Calypso Wireless (fka CLYW)

[conagra]

Calypso's filing ex exhibits...I did not copy over all the footnotes.


IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
CALYPSO WIRELESS, INC., and
DRAGO DAIC
Plaintiffs,
v.
T-Mobile USA, Inc.
Defendant.
§§§§§§§§§§
Case No. 2:08-CV-00441
Jury Demanded

CALYPSO’S RESPONSE IN OPPOSITION TO DRAGO DAIC’S MOTION
TO SUBSTITUTE A PARTY AND TEMPORARILY STAY THE CASE

Comes now Plaintiff Calypso Wireless, Inc. (“Calypso”) and files this Response in Opposition to Drago Daic’s (“Daic”) Motion to Substitute a Party and Temporarily Stay the Case (the “Motion”), and would respectfully show the following:

I. Substitution under Fed. R. Civ. P. 25(c) Because a Dispute Exists as to Daic’s Alleged Status as a Successor in Interest.

Substitution (or addition) of a plaintiff under Fed. R. Civ. P. is a matter within the Court’s discretion. Rule 25(c) “does not require that anything be done after an interest has been transferred.” In this case, however, there was no transfer of any interest at all, because the alleged transfer of ownership of the Patent-in-Suit was based on an invalid and unenforceable
contract. In fact, Calypso will soon file cross-claims against Daic seeking, among other things, a declaration that the 2009 Agreement is invalid and unenforceable. Calypso respectfully
submits that the proper method of determining who owns and controls the ‘923 Patent is to try these issues before a jury, rather than as an exercise of the Court’s discretion under Fed. R. Civ. P. 25. Daic, on the other hand, would have the Court make this determination without evidence or even the hearing required by Rule 25. Granting Daic’s requested substitution would be an
abuse of the Court’s discretion, and would unfairly and improperly sanction Daic’s attempted misappropriation of the ‘923 Patent. The Court should therefore deny Daic’s Motion.

II. The 2009 Agreement Is Not Valid or Enforceable.

The 2009 Agreement – which is the basis of Daic’s alleged right to foreclose on the ‘923 Patent – is not a valid agreement because it was never properly executed (or even agreed to),
because the one signature obtained was given under duress, and because the alleged breach on which Daic bases his claim to the ‘923 Patent was of a term that was impossible to perform at the time of the purported agreement – and Daic knew it.

A. The 2009 Agreement Was Never Agreed to and Was Never Properly
Executed.

The 2009 Agreement was never agreed to by Calypso’s board of directors, as was required for the company to enter into any contract, let alone one as onerous and one-sided as the
2009 Agreement. In early April 2009 – when the 2009 Agreement was supposedly executed – there were three board members: (1) Cristian Turrini, (2) Kathy Daic (Drago Daic’s wife), and
(3) Richard Pattin. Of the three, Mrs. Daic resigned that afternoon, and Mr. Turrini declined to give his approval. Only Mr. Pattin signed. He did so under duress (as explained below), and, more importantly, after being informed explicitly and in writing that Mr. Turrini did not consent to the 2009 Agreement. He had no authority to sign the 2009 Agreement on behalf of Calypso, and both he and Drago Daic were well aware of this fact. There was therefore (1) no valid acceptance of Daic’s contract, (2) no meeting of the minds, and (3) no consent to the terms of the 2009 Agreement – each of which is a necessary element of proof of a contract. Daic’s argument that “Calypso and Daic are parties to an Amended And Restated Settlement Agreement dated April 3, 2009 [the 2009 Agreement]” is false, and unsupported by evidence, as is his argument that “[t]itle to … the Patent-In-Suit, has been transferred to the Trustee pursuant to a Security Agreement [contained in the 2009 Agreement].” There has been no transfer of interest, and substitution of either Daic or his “Trustee” under Fed. R. Civ. P. 25(c) is not proper here.

B. The One, Non-binding Signature that Appears on the 2009 Agreement Was Given under Duress.

Even if Richard Pattin’s lone signature were somehow enough to bind Calypso to the terms of the 2009 Agreement, the agreement is unenforceable because Mr. Pattin’s signature was obtained under duress. The e-mail traffic between the only Calypso board members who participated in the evaluation of the 2009 Agreement – Messers. Turrini and Pattin – makes clear that neither was willing to sign the 2009 Agreement. Mr. Turrini and Mr. Pattin proposed multiple sets of changes to the 2009 Agreement in an effort to secure an agreement that was not so onerous and one-sided. Drago Daic, however, refused to make any of the changes, and instead threatened (1) foreclose on Calypso’s entire patent portfolio, (2) to enforce his more than $100 Million default judgment (which he had obtained solely due to the ineptitude and selfdealing of Calypso’s original management), and (3) to refuse to cooperate, with his partner, Mr. Jimmy Williamson, as a necessary plaintiff (having an ownership interest under the 2008 Agreement) in the current action. If Daic had carried out any of his threats, Calypso would have been left with more than $100 Million in debt, no assets, and no way to continue as a business. In other words, Calypso would have been destroyed. If that is not duress, what is? Daic had no legal right to do any of the things he threatened. He claimed, of course, that he was entitled to take Calypso’s patents and enforce his default judgment because Calypso had not paid him the money he was supposed to receive under the 2008 Agreement. The reality, however, is that, in violation of the 2008 Agreement, Daic had tortiously interfered with and sabotaged every deal and effort by Calypso to secure the funding that would have allowed Calypso to comply with its obligations therein. Thus, even if Mr. Pattin’s lone signature satisfied the elements of (1) acceptance, (2) consent as to terms, and (3) meeting of the minds, and there was a valid contract, the 2009 Agreement is not enforceable because Mr. Pattin was forced to sign it under duress. Because the 2009 Agreement is unenforceable, Mr. Daic has no right to transfer any interest of the ‘923 Patent, and the Court should deny his Motion.

C. Daic’s Motion to Substitute Should Be Denied Because It Is Predicated on an Alleged Breach of an Impossible Term in the 2009 Agreement.

Daic claims that he was entitled to foreclose on the ‘923 Patent because Calypso failed to deliver shares of Calypso stock as was allegedly required by the 2009 Agreement. The 2009 Agreement, which was drafted entirely by Daic (or his lawyers), calls for – among other things – the delivery of 13.4 Million shares within two weeks of its execution. Having been intimately involved (and having a spouse on Calypso’s board of directors), Daic either knew or should have known that this was impossible because (1) Calypso did not have anything like that number of shares available, and (2) creating a sufficient number of shares would have required a meeting of Calypso’s 1467 shareholders of record (along with likely twice that again in beneficial owners of shares) and certain SEC filings, which would have taken more than the allotted two weeks. Daic knew or should have known that it would have been impossible to comply with this term. In fact, the only reasonable conclusion is that Daic included this term in the 2009 Agreement solely because he knew it would lead to a breach, which would enable him to obtain – as he has been attempting to do for years – Calypso’s patents. Calypso should be excused from complying with this term of the 2009 Agreement under the doctrine of impossibility. At the very least, the Court should not grant Daic’s Rule 25 Motion, which is predicated on an alleged violation of this impossible term, without a full and fair hearing.

III. Conclusion & Prayer
For the foregoing reasons, Calypso respectfully requests that the Court deny Daic’s Motion to Substitute a Party and Temporarily Stay the Case, and grant Calypso any and all other relief to which it may be entitled.

Dated: December 4, 2009 Respectfully submitted,
/s/ Paul V. Storm
Paul V. Storm (lead counsel)
[e-mail]
State Bar No. 19325350
Anthony P. Miller
[e-mail]
State Bar No. 24041484
Michael Leach
[e-mail]
State Bar No. 24065598
Storm LLP
901 Main Street, Suite 7100
Dallas, Texas 75202
Phone: [phone]
Fax: [phone]
CERTIFICATE OF SERVICE
I hereby certify that on December 4, 2009, I caused a true and correct copy of the
foregoing to be served on all counsel of record via the Court’s CM/ECF system, pursuant to
Local Rule CV-5(a)(3).
/s/ Paul V. Storm
Paul V. Storm
Case 2:08-cv-00441-TJW-CE Document 67 Filed 12/04/2009 Page 7 of 7