4-7-16 SFRX vs Volentine Hearing

8/18/2019 4-7-16 SFRX vs Volentine Hearing

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BAY AREA COURT REPORTING, INC.

[email protected] (866)240-9500

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IN THE CIRCUIT COURT OF THE THIRTEENTH JUDICIAL CIRCUIT IN AND FOR HILLSBOROUGH COUNTY, FLORIDA

SEAFARER EXPLORATIONCORP,

Plaintiff CASE NO.: 14-CA-8902vs. Division "L"DARRELL VOLENTINE,

Defendant.

__________________________________________________________

Defendant's Verified Amended Motion for Contempt andSanctions Against Plaintiff's Counsel, Craig Huffmanand/or ClearTrust, LLC; and Plaintiff's Motion for Contemptand Show Cause___________________________________________________________

Before the Honorable Steven Scott Stephens Hillsborough County Circuit Court Judge

____________________________________________________________

DATE: April 7, 2016

TIME: 11:00 a. m. - 12:17 p. m.

PLACE: Hillsborough County Courthouse 800 East Twiggs Street Fifth Floor Tampa, Florida 33602

REPORTED BY: ELIZABETH GOTCH, RPR Notary Public

State of Florida at Large

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1 APPEARANCES:

2 CRAIG A. HUFFMAN, ESQUIRE Securus Law Group, P. A.

3 14036 Racetrack Road, Number 234 Tampa, Florida 33626

4 (888) 914-4144

5 Attorney for the Plaintiff

6 EVAN KIDD, ESQUIRE

7 730 1st Ct Palm Harbor, Florida 34684

8 (727) 512-4971 [email protected]

9 Attorney for Defendant

10

11

12 I N D E X Page

13 Argument 3, 52Ruling 36, 56

14 Certificates of Reporter 62

Plaintiff's Witness: Direct Cross15 Kyle Kennedy 45 51

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1 * * * * *

2 P R O C E E D I N G S

3 * * * * *

4 THE COURT: All right. Well you got here on time

5 and everything's good. I can't really get the spelling

6 of your name off of your signature here. So let's do

7 that for the reporter, please.

8 We're on the record now so go ahead.

9 MR. KIDD: Sure. Attorney Evan Kidd, E-V-A-N,

10 last name K-I-D-D.

11 THE COURT: All right. And let's get appearances

12 from the others.

13 MR. HUFF: Your Honor, Craig Huffman on behalf

14 of Seafarer Exploration. Present with me is

15 Kyle Kennedy, Chief Executive Officer of

16 Seafarer Exploration Corporation.

17 THE COURT: All right. What all do we have on the

18 agenda for today from your standpoint?

19 MR. HUFFMAN: All right. Just asking counsel: Is

20 Mr. Volentine appearing by phone or ...

21 MR. KIDD: No. I'll be appearing.

22 MR. HUFFMAN: Okay.

23 THE COURT: I think we told him last time that he

24 can't appear by phone.



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1 THE COURT: We don't have phone appearances, in

2 general, in here unless we have to make special

3 arrangements for people who are, you know, in the

4 hospital or something like.

5 MR. HUFFMAN: I'm assuming counsel has the correct

6 filings.

7 THE COURT: I don't know. But I'm still waiting

8 for you to tell me what we have on the agenda for

9 today.

10 MR. HUFFMAN: The first matter that we have is:

11 Our matter has been pending on a Motion for an

12 Order to Show Cause. This was previously filed before

13 Judge Foster.

14 THE COURT: So there has not been any show cause

15 order issued yet. You're just asking to get one

16 issued.

17 MR. HUFFMAN: Correct.

18 THE COURT: Okay.

19 MR. HUFFMAN: Judge Foster had set a date.

20 However, in between he was recused, and we are

21 rebringing this motion just to --

22 THE COURT: Was there a motion to ask Judge Foster

23 to disqualify or what happened?

24 MR. HUFFMAN: Yeah, there was a recusal by the

25 defendant.


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1 THE COURT: He filed a motion asking him to step

2 down.

3 MR. HUFFMAN: Yes. And that's when the case --

4 THE COURT: And he granted that.

5 MR. HUFFMAN: That's when the case came to your

6 court.

7 THE COURT: Well, see, that's important because

8 when -- when there's been a predecessor judge granting

9 a Motion to Disqualify, it changes the standard by

10 which subsequent motions or successful motions would be

11 decided.

12 MR. HUFFMAN: Yes, sir.

13 THE COURT: Go ahead. Go ahead.

14 MR. HUFFMAN: So just to --

15 THE COURT: Well I just want you to tell me

16 what's on the agenda today because --


18 THE COURT: -- I'm going to ask the other side

19 what they think is on the agenda today also.

20 MR. HUFFMAN: Okay. Then the other side -- this

21 is the defendant's motion -- is --

22 THE COURT: Well he'll tell us. He's here. He

23 can speak for himself.


25 THE COURT: What is it that you would have in mind


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1 for today, sir?

2 MR. KIDD: Your Honor, we have a Response in

3 Opposition to the Plaintiff's motion as well as our own

4 Amended Verified Motion for Contempt and Sanctions

5 Against the Opposing Attorney and --

6 THE COURT: Are those in the -- I saw the motion.

7 I didn't see the response. Don't get nervous.

8 MR. KIDD: No, sir.

9 THE COURT: It's hard for me to find things in the

10 docket these days because, for whatever reasons, our

11 clerks computer system doesn't number the pleadings so

12 we can, you know, make it easy to find.

13 MR. KIDD: Of course.

14 MR. HUFFMAN: Like Federal court.

15 THE COURT: Like probably every other court except

16 for the ones that use that same vendor.

17 MR. KIDD: As far as we're aware, there hasn't

18 been a response.

19 THE COURT: Okay. So what's the nature of -- well

20 let me ask plaintiff's side first.

21 You're asking for an Order to Show Cause. What

22 kind of conduct are you --


24 THE COURT: -- referring to that you're asking me

25 to show cause?


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1 MR. HUFFMAN: There was a consent entered -- and

2 this was a very large consent -- on September 30, 2014.

3 That consent by Mr. Volentine included liability,

4 damages, and a permanent injunction.

5 The permanent injunction, which is the point that

6 I'm here for today, banned him from directly,

7 indirectly, posting anything about Seafarer, its

8 employees, officers, directors or anything. He agreed

9 to that.

10 Now what happened is: Judge Cook had the case --

11 okay? -- and then subsequently Judge Foster.

12 But Judge Cook accepted that as far as the

13 injunction went and as far as the liability aspect,

14 but rejected the damages portions as we needed a basis

15 in fact to have the damages.

16 So on October 7th -- as the pleading are there --

17 she entered the approval on the permanent injunction.

18 THE COURT: Of what year?

19 MR. HUFFMAN: Of 2014. Okay?

20 Subsequently, what Mr. Volentine did is he made

21 numerous postings on an internet site, which is a stock

22 coverage site called InvestorsHub, and some other

23 locations that were -- actually had the right to do --

24 with Kyle Kennedy, accusing Kyle Kennedy, Mr. Kennedy,

25 of doing insider trading, doing manipulative stock


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1 trades actions.

2 THE COURT: After the injunction was entered.

3 MR. HUFFMAN: Correct. And what I did is -- in

4 the original motion is, the time frame that I used was

5 actually April through July of last year, of 2015.

6 Okay? And that's when I filed the original was in

7 July of 2015, then the matter went before

8 Judge Foster.

9 THE COURT: Would you interpret the injunction as

10 barring the gentleman from making factual posts that

11 were truthful?

12 MR. HUFFMAN: Well he wasn't suppose to post

13 anything, but --

14 THE COURT: I understand that. But I'm asking if

15 that's what you would ask me to do.16 MR HUFFMAN: No.

17 THE COURT: Or are you just telling me that's a

18 different case because you're not relying on the

19 injunction to -- to proceed against him for anything

20 that he did that was truthful, only from untruthful

21 things?

22 MR. HUFFMAN: Untruthful things we can certainly

23 proceed on.

24 THE COURT: That's what I'm saying. That's what

25 you're asking me to proceed on.


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2 THE COURT: It would be a really difficult

3 situation if somebody asked me to proceed on an

4 injunction against making posts on the internet if the

5 truth defense was successfully brought forth. Right?

6 Even though your right would technically be in

7 violation of the injunction, it may be a privileged

8 violation of the injunction.

9 MR. HUFFMAN: I understand what the court's

10 saying, and it's an interesting --

11 THE COURT: It's an academic question. We don't

12 need to get distracted by it.

13 MR. HUFFMAN: Right.

14 THE COURT: Because you're only -- you're saying

15 that he continued to make posts that --


17 THE COURT: -- turned out to be -- factually

18 accused the gentleman of insider trading.

19 MR. HUFFMAN: Insider trading, manipulative

20 trading, giving stock --

21 MR. KENNEDY: Pump and dump.

22 MR. HUFFMAN: Yeah. Pump and dump, giving stock

23 to relatives and --

24 THE COURT: Yeah, I saw your papers. The way that

25 you refute that is by saying that he hasn't sold any


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1 shares ever.

2 MR. HUFFMAN: Not only he's never sold any shares,

3 but all of the production of documents now, on all the

4 subscription agreements, promissory notes, show that

5 they have a floor. Okay?

6 So if someone buys it at a penny, if the stock

7 goes down, they're losing money.

8 All of these promissory notes and subscription

9 agreements have floors except a couple of commercial

10 lenders.

11 THE COURT: What do you mean by "floors"?

12 MR. HUFFMAN: In other words, when you convert --

13 if you loan the company $5,000 or a subscription

14 agreement of $5,000, because this is a reporting at

15 company, you can't immediately get free trading shares

16 in exchange for that note.

17 So you have to wait six months -- okay? -- at a --

18 THE COURT: So the shares are restricted.


20 THE COURT: They were restricted shares from the

21 beginning, is what you're telling me.

22 MR. HUFFMAN: Well, right. But when you go to

23 -- when you go to get the shares, you're now at a fixed

24 price -- okay? -- of, let's say, a penny.

25 If the share price is at half-a-penny, it doesn't


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1 matter. You still got it at a penny. So you've just

2 lost 50 percent.

3 THE COURT: Who would do that?

4 MR. HUFFMAN: Anyone who would -- well --

5 THE COURT: Who would buy something --

6 MR. HUFFMAN: Family members, friends --

7 THE COURT: -- that only trades for half-a-penny?

8 MR. HUFFMAN: Well first of all -- no, no, no.

9 What I'm saying is, subsequently, the drop in market.

10 Okay?

11 In our case about Mr. Volentine is that he's a

12 substantial cause of the drop in market.

13 THE COURT: I understand that's what your argument

14 is --


16 THE COURT: -- but that's not really pertinent to

17 today's --

18 MR. HUFFMAN: No, it's not, but those are some of

19 the accusations being made.

20 THE COURT: All right. Let's find out what the

21 other side has to say about that one and also about

22 whatever his motion for today was about.

23 Go ahead, sir.

24 MR. KIDD: Thank you, Your Honor.

25 In response to the Plaintiff's Motion to Show


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1 Cause, our first argument is simply that they have a

2 procedural defect. Rule 3.840(a) of Federal Rules of

3 Criminal Procedure states that --

4 THE COURT: That isn't a state court rule, but go

5 ahead. It's better because -- I'm bound by the state

6 court rules. That is the right rule to cite for this

7 purpose, though. Go ahead.

8 MS. KIDD: Sure. So a rule to show cause must be

9 based on the judge's own motion or the affidavit of any

10 person having knowledge of the facts.

11 THE COURT: Are you saying that their Motion for

12 Order to Show Cause is not supported by an affidavit?

13 MR. KIDD: Correct. It is not -- it is not true

14 and verified.

15 THE COURT: Do you-all have an affidavit in

16 support of your motion?

17 MR. HUFFMAN: Judge, we did not file an affidavit

18 in support of the motion.

19 Is he -- I'm using the civil contempt. Is that

20 the applicable standard?

21 THE COURT: That's where we're going to go next.


23 THE COURT: That's exactly what we're going to do.

24 What you're relying in there is the criminal

25 standard, and that's for incarcerating somebody


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1 irrespective of whether they have the right to a purge.

2 How are you asking for something that's civil in

3 this case?

4 MR. KIDD: Yeah, it's criminal contempt.

5 MR. HUFFMAN: I'm not asking for criminal contempt

6 in this.

7 THE COURT: What remedy would you be looking for?

8 MR. HUFFMAN: Oh, there could be any number of

9 things. There could be --

10 THE COURT: Pick one, the best one that you think

11 you can convince me is realistic.

12 MR. HUFFMAN: Yes. Number one, it would be a

13 reiteration of the ban -- okay? -- and --

14 THE COURT: You want me to re-enter the injunction

15 and write we really mean it this time at the bottom of

16 it?

17 MR. HUFFMAN: Judge, I've seen that before and --

18 and other sanctions. Okay? Monetary sanctions.

19 THE COURT: But tell me what, though. What

20 really, I mean ... because it sounds to me like most of

21 the things that you could be thinking of to redress

22 past conduct would be things that constitute punitive

23 measures rather than coercive measures.

24 And, as you know, the difference between criminal

25 and civil contempt is whether it's coercive rather than


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1 punitive.

2 MR. HUFFMAN: Right. And we are not looking for

3 the punitive side. We are looking for him to abide by

4 it. We have presented overwhelming evidence that he

5 did violate the injunction.

6 So there would also be the court costs involved as

7 far as attorney's fees in the course of the injunction.

8 THE COURT: Well that's a different issue.

9 We get back to the question of what precise

10 remedy could we get under that, you know.

11 MR. HUFFMAN: Well correct me if I'm wrong, but,

12 you know, the court can make findings that would have

13 civil contempt. It could even include incarceration up

14 to a period of time.

15 THE COURT: Well civil contempt can include

16 incarceration, but it can only include incarceration

17 where the person who has been incarcerated has the

18 ability to purge themselves of the contempt and ...


20 THE COURT: -- and they can't undo something

21 they've done in the past.

22 MR. HUFFMAN: No.

23 THE COURT: So usually we would -- civil contempt

24 is available for getting people to, you know, sign

25 deeds that they won't sign or -- or make child support


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1 payments is probably the most common reason it's used,

2 things like that.

3 MR. HUFFMAN: Right. So what we're looking at is

4 for him to understand and abide.

5 Because there has to be a method sent here.

6 There's thousands of people who are reading these blogs

7 and posts, thousands of people. We have 4,000

8 shareholders. Thousands of them are following this

9 case. Okay?

10 THE COURT: Why aren't you asking for criminal

11 contempt then if that's -- if he is going to flagrantly

12 violate, in your estimation -- that's what you're

13 telling me he's done -- if he's going to flagrantly

14 violate an order of the court, then, you know, normally

15 what happens is a criminal contempt affidavit and

16 motion for order to show cause is filed.

17 If an order to show cause is filed, that operates

18 as a criminal law charging document. The clerk assigns

19 a case -- a criminal law case number to it and we have

20 the hearing. The Rules of Criminal Procedure apply;

21 that is, notice of the charges, and a court reporter is

22 provided by the state --


24 THE COURT: -- and all of those things that we

25 have to do. If they're going to be facing more than


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1 six months of incarceration, they have to be afforded a

2 jury trial.

3 But we typically can certify incarceration of no

4 more than 179 days.


6 THE COURT: I hope you're getting the message

7 that I've done this before.

8 We'll do it again, if need be. I mean, it's -- we

9 know how to use that. It's a realistic remedy, is what

10 I'm trying to tell you.

11 MR. HUFFMAN: The reason why, Your Honor, is

12 because when we were here on December 1st and this

13 matter was brought before the Court, you told me and --

14 you didn't direct me which direction to go.

15 However, by the end of that hearing, it was

16 directly contemplated that it would be a civil matter

17 and it would be an order to show cause. And on

18 December 6th, I sent all of this into the Court.

19 THE COURT: Well you can -- as long as you're not

20 talking about jail, there are other remedies, I guess,

21 that you could be asking for in connection with a civil

22 case.


24 THE COURT: And I think that's what you were

25 mentioning --


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1 MR. HUFFMAN: That's correct, Your Honor.

2 THE COURT: -- a few minutes ago in terms of

3 the --

4 MR. HUFFMAN: Now a subsequent violation would

5 certainly change things, but we're not there yet.

6 THE COURT: Well right now a new injunction that

7 compels the gentleman to do the same thing that he did

8 would be -- you know, once we've done it, it would be

9 done again already. And, I mean, I don't know what

10 you're asking me to do that could prevent that at this

11 point.

12 MR. HUFFMAN: Well, Judge, again, there are

13 sanctions. There are monetary sanctions, there are

14 enforcement measures.

15 THE COURT: All right. So his answer to your

16 point, which is correct, if he's asking -- excuse me --

17 if he's asking for a criminal contempt, it would just

18 have me send the sheriff out and pick your fellow up

19 and, I guess, extradite him back to ... you know,

20 we've done things like when we had to.

21 But that's not what he's asking for at this point.

22 What he's asking for is basically going to be a

23 monetary sanction for the violation. That's what

24 you're getting to. And the cost of having to come in

25 and do the enforcement. So that's what he's talking


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1 about.

2 MR. KIDD: Well, Your Honor, I stick by my

3 original point that there's procedural defects here.

4 If he wants to claim that he's making a claim for civil

5 contempt and not criminal, then, you know, where's the

6 purge provision next to the suggestion of

7 incarceration. Like there's -- procedurally this has

8 defects to it, so ...

9 THE COURT: Well I'm pretty sure we're taking the

10 incarceration off the table at this point because

11 I can't incarcerate him pending his promise to actually

12 obey the law.

13 MR. KIDD: Understood. In that case, I would also

14 argue that in this entire case, the defendant has been

15 acting pro se and ... it's challenging now even the

16 order to -- sorry -- the gag order, essentially, to not

17 to speak about the company or anything. He's

18 challenging that as well. And if that were to go in

19 his favor, then there wouldn't really be a basis for

20 contempt.

21 THE COURT: Well, actually, if you violate a court

22 order while it's in effect, while you're challenging

23 it, it's still a basis for contempt. If he did that

24 in Federal court, the guy would be in jail already.

25 The state court enforcement mechanism is much


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1 weaker than the federal court enforcement mechanism.

2 And since I am state a court enforcement mechanism, I

3 don't like saying that, but it is.

4 MR. KIDD: Right.

5 THE COURT: A federal judge would issue a warrant,

6 and a marshal in the -- in the state where the state

7 where the gentleman lives would have picked him up by

8 now because you're not allowed to just challenge an

9 injunction and violate it while you challenge it.

10 Where is he challenging it; is that here in this

11 case?

12 MR. KIDD: I believe so, yes.

13 THE COURT: All right. Well, I mean --

14 MR. KIDD: No. Not here today, no.

15 THE COURT: No, no, I just mean in general.

16 MR. KIDD: Yes.

17 THE COURT: You mentioned that he was challenging

18 the injunction.

19 MR. KIDD: Sure.

20 MR. HUFFMAN: Judge, there's been no filing or

21 anything on that.

22 THE COURT: None that you know of.

23 MR. HUFFMAN: Well --

24 THE COURT: It could be in a different -- he could

25 have collaterally attacked it in a different court


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1 somewhere else and you wouldn't know.

2 MR. HUFFMAN: That's correct.

3 THE COURT: I mean, it's possible.

4 So in any case, we have the one issue of him not

5 being here today. He sent you. And that's a whole lot

6 better than sending nobody or ...

7 MR. KIDD: Sure.

8 THE COURT: But usually when you have these kinds

9 of things, the only real question the Court decides is

10 whether it's facially sufficient to support the

11 entry of an order to show cause.

12 And this time he's just talking about an order

13 for civil contempt. He's just asking for monetary

14 sanctions.

15 What would you be proposing to do at an

16 evidentiary hearing to prove that there was --

17 Mr. HUFFMAN: Prove the postings.

18 THE COURT: I'm sure you want to prove the

19 postings, but how are you going to do the hard part?

20 MR. HUFFMAN: Oh, prove the --

21 THE COURT: Yeah. I mean --

22 MR. HUFFMAN: Well, yeah. Well this whole case is

23 about him assuming things. He's taken so many

24 different standings. At first, he said that this was a

25 pump and dump, an insider trading, and now things have


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1 dwindled down to, well, the company's not accurate in

2 its press releases.

3 You know, so we have multiple -- I have the CEO, I

4 have the CFO, I have numerous -- I have the auditors

5 available, everyone who can bring in the evidence to

6 contradict everything that he states.

7 THE COURT: Once again, though, if you prove it's

8 all false, if you prove that the guy -- even if you

9 were able to prove that the guy just sits around and

10 makes stuff up for sport --


12 THE COURT: -- if you're able to do that, what's

13 the -- how do you get past the next couple of links

14 that you need in your chain; that is, how do you show

15 it caused any damages and how do you show that --

16 MR. HUFFMAN: Well that's for the finder of fact,

17 in deed, to make that nexus. But we show the postings

18 and you can show that --

19 THE COURT: Well isn't that me?

20 MR. HUFFMAN: It is.

21 THE COURT: Yeah.

22 MR. HUFFMAN: But we show the -- Judge, I believe

23 the evidence is there. This isn't my first rodeo.

24 THE COURT: Well I'm asking you so let's hear it.

25 MR. HUFFMAN: Okay. So he makes a posting on a


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1 Tuesday -- all right? -- or a number of postings,

2 saying that there's insider trading, they're stealing

3 treasure. Because this is a treasure recovery company

4 that's out there on the east coast. Okay?

5 THE COURT: I thought he was saying that there

6 isn't any treasure.

7 MR. HUFFMAN: Exactly. Right. Or he says there

8 isn't any treasure or they're stealing it, or they're

9 giving these fraudulent and security ... and then the

10 next day there's a massive sale. Okay?

11 Or have people available who can come in and

12 testify that would have put money into the company

13 directly, but they read his postings and they did not.

14 We also have people available who said they read

15 his postings. They were shareholders of they company.16 They sold, thus driving down the price because they

17 sold.

18 THE COURT: But when they found out it was false,

19 did they buy it back and drive the price back up?

20 MR. HUFFMAN: Well, Judge that's not really --

21 THE COURT: No, it is. You've got to understand.

22 You can't show a temporary change in price which --

23 you know, if the price goes down tomorrow because of

24 something that somebody said that was false, the rest

25 of the world realizes it's true the day after


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1 tomorrow, the price goes back up, then you don't have

2 any damages --

3 MR. HUFFMAN: Judge, I --

4 THE COURT: -- if that what happens.

5 MR. HUFFMAN: I understand the theory. However,

6 this was an ongoing -- our original lawsuit is an

7 ongoing period of time -- I believe covered a period

8 of six months -- that could show the diminution in the

9 value of the value of the stock price.

10 That continued. Okay? Even during the time of

11 his violation of the order -- okay? -- there was

12 reactions in the market -- okay? -- because of his

13 postings.

14 THE COURT: What I'm trying to tell you is --

15 MR. HUFFMAN: I can also argue res ipsa loquitur.

16 THE COURT: No, you can't. There is -- there is a

17 bunch of people out there -- I used to be one -- who

18 used scientific method to try to evaluate the changes

19 in stock prices as a result of the release of

20 certain kinds of information --


22 THE COURT: -- true or false information -- into

23 the marketplace.

24 And there are accepted scientific methods for

25 being able to determine the difference between


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1 information release and randomness or temporary blimps

2 based on information being false that everybody pretty

3 quickly figures out is false.


5 THE COURT: All the stuff that you showed me in

6 the Complaint originally -- in the original Complaint

7 -- I realize you're talking about different stuff

8 now, but the stuff that was in the Complaint was the

9 kind of information, which if it was false, would

10 usually be found out by the rest of the market to be

11 false and any sort of damage to the stock price that

12 came from that bad information would be -- would be

13 likely to be recovered.

14 MR. HUFFMAN: I would have to disagree with the

15 Court that --

16 THE COURT: Well you might want to read the book I

17 wrote on the subject.

18 MR. HUFFMAN: I will do so.

19 THE COURT: I don't think you will. I don't think

20 you can find it.

21 MR. HUFFMAN: That sounds vague, Your Honor.

22 THE COURT: I wrote -- I wrote a book in 2000

23 called "The Uncertainty of Legal Rights". It was about

24 how the prices of stocks changed when information about

25 litigation events was released.


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1 And there's a lot in there about how the

2 methodology that had been developed to try to deal with

3 -- the biggest problem is that when the market goes up

4 or down, all the stocks go up or down -- right? --

5 and --

6 MR. HUFFMAN: Well that's true. They're external

7 forces.

8 THE COURT: And then there's a lot of other things

9 too, and it's hard to identify any one change in stock

10 as being attributable just to one isolated thing. I'm

11 not saying you can't do it. I'm just saying you can't

12 expect me to assume that.

13 You might have done better in a different county

14 where the person didn't come from that industry, but

15 the -- there's not going to be an assumption that the

16 change in stock price today resulted from an action

17 yesterday.

18 And just to be clear, some of the evidence you

19 were pointing me to is in the right direction. If you

20 have people who actually said I didn't buy the stock --


22 THE COURT: -- they're still going to have to

23 answer the question, well when you found out what was

24 said was false, did you buy it then? It was available

25 to you even at an even lower price, so did you buy it


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1 then?

2 And then if you show, yeah, they bought it then

3 ... I mean, you -- if you have that kind of evidence,

4 we'll hear it, is what I'm telling you.

5 MR. HUFFMAN: But then you have dilutive effect.

6 Because at a lower price, you -- in order to take in

7 $10,000, for instance, if you're at a penny -- okay? --

8 it's a million shares. If you're at half-a-penny, it's

9 two million shares. So the dilutive effect on the

10 company is also there.

11 But, Judge, obviously Mr. Kennedy can speak

12 because he was -- he started three broker dealers and

13 has been licensed in the security industry. I know he

14 wants to speak. I'm not letting him, but ...

15 THE COURT: And I'll hear from him if it's

16 necessary to hear from him about anything we're doing

17 today. But today, we're focused on something that's a

18 little different.


20 THE COURT: I'm just telling you, you can't expect

21 anybody to make the assumption that information

22 released one day causes the stock price the next day

23 without other surrounding information that tends to

24 give that more credence than --

25 MR HUFFMAN: Well I understand --


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1 THE COURT: Listen to me. -- because it happened

2 after, it might have happened because of.

3 MR. HUFFMAN: Okay. And I will find the Court's

4 book. Okay?

5 THE COURT: I think I have one here. It's only --

6 MR. HUFFMAN: Okay. But the point being, is we're

7 here because Darrell Volentine violated the court

8 order which he agreed to.

9 THE COURT: Yeah, I understand. And tell me more

10 about what happened with the damages under the

11 preceding situation. You told me that Judge Cook

12 decided not to agree to the damages part of the

13 agreement between the parties.

14 MR. HUFFMAN: That's correct.

15 THE COURT: I guess we heard that correctly.

16 So where is that damages thing now; did it ever get

17 resolved or not get resolved?

18 MR. HUFFMAN: No. That's why we're here, is to

19 prove damages.

20 THE COURT: And did you or he plead a jury trial?

21 MR. HUFFMAN: We actually -- Judge, I can't

22 recall, but we -- somewhere along the line it went to

23 the judge -- okay? -- and he agreed. All right?

24 THE COURT: To do what?

25 MR. HUFFMAN: Have just a nonjury trial.


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1 THE COURT: Okay. And now that would be me.

2 MR. HUFFMAN: That would be you.

3 THE COURT: And I'm thinking that what you need to

4 do is to schedule your trial sooner rather later where

5 all of these pretrial thing are is less of an

6 impediment to getting --

7 MR. HUFFMAN: Let me -- let me point out, Judge --

8 THE COURT: Please. The nice lady here can only

9 take down what one of us say at a time.

10 Go ahead. What do you want to point out?

11 MR. HUFFMAN: On December 1st, pursuant to this

12 Court, at that hearing you had asked for a trial order

13 to be presented.

14 On December 6th, I sent in the Trial Order. Okay?

15 The only thing to be determined -- and Mr. Volentine

16 had asked that the nonjury trial be in the latter part

17 of March, which has now passed.

18 I sent this in to your chambers, submitted it

19 through JAWS with the cover letter. I then --

20 THE COURT: Did you get it back?

21 MR. HUFFMAN: I then contacted -- in January,

22 after hearing nothing -- and I was told that I should

23 have had a pretrial date although I was instructed when

24 I left here to leave that blank and one would be sent.

25 THE COURT: Oh, no, no, no, that's not what


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1 happened. I'll tell you why it's not what happened

2 because it won't get processed if there's a blank in

3 it.


5 THE COURT: And it's possible for me to have said

6 something that would have given you that impression, I

7 guess.


9 THE COURT: But I wouldn't have specifically said

10 leave it blank because I know exactly what would happen

11 if you left it blank, which is exactly what did

12 happen. It won't get processed if it's blank.

13 MR. HUFFMAN: Right. So we had a --

14 THE COURT: Let's do it again.


16 THE COURT: All right. That's my answer to that.


18 THE COURT: We'll do it again, and we'll get that

19 to happen. I'm sorry we had that confusion about how

20 to get it done.

21 Because what we -- what you really needed, I

22 guess, was a different order than the standard order

23 because the standard order has that blank in it. And

24 I'm sure I didn't make because I doubt that I thought

25 it through to that degree while we were here before.


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1 MR. HUFFMAN: And I had actually done that before

2 without the blank because I did -- all I did is I took

3 that out in a previous order.

4 THE COURT: Yeah. So --

5 MR. HUFFMAN: And by the way, this matter was set

6 before Judge Foster for trial on December 1st of last

7 year before his recusal.

8 THE COURT: Let's hear defense's counsel about

9 this whole business.

10 I'm not trying to ask you any more than you want

11 to tell about the relationship you have with the client

12 or anything, but I noticed you're making a special

13 appearance and I don't know if that means that you're

14 onboard through the trial or not or if that's decided

15 yet even.

16 MR. KIDD: That's yet to be determined. You know,

17 the client's financial situation is not one where he

18 could afford a retained attorney, you know, on call

19 whenever he needed it.

20 So as of right now, I'm just here on this matter.

21 Potentially, I could be involved in future matters.

22 Potentially, he could continue on pro se. That'll be a

23 determination we make at a later date.

24 THE COURT: All right. So what else -- what about

25 the motion that you wanted to bring; what's that all


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1 about?

2 MR. KIDD: Okay. The Amended Verified Motion for

3 Contempt. Essentially, what we're claiming here is

4 that Attorney Huffman made statements on December 1st.

5 THE COURT: That was the one where he said he

6 didn't have a certain documents.

7 MR. KIDD: Correct. And subsequently admitted

8 that he did have them, which was -- constitutes, you

9 know, lying in open court, which is a contemptible

10 offense.

11 THE COURT: Well let's figure that out. Exactly

12 what documents are you talking about?

13 MS. KIDD: Okay. Mr. Volentine subpoenaed some

14 documents related ClearTrust and Seafarer.

15 THE COURT: Yeah. But exactly which ones, I need

16 to know.

17 MR. KIDD: Right.

18 THE COURT: Take your time. I'm not trying to

19 -- it's not a memory test.

20 MR. KIDD: I understand. I got copies some copies

21 here. This is --

22 THE COURT: That's okay. Take your time.

23 (PAUSE)

24 MR. KIDD: It looks to be mostly records; such as,

25 transfer journal, registra journal.


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1 THE COURT: Well let's pick the one -- pick one of

2 those records that you are advancing the contention.

3 And I realize this was filed pro se by your client

4 and not you --

5 MR. KIDD: Yeah.

6 THE COURT: -- but you still ... if you're going

7 to press a motion like that in court, you've got to be

8 able to identify exactly what it is you're talking

9 about because that's the only way you can be fairly

10 expected to be able to speak to it.

11 So you need to pick one document that -- at least

12 one document, let's just start with one -- that says

13 what you're relying on. Just pick one.

14 MR. KIDD: Sure. Exhibit C ...

15 (PAUSE)

16 THE COURT: So it's been a couple of minutes

17 now. It doesn't seem like that is readily available.

18 MR. KIDD: Yeah. I'm trying to understand the ...

19 THE COURT: Yeah. You kind of have to be ready to

20 do that when you come in if you're going to press a

21 motion for contempt against somebody. So unless you

22 can do that, we're going to have to drop the

23 Motion for Contempt at this point.

24 MR. KIDD: I believe it was having to do with

25 issuance for shares in regards to ClearTrust. Because


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1 Mr. Volentine was able to receive the documents in

2 regards to Seafarer, and Mr. Huffman, despite claiming

3 that he did not have access to the same documents for

4 ClearTrust on December 1st, then in an e-mail on

5 February 16th claimed that he was in possession of the

6 documents, but that he needed to go over them to make

7 sure they duplicative of what he already said.

8 THE COURT: So how would you know -- even if we

9 just assume that to be true, how would that amount to

10 proof that he didn't tell the truth back at the first

11 time when it's possible he could have acquired them

12 between date number one and date number two?

13 MR. KIDD: Because ClearTrust was required to

14 have them as a matter of law.

15 THE COURT: So what if they broke that law?

16 MR. KIDD: Well then, alternatively, we would like

17 sanctions against ClearTrust.

18 THE COURT: Well I think the SEC is the one who

19 gets to enforce those kinds of things. If you don't

20 have documents that you're required to have, then

21 there's regulators who take control over that stuff.

22 I'm not one of those regulators. This is just a

23 state court. We actually have to defer to what the

24 regulators want to do if they want to.

25 But we don't have the authority to just make a


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1 sanction to somebody in a case for not complying with

2 the Federal regulation that requires them to keep

3 documents.

4 That's why I asked the fellow what law he was

5 talking about last time. Because you can only ask a

6 state court judge in a state court case to enforce the

7 things that are within the authority of the state court

8 judge to enforce.

9 And the requirement that they maintain certain

10 regulations that comes from federal law is something

11 that -- certainly we don't condone people breaking it,

12 if that's what they do. But we don't have the

13 authority to just reach out and start writing up

14 sanctions for that in the course of this case because

15 there's due process requirements that apply to it.

16 People have to be given notice of exactly what

17 they are alleged to have done wrong and have to be

18 given a hearing where they can explain what they -- you

19 know, what they're being charged with or give evidence

20 of their -- you know, their own viewpoint.

21 So I can't enter any sanctions against anybody for

22 not having documents that the federal regulations

23 require them to have, and I can't enter any sanctions

24 against the attorney even if I assume that what you're

25 telling me about the two different points in time is


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1 correct.

2 Because if he didn't have them or didn't know

3 about them at one point and then he knew about them at

4 another point and he said I know about them and gave

5 them over to you, that's what we want people to do.

6 MR. KIDD: He hasn't given them over, Your Honor.

7 THE COURT: Well that's a different story. If he

8 hasn't given them over, then we would be talking about

9 a motion to compel discovery, not some sort of motion

10 to attack the gentleman's honesty and things like that.

11 So I understand that and maybe we'll be back here

12 on the motion to compel discovery. But it seems to me

13 that your client's motion for contempt is an effort to

14 erect a false equivalency.

15 There is substance to the motion that the other

16 side has raised for contempt against the defendant if

17 it turns out to be true that he has actually continued

18 to make false claims against the company after

19 submitting to and agreeing to and having the court sign

20 and serve an injunction against doing that. And if

21 that's happened, then that's a fairly serious matter.

22 But if it -- and it seems to me like the

23 gentleman's effort to make a claim that the other side

24 has done something equally serious in violation of the

25 rules is, for the most part, manufactured.


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1 So I'm going to deny the Defendant's Motion for an

2 Order to Show Cause because it doesn't come anywhere

3 close to the standard that we need.

4 With regard to the Plaintiff's Motion for Order to

5 Show Cause, I think the only thing that I can do

6 prospectively is to order that the -- that the

7 defendant will be fined $2,500 every time he does it

8 going forward in the future automatically.

9 And that's as a fine and not as a recoupment of

10 damages. Although it would probably be a set-off

11 against damages if they were -- if damages are ever

12 ordered.

13 And then if you can prove it happens going

14 forward, then the court can use that measure -- that's

15 how we do a coercive measure going forward when we

16 don't have, as a practical matter, the ability to use

17 the threat of incarceration.

18 MR. HUFFMAN: Just so we're clear, that would be

19 -- since I'm the one who will be drafting this order,

20 that would be the Court's order, then, perspectively

21 going forward?

22 THE COURT: It's to amend the injunction going

23 forward -- as a matter of enforcement, to amend the

24 injunction to, perspectively, going forward, provide

25 that the gentleman will be -- you know, this is how we


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1 coerce people going forward in civil contempt -- right?

2 -- is we give them a consequence that they don't want

3 if they continue to do it.

4 If he does that, it turns out that he had some

5 sort of a right to do it, maybe a protected privilege

6 or something like that, then we deal with that after

7 we can see what it is.

8 MR. HUFFMAN: So we're not going to have an actual

9 order to show case hearing.

10 THE COURT: Well I think that the order to show

11 cause hearing has presented enough evidence to justify

12 as an alternative -- you're basically -- the order to

13 show cause hearing and the last one, if you put them

14 together, you have sought to enforce the injunction,

15 and you're asking the Court to enforece the injunction

16 with the criminal or -- or civil contempt power.

17 And the Court, in order to do that, is going to

18 amend the injunction or enter an additional -- I guess

19 a separate order enforcing the injunction by specifying

20 that you've shown that the gentleman has -- by showing

21 that the gentleman has continued to do in the past what

22 the injunction prohibits, that going forward he has to

23 be -- in order to coerce him to not do that, he'll face

24 a fine of $2500 every time he does it.

25 But, of course, it's still going to be up to you


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1 to prove that he's actually done it order to have that

2 fine actually attached.


4 THE COURT: It doesn't fall from the sky.


6 THE COURT: You have to bring in the evidence of

7 the post. You have to bring in the evidence that it

8 was false. You don't have to bring in evidence that it

9 damages you.


11 THE COURT: But you'd have to do all those thing

12 to do that.

13 And if that doesn't serve to deter him, then we'll

14 have the kind of hearing that we have to have and we'll

15 deal with it that way.

16 MR. HUFFMAN: Very well.

17 THE COURT: So that's all the remedy that you can

18 get that's prospective, that's within the scope of

19 civil contempt, that you can support based on the

20 various different kinds of things -- requests that

21 you've made so far.

22 MR. HUFFMAN: Very well.

23 THE COURT: Anything you want to say at this

24 point, sir?

25 With regard to the possibility that any kind of


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1 criminal contempt would be issued from the state's

2 proceeding, you're correct, and that part would not be

3 done.

4 So is there anything else that you want to add at

5 this point?

6 MR. KIDD: Just that, you know, the plaintiff's

7 side has an SEC specialized attorney who should have

8 known that the documents were at least suppose to be

9 in possession of Clear Channel and --

10 MR. HUFFMAN: ClearTrust.

11 MR. KIDD: ClearTrust, yeah. I'm a radio fan.

12 Yeah, you got it.

13 -- ClearTrust, and that, you know, moving forward,

14 I will certainly advise my client of the decision today

15 and that he's refrain from, you know, any posts he

16 might make.

17 THE COURT: He'll get something in --

18 MR. KIDD: In writing?

19 THE COURT: In writing, right.

20 MR. KIDD: Sure.

21 THE COURT: One thing I -- I mean, it's kind of an

22 elephant in the room. I asked you about it originally.

23 It's not purely an academic question. Because if

24 you're asking -- I want to be clear, if you're asking

25 me to enforce the injunction, there's a question about


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1 enforcing that injunction. If it were to be applied to

2 truthful postings, you know, there would be an issue

3 about that, that I don't want to have to deal with.


5 THE COURT: What I'm doing today only applies to

6 any postings that contain false factual content.

7 MR. HUFFMAN: And it would be our burden, then, at

8 a hearing that we would have to prove that under the

9 standard. Right?

10 THE COURT: If factual assertions are made and you

11 bring up a hearing and you bring any evidence at all

12 and it's false, then it would up to them, if they

13 wanted to assert that it was true, to -- you know, it

14 would shift to them once you had evidence of the

15 falsity.

16 MR. HUFFMAN: I hate to get academic again, but

17 isn't that kind of giving the defendant in this case

18 the argument or the ability, in his mind, that he

19 thinks that he can post no matter how egregious it is.

20 Because in his mind, if he feels he's right, even

21 if he has no basis of fact and he's doing so however

22 recklessly in disregard to not knowing the facts, are

23 we kind of opening that up for him?

24 THE COURT: Yes, indeed, and that's deliberate.



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1 THE COURT: Unfortunately, it has be done that way

2 because there's a First Amendment issue that overhangs

3 all of this stuff that we have to respect.

4 The First Amendment doesn't protect making

5 factually false speech. And there's an injunction

6 against the gentleman posting, and it certainly extends

7 to factually false speech without question.

8 If you wanted to try a different approach to

9 remedies, it would be -- you know, I would consider

10 whatever they were. But I'm not in a position today to

11 tell him that he can't post -- period.

12 MR. HUFFMAN: Well, Judge, that's actually what

13 the stipulation he agreed to and that's what the order

14 enforced.

15 THE COURT: I understand. But I don't understand

16 why you would want to argue with me because this point

17 is obvious.

18 You buy yourself a big, long, expensive

19 appellate process if you try to enforce the injunction,

20 that he agreed to even, against any posting at all even

21 if it's true.

22 And right now I'm happy. And I would like to be

23 able to do more, because it does appear under the

24 circumstances that the gentleman isn't going to obey

25 the court order and we take that seriously.


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2 THE COURT: But, you know, what I'm saying, the

3 $2500 per incident thing that I'm talking about is

4 designed to be a deterrent. It's designed to be a

5 deterrent against the stuff that he's not allowed to do

6 under the injunction. I'm certain he's not allowed to

7 do under the injunction.


9 THE COURT: And I hope that we'll see that it

10 amounts to some kind of a deterrent because the -- you

11 know, he'll have to be able to support the truthfulness

12 of what he's doing to some degree if your client comes

13 in and testifies, no, that's not true.

14 I mean, it's hard to prove a negative. It's much

15 easier to prove a positive. So, typically, the people

16 who want to prove the truth of something are the ones

17 who have the burden of proving that.

18 So we'll see what happens. Hopefully what will

19 happen is the gentleman will understand that the legal

20 process means something and will confine himself to

21 doing things that are legally permissible.

22 MR. HUFFMAN: Only two clean-up items then,

23 Your Honor. I would be bereft if I did not raise the

24 issue that given the Court's ruling, that there be some

25 remedy as to the attorney's fees and costs.


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1 THE COURT: For which of the proceedings we were

2 here for today?

3 MR. HUFFMAN: Actually the Order to -- for the

4 Motion for the Order to Show Cause on the Injunction

5 against Mr. Volentine.

6 THE COURT: Okay. And what would that be?

7 MR. HUFFMAN: I'm not going to be excessive, but

8 there certainly has been time. Because it was filed

9 before Judge Foster, it was continued to --

10 THE COURT: I understand.

11 MR. HUFFMAN: -- December 1st to --

12 THE COURT: Let me hear from the other side about

13 that.

14 MR. KIDD: Your Honor, you know, I brought up

15 procedural defects at the beginning. This motion was16 not perfect. We had standing to defend it so I don't

17 believe that attorney's fees are appropriate in this

18 situation.

19 THE COURT: I'm certainly not going to find that

20 your handling of the defense was improper in any way.

21 But the underlying question is whether or not it

22 should of had to be brought in the first place. And I

23 think that's what he's -- his basis for his motion is.

24 I know you were disadvantaged because it's a long

25 file and you may not have had time to look at it. I


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1 certainly haven't. But I don't know if there's

2 anything you want to say about that.

3 MR. KIDD: As far as the size of the file or ...

4 THE COURT: No, no. As far as the underlying --

5 whether it should have been necessary to bring these

6 proceedings in the first place.

7 Maintaining a proceedings in bad faith is one

8 thing. Certainly nobody is accusing you of that.

9 MR. KIDD: Sure. Okay.

10 THE COURT: But taking the position or requiring

11 the commencement of additional unnecessary proceedings

12 is an entirely separate ground for holding somebody

13 responsible.

14 MR. KIDD: Understood. I think that, you know, my

15 client had enough ground to at least oppose this

16 motion. You know, we haven't verified whether any of

17 the statements made under the basis of this motion are

18 true or not. The statements aren't even verified to

19 begin with.

20 THE COURT: Is there anything that you would want

21 to do to answer that concern that the gentleman's

22 raised?

23 MR. HUFFMAN: Well other than -- there is no

24 transcript other than him admitting it before two other

25 Circuit Court Judges of this Court, and --


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1 THE COURT: Do you have, like, a witness who can

2 offer evidence on it or something?

3 MR. HUFFMAN: Mr. Kennedy.

4 THE COURT: Raise your right hand, sir.

5 MR. KENNEDY: (Complying).

6 THE COURT: Your swear that the evidence you give

7 will be the truth and nothing but the truth?

8 THE WITNESS: Yes, sir.

9 THE COURT: All right. Go ahead.

10 MR. HUFFMAN: Judge, you have an Exhibit A.

11 THE COURT: I don't know what I have.

12 MR. KIDD: I have a copy here if you need one.

13 THE COURT: I gave you back everything I got.

14 MR. HUFFMAN: Okay. I'll take this one,

15 Your Honor.16 KYLE KENNEDY, PLAINTIFF'S WITNESS

17 EXAMINATION

18 BY MR. HUFFMAN

19 Q. Okay. Mr. Kennedy, what is your position?

20 A. I'm a CEO of Seafarer Exploration, Corp.

21 Q. All right. You're familiar --

22 THE COURT Wait. Hang on a second.

23 Say your full name, please.

24 THE WITNESS Kyle Gregory Kennedy.

25 THE COURT Go ahead, sir.


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1 BY MR. HUFFMAN:

2 Q. And you are Chief Executive Officer of

3 Seafarer Exploration, Corporation. Correct?

4 A. Yes, sir.

5 Q. Are you familiar with the Injunction that was

6 ordered against Mr. Darrell Volentine on October 7, 2014?

7 A. I think so. When we say "injunction," can you

8 clarify that? Because you filed a lot of paperwork.

9 Q. No. This was actually from Judge Cook.

10 A. Oh, okay. Oh, when she asked him to stop posting

11 in any form, in any manner, in any way whatsoever --

12 THE JUDGE: It sounds like he knows what document

13 you're talking about.

14 MR. HUFFMAN: He does.

15 THE COURT: What's the next question?16 MR. HUFFMAN: Thank you.

17 BY MR. HUFFMAN:

18 Q. Are you familiar with the postings that are

19 contained in what's been filed in Exhibit A to the

20 Motion for the Order to Show Cause?

21 A. Yes.

22 Q. Do you recognize these names including the names

23 on these postings?

24 A. I do recognize the names. The names are

25 Darrell Volentine.


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1 Q. Okay. In particular, let's look at page 4. Who

2 is Buccaneer 961 to your knowledge? That's a user name.

3 A. Buccaneer 1961 is Darrell Volentine, who admitted

4 that that's him and he's posting this. He admitted clearly

5 to Judge Cook, and I believe he also admitted it again to

6 Judge Foster.

7 Q. Okay.

8 THE COURT: Before or after those posts, that you

9 have in your hand now, were posted?

10 THE WITNESS: I'm sorry, sir. Ask me one more

11 time.

12 THE COURT: Before or after -- you talked about

13 the fellow admitting that that was his user name.

14 THE WITNESS: Yes.

15 THE COURT: Was that before these posts that16 you're -- that you have in front of you?

17 THE WITNESS: No, sir, after. He had already

18 posted --

19 THE COURT: Those were already posted by then.

20 THE WITNESS: Yes.

21 BY MR. HUFFMAN:

22 Q. Please look at the date.

23 A. 7.23.15.

24 Q. Right.

25 A. Oh, these were posted after --


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1 THE COURT: Ah, that's what I was asking. Next

2 question.

3 THE WITNESS: Thank you.

4 BY MR. HUFFMAN:

5 Q. Okay. So who is Buccaneer 1961?

6 A. Darrell Volentine.

7 Q. All right. And are those postings then -- do

8 those postings reveal any information that is prejudicial to

9 the company and untrue -- that you see?

10 A. Yes.

11 Q. Can you give me an example.

12 A. Sure.

13 Q. And, if you could, read us the date.

14 A. This is an example. Here's one on 7.19. it's the

15 one in front of me.

16 Q. 7.19 of what year?

17 A. 7.19.2015. It says, "I held the stock and other

18 "scammy, trashy, so called cover stocks before and

19 "they all lost value. Because unknown to shareholders,

20 "they were meant to be scammy from the beginning.

21 "E-A-H" and then "O-R-V." I don't know what that

22 means. "More ammo for their evil master." That was in

23 reflection to me. "But remember, some ducks were

24 "never meant to fly. But this one is real. Glad to

25 "be part of it."


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1 THE COURT: What in there, in your estimation, has

2 referred it to your company? None of the part you read

3 did.

4 THE WITNESS: This all these posts are posted

5 under Seafarer Explorations post.

6 THE COURT: I see, they're -- they're in the

7 group.

8 THE WITNESS: And they're all -- all pertain to

9 that particular company in columns or files.

10 THE COURT: I see. Go ahead. What's next?

11 Anything else?

12 THE WITNESS: Yeah, there's a ton of these.

13 THE COURT: No. I mean, I'm asking your attorney

14 to ask you the next question.

15 BY MR. HUFFMAN:

16 Q. If you could refer to this posting and what the

17 date on that is.

18 A. The date on this one is July 24, 2015.

19 Q. And the poster is who?

20 A. Buccaneer 1961.

21 Q. Okay. So that was after the injunction. Correct?

22 A. Yes.

23 Q. Okay. Can you go to that post?

24 A. Sure.

25 Q. Can you read it?


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1 A. Yes, sir. It says, "So ones can't pump and dump

2 "this stock, saying this or that, as is custom on junk

3 "stocks. This one will give an awesome date when the

4 "time comes. They must first prep everything. A good

5 "time frame, et cetera, can be found on their Facebook

6 "page as questions were asked. Also, it's for security

7 "purposes not to say exactly where they are. We are

8 "on top of treasure. We are on this wreck. We this,

9 "we that. There she blows. ATM." I don't know what

10 that means.

11 "All that stupid hoopla surrounding idiots,

12 "etc cetera, and security purposes. Real

13 "companies work this way. A mighty fine CEO isn't a

14 "koward" spelled with a "K" -- "but a very smart

15 "person. Watch and see."

16 Q. Mr. Kennedy, on the coward that is spelled with a

17 "K", have you seen other references to the "K" and who that

18 is meant to be?

19 A. Yes.

20 Q. Who is that meant to be?

21 A. It's meant to reflect me because of my initial KK.

22 Q. And in other places you see the initials KK.

23 A. Yes.

24 THE COURT. Cross-examination.

25 CROSS-EXAMINATION


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1 BY MR. KIDD:

2 Q. What in that do you find to be damaging to your

3 company or untrue?

4 A. The theme or spirit is what I look at because it's

5 consistent. And he posts 20 to 30 times a day sometimes.

6 And so they're constantly reading his line of what he

7 thinks. Okay?

8 And so as a whole, when you read that this is a

9 pump and dump or that he's talking about being a coward or

10 when he's talking about how they sell the stock that's not

11 the way we sell the stock or how it works and it's

12 continual, it creates a perception in our mind even when he

13 just asks questions is this a pump and dump. Okay?

14 If you ask that question, is this a pump and dump

15 60 to 70 times or more and that's all this audience reads

16 all day long day in and day out, month in and month out,

17 they develop a perception that maybe that's the truth.

18 Because I don't counter any of these. The fact

19 is, I don't even go on-line to read any of these. I don't

20 have to because my shareholders print them off and mail me

21 these things which I don't want to see. Okay?

22 I want to run a company. I want to do something

23 good, and this slows me down and costs money, and I don't

24 want that. Okay?

25 THE COURT: Hang on. Is there another question?


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1 MR. KIDD: No, Your Honor.

2 THE COURT: All right. So I guess we're done with

3 the taking of evidence or is there more?

4 MR. HUFFMAN: Nothing else, Your Honor.

5 THE COURT: All right. Anything else you want to

6 say about any of this stuff? Because it's now six

7 minutes to 12 and --

8 MR. KIDD: Almost lunchtime.

9 THE COURT: That's what I was thinking.

10 MR. KIDD: You know, I would say that the majority

11 of what I heard was mere puffery and not anything that

12 could be found to be factually untrue. So I disagree

13 with the plaintiff's assertion that he's been making

14 untrue statements.

15 THE COURT: Well I understand what you're saying.

16 There's -- a lot of it sounds like ravings, and it

17 would not be expected to be a lot of effect,

18 realistically, on what intelligent people do with their

19 money.

20 But the law still protects you from having people

21 use terms like "pump and dump," which is a well-known

22 term in the securities industries for people who make

23 false claims about the future prospects of their

24 company all while they're actually selling their own

25 personal shares.


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1 And this fellow -- you didn't ask him before while

2 he was sworn in, but have you ever sold any shares of

3 the company yourself?

4 THE WITNESS: No, sir.

5 THE COURT: Any of your family members sold shares

6 of the company?

7 THE WITNESS: No, sir, unless one of my brothers.

8 I've got three brothers, my parents, and my daughters.

9 And the only one that may have sold some stock for tax

10 reasons was my youngest brother.

11 THE COURT: How many shares might he have sold?

12 THE WITNESS: An insignificant amount, Your Honor.

13 THE COURT: Less than a thousand?

14 THE WITNESS: Oh, he might have sold --

15 MR. HUFFMAN: You've got to understand --

16 THE COURT: I realize it's a penny stock. Just

17 answer the question.

18 MR. HUFFMAN: Below a penny.

19 THE COURT: Yeah, I realize that.

20 THE WITNESS: He might have sold a million shares,

21 but --

22 THE COURT: That would be $10,000 -- less than

23 $10,000.

24 THE WITNESS: Yes. But he owns maybe between

25 20 and 30 million shares, maybe more. I don't even


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1 know how many he owns.

2 THE COURT: All right.

3 THE WITNESS: But he doesn't sell. My whole

4 family doesn't sell.

5 THE COURT: Nevertheless, you made the point, and

6 unless there's something else that we need to talk

7 about today --

8 MR. HUFFMAN: So we're not going to talk about the

9 attorney's fees?

10 THE COURT: We haven't finished.


12 THE COURT: We haven't got an answer about that.

13 But I don't give an answer until everybody tells me

14 they're done. I'm asking you if you're done?

15 MR. HUFFMAN: Nothing else as to this, just

16 dealing with the trial date.

17 THE COURT: What about you, sir; anything else

18 that you want to say today?

19 MR. KIDD: Nothing further, Your Honor.

20 THE COURT: Any evidence that you want to put on,

21 anything like that?

22 MR. KIDD: No, sir.

23 THE COURT: You know, I've got to wonder what goes

24 through the mind of the defendant when he agrees to an

25 injunction that says he won't do stuff and then turns


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1 around and is going to do it anyway.

2 I mean, it's not the kind of thing a rational

3 person does because it exposes you to a lot of legal

4 liability that even if the things that he said were

5 opinion -- I mean, he's allowed to say I hate

6 Mr. Kennedy, I hate his company, they're big boo-boo,

7 heads all he wants. Right? And he can say it 50 times

8 a day if he wants.

9 What he can't do is make factual claims that are

10 false, and also you can't use words that imply things

11 that are false.

12 Defamation by implication was recognized by the

13 Florida Supreme Court in the case that we call Rapp,

14 R-A-P-P.

15 And as a result, the things that the gentleman

16 read to me while he was under oath are the kinds of

17 things that you're just not allowed to do.

18 So those findings are good enough to support the

19 idea that was necessary to bring a proceeding to

20 enforce the injunction and falls within the exception

21 of the Attorney Fee Shifting Rule.

22 Because if you have an injunction and people have

23 to enforce it because you break it or because there's

24 -- at least at this point there's prima facie evidence

25 that you broke it, then that's something where you end


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1 up having to pay the attorney's fees for the other

2 party.

3 So the court has two rulings that it makes today.

4 One of them, as I mentioned before, is that in order to

5 enforce the injunction, we need to prospectively

6 coerce the gentleman to not to do these posts that

7 contain either factually false or false factual

8 implications. To do that, the Court would assess a

9 $2500 fine against each one to occur in the future.

10 That's my way of trying to prevent it going

11 prospectively.

12 And with regard to what's already happened, a

13 reasonable attorney fee for having to bring this

14 proceeding could be -- will be assessed against the

15 defendant, the amount to either be agreed upon by the

16 parties or resolved at a separate evidentiary hearing.

17 MR. HUFFMAN: I would, if agreed to, for two hours

18 for $500 rather than --

19 THE COURT: Well we're not going to negotiate --

20 (Overtalk)

21 THE COURT: No, no. Stop, please. Please, stop.

22 We're not going to negotiate that here on the record.

23 You guys are going to talk about that. If you agree to

24 it, submit an order. If you don't agree -- he's

25 doesn't have any authority to agree.


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2 THE COURT: Don't put him in that position.

3 If you agree to it, then submit an order. If you

4 don't agree, we'll have a hearing. It's just that

5 simple.

6 MR. HUFFMAN: What would the court like to do as

7 far as a trial date in this matter?

8 THE COURT: I would like Mr. Kidd here to be able

9 to tell us whether he's going to do the trial, then it

10 would make sense to talk to him about his calendar.

11 But he can't do that yet, and we want to wait until he

12 can.

13 How soon before you might be able to give us an

14 answer about that, sir?

15 MR. KIDD: I would say a day or two.

16 THE COURT: Well I'll give you 10 days or so and

17 ask you to contact my --

18 MR. KIDD: Yeah, 10 days. And I will try to make

19 an agreement with the client or else not make one, and

20 then I'll let you know that he will be pro se.

21 THE COURT: I understand what you're up against.

22 But one way or the other, if you're going to be the

23 attorney, we want to extend to you the same courtesy we

24 extend to everybody else and make sure that we schedule

25 the trial date that's a day that fits with your


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1 schedule.

2 MR. KIDD: Thank you, Your Honor.

3 THE COURT: And if you're not, then we want to try

4 to extent to your client, pro se -- or who will be

5 pro se, the same courtesy although it's not as easy

6 with people who aren't attorneys.

7 They're entitled to the same degree of

8 consideration, but sometimes we have to schedule things

9 at times that they consider to be inconvenient because

10 the number of things they consider to be inconvenient

11 can be so large.

12 MR. KIDD: Of course.

13 THE COURT: Attorneys usually realize that there

14 are certain things you have to move, if necessary, to

15 make a trial date happen.

16 MR. KIDD: Very quickly.

17 THE COURT: What do you want to say, sir? Go

18 ahead.

19 MR. KIDD: We have a request to grant an order for

20 the Motion of an Appointment of a Commissioner to Take

21 a Deposition in Connecticut.

22 THE COURT: All right. Is there any objection to

23 that?

24 MR. HUFFMAN: No objection.

25 THE COURT: Yeah. That will be granted.


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1 MR. KIDD: Okay. Shall we get you to sign it?

2 THE COURT: Well sure. We usually do these by

3 electronic form. But since you got one right here and

4 I have a pen ...

5 MR. KIDD: Can you take the copy?

6 MR. HUFFMAN: Actually, you can properly keep that

7 copy and let it be conformed.

8 THE COURT: I'm going to give this to my

9 assistant, and she will stamp conformed copies for

10 you folks.

11 MR. KIDD: Okay. So I can just hold on to this

12 copy then?

13 THE COURT: Well you're going to take it to her

14 right now.

15 MR. KIDD: Okay.

16 THE COURT: We have a new procedure, though. A

17 lot of the judges will just hand the lawyer back a

18 copy, and I don't do that anymore. The whole state's

19 going to have to stop doing that.

20 MR. KIDD: I have motion for the appointment of

21 Commissioner as well, but I was told to just leave that

22 in your box as well. Correct?

23 THE COURT: No. Have you electronically filed it

24 with the --

25 MR. KIDD: I gave it to the clerk this morning.


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1 She told me to put it in your mail box.

2 THE COURT: Really? You have to electronically

3 file it through the portal. And then, if it's

4 something that there's no objection to, you can contact

5 opposing counsel.

6 I realize -- you don't know about our local

7 computer system because you're from Pinellas.

8 MR.KIDD: I've been all around the state this

9 year. Hillsborough's been my most recent stop.

10 THE COURT: Well we have -- everybody's got a

11 different computer system. We have computer system

12 that you can upload the orders to.

13 MR. KIDD: Okay.

14 THE COURT: And if you upload the order and it

15 says, you know, we filed a motion and there's no

16 objection, please go ahead and sign the order. We just

17 sign it right away electronically, you know.

18 MR. KIDD: Okay.

19 THE COURT: We usually get them out every day.

20 It's the JAWS system. See, if people are pro se, they

21 don't have access to it. Right now it only gives

22 access to lawyers.

23 MR. KIDD: Okay. That's something I can handle.

24 THE COURT: All right. I'll get this order filed

25 and see you gentlemen -- I see you again again in this


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1 case or another one.

2 MR. KIDD: Thank you very much.

3 THE COURT: You're very welcome.

4 MR. HUFFMAN: Thank you, Your Honor.

5 THE COURT: You take care.

6 (Hearing adjourned at 12:20 a. m.)

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1 REPORTER'S CERTIFICATE WITH ACKNOWLEDGEMENT

2 STATE OF FLORIDA)

3 COUNTY OF HILLSBOROUGH)

4

5 I, ELIZABETH GOTCH, RPR, Certified Shorthand

6 Reporter, certify that I was authorized to and did

7 stenographically report the forgoing proceedings; and

8 that the transcript is a true record of the proce

Documents

4-7-16 SFRX vs Volentine Hearing