I don't have time today to get into a debate. I would like everyone to first read this and see if it sounds familiar:
I. PROCEDURAL POSTURE
1. Plaintiff MADISON STOCK TRANSFER, INC. moved this Honorable Court August 15th, 2006 in an Interpleader action requesting a stay on new issuances of the securities of Defendant NETCO INVESTMENTS, INC. and the determination and adjudication of proper authority to Defendant NETCO INVESTMENTS, INC. as brought into issue by Defendant CHAVARRIA by operation of a purported Cognovit Note. This Honorable Court granted a Temporary Restraining Order on new issuances regarding Defendant NETCO INVESTMENTS, INC. in conjunction with the Cognovit Note pending plenary adjudication on September 6th, 2006.
2. Defendant NETCO sought to remove a judgment filed in the State of Pennsylvania regarding the legitimacy of the Cognovit Note into the jurisdiction of the E.D.N.Y, on or about August 23rd, 2006. Defendant CHAVARRIA filed a motion for remand on or about August 23rd, 2006.
3. Defendant CHAVARRIA moved this Honorable Court on or about August 25th, to disqualify Attorney for Plaintiff MADISON STOCK TRANSFER, INC. and Attorney for Defendant NETCO INVESTMENTS, INC. This motion is still pending.
4. Defendant CHAVARRIA then made the instant motion for Summary Judgment, on or about August 30th, 2006.
5. On or about September 15th, 2006 Third Parties AJW PARTNERS, L.L.C., NEW MILLENNIUM CAPTIAL PARTNERS II, L.L.C., AJW OFFSHORE, LTD, and AJW QUALIFIED PARTNERS, L.L.C. (“Third Parties”) sought to Intervene in the instant litigation.
II. BACKGROUND
6. Defendant CHAVARRIA has presented a Cognovit Note to the Plaintiff, but no request for issuance of the shares purported to be vested by the Cognovit Note. Said Cognovit Note (the “Note”) purports to grant a majority interest in Defendant NETCO INVESTMENTS, INC., act as a change of control of the Netco Investments, Inc. as a public company (sometimes referred to in that capacity as Issuer or Registrant), and seeks to void certain contracts with a consultant Mr. Paul Taylor and a Mr. Corey Ribitsky.
7. Defendant CHAVARRIA sought, and still seeks, to exert his dominance over the Registrant by vesting himself as majority shareholder. However, Plaintiff received no instructions from the then known management of the validity of the transaction. Plaintiff neither received the requisite corporate resolutions that would authenticate such transfer.
8. Plaintiff then instigated an action for interpleader because it was unclear the chain of corporate command and whom Plaintiff should be taking instructions from. Moreover, if Plaintiff were to issue the shares to Defendant NETCO, Plaintiff could incur liability from Defendant CHAVARRIA, and vise versa.
9. AFTER the instigation of the litigation, Defendant CHAVARRIA exhibited a certificate of amendment to the articles of incorporation of Netco Investments, Inc., dated July 17th, 2006, and filed with the secretary of State of the State of Texas, the res of incorporation for Netco, on August 16th, 2006. Defendant CHAVARRIA at no time presented these documents to Plaintiff. A copy of said certificate of amendment is exhibited as Exhibit A in the Declaration of Marshal Shichtman, Esq., attorney for Plaintiff, dated September 19th, 2006.
10. In the interim, no shares have been issued to Defendant CHAVARRIA.
11. Plaintiff then withdrew as the Registrants transfer agent on September 11th, 2006. See Declaration Exhibit B Plaintiff withdrew as transfer agent for several reasons: the Registrant Netco is behind in its payment approximately $16,430.35 as of March 2006, plus fees incurred since March 2006 and legal fees from the instant interpleader pursuant to the indemnification in its contract. See Exhibit C Plaintiff is not comfortable with Defendant CHAVARRIA filing on behalf of the corporation as majority holder and officer with a single share being issued to him nor any supporting corporate resolutions.
III. STANDARD FOR SUMMARY JUDGMENT
12. A motion for summary judgment is properly granted only if the court determines that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. FRCP-56(c); Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 250, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The party seeking judgment bears the burden of demonstrating that no issue of fact exists. McLee v. Chrysler Corp. 109 F.3d 130, 134 (2d Cir. 1997) . However, when the nonmoving party fails to make a showing on an essential elements of its case with respect to which it bears the burden of proof, summary judgment will be granted. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The party resisting summary judgment must not only show a disputed issue of fact, but it must also be a material fact in light of substantive law. Only disputed facts that "might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 242. GAIL ZUCKERMAN, v. VOLUME SERVICES AMERICA, INC., et al., 304 F. Supp. 2d 365, 368 (E.D.N.Y. 2004, LDW)
IV. ARGUMENTS
A. THE LITIGATION IS NOW MOOT.
13. Plaintiff has withdrawn as transfer agent from Registrant Netco, and therefore has no more vested interest and no standing.
B. REMOVAL AND REMAND OF THE PENNSYLVANIA JUDGMENT.
14. “Its is well settled that the Federal Courts may exercise their equity powers so as to set aside, enjoin enforcement of, or ignore a State Court judgment obtained by fraud.” Servidone Construction Corp. v. St. Paul Fire & Marine Ins. Co. and First Bank National Association v. Servidone et al v. Barr et al, 1993 U.S. Dist. LEXIS 6695, 6 (N.D.N.Y. 1993, NPM) citing Griffith v. Bank of New York, 147 F.2d 899, 901 (2nd Cir, 1945) cert denied 325 U.S. 874, 65 S. Ct. 1414 (1945) in a case regarding an interpleader action and a confession of judgment.
15. “Under 28 U.S.C. §1335 [Interpleader], a District Court has jurisdiction over a civil action involving adverse claims to money or property worth $500 or more so long as at least two of the adverse claimants are of diverse citizenship and are claiming or may claim to be entitled to such money or property.” Ashton, Steel and Chemical Bank, as executors of the estate of Raymond I. Paul v. The Josephine Bay Paul and C. Michael Paul Foundation, Inc., Miller, et al 918 F2d 1065,1068 (2nd Cir Ct. App 1990) In aid of such jurisdiction, the District Court has authority under 28 U.S.C. §2361. Id
16. This Honorable Court has authority to examine the Pennsylvania confession of judgment, should it so choose. However, Plaintiff has no opinion regarding the judgment , and/or the subsequent removal thereof. If the Pennsylvania judgment is good with this Honorable Court, then it is good with the Plaintiff. Likewise, if is not, then that is fine too. All Plaintiff asked for was a proper determination of the authority of Defendant CHAVARRIA, or lack thereof. But again, this is moot as the Plaintiff has resigned as the Registrant’s transfer agent.
C. THIS HONORABLE COURT SHOULD DISCHARGE PLAINTIFF WITHOUT LIABILITY.
17. Defendant CHAVARRIA has, in a way, furnished Plaintiff with filings from the Texas Secretary of State declaring Defendant CHAVARRIA as majority holder in Registrant NETCO. As such, Defendant CHAVARRIA has completed his duty to furnish documentation for authority.
18. It is not Plaintiff’s duty, nor has Plaintiff the authority to question the legitimacy of said documents. However, Plaintiff cannot reconcile how Defendant CHAVARRIA filed such documents without owning a single share on the books and records of Registrant Netco. As such Plaintiff has filed the instant interpleader. While Plaintiff may not have the authority to call into question the documents, which it finds dubious, it does have the power not to have anything to do with it, and has hence forth withdrawn as transfer agent of Registrant Netco.
19. Plaintiff acted in good faith when dubious documents and conflicting interests presented themselves and instituted an interpleader. More dubious documents presented themselves, and Plaintiff has now decided that it is time to step away before any smell permeates.
20. THEREFORE, Plaintiff should be discharged because it is no longer the transfer agent for the Registrant and does not object to the instant motion for Summary Judgment. Moreover, Plaintiff should be awarded attorneys fees and costs from the instant litigation Metropolitan Life Ins. Co. v. Brody, 35 Misc. 2d 384, 228 N.Y.S. 2d 312 (Sup. Ct. Albany County, 1962) and Registrant Netco must indemnify Plaintiff pursuant to the terms of its agreement with Registrant.
V. CONCLUSION
21. THEREFORE, Plaintiff has no opinion and no objection to Defendant CHAVARRIA’s motion for Summary Judgment and Plaintiff should be fully discharged with costs and attorney fees.
[signature page to follow]
Dated: Carle Place, New York
September 19th, 2006
Respectfully Submitted,
MARSHAL SHICHTMAN & ASSOCIATES, P.C.
__________________________________
Marshal Shichtman, Esq. (MDS 4012)
Attorney for Plaintiff Madison Stock Transfer, Inc.
One Old Country Road, Suite 498
Carle Place, New York 11514
Tel (516) 741-5222, Fax (516) 741-5212
