LOMBARDI v BARRETT - Legal Case Documents

SUMMARY JUDGMENT
COURT
FIDUCIARY DUTY
AFFIDAVIT
PLAINTIFFS
DEFENDANT
FRAUD
BREACH
SEPARATION AGREEMENT
FRAUDULENT INDUCEMENT
MOTION
DELAWARE
LOMBARDI
LAW
BREACHES
AUTHORITIES
HICKS AFFIDAVITS
FRAUDULENT INDUCEMENT DEFEATS
MISCONDUCT
MATERIAL FACT
VICTOR
DONAL BARRETT
UNCLEAN HANDS
PEASANT TECHNOLOGIES
CALIFORNIA CIVIL CODE
DISCLOSURE
PUBLIC POLICY
ROCKWOOD COMPUTER
CONTRACTS

                                                                             ORIGINAL
          IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                                                                                      I/' `, b
                                 IN AND FOR NEW CASTLE COUNTY                         J
VICTOR J. LAMBERT, JR. and
NETFAX INCORPORATED,                           i
a Delaware corporation
                                               i
                            Plaintiffs,
                                               I           CIVIL ACTION NO. 18163 (LES)
                   V.                          >
                                               1
DONAL BARRETT
                                               :
                            Defendant          1


     PLAINTIFFS NETFAX INCORPORATED AND VICTOR J. LAMBERT, JR.`S
       SUR-REPLY BRIEF TO DEFENDANT'S REPLY BRIEF IN SUPPORT OF
                         DEFENDANT'S MOTION FOR SUMMARY JUDGMENT



                                            PHILLIPS, GOLDMAN  & SPENCE, P.A.
                                            JOHN C. PHILLIPS, JR., ESQUIRE (#l 10)
                                            1200 North Broom Street
                                            Wilmington, DE 19806
                                            (302) 655-4200 (t)
                                            (302) 655-4210 (f)

                                            -and-

                                            BRYAN D. PAF:KER
                                            SHAWNCOULSON
                                            1850 M St., NW Ste 2000
                                            Washington, D.C. 20036
                                            (202) 33 l-7900 (t)
                                            (202) 33 l-0726 (0

                                            Attorneys for Plaintiffs
April 27, 200 1



                                                 TABLE OF CONTENTS

TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . .  ii

SUMMARYOFARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PLAINTIFFS NETFAX INCORPORATED AND VICTOR J. LAMBERT, JR.`S SUR-REPLY BRIEF TO DEFENDANT'S

VICTOR J. LAMBERT, JR.

DONAL BARRETT

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

Defendant's Affidavit Does Not Establish He Is Entitled

Immune from Attack for Fraud or Breach of Fiduciary Duty

Defendant's Fraudulent Inducement Defeats Enforcement

The Release NetFax Gave to Defendant is a General Release.

Is Inapplicable as a Matter of Law

`Unexcused Breaches of the Separation Agreement.

for his fraudulent inducement, breaches of fiduciary duty, and unclean hands.

were excused by Mr. Lombardi and NetFax's prior breaches.

prohibit Plaintiffs from informing criminal and regulatory authorities of Defendant's

Defendant's Affidavits Create Further Issues of Material Fact Not Resolvable

DeVasto, AuriEema, and Hicks Affidavits Are Irrelevant

Peasant Technologies, LLC misappropriated or attempted to misappropriate NetFax's

Defendant's Fraudulent Inducement Defeats Enforcement ofHis Release

included a waiver of the protections afforded by California Civil Code Section 1542.

full disclosure ofthe relevant facts.

See, e.& Rockwood Computer

including its application to contracts.

fiduciary duty are void against public policy.

2 . DEFENDANTS REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT

PLAINTIFFS
COURT
MOTION
SUMMARY JUDGMENT
NETFAX
LOMBARDI
SUPPORT
PRELIMINARY STATEMENT
CHANCERY
DELAWARE
BARRETT
SEPARATION AGREEMENT
ORIGINAL MOTION
PLEASANT STREET
PROVISIONS
FACTUAL HISTORY
CIVIL ACTION
PRO
AFFIDAVITS
OBJECTION
MASSACHUSETTS
FRAUDULENT
CONTENTION
HOLDING COMPANY
DISTRICT COURT
PROCEEDING
POST-RELEASE
ACCOMPANYING
PREJUDICIAL EFFECT

          IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

                             IN AND FOR NEW CASTLE COUNTY


VICTOR J. LOMBARDI, JR. and                    )
NETFAX INCORPORATED,                           1
a Delaware corporation,                        )

                         Plaintiffs,           ;)
                                               )
                                               1           CIVIL ACTION NO. 18163
               V.                              )
                                               1
DONAL BARRETT                                  1

                         Defendant.




                     DEFENDANT  DONAL BARRETT'S REPLY BRIEF
                                        IN SUPPORT OF
                DEFENDANT'S MOTION FOR SUMMARY JUDGMENT


                                                         Donal B. Barrett
                                                         11 Pleasant Street
                                                         Dover, MA 02030
                                                         (508) 785-1618
                                                         (Fax) 785-1304

                                                         PRO SE



Dated: April  17,2001



                                                                                                 



PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3


SUMMARY OF PLAINTIFF'S POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

DEFENDANT DONAL BARRETT'S REPLY BRIEF

VICTOR J. LOMBARDI, JR.

NETFAX INCORPORATED,

Plaintiffs,;)

CIVIL ACTION NO. 18163

DONAL BARRETT

IN SUPPORT OF

DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

11 Pleasant Street

PRO SE

PRELIMINARY STATEMENT.

Granting of Summary Judgment in the Defendant's Behavior.

3 . PLAINTIFFS ANSWERING BRIEF TO MOTION FOR ORDER

MOTION
NETFAX
REQUEST
DISCOVERY
PLAINTIFFS
LOMBARDI
COURT
SUMMARY JUDGMENT
INTERROGATORIES
DEADLINE
PRODUCTION
EXTEND
DEF
MOT
CHANCERY COURT
SCHEDULING
JUSTIFY
POSTPONE
RESPONSES
SALES EFFORTS
PROPOUNDING DISCOVERY
REASON
OPPOSE
COMPEL
PREMATURE
CHANCERY COURT RULES
REMOTE
PARTIES
INTELLECTUAL PROPERTY

f ,
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY i-?i 6: 32
I.- 1
VICTOR J. LOMBARDI, JR. and > REg!; I
,p::;- i.c: ::.:.;,n:;$
NETFAX INCORPORATED,
a Delaware corporation i

Plaintiffs, i> CIVIL ACTION NO. 18163
V.

1
DONAL BARRETT
1
Defendant >

PLAINTIFFS NETFAX INCORPORATED AND VICTOR J. LOMBARDI, JR.'S
ANSWERING BRIEF TO DEFENDANT'S MOTION FOR AN ORDER OF THE COURT
(1) EXTENDING THE DEADLINE FOR FlLING DEFENDANT'S REPLY BRIEF
AND (2) COMPELLING PLAINTIFFS TO RESPOND TO DISCOVERY REQUESTS

SUMMARY OF ARGUMENT

Although Defendant failed to consult Plaintiffs before seeking a unilateral change to the

Stipulated Scheduling Order for his Motion for Summary Judgment, NetFax and Mr. Lombardi do

not object to his requested four-day extensi.on; provided, their sur-reply deadline is similarly

extended to avoid prejudice to their position. Defendant, however, presented no justifiable reason

to postpone the hearing on his Motion and Plaintiffs therefore oppose any such postponement.

The remainder ofDefendant's Motion is regretta.bly long on rhetoric but short on

Since Defendant never served his Interrogatories and Request for Production of Documents on Mr.

Lombardi or NetFax, Defendant's Motion to compel their responses within a truncated time period

is premature and would unjustifiably deny NetFax and Mr. Lombardi the thirty days provided under

Chancery Court Rules 33 and 34 to respond to discovery. In addition, Defendant utterly failed to

explain how the ~confidential information he seeks on NetFax's current sales efforts is even

PLAINTIFFS NETFAX INCORPORATED AND VICTOR J. LOMBARDI, JR.'S ANSWERING BRIEF TO DEFENDANT'S

EXTENDING THE DEADLINE FOR FlLING DEFENDANT'S REPLY BRIEF

AND COMPELLING PLAINTIFFS TO RESPOND TO DISCOVERY REQUESTS

Although Defendant failed to consult Plaintiffs before seeking a unilateral change to the

Stipulated Scheduling Order for his Motion for Summary Judgment, NetFax and Mr. Lombardi do

Defendant, however, presented no justifiable reason

to postpone the hearing on his Motion and Plaintiffs therefore oppose any such postponement.

Since Defendant never served his Interrogatories and Request for Production of Documents on

Defendant's Motion to compel their responses within a truncated time period

Chancery Court Rules 33 and 34 to respond to discovery.

In his Motion,' Defendant asked this Court to extend his deadline for filing a reply brief to

Def.

Mot., p. 1.

status of NetFax's efforts to sell its intellectual property; a summary ofpast and

sheets or other documentation" on NetFax's sales efforts.

Plaintiffs Do Not Oppose Equal Extensions to the Deadlines for the Parties to

Defendant's inexplicable dilatoriness in propounding discovery should not delay this matter

Defendant's Motion is Premature alnd Disregards Chancery Court Rules on

Hopefully, Defendant was not attacking Plaintiffs and their counsel for originally suggesting

Attempting to justify his last minute request,

remote from NetFax's current sales efforts.

4 . NETFAX AND V. LOMBARDIS ANSWERING BRIEF IN OPPOSITION TO DEFENDANTS MOTION FOR SUMMARY JUDGMENT

NETFAX
LOMBARDI
COURT
STOCK
STOCKHOLDERS
SUMMARY JUDGMENT
SEPARATION AGREEMENT
DELAWARE
MOTION
DIRECTORS
DEL
FUNDS
CPT
BARRETT
LOMBARDI AFF
TECHNOLOGY
PLAINTIFFS
VACATION HOME
UNCLEAN HANDS
DONAL BARRETT
EMBEZZLEMENT
MISAPPROPRIATION
FIDUCIARY DUTY
MASSACHUSETTS
PUBLIC POLICY
ENFORCEMENT
JURISDICTION
DEFENDANT IMMEDIATELV
NETFAX COFFERS

                                                              ,.
                                                      ..*    ' J :`               3
                                                                         a!?  Q
         IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE "2
                          IN AND FOR NEW CASTLE COUNTY                  i  IL 53 "i-7"
                                                                                               .-. 
                                                                        -_
                                                                        .- - :          &A  "%a
VICTOR J. LOMBARDI, JR. and                                            c:..! ,.,. 2  i*."z
NETFAX  INCORPORATED,                                                                          n  `J
                                                                       I~-,  -`,  -*,  `,
a Delaware corporation                                                 c;>  *.  `.  _*'
                                                                       -.,.;
                                                                       .-`.I           -...
                                                                       - ;,3
                                                                           -i 47
                     Plaintiffs,
                                               CIVIL ACTION NO. 18 163
             V.

DONAL BARRETT

                     Defendant         >


                    PLAINTIFFS NETFAX  INCORPORATED AND
                   VICTOR J. LOMBARDI, JR.`S ANSWERING BRIEF
   IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT



                                                     John Phillips
                                                     Phillips, Goldman, and  Spence
                                                     1200 North Broom Street
                                                     Wilmington, DE 19806
                                                     (302) 655-4200 (t)
                                                     (302) 655-4210 (0

                                                     Bryan D. Parker
                                                     ShawnCoulson, L.L.P.
                                                     1850 M St., NW Ste 2000
                                                     Washington, D.C. 20036
                                                     (202) 33 I-7900 (t)
                                                     (202) 33 l-0726 (0

                                                     Attorneys for Plaintiffs
                                                     NetFax Incorporated and
                                                     Victor J. Lombardi, Jr.

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE "2

DONAL BARRETT

PLAINTIFFS NETFAX INCORPORATED AND

VICTOR J. LOMBARDI, JR.`S ANSWERING BRIEF IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY

Defendant Immediately Begins His Embezzlement Upon

Defendant Embezzles NetFax Funds to Pay for His Vacation Home

Defendant Continues to Raid the NetFax Coffers During

NetFax Stock for His Own Sake

NetFax Stockholders Remove Defendant from the Board of Directors.

Defendant's Theft of NetFax's Technology and Trade Sec.rets

Rule 56 Requires the Court to Deny Defendant's Motion If Any

Defendant's Unclean Hands Prevent Enforcement of the

Separation Agreement Against NetFax.

ACE Ltd. v. Capital Re Corp., Del.

5 . DEFENDANTS MOTION FOR SUMMARY JUDGMENT ...

6 . PLAINTIFF NETFAXS OPENING BRIEF IN SUPPORT OF MOTION FOR PRELIMINARY INJUNCTION

NETFAX
COURT
LOMBARDI
PROVISION
PLAINTIFFS
LAW
INTERPRETATION
DELAWARE
MOTION
SUMMARY JUDGMENT
PERSONAL JURISDICTION
SEPARATION AGREEMENT
CHANCERY COURT
CALIFORNIA CIVIL CODE
CONTRACTS
VIOLATION
EXCLUSION
INSURANCE
ANNEXED HERETO
LEGAL PRINCIPLES
CASTLE COUNTY
HEREAFTER
RESTATEMENT
WILLISTON
SECURITIES
REFERENCE
MASSACHUSETTS
DELAWARE CORPORATION
PLAINTIFF VICTOR

    IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
    -
                  IN AND FOR NEW CASTLE COUNTY
                  __-


VICTOR J. LOMBARDI, JR. and
NETFAX INCORPORATED, a
Delaware corporation,
                  Pla!.intiffs,       i
            V.                              CIVIL ACTION NO. 18163-NC
                                      i
DONAL BARRETT,                        j
                   Defendant.


          DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
          AGAINST PLAINTIFF NETFAX INCORPORATED
          PURSUANT TO RULE 56 OF THE CHANCERY COURT
          RULES AND FOR DISMISSAL (WITHOUT PREJUDICE) .,
          OF PLAINTIFF VICTOR J. LOMBARDI, JR.'S
          CLAIMS PURSUANT TO RULE 12(B)(2) OF THE         -1:  ,~~.'
          CHANCERY COURT RULES (LACK OF PERSONAL
          JURISDIC"LION OVER DEFENDANT)


          Defendant Donal Barrett (Donal B. Barrett) hereby moves
this Court for an Qrder of Summary Judgment against Plaintiff
NetFax Incorporated ("NetFax")  pursuant to the provisions of Rule
56 of the Chancery Court Rules and for an Order of Dismissal of
the claims of Plaintiff Victor J. Lombardi, Jr. ("Lombardi") pur-
suant to Rule 12(b)(2) of the Chancery Court Rules (lack of per-
sonal jurisdiction over the Defendant), relying upon the Arguments
and Affidavit of the Defendant which are set forth hereafter.

                   I-2    SUMMARY OF ARGUMENT

          NetFax's 


SNIPPETS:
  IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
 
 and NETFAX INCORPORATED, a Delaware corporation,
 
 DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AGAINST PLAINTIFF NETFAX INCORPORATED PURSUANT TO
 
 CHANCERY COURT RULES (LACK OF PERSONAL JURISDIC"LION OVER DEFENDANT)
 
 Defendant Donal Barrett hereby moves this Court for an Qrder of Summary Judgment against
 
 pursuant to Rule 12of the Chancery Court Rules, relying upon the Arguments and Affidavit of
 
 Any claims against Defendant of Lombardi should, following the entry of summary judgment in
 
 Motion to Dismiss which is annexed hereto as Exhibit B, and specifically to the section
 
 Although they are technically not relevant to this Motion, because of -their potentially
 
 For a succinct critique of this outrageous transaction reference is made to the excerpt from
 
 curities-law statutory provision or legal principle, nor any rule of the Unitkd States
 
 The Defendant's "previous securities law violations" take the form of one April 10, 1989
 
 At no time was it ever alleged that this purported "ministerial" oversight -- the sole
udes some of the most prominent venture capital firms and investment banks in the United States.
 
 Background of t&e July 1998 Separation Agreement Although the worst was .yet to come, in late
 
 Governing Law There is apparently now no question that the State of Delaware has adopted the
 
 of contracts -- as opposed to the "construction" of their legal effect .-- would be those to
 
 Based upon his examination of the applicable laws and legal principles of California,
 
 (It might be noted parenthetically that the release provisions of the Separation Agreement do
 
 Section 4:of the Separation Agreement includes a puzzling exclusion from the
 
 For a general discussion of this subject see Corpus Juris Secundum, "Contracts", Sections
 
 L J.W. Stempel, Law of Insurance Contract Disputes, Section 4.08.
  On the same point also see New Castle County v. Hart-

DEFENDANT
LOMBARDI
STOCK
FUNDS
CPT
COURT
INJUNCTION
LOMBARDI AFF
DELAWARE
EVIDENCE
DONAL BARRETT
FRAUD
STOCKHOLDER
MOTION
FACTS
EMBEZZLED NETFAX FUNDS
PRELIMINARY INJUNCTION
DOCUMENTATION
FIDUCIARY DUTY
OVERWHELMING
CORPORATE FUNDS
SECURITIES LAWS
INJUNCTIVE RELIEF
CANCELLATION
INADEQUATE CONSIDERATION
CONSTRUCTIVE FRAUD
FOUNDERS STOCK
MASSACHUSETTS
UST ACCOUNT

          IN THE COURT OF CHA-NCERY OF THE STATE OF DELAWARE

                            IN AND FOR NEW CASTLE COUNTY

VICTOR J. LOMBARDI, JR. and
NETFAX INCORPORATED,
a Delaware corporation

                       Plaintiffs,
                                                 CIVIL ACTION NO. 18 163-NC
               V.

DONAL BARRETT

                       Defendant

                PLAINTIFF NETFAX'S OPENING BRIEF IN SUPPORT OF
                       MOTION PO& PRELIMINARY INJUNCTION

Of Counsel:                                      John C. Phillips, Jr., Esquire (#l 10)
                                                 Phillips, Goldman, and 1Spence
Jerome Elbaum                                    1200 North Broom Street
Kevin Morin                                      Wilmington, DE 19806
ShawnCoulson                                     (302) 655-4200  (t)
Corporate Center West, Suite III                 (302) 655-4210 (0
West Hartford, CT 06110
(860) 561-0000 (t)                               Attorneys for Plaintiffs
(860) 561-1555 (Q

Bryan D. Parker
ShawnCoulson
1850 M St., NW Ste 2000
Washington, D.C. 20036
(202) 33 l-7900 (t)
(202) 331-0726 (Q


Dated: September 5, 2000



                                                   TABLE OF CONTENTS

TABLEOFAUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . .                                    

STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

IN THE COURT OF CHA-NCERY OF THE STATE OF DELAWARE

Standard for Preliminary Injunction.

Defendant's NetFax Stock is Subject to Cancellation Because

There Was a Complete Failure of Consideration Defendant

Defendant Breached His Fiduciary Duty to NetFax

Defendant Committed Actual and Constructive Fraud

Overwhelming Documentary and Testimonial Evidence Establish

Defendant Embezzled NetFax Funds

corporate bank account to divert investments from NetFax, concocted separate stockholder lists

NetFax's compliance with applicable corporate and securities laws,

Cpt.

the NetFax Technology, Defendant Donal Barrett, a purported businessman and lawyer, and Victor

Lombardi, an angel investor.

Lombardi Aff.

As consideration for his Founders Stock, Mr. Lombardi invested significant capital into

consent decree for securities laws violations with the Massachusetts authorities.

since he had `already used NetFax corporate funds to pay his personal debt.

NetFax reserves the right to adduce evidence of additional stolen amounts at a hearing on

was an officer ofNetFax and signed documentation for Berry attesting to the

that harm to the plaintiff if injunctive relief is denied outweighs the harm to the defendant

Defendant's NetFax Stock Is Subiect to Cancellation Because It Was

and managerial services constituted inadequate consideration for his Founders Stock.

the facts of the case.

Defendant Committed Actual and Constructive Fraud

7 . VERIFIED COMPLAINT

DEFENDANT
LOMBARDI
STOCKHOLDERS
COURT
STOCK
SECURITIES
OFFICER
BUSINESS
MASSACHUSETTS
DELAWARE
SOLE
ACCOUNT
DONAL BARRETT
NETFAX COMMON STOCK
PARAGRAPH
NETFAX TECHNOLOGY
TIMES RELEVANT
SECURITIES LAW
NETFAX FUNDS
NETFAX SHARES
STOCK CERTIFICATES
PERSONAL BANKRUPTCY
UST ACCOUNT
GERMANTOWN
PRINCIPALS
NETFAX RESPECTFULLY REQUESTS
LAW VIOLATIONS
NETFAX RESTATES
ALLEGATIONS

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

VICTOR J. LOMBARDI, JR. and
NETFAX INCORPORATED,
a Delaware corporationPlainti&
) CIVIL ACTION NO.
V.

;
DONAL EIARRETT >

Defendant ,,
!-
VERIFIED COMPLAINT ._ -

I. PARTIES

1. Plaintiff Victor J. Lombardi, Jr. ("Mr. Lombard?), is a citizen of the State of Maryland.

Mr. Lombardi resides at 15530 Darnestown Road, Germantown, Maryland. At all times relevant

to this complaint, Mr. Lombardi, through corporations wholly owned and controlled by him, was

and still is a principal stockholder of NetFax Incorporated. Mr. Lombardi is also its present sole

Director and Chief Executive (Officer.

2. NetFax Incorporated ("`NetFax") during all times relevant to this complaint was and still

is a Delaware corporation. NetFax's principal place of business is in Germantown, Maryland.

3. Defendant Donal Barrett is a citizen of the Commonwealth of Massachusetts and resides

at 11 Pleasant Street, Dover, Massachusetts. Defendant has touted himself a Harvard-trained

securities lawyer with over thirty years experience. Subject to this complaint, Defendant Barrett

is a NetFax stockholder. Defendant became NetFax's sole director in August 1996 and

continued as the sole director until his removal on July 30, 1998. From August 1996 through

July 30, 1998, Defendant was also a NetFax officer.

II. JURISDICTION AND VENUE