Team Prenda Plays Dumb In Central California, As Brett Gibbs Says They Lied In Northern California

Too Much Free Time

from the have-fun-guys dept

It was a busy day for Team Prenda yesterday, as summarized by Joe Mullin. Down in Central California, in the case overseen by Judge Otis Wright — who famously called out Team Prenda on their scam — four of the members of Team Prenda all sent coordinated filings, attacking the opposing lawyers, Morgan Pietz and Nick Ranallo, claiming that they should be sanctioned for failing to serve the various members of Team Prenda concerning the additional filings in the case. John Steele, Paul Hansmeier, Peter Hansmeier and Mark Lutz all claim that they’ve been blissfully unaware that anything was happening in the case. Yeah, seriously. Lutz’s is the funniest of the bunch:

I am Mark Lutz and two attorneys named Morgan Pietz and Nicholas Ranallo are filing motions asking this court to issue orders without notifying me! I apologize to the Court for my anger, but I have never had a chance to fight any of their motions! The Constitution gives me the right of Due Process, which means that the courts can’t take something from me without first giving me a chance to contest that decision. Just so I am as clear as I can be, I have never been served with any paperwork by either attorney Pietz or Ranallo. EVER.

People’s faith in the law rests on the belief that attorneys who break the rules don’t get away with it. I place my trust in this Court to make sure that these attorneys will be held accountable for their actions. Here the record is obvious that Pietz and Ranallo have been breaking the rules. I therefore ask the court to strike all pleadings filed by attorneys Pietz and Ranallo that do not have a proof of service filed with them. I also ask that any orders that were entered by this court against AF Holdings, Ingenuity 13 or me be vacated. These guys are total fraudsters

The other filings are similar, if only slightly more professional. Steele had actually filed a similar filing a week earlier, which Judge Wright rejected within an hour. It seems unlikely that he’ll be any more open to these latest claims as he’s made it clear that he’s very much onto Team Prenda’s usual tactics of denying everything, trying to talk their way out of any hole they’ve dug, and when caught, attacking those who caught them. This latest is straight out of their playbook. The question of whether or not these four guys are being served is an important one, but as Judge Wright made clear in his initial ruling, Steele and Paul Hansmeier are considered by the Court to be principals of Prenda, so as long as Pietz and Ranallo are serving Prenda itself, in the form of Paul Duffy (who, you’ll notice, is the lone member of the “Team” as defined by Judge Wright and who did not file one of these statements), it probably covers those three. The situation may be different with Lutz and Peter Hansmeier, but even then, I’ll wait on Pietz’s and Ranallo’s reply, since nearly every statement from Team Prenda ends up proving to be less than fully accurate later on.

On a related note, earlier in this same case, we discussed how Team Prenda had done everything to try to hide from being served during an earlier round of filings. Their efforts to avoid service may become fairly relevant should this issue get any further.

Of course, on the same day this happened, something even more interesting was happening up in Northern California, in the AF Holdings v. Navasca case. That was the case where Judge Edward Chen had ordered Team Prenda to produce a copy of the supposed “Salt Marsh” signature, which Mark Lutz insisted he could not find (as did Paul Duffy). Lutz tried to brush off everything, saying that Brett Gibbs regularly asked him to sign various things and he would do so on behalf of the mysterious Salt Marsh trust. While this argument was an odd one, Judge Chen accepted it and was ready to close the case.

However, Ranallo has now asked Judge Chen for sanctions against a variety of the members of Team Prenda for their actions and statements in the case, and has presented a tremendous amount of evidence that Steele, Hansmeier and Lutz have been flat out lying. And, some of that evidence comes in the form of a damning deposition from former Prenda lawyer Brett Gibbs. Gibbs, it appears, has finally realized that Steele and Hansmeier were throwing him under the bus. While Gibbs had already given one deposition against Steele and Hansmeier, it was fairly tame compared to this latest one, in which he points out that Lutz’s claims are clearly untrue:

I have reviewed the Affidavit of Mark Lutz filed in this case on May 13, 2013 (Doc. #80). I believe that the information provided in the fifth paragraph of that affidavit regarding my interactions with Mr. Lutz is not an accurate description of those events. I did not “from time to time” send certificates for Mr. Lutz to sign on behalf of the Salt Marsh Trust. I did not have the alleged conversations with Mr. Lutz. In fact, I did not know that Mark Lutz was directly affiliated with these companies, as an owner or otherwise, until months after filing the ADR Certification in this case.

Instead, I was specifically told by Mr. Hansmeier that Salt Marsh was the owner of AF Holdings, and that he, Salt Marsh, had read and understood the ADR handbook, and that I could go ahead and file the ADR Certification with the electronic signature of Salt Marsh. Again, I never spoke with Salt Marsh directly. Through my conversation with Mr. Hansmeier, I was under the impression that the Salt Marsh was an individual who had in fact complied with the Local Rule and that his original signature existed on a document that was being held by my then employer, Prenda Law, Inc. Given that information, I proceeded to file the ADR Certification on that basis.

After I filed this case, I learned through a separate case filed in Minnesota that the assignment agreement may have been invalid because there was a dispute whether a signature on the agreement was in fact forged. Once alerted to this, I immediately discussed this matter with John Steele and Paul Hansmeier. They assured me that it was a valid signature, that the allegations were mere “conspiracy theories,” and that I should have no concern in continuing to prosecute this and other AF Holdings’ cases. I believe I was diligent in my factual and legal investigation of this matter.

Of course, one could argue that Gibbs’ credibility is less than perfect (though, still better that Steele/Hansmeier/Lutz). But, even without Gibbs’ deposition, Ranallo has pretty strong evidence of the typical shenanigans from Steele/Hansmeier here, in that he actually shows that Steele and Hansmeier’s own statements in two different cases, directly contradicts each other.

AF Holdings’ first attempt to explain this assignment came on February 19th, when Paul Hansmeier appeared as AF Holdings’ 30(b)(6) deponent in this action. In a clearly rehearsed explanation, Mr. Hansmeier stated that Mark Lutz, paralegal for Steele Hansmeier, Prenda Law, and the Anti-Piracy Law Group tasked his boss, John Steele, with arranging a “corporate representative” to acknowledge the assignment in this case (Hansmeier Dep. at 121:11-128:12).

We are to believe that Mr. Steele did this as a favor to his paralegal, because the paralegal was himself too busy to personally sign his own name on behalf the company he supposedly runs. It is unclear how Mr. Lutz saved any time this way, since it undoubtedly took at least as long to arrange for the “representative” as it would have to sign his own name, but nonetheless, we are told that efficiency was the motivation. See Hansmeier Dep. at 127:22- 128:8 (“…Mr. Lutz is an individual. There are a certain number hours in a day and for him to accomplish everything he’s going to accomplish in a given day, or for anyone in any capacity in any business, you rely on third parties to aid you to accomplish tasks.”)

According to Mr. Hansmeier, Mr. Steele then sought out his property caretaker in Minnesota, Alan Cooper, to serve as “corporate representative” to acknowledge the assignment. Hansmeier Dep. at 122:5-11. According to Mr. Hansmeier, Mr. Steele was therefore the sole individual that could shed any light on the circumstances surrounding the execution. Hansmeier Dep. at 122:11-126:21. Specifically, Mr. Hansmeier testified that

“Mark Lutz spoke to Mr. Steele and said, Well, I understand that there’s an issue with this Alan Cooper and asked Mr. Steele point-blank, Is the signature a forgery. Mr. Steele said the signature is not forgery. And he asked him, Is the— is the signature authentic. Mr. Steele says, yes, the signature is authentic…” and, “…all I can say is that AF Holdings – the only person who knows who this Alan Cooper is is John Steele…”. Hansmeier Dep. 122:11-18 and 126:10-127:2.

Mssrs. Steele, Hansmeier, and Duffy were each given a chance to forward their own explanation(s) for the Cooper assignment on April 2, 2013 at a hearing in the Central District of California. Rather than testifying under oath (and subject to cross examination), however, each invoked their Fifth Amendment right. Ingenuity 13 v. Doe, 2013 WL 1898633 at * 2 (C.D. Cal., May 6, 2013).

Mr. Steele later decided to address this issue in the form of an affidavit– safe from cross-examination – in response to yet another Order to Show Cause regarding sanctions in the District of Arizona. A copy of the Arizona Order to Show Cause is annexed hereto as Exhibit K , AF Holdings response is annexed as Exhibit L, and Mr. Steele’s affidavit in support is annexed hereto as Exhibit M. Mr. Steele’s affidavit is wholly inconsistent with Mr. Hansmeier’s version of events, and Mr. Steele cannot bring himself to even claim that Mr. Cooper actually executed the assignment. What Mr. Steele does say, however, contradicts Mr. Hansmeier’s testimony and various publicly available documents. See, e.g. Exhibit M… Specifically, Mr. Steele describes the Alan Cooper circumstances as follows:

“8. …I agreed to help him set up a company for him and help him out in getting started with his business.
9. Shortly thereafter, Alan told me that he could not put any time into the project and I believe that he never ended up following through with getting his new company off the ground. As a less time intensive alternative, I suggested that if Alan wanted to learn more about the adult industry, I could connect him to a new company that was run by Mark Lutz.
10. I informed Alan that one way to get his name established would be to serve in a corporate representative role, which would let him gain exposure to the types of deals Mr. Lutz was doing and see if that was something that appealed to him.
11. My understanding is that Alan took me up on the offer and participated in a limited number of transactions in 2011 with Mr. Lutz’s companies. I am not aware of any post-2011 transactions in which Alan participated.” Steele Aff. at 8- 11.

Several things are notable about Mr. Steele’s version of events. First, and most conspicuously, is his purported ignorance regarding the Alan Cooper transactions, notwithstanding Mr. Hansmeier’s testimony that Mr. Steele was the only one with information. In contrast to Mr. Hansmeier’s testimony, which makes it clear that Mark Lutz specifically tasked Mr. Steele with finding a corporate representative for the purpose of acknowledging AF Holdings’ assignments, Mr. Steele implies that this was a favor for Mr. Cooper, wholly unrelated to any specific task. Moreover, Mr. Steele disclaims any personal knowledge regarding the “limited number of transactions” that Mr. Cooper was involved in, and disclaims any knowledge that would allow him to reassure Mr. Lutz and Mr. Hansmeier that the relevant assignments were not forgeries, as he apparently did. Indeed, Mr. Steele’s affidavit seems to indicate that Mr. Lutz would himself have all the necessary information regarding the assignment, and there would be no reason for Mr. Lutz to go to Mr. Steele for confirmation regarding the validity of the assignments.

Secondly, AF Holdings response and Mr. Steele’s affidavit simply do not square with documented reality. AF Holdings’ response to the OTSC indicates that “At some point in early 2011, Steele and Cooper discussed how a friend of Steele’s was exploring opportunities related to purchasing and marketing adult content. Cooper expressed interest in learning more about these opportunities, and Steele offered to help him learn more…Cooper ended up not moving forward with the ideas Steele proposed to him…” See Exhibit N at 6.

This explanation does not square with history. Indeed, John Steele began misappropriating Mr. Cooper’s identity before “early 2011,” in connection with VPR, Inc., and other entities. As previously described in ECF No. 55, 55-1, and 55-5, VPR, Inc., was formed and registered with the Nevada Secretary of State in late 2010 and identified Alan Cooper as the president, secretary, and all other relevant positions in the entity. As previously described, the corporate address identified by the Nevada Secretary of State is 4532 East Villa Theresa Drive (“the Villa Theresa Address”), an address previously shared by John Steele’s sister and Anthony Saltmarsh. See ECF Nos. 55-1, 55-3 and 55-4.

VPR, Inc. cannot be the entity that never came to fruition, as described in Mr. Steele’s affidavit, as it has filed copyright lawsuits against more than a thousand Does, through its counsel, Steele Hansmeier.

Believe it or not, there’s much more in there, but that selection of using Steele’s claims against Hansmeier’s claims is really quite classic. This is, of course, what happens when you dig yourself a giant hole and then try to bullshit your way out of it. Sooner or later you’re going to contradict your own claims.

Filed Under: brett gibbs, copyright, copyright trolling, edward chen, john steele, mark lutz, morgan pietz, nicholas ranallo, otis wright, paul hansmeier, peter hansmeier
Companies: af holdings, prenda, prenda law