FSP Stallion 1, LLC et al

Filing 686

ORDER GRANTING 663 Motion for Approval of Settlement and Barring Claims for Equitable Indemnity or Contribution Against Defendants TIC Capital Markets Inc, Direct Capital Securities Inc and Clay Womack. See Order for details. Signed by Judge Philip M. Pro on 1/6/12. (Copies have been distributed pursuant to the NEF - ECS)

1 Thomas N. FitzGibbon (Admitted Pro Hac Vice)

PFEIFFER THIGPEN FITZGIBBON & ZIONTZ LLP

2 233 Wilshire Boulevard, Suite 220
3 Santa Monica, California 90401

Tel: [phone]
4 Fax: [phone]
E-mail: [e-mail]
5

Doris Nehme-Tomalka

6 NEHME-TOMALKA & ASSOCIATES

2620 Regatta Drive, Suite 102

7 Las Vegas, Nevada 89128

Tel: [phone]

8 Fax: [phone]
9

E-mail: [e-mail]

TIC Capital Markets, Inc.; Direct Capital Securities, Inc.
11 Clay Womack
12
233 Wilshire Blvd., Suite 220
Santa Monica, California 90401

Pfeiffer Thigpen FitzGibbon & Ziontz LLP

10 Attorneys for Defendants

UNITED STATES DISTRICT COURT

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DISTRICT NEVADA

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15 FSP STALLION 1, LLC, a Nevada limited
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17
18
19
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liability company, et al.

Plaintiffs,
v.
MICHAEL F. LUCE, an individual, et al.
Defendants.

CASE NO.: 2:08-CV-01155-PMP-PAL
[Assigned to the Hon. Philip M. Pro]
[PROPOSED] ORDER APPROVING
SETTLEMENT AND BARRING
CLAIMS FOR EQUITABLE
INDEMNITY OR CONTRIBUTION
AGAINST DEFENDANTS TIC
CAPITAL MARKETS, INC., DIRECT
CAPITAL SECURITIES, INC. AND
CLAY WOMACK

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Defendants Clay Womack (“Womack”), TIC Capital Markets, Inc. (“TICCM”) and

23 Direct Capital Securities, Inc. (“DCS”)(collectively the “DCS Defendants” or the “Settling
24 Defendants” or the “Moving Parties”) have moved the Court for an order (a) approving
25 the settlement between Plaintiffs FSP Stallion, LLC entities 1-26 (collectively “Plaintiffs”)
26 and the DCS Defendants, (b) finding that the settlement is in good faith and (c) barring
27 claims for contribution or indemnity by any person including but not limited to the non28 settling Defendants against any of the Moving Parties that relate to or reasonably flow from

CASE NO.: 2:08-CV-01155-PMP-PAL

ORDER APPROVING SETTLEMENT AND BARRING CLAIMS FOR INDEMNITY
OR CONTRIBUTION

1 this Action (the “Motion”). The Court grants the Motion to the extent it bars all claims for
2 contribution and equitable indemnity, based on the following findings of fact:

FINDINGS

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1.

Plaintiffs filed a First Amended Complaint that included the Broker

5 Defendants in August 2009. Specifically, the Plaintiffs alleged the following claims or causes
6 of action against the DCS Defendants: (1) Violation of Section 10(b) of the Securities Act of
7 1934 and the related Rule 10b-5 for securities fraud, (2) Violation of Section 20 of the
8 Securities Act of 1934 for control person liability, (3) Violation of the Nevada Securities
9 Laws, (4) Common Law Fraudulent Misrepresentation, (5) Common Law Fraudulent

11 Nevada Common Law Conspiracy To Commit Fraud. The other six (6) claims for relief in
12 the First Amended Complaint were not alleged against the DCS Defendants.
233 Wilshire Blvd., Suite 220
Santa Monica, California 90401

Pfeiffer Thigpen FitzGibbon & Ziontz LLP

10 Concealment, (6) Nevada Common Law Aider And Abettor Liability For Fraud, and (7)

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2.

The DCS Defendants moved to compel arbitration in March 2010 as to

14 Plaintiffs’ claims and the motion was granted as to eighteen (18) of the twenty-six (26)
15 Plaintiffs, namely FSP Stallion limited liability company numbers 1, 2, 4, 5, 6, 7, 8, 10, 11, 12,
16 13, 14, 15, 17, 18, 21, 23 and 26 (the “Arbitrating Plaintiffs”). The eight non-arbitrating
17 plaintiffs are FSP Stallion limited liability company numbers: 3, 9, 16, 19, 20, 22, 24 and 25
18 (the “Non-Arbitrating Plaintiffs”). The Arbitrating Plaintiffs agreed with the DCS
19 Defendants to stay any arbitral activity pending the conclusion of the Action and they entered
20 into a tolling agreement to accomplish that stay. As a part of their settlement, the Arbitrating
21 Plaintiffs and the DCS Defendants have stipulated that the potential arbitrations are
22 terminated and that all claims by the Arbitrating Plaintiffs are re-asserted through the First
23 Amended Complaint and have been settled through the settlement.
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3.

Plaintiffs withdrew and dismissed Claim Four for fraudulent misrepresentation

25 in early 2011.
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4.

In May 2011, the DCS Defendants moved for summary judgment with respect

27 to the First Amended Complaint and in August 2011 the Court granted the Motion in part
28 and entered a summary judgment of dismissal in favor of the DCS Defendants with respect

CASE NO.: 2:08-CV-01155-PMP-PAL

-2-

ORDER APPROVING SETTLEMENT AND BARRING CLAIMS FOR INDEMNITY
OR CONTRIBUTION

1 to the two federal securities claims. The Court denied the summary judgment motion of the
2 DCS Defendants as to the remaining state law claims of Plaintiffs. Thus, there are currently
3 four (4) state law claims alleged by Plaintiffs pending against the DCS Defendants in the
4 Action: Violation of the Nevada Securities Laws, Common Law Fraudulent Concealment,
5 Nevada Common Law Aider And Abettor Liability For Fraud, and Nevada Common Law
6 Conspiracy To Commit Fraud (the “Remaining Claims”).
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5.

In late December 2011, Plaintiffs and the DCS Defendants agreed to a

8 settlement of the Action as between them, which is embodied in a written Settlement
9 Agreement. The Settlement Agreement is conditional on the Court’s approval of the

11

6.

All Defendants in this Action other than the DCS Defendants are known as

12 the “Non-Settling Defendants.”
233 Wilshire Blvd., Suite 220
Santa Monica, California 90401

Pfeiffer Thigpen FitzGibbon & Ziontz LLP

10 settlement and finding it to be in good faith, as requested in the Motion.

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7.

On January 2, 2012, the DCS Defendants made the Motion, which was

14 supported by the Declarations of Thomas N. FitzGibbon and Clay Womack, as well as other
15 documents and evidence previously filed with the Court. The Non-Settling Defendants filed
16 a Response to the Motion on January 3, 2012, and opposed the Motion to the extent it would
17 bar claims for contractual indemnity.
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8.

The Court heard the Motion on January 4, 2012, and counsel for all parties to

19 the Action were present and given an opportunity to object to, oppose and/or argue against
20 the Motion and oral argument was conducted.
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In light of the foregoing, and because good cause appears;

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IT IS HEREBY ORDERED THAT:

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1.

The Motion of the DCS Defendants is granted, and the Court finds the

24 settlement between the Plaintiffs and the DCS Defendants to be in good faith under all
25 potentially applicable standards, whether federal common law, California law or Nevada law.
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2.

The Court approves the settlement under the Private Securities Litigation

27 Reform Act (“PSLRA”). 15 U.S.C. § 78u-4 (f)(7).
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CASE NO.: 2:08-CV-01155-PMP-PAL

-3-

ORDER APPROVING SETTLEMENT AND BARRING CLAIMS FOR INDEMNITY
OR CONTRIBUTION

January 6, 2012.