4/21/2017 12:32:29 PM
`Chris Daniel - District Clerk Harris County
`Envelope No. 16593348
`By: JEANETTA SPENCER
`Filed: 4/21/2017 12:32:29 PM
`
`CAUSE NO. 2016-84872
`
`
`IN THE DISTRICT COURT OF
`§
`MN.J GROUP, INC.
`
`§
`
`HARRIS COUNTY, TEXAS
`§
`V.
`
`§
`
`215TH JUDICIAL DISTRICT
`§
`CAR STEREO OF TEXAS, INC.;, ET-AL
`DEFENDANTS OMAR ET-AL’S MOTION FOR SUMMARY JUDGMENT AND
`MEMORANDUM IN SUPPORT OF ITS MOTION FOR SUMMARY JUDGMENT
`
`The defendants Omar's Financial Services, Inc.: Omar's Financial Consultants.
`Inc. and Omar Omar ('"CPA Defendants") respectfully moves for summary
`judgment. The plaintiff alleges that he CPA, Car Stereo of Texas completely
`fabricated the sales of its car stereo business, and further under-reported its
`payroll (most of the wages Defendants paid their employees were in cash and
`were not disclosed on Defendants' financial statements or tax returns) See
`Petition attached as Exhibit 2, at para. 21)
`
`Summary judgment should be granted on the plaintiff’s allegations of
`negligence because the undisputed evidence, shows that the Defendants'
`financial statements or tax returns was intended for the IRS and plaintiff was not
`the person for whose use and purpose the representation was intended.
`UNDISPUTED FACTS
`For the purposes of this motion, the following facts are undisputed: For ten
`or more years, including the period at issue in this lawsuit the accountant has
`prepared financial statements or tax returns and Federal Income Taxes for Car
`Stereo Texas, Inc. for filing with the IRS only. All the information used as input to
`the preparation of the Federal income tax was provided to the accountant by Mr.
`Nabeel Arafat.
`
`At no time during this ten or more year period was the accountant actually
`aware of MNL Group, Inc. nor did the accountant intend that the tax prepared on
`behalf of Nabeel Arafat for Car Stereo Texas, Inc. to be relied on by MNJ Group,
`Inc. for any particular transaction with Car Stereo Texas, Inc.
`
`
`C. Argument & Authorities
`
`
`
`1
`
`

`

`To prevail on a traditional summary judgment motion, a movant must
`
`prove that there is no genuine issue regarding any material fact and that it is
`entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a (c); Little v. Tex.
`Dep’t of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004). A party moving for
`summary judgment on one of its own claims must conclusively prove all essential
`elements of the claim. See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223
`(Tex. 1999).
`
`A defendant may also prevail by traditional summary judgment if it
`
`conclusively negates at
`least one essential element of a plaintiff’s claim
`or conclusively proves an affirmative defense. See IHS Cedars Treatment Ctr. of
`DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004). A movant seeking
`traditional summary judgment on an affirmative defense has the initial burden of
`establishing its entitlement to judgment as a matter of law by conclusively
`establishing each element of its affirmative defense. See Chau v. Riddle, 254
`S.W.3d 453, 455 (Tex. 2008) (per curiam); see also TEX. R. CIV. P. 166a (b)–(c). A
`matter is conclusively established if reasonable people could not differ as to the
`conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168
`S.W.3d 802, 816 (Tex. 2005). If the movant meets its burden, the burden then
`shifts to the nonmovant to raise a genuine issue of material fact precluding
`summary judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.
`1995).
`
`The evidence raises a genuine issue of fact if reasonable and fair-minded
`
`jurors could differ in their conclusions in light of all of the summary-judgment
`evidence. See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex.
`2007) (per curiam).When a defendant moves for summary judgment on an
`affirmative defense, he is entitled to summary judgment if his proves all essential
`elements of his defense as a matter of law. Diaz v. Westphal, 941 S.W.2d 96, 98-
`99 (Tex. 1997); Johnson & Johnson Med., Inc. v. Sanchez, 924 S.W.2d 925, 927
`(Tex. 1996); Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 121 (Tex. 1996);
`Randall’s Food Mkts. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995); City of
`Lancaster v. Chambers, 883 S.W.2d 650, 653 (Tex. 1994). Defendant must show
`there are no genuine issues of material fact. Tex. R. Civ. P. 166a(c).
`NEGLIGENT MISREPRESENTATION AGAINST A PROFESSIONAL
`
`
`
`2
`
`

`

`In most states today, including Texas claims for negligent
`
`misrepresentation against a professional generally arise under the aegis of Section
`552 of the Restatement (Second) of Torts:
`
`Information Negligently Supplied for the Guidance of Others
`
`(1) One who, in the course of his business, profession or employment, or
`
`in any other transaction in which he has a pecuniary interest, supplies false
`information for the guidance of others in their business transactions, is subject to
`liability for pecuniary loss caused to them by their justifiable reliance upon the
`information, if he fails to exercise reasonable care or competence in obtaining or
`communicating the information.
`
`(2) Except as stated in Subsection (3), the liability stated in Subsection (1)
`
`is limited to loss suffered (a) by the person or one of a limited group of persons
`for whose benefit and guidance he intends to supply the information or knows
`that the recipient intends to supply it; and (b) through reliance upon it in a
`transaction that he intends the information to influence or knows that the
`recipient so intends or in a substantially similar transaction.
`
`(3) The liability of one who is under a public duty to give the information
`
`extends to loss suffered by any of the class of persons for whose benefit the duty
`is created, in any of the transactions in which it is intended to protect them.
`
`RESTATEMENT (SECOND) OF TORTS § 552 (1977). Clearly, under Section
`
`552, privity is not an automatic bar to liability – as long as a party can meet the
`requirements of subsection (2).
`
`This means that foreseeability of harm is not the test. The plaintiff must
`have been a person for whose use the representation was intended, and it
`is not enough that the defendant ought reasonably to have foreseen
`reliance by someone such as the plaintiff. Also, if the plaintiff is not an
`identifiable person for whose benefit the statement was intended, he must
`at least have been a member of some very small group of persons for
`whose guidance the representation was made
`
`PROSSER AND KEATON ON THE LAW OF TORTS § 107, at 747 (1984).
`
`interpret Section 552 to require the professional to either
`Texas
`
`specifically intend the claimant (or the class of persons in which the claimant falls)
`
`
`
`3
`
`

`

`to rely on the representations, or to actually know and expect that the claimant
`(or the class) will so rely. This is a fairly high standard, and significantly restricts
`the abilities of third parties to make negligent misrepresentation claims against a
`professional.
`
`Under this test, a professional (such as an appraiser or accountant) will be
`
`liable to third parties where two criteria are satisfied: First, the loss must be
`suffered “by the person or one of a limited group of persons for whose benefit
`and guidance [the professional] intends to supply the information or knows that
`the recipient intends to supply it”; and second, the loss must be suffered “through
`reliance upon it in a transaction that [the professional] intends the information to
`influence or knows that the recipient so intends or in a substantially similar
`transaction.” Under this test, the professional and the client agree between
`themselves as to who will be permitted to rely on the statements of the
`professional (audit, appraisal, survey, etc.).
`
`
`
`Texas follows this approach. As the Texas Supreme Court held:
`
`“[A] section 552 cause of action is available only when
`information is transferred by [a professional] to a known
`party for a known purpose.” [McCamish, Martin, Brown &
`Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 794 (Tex.
`1990) (emphasis added)]. Under section 552, a “known
`party” is one who falls in a limited class of potential
`claimants ‘“for whose benefit and guidance one intends to
`supply the information or knows that the recipient intends
`to supply it.”’ Id. (quoting RESTATEMENT (SECOND) OF
`TORTS § 552(2)(a)). This formulation
`limits
`liability to
`situations in which the professional who provides the
`information is “aware of the nonclient and intends that the
`nonclient rely on the information.” Id.
`
`Grant Thornton LLP v. Prospect High Income Fund ML CBO IV (Cayman), Ltd., 314
`S.W.3d 913, 920 (Tex. 2010). The Supreme Court also noted that this rule was in
`contrast to earlier Texas appellate decisions that had applied a broader standard –
`the “should have known” standard. Id. at 920 & n. 12 (disapproving Blue Bell, Inc.
`v. Peat, Marwick, Mitchell & Co., 715 S.W.2d 408, 413 (Tex. App.—Dallas 1986,
`writ ref’d n.r.e.). Hence, Texas law requires that the professional actually know of
`the non-client and actually intend the non-client to rely on the information. Id.
`
`
`
`4
`
`

`

`A plaintiff has no standing to litigate without a breach of a legal right
`
`belonging to the plaintiff. Nobles v. Marcus, 533 S.W.2d 923, 927
`(Tex.1976) ("Without breach of a legal right belonging to the plaintiff no cause of
`action can accrue to his benefit."); Nauslar, 170 S.W.3d at 249; Cadle Co. v.
`Lobingier, 50 S.W.3d 662, 669-70 (Tex.App.-Fort Worth 2001, pet.
`denied); Brunson v. Woolsey, 63 S.W.3d583, 587 (Tex.App.-Fort Worth 2001, no
`pet.). Only the person whose primary legal right has been breached may seek
`redress for an injury. Nobles, 533 S.W.2d at 927. An individual stakeholder in a
`legal entity does not have a right to recover personally for harms done to the legal
`entity.
`SUMMARY JUDGMENT SHOULD BE GRANTED ON PLAINTIFF’S ALLEGATION OF
`NEGLIGENCE - PROFESSIONAL MALPRACTICE OF THE CPA DEFENDANTS
`
`In fact, the Movants breached no duty to the Plaintiff because under Texas
`
`law foreseeability of harm is not the test. Hence, Texas law requires that that
`Defendants’ Omar et-al actually knew of MNJ Group and actually intend the MNJ
`Group to rely on the information. Grant Thornton LLP v. Prospect High Income
`Fund ML CBO IV (Cayman), Ltd., 314 S.W.3d 913, 920 (Tex. 2010) The plaintiff
`must have been a person for whose use the representation was intended, and it is
`not enough that the defendant ought reasonably to have foreseen reliance by
`someone such as the plaintiff. Id.
`
`There are no fact issues in this case. The court may decide this case on the
`
`summary judgment evidence included in the appendix to this motion.
`
`D. Summary Judgment Evidence
`
`Defendant includes the summary judgment evidence in an appendix filed
`
`with this motion and incorporates the evidence by reference.
`
`This motion for summary judgment depends upon the following proof
`
`included in the appendix:
`
`Affidavits. The affidavits of the following individuals establish the
`a.
`following facts: Affidavit of Omar Omar, Omar's Financial Services, Inc.;
`Omar's Financial Consultants, Inc.
`b.
`Pleadings. The plaintiff’s original petition and the Defendants’ answer
`et-al.
`
`
`
`5
`
`

`

`E. Attorney Fees
`
`Defendants are entitled, to reasonable and necessary attorney fees that
`
`were incurred in the prosecution and defense of this suit and attorney fees for the
`appeal (in the event of an appeal). The affidavit of defendant’s attorney, attached
`as Exhibit c, establishes that these fees are reasonable attorney fees for this case
`and establishes the following as a matter of law:
`
`a. Defendant is entitled to attorney fees in the amount of $10,000.00
`that were incurred in the prosecution and defense of this suit b. If this
`case is appealed to the court of appeals, defendant is entitled to the
`additional amount of $5,000.00.
`
`c.
`
`If this case is appealed to the Texas Supreme Court, defendant is
`entitled to the additional amount of $5,000.00.
`
`CONCLUSION
`
`Summary judgment should be granted because Texas law requires that the
`professional actually know of the non-client and actually intend the non-client to
`rely on the information. And that was not the case here.
`
`WHEREFORE, Omar et-al respectfully request that the court grant this
`motion for summary judgment.
`
`Respectfully submitted,
`
`BY:/S/ DIOGU KALU DIOGU II
`Diogu Kalu Diogu II, LL.M.
`State Bar Number 24000340
`P. O. Box 994 Fulshear, Texas 77441
`Phone (713) 791 3225/
`ax: (832) 408-7611
`Email: diogu.diogu.law.firm@gmail.com
`
`
`
`6
`
`

`

`
`
`CERTIFICATE OF SERVICE
`I hereby certify that a true and correct copy of the above instrument was
`duly served via electronic copy to all known counsel of record in accordance with
`the Texas Rules of Civil Procedure on this the April 21st, 2017
`
`
`Via e-filing
`Salar Ali Ahmed
`One Arena Place
`7322 Southwest Freeway, Suite 1920
`Houston, Texas 77074
`Telephone: 713-223-1300
`Facsimile: 713-255-0013
`aahmedlaw@gmail.com
`
`TED A. COX Attorney for
`Defendants Car Stereo of Texas,
`Inc., Texas Electronics & Car
`Sales, Inc., Nabeel Arafat, Adam
`Arafat and Kelly Arafat
`"Ted A. Cox" <ted@tedacox.com>
`
`
`BY: /S/ DIOGU KALU DIOGU II
`Diogu Kalu Diogu II, LL.M
`
`
`
`
`
`7
`
`

`

`Appendix
`Affidavits. The affidavits of the following individuals establish the
`a.
`following facts: Affidavit of Omar Omar, Omar's Financial Services, Inc.;
`Omar's Financial Consultants, Inc.
`b.
`Pleadings. The plaintiff’s original petition and the Defendants’ answer
`et-al. (Already part of the record in this case)
`c.
`Attorney Fees. The affidavits of Attorney Diogu Kalu Diogu II, LL.M.
`
`
`
`8
`
`

`

`MNJ GROUP, INC.
`
`V.
`
`CAR STEREO OF TEXAS, INC.ET-
`AL
`
`2016-84872
`§
`§
`§
`§
`§
`§
`
`IN THE DISTRICT COURT
`
`215TH JUDICIAL DISTRICT
`COURT
`
`HARRIS COUNTY , TEXAS
`
`AFFIDAVIT OF OMAR OMAR,
`OMAR'S FINANCIAL SERVICES, INC.; OMAR'S FINANCIAL CONSULTANTS, INC
`
`
`
`THE STATE OF TEXAS
`
`COUNTY OF FORT BEND
`
`
`
`
`
`§
` §
` §
`
`
`I, Omar Omar individually and as the representative of Omar's Financial Services,
`Inc.; Omar's financial consultants, Inc., make this affidavit and hereby on oath
`state the following:
`
`My name is Omar Omar . I am over 21 years old. I have personal knowledge of the
`facts contained in this affidavit and the facts contained in this affidavit are true
`and correct.
`
`Omar Omar, Omar's Financial Services, Inc.; Omar's financial consultants, Inc are
`named Defendants in the above numbered cause.
`
`Omar Omar, Omar's Financial Services, Inc.; Omar's financial consultants, Inc
`(“ACCOUNTANT”) do not have any contractual relationship, with the Plaintiff, MNJ
`GROUP, INC. permitting it to sue the accountant for Negligent malpractice as
`alleged in the Plaintiff’s Petition.
`
`For ten or more years, including the period at issue in this lawsuit the accountant
`has prepared Federal Income Taxes for Car Stereo Texas, Inc. for filing with the IRS
`only. All the information used as input to the preparation of the Federal income tax
`was provided to the accountant by Mr. Nabeel Arafat.
`
`At no time during this period was the accountant actually aware of MNL Group, Inc
`nor did the accountant intend that the tax prepared on behalf of Nabeel Arafat for
`Car Stereo Texas, Inc to be relied on by MNJ Group, Inc for any particular
`transaction with Car Stereo Texas, Inc.
`
`
`
`1
`
`

`

`Signed this
`
`
`day of
`
`, 2017.
`
` Signature of Affiant
`
`Affiant
`
`BEFORE ME, the undersigned authority, this day personally appeared Omar Omar
`and as the representative of Omar's Financial Services, Inc., and Omar's financial
`consultants, Inc and by oath stated that the facts herein stated are within his
`personal knowledge and are true and correct.
`
`SWORN TO AND SUBSCRIBED BEFORE ME before me on this day of April 2017.
`
`Notary Public in and
`for the State of Texas
`
`My commission expires:
`
`
`
`2
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`CAUSE NO. 2016-84872
`
`
`§
`MN.J GROUP, INC.
`§
`
`§
`V.
`§
`
`§
`CAR STEREO OF TEXAS, INC.;, ET-AL
`AFFIDAVIT OF
`DIOGU KALU DIOGU II, LL.M REQUEST FOR ATTORNEY FEES
`
`IN THE DISTRICT COURT OF
`
`HARRIS COUNTY, TEXAS
`
`215TH JUDICIAL DISTRICT
`
`
`
`“My name is Diogu Kalu Diogu II, LL.M. I date of Birth June 25th, 1959, and my address
`
`is 4726 Gainsborough Drive, Brookshire, Texas 77423, Fort Bend County, Texas, United States
`
`of America. I declare under the penalty of Perjury that the statements made in this Diogu Kalu
`
`Diogu II, LL.M request for Attorney fees are true and correct and I acquired the knowledge as
`
`the attorney and party in this case.
`
`1. “My name is Diogu Kalu Diogu II, LL.M. I am over 18 years of age, of sound mind, and
`
`capable of making this affidavit. The facts stated in this affidavit are within my personal
`
`knowledge and are true and correct.
`
`2. I am an attorney licensed to practice in the State of Texas.
`
`3. Plaintiff retained me to represent him in this suit. I have personal knowledge of this case
`
`and the work performed.
`
`4. I have over ten years of experience in civil litigation.
`
`5. It was necessary for Plaintiff to retain an attorney.
`
`

`

`6. I spent 6 hours at $350.00 per hours in responding to the Defendants’ motion for
`
`summary Judgment: by (1) investigating and researching the claims, (2) drafting response
`
`and (3) taking other necessary actions to perform my legal services properly.
`
`7. The novelty and difficulty of the questions involved in this case required me to spend ten
`
`(20) hours responding this motion.
`
`8. Based on our fee agreement, Plaintiff incurred attorney fees in the amount of $7,000.
`
`9. The attorney fees charged in this case were necessary, reasonable, and incurred in the
`responding to the Defendants’ motion in this suit.
`
`10. The Court can take judicial notice of the usual and customary attorney fees and the
`contents of the case file without receiving any further evidence. Tex. Civ. Prac. & Rem.
`Code §38.004.”
`
`11. The fees I charged in this case are customarily charged in this area for the same or
`similar services for an attorney with my experience, reputation, and ability, considering
`the nature and length of my relationship with the Plaintiff the novelty of this motion for
`Summary Judgement prosecution controversy, the time limitations imposed, and the
`results obtained.”
`
`Executed in Brookshire, Fort Bend County, State of Texas on the April 21st, 2017
`
`/S/Diogu Kalu Diogu II._
`Diogu Kalu Diogu II, LL.M.
`
`EXHIBIT “C”
`
`2
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`

`

`CAUSE NO. 2016-84872
`
`4/21/2017 12:32:29 PM
`Chris Daniel - District Clerk Harris County
`Envelope No. 16593348
`By: JEANETTA SPENCER
`Filed: 4/21/2017 12:32:29 PM
`
`MN.J GROUP, INC.
`v.
`CAR STEREO OF TEXAS,
`INC.;, ET-AL
`NOTICE OF ORAL HEARING ON MOTION FOR SUMMARY JUDGMENT
`
`IN THE DISTRICT COURT
`OF HARRIS COUNTY, TEXAS
`215TH JUDICIAL DISTRICT
`
`'
`'
`'
`
`PLEASE TAKE NOTICE that Defendant=s Motion for Summary Judgment is filed in this
`cause and it set for an Oral hearing on June 16th 2017, at 8.30 o=clock a.m. for 30
`minutes
`
`
`
`
`
`
`
`Respectfully submitted,
`
`By:/s/ Diogu Kalu Diogu II
`Diogu Kalu Diogu II, LL.M.
`State Bar Number 24000340
`P. O. Box 994
`Fulshear, Texas 77441
`Phone (713) 791 3225/
`ax: (832) 408-7611
`Email: diogu.diogu.law.firm@gmail.com
`
`
`CERTIFICATE OF SERVICE
`I hereby certify that a true and correct copy of the above instrument was duly
`served via electronic copy to all known counsel of record in accordance with the
`Texas Rules of Civil Procedure on this the April 21st, 2017
`
`
`Via e-filing
`Salar Ali Ahmed
`One Arena Place
`7322 Southwest Freeway, Suite 1920
`Houston, Texas 77074
`Telephone: 713-223-1300
`Facsimile: 713-255-0013
`aahmedlaw@gmail.com
`
`TED A. COX Attorney for
`Defendants Car Stereo of Texas,
`
`
`
`1
`
`

`

`Inc., Texas Electronics & Car Sales,
`Inc., Nabeel Arafat, Adam Arafat
`and Kelly Arafat
`"Ted A. Cox" <ted@tedacox.com>
`
`
`By: /s/ Diogu Kalu Diogu II
`Diogu Kalu Diogu II, LL.M
`
`
`
`2
`
`

`

`4/21/2017 12:32:29 PM
`Chris Daniel - District Clerk Harris County
`Envelope No. 16593348
`By: JEANETTA SPENCER
`Filed: 4/21/2017 12:32:29 PM
`
`MNJ GROUP, INC.
`
`V.
`
`2016-84872
`§
`§
`§
`§
`
`§
`
`HARRIS COUNTY , TEXAS
`§
`CAR STEREO OF TEXAS, INC.
`ORDER REGARDING MOTION FOR SUMMARY JUDGMENT
`
`IN THE DISTRICT COURT
`
`215TH JUDICIAL DISTRICT COURT
`
`After considering Defendants Omar's Financial Services, Inc.; Omar's
`Financial Consultants, Inc.; and, Omar Omar (“Omar et-al”)’s motion for
`summary judgment, the pleadings, the response, the affidavits, and other
`evidence on file, the court
`GRANTS Defendants, Omar et-al’s motion for final summary judgment.
`Attorney, Diogu Kalu Diogu II, LL.M., shall prepare a judgment reflecting the
`court’s order.
`
`
`SIGNED on __________, 2017.
`
`_______________________
`PRESIDING JUDGE
`
`