c.

23 See id., Ex. 4b. Romspen asks that the Court take judicial notice.

24 See id., Ex. 5d.

25 See id., Ex. 4c. Romspen asks that the Court take judicial notice.

26 See id., Ex. 5e.

plan, allowing Romspen to post and pursue a non-judicial sale only as early as October 2024. 27

Romspen cancelled the September sale. On September 10, 2024, Romspen caused a Notice of Substitute Trustee’s Sale to be posted and recorded in the county records (FRCL-2024-4895), and mailed the Notice via certified mail with a cover letter to GLNH and Choudhri (copying others (including Mr. Pope) by email), providing actual notice of the October 1, 2024, trustee’s sale. 28

20. Romspen did not send a copy of the notice on September 10 to Mr. DeLaRue, because Romspen had no knowledge that Mr. DeLaRue represented GLNH – the Third Action was never served on Romspen.

21. But clearly, GLNH, its principal Choudhri, and GLNH’s lawyer29 had actual notice of the sale, and Romspen complied with the statutory notice provisions.

Yet Mr. DeLaRue signed the petition, and Mr. Darjean signed the declaration in support, containing the false allegation that Romspen had failed to provide proper notice.

22. The foregoing justifies sanctions. But the circumstances are even more severe.

C. Refusal to Rectify False and/or Misleading Allegations.

23. After learning about the petition and the allegations therein, Romspen, through its counsel, sent to Mr. DeLaRue via emails on September 30, 2024, a copy of the Appellate Decision, the Bankruptcy Court Findings, the email transmittal containing the Recorded Notice of Substitute Trustee’s Sale and accompanying cover letter, and copies of the certified mail receipts reflecting mailing. 30

With this information, Romspen informed Mr. DeLaRue that the petition and ex parte

27 See id., Ex. 4d. Romspen asks that the Court take judicial notice.

28 See id., Ex. 8.

29 Mr. Pope filed a motion in the Bankruptcy Case on September 12, 2024 on behalf of Plaintiff (ECF 500). See id., Ex. 6. Romspen asks that the Court take judicial notice.

30 See id., Exs. 7 & 8.

request for TRO contained false and misleading information, and offered an opportunity for Mr. DeLaRue to withdraw the petition. 31

Mr. DeLaRue has not responded – and has not withdrawn the petition.

24. Undersigned counsel followed up with a letter to Mr. DeLaRue the evening of September 30, 2024, further explaining the false information contained in the petition and making the demand that GLNH withdraw its petition with prejudice. 32

Not only did Mr. DeLaRue fail to respond, but his office doubled-down on its position – the next morning, at 9:14 am Central time, Ms. Daughtrey sent undersigned counsel a copy of the issued (but ineffective) TRO from this Court, asking for confirmation that the sale is being cancelled.

When undersigned counsel responded to again inform counsel of the ineffectiveness of the TRO and the pending demand to withdraw the false and materially misleading petition, Mr. DeLaRue waited until the district court entered its order remanding the case before responding – completely ignoring the issue of false information in the pleadings and the demand to withdraw.33

LEGAL ARGUMENT

25. The Texas Civil Practice and Remedies Code provides that:

The signing of a pleading constitutes a certificate by the signatory that to the signatory’s best knowledge, information, and belief, formed after reasonable inquiry:

(i) The pleading or motion is not being presented for any improper purpose, including to harass or to cause unnecessary delay or needless increase in the cost of litigation;

(ii) Each claim, defense, or other legal contention in the pleading is warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law;

(iii) Each allegation or other factual contention in the pleading or motion has evidentiary support or, for a specifically identified allegation or factual contention, is likely to

31 See id.

32 See id., Ex. 9.

33 See id., Ex. 10.

have evidentiary support after a reasonable opportunity for further investigation or discovery;

and

(iv) Each denial in the pleading or motion of a factual contention is warranted on the evidence or, for a specifically identified denial, is reasonably based on a lack of information or belief.

Tex. Civil Prac. & Rem. Code Sec. 10.001.

26. This applies to each claim and each allegation.

Low v. Henry, 221 S.W.3d 609, 615 (2007)

(affirming lower court’s finding of violations, remanding for proceedings to support the basis of the sanction).

A trial court may sanction an attorney or party for filing pleadings that have “little or no basis for the claims, no grounds for legal arguments, [contain] misrepresentation of law or facts, or [seek] legal action . . . in bad faith.”

Lake Travis Indep. Sch. Dist. v. Lovelace, 243 S.W.3d 244, 256–57 (Tex.App.-Austin 2007, no pet.); see also Tex. Civ. Prac. & Rem.Code Ann.§ 10.004 (authorizing sanctions).

Sanctions are warranted for filing a false petition. Id.

27. Similarly, Texas Rule of Civil Procedure 13 provides that the Signatures of attorneys or parties constitute a certificate by them that they have read the pleading, motion, or other paper; that to the best of their knowledge, information, and belief formed after reasonable inquiry the instrument is not groundless and brought in bad faith or groundless and brought for the purpose of harassment.

Attorneys or parties who shall bring a fictitious suit as an experiment to get an opinion of the court, or who shall file any fictitious pleading in a cause for such a purpose, or shall make statements in pleading which they know to be groundless and false, for the purpose of securing a delay of the trial of the cause, shall be held guilty of a contempt.

If a pleading, motion or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, after notice and hearing, shall impose an appropriate sanction available under Rule 215-2b, upon the person who signed it, a represented party, or both.

Tex. R. Civ. P. 13.

28. Although courts presume pleadings are filed in good faith, a party acts in bad faith when he is placed on notice “that his understanding of the facts may be incorrect and he does not make a reasonable inquiry into the facts before filing a pleading.”

Monroe v. Grider, 884 S.W.2d 811, 819 (Tex.App.-Dallas 1994, writ denied).

29. In turn, Rule 215-2b provides for sanctions “as are just,” including but not limited to

(i) an order charging all or any portion of the expenses of discovery or taxable court costs or both against the disobedient party or the attorney advising him;

(ii) an order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing designated matters in evidence;

(iii) an order striking pleadings, or dismissing with or without prejudice the action, or rendering a judgment by default against the disobedient party and

(iv) in lieu or in addition to the foregoing, an order to pay the reasonable expenses, including attorneys’ fees, caused by the sanctionable conduct.

Tex. R. Civ. P. 215.2(b).

30. The factual allegations in the petition have no evidentiary basis, and the petition was filed in bad faith to interfere with and wrongfully delay Romspen’s legitimate enforcement rights,

warranting sanctions against Mr. DeLaRue, who signed the petition;

his law firm, The Law Offices of Erick DeLaRue;

his client, GLNH;

and

Mr. Darjean, who signed the declaration in support.

31. The Texas Court of Appeals sustained GLNH’s arguments (advanced by Romspen) that the September 2019 sale was valid, as reflected in the Appellate Decision. GLNH (and Mr. DeLaRue) knew, or upon conducting reasonable inquiry should have known, this had occurred – GLNH was a party to the appeal.

What makes it even more difficult to believe neither GLNH nor Mr. DeLaRue knew about the Appellate Decision is that the petition names George Lee – the appellant in the appeal – as a defendant in this action.

32. The Bankruptcy Court Findings reinforce the Appellate Decision’s effect by finding 1001 WL, LLC, as successor to GLNH, barred from making the same contradictory arguments GLNH asserts in the petition. 34 Choudhri – GLNH’s sole member and manager, and

34 See Bankruptcy Court Findings, paras. 42-56 (judicial estoppel), 57-64 (quasi-estoppel).

the manager and person in control of 1001 WL, LLC – had actual knowledge of the Bankruptcy Court Findings.

33. The Admissions reflect that, on numerous occasions, the arguments raised in the petition had been waived and/or lack any basis.

34. Mr. DeLaRue, who signed the petition on behalf of The Lae Firm of Erick DeLaRue for GLNH, and Mr. Darjean, who signed the declaration under penalty of perjury, had no factual basis to make these assertions. Sanctions are warranted.

35. Further, GLNH, its principal Choudhri, and its lawyers received proper and effective notice of the October 1, 2024 sale, defeating any plausible argument that GLNH lacked proper notice of the sale.

Mr. DeLaRue and Mr. Darjean knew, or could have upon reasonable inquiry, confirmed that the allegations in the petition were false.

36. GLNH has been repeatedly provided with notice of Romspen’s scheduled foreclosure sales for several months prior to the October 1, 2024 sale (each such sale has been cancelled due to, or as a result of, GLNH’s, Choudhri’s, and 1001 WL’s delay and obstruction tactics).

The October 1, 2024 sale is no different.

The correspondence regarding this specific sale reflects actual notice on September 10, 2024, to GLNH via US Certified Mail, including to the address recited by Mr. Darjean in his declaration (1001 West Loop South, Suite 700, Houston, Texas); via US Certified Mail and email to Mr. Choudhri; and via email to Mr. Pope.

There is no legitimate argument that GLNH lacked timely and proper notice of the sale. Mr. DeLaRue’s signature on the petition, and Mr. Darjean’s execution of the declaration, clearly support false information that should be sanctioned.

37. Further, the petition – containing these improper allegations – is presented for an improper purpose, including to cause unnecessary delay or needlessly increase the cost of

litigation; and the request for injunctive relief, at an ex parte basis, had no basis in fact or law when presented to this Court.35

38. Assuming, arguendo, that GLNH’s allegations are true (which they clearly are not), then any purported foreclosure by Romspen would not impair GLNH’s interests in the Property. GLNH is not the owner of the Property – GLNH transferred the Property to 1001 WL, LLC, the debtor in the Bankruptcy Case.36 So GLNH is not claiming to protecting its ownership interest in
the Property.

39. Rather, at its core, GLNH falsely alleges that the September 2019 sale was defective, meaning either

(i) Romspen’s foreclosure would not foreclose GLNH’s interests the Property because Romspen’s deed of trust was given by a non-owner of the Property and would thus be ineffective;

or

(ii) any foreclosure of the Romspen deed of trust recorded in September 2019 would remain subject to the MidFirst Bank liens recorded in 2012 and 2014 that GLNH had acquired with the intention of foreclosing. Injunctive relief that stops Romspen from foreclosing does not benefit GLNH, but simply wastes time and needlessly increases litigation.37

But GLNH knows that its allegations are false, so stopping the foreclosure sale under false pretenses is the only way to preserve any rights it – and its affiliate also controlled by Choudhri, 1001 WL, LLC – holds in and to the Property.

35 Because Romspen was not afforded notice of the hearing, and when it learned of the hearing its counsel could not get a hold of chambers in requesting to appear remotely, Romspen does not know what false information was given to the Court in support of the ex parte injunctive relief requested besides the false allegations in the petition. Romspen expressly reserves all of its rights in connection with the foregoing.

36 Romspen reserves all rights regarding the alleged transfer of the Property from GLNH to 1001 WL, LLC.

37 Romspen is seeking to extinguish the TRO, and incorporates all of its arguments herein.

40. The only reason to seek ex parte relief was to advance clearly false narratives without opposition. GLNH, Choudhri, and Mr. Darjean had actual notice of the identity of Romspen’s counsel.

Mr. DeLaRue could have learned this information with minimal inquiry.

But they knew their claims would be successfully challenged if Romspen’s counsel had notice.

So they took unfair advantage of the ex parte provisions, depriving Romspen from due process.

41. Mr. DeLaRue had an opportunity to remedy his sanctionable conduct.

42. At 12:45pm on September 30, shortly after learning (through its own research) of this action, Romspen’s counsel sent an email to Mr. DeLaRue and his colleague, Ms. Daughtrey, attaching a copy of the Appellate Decision and the Bankruptcy Court findings, requesting that the petition be immediately withdrawn.

That email was ignored.

43. At 1:25pm on September 30, Romspen’s counsel sent an email to Mr. DeLaRue and his colleague, Ms. Daughtrey, attaching

(i) a copy of the September 10, 2024, transmittal email to Mr. Choudhri, Mr. Pope, and others attaching a copy of the September 10, 2024 notice letter sent via US Mail to GLNH (at multiple addresses, including 1001 West Loop South, Suite 700, Houston, Texas) and Mr. Choudhri with the Notice of Substitute Trustee’s Sale filed and posted on September 10, 2024,

and

(ii) copies of the US Certified Mail receipts showing deposit with the US Postal Service of the notice letter to GLNH and Mr. Choudhri. Romspen’s counsel demanded that the petition be withdrawn.

That email was ignored.

44. At 7:33pm on September 30, Romspen’s counsel sent via email a letter to Mr. DeLaRue and Ms. Daughtrey again providing an explanation why the petition contains false and materially misleading information; demanding that it be withdrawn by 10am Thursday, October 1, 2024, with prejudice; and informing them that if not timely withdrawn, Romspen intends to file this Motion.

That letter was ignored.

45. At 9:14am on October 1, 2024, knowing that this matter had been removed to federal court (GLNH had filed an emergency motion to remand the evening of September 30), Ms. Daughtrey sent a copy of the TRO, signed after removal, to Romspen’s counsel requesting confirmation that the sale be cancelled.

Romspen’s counsel responded, informing her that the TRO was ineffective due to the removal, and again referring to the prior day’s communications to which neither she nor Mr. DeLaRue had responded.

Again, the reference to the prior day’s communications was flatly ignored.

46. Thus, rather than correcting sanctionable conduct, Mr. DeLaRue, for himself and GLNH, doubled-down on the false and materially misleading allegations in the petition even after receiving ample evidence to contradict the allegations with an opportunity to do the right thing and withdraw the petition.

The conduct demonstrated warrants sanctions; and given the blatantly false allegations, sanctions should include striking GLNH’s offending pleadings along with denial of any request for injunctive relief, with prejudice.

47. Finally, the petition names George Lee as a defendant for no apparent reason other than to defeat removal on diversity grounds.

Other than reciting George Lee’s citizenship in Texas (which is the same as GLNH’s citizenship, thus destroying complete diversity), there is not a single factual allegation concerning Mr. Lee.

Such a tactic is clearly gamesmanship designed to thwart Romspen from exercising its right of removal, and independently subjects Mr. DeLaRue (and his law firm), GLNH, and Mr. Darjean to sanctions.

PRAYER FOR RELIEF

For these reasons, Romspen respectfully request that this Court grant this motion; award sanctions in favor of Romspen jointly and severally against Mr. DeLaRue, the Law Firm of Erick DeLaRue, and Dward Darjean, for payment of Romspen’s reasonable expenses and attorneys’ fees plus all costs for inconvenience, harassment, and out-of-pocket expenses pursuant to Texas Civil Practice and Remedies Code Section 10.001 et seq. in an amount to be determined by the Court upon application by Romspen; striking the petition; denying injunctive relief with prejudice; and for such other and further relief as the Court deems just and proper under the circumstances.

Dated: October 7, 2024

Respectfully submitted,