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Stafford continues restraining order against Burnett, pending July 19 hearing

Thursday, June 23, 2005

Chancellor J. Steven Stafford Tuesday let stand a temporary restraining order against Dyersburg developer Frank Burnett, pending a July 19 hearing on whether the restraining order is proper.

Tuesday's hearing was on a motion to hold Burnett in contempt for failing to comply with the restraining order.

On June 6 Stafford issued a temporary injunction reaffirming a restraining order he had issued on June 1. The order for the temporary injunction states that neither Burnett nor his attorney appeared at the June 6 hearing.

The orders are in response to a lawsuit filed June 1 by Dyersburg restaurant owner Darrell Sells and two of his children against a group of partners asking for an accounting of their share of a $100 million loan collection partnership.

Darrell Sells, owner of McDonalds franchises in Dyersburg and elsewhere in West Tennessee and Missouri, his son, Darren Sells, his daughter, Dena Sells Quertermous, and the children's business, Interiors for Less Outlet, filed the civil complaint in Dyer County Chancery Court against Hewell Dennis Joslin, Burnett, Dennis Joslin Co., Walter Hastings and several other companies and partnerships owned or controlled by Joslin and/or Burnett.

The complaint also contends that Burnett and Joslin improperly diverted funds for their own use and should repay it to Sells.

It asks for the defendants to be ordered by the court to provide an accounting for a business arrangement financed by Darrell Sells to buy loans at auction from lending institutions and collects them.

The restraining order directs Burnett to deposit proceeds from his share of a California real estate sale into an interest-bearing account held by the court.

The contempt motion against Burnett was filed because he did not deposit more than $624,000 he received from the California sale.

Burnett's attorney, Edward K. White III of Franklin, said the California partnership's managing partner wired the money to him for Burnett.

In announcing he is scheduling the July hearing, Stafford said the temporary restraining order is in effect and he wants it complied with.

"That money is frozen," White said. "I'm an officer of the court and I work for you, your honor."

During the hour-long hearing White raised the issue of whether the defendants, specifically Burnett, had been properly served with notice of restraining order hearings as required by law and court rules.

"There was no notice of the prior hearings served on Mr. Burnett," White said. "Mr. Burnett was served with a notice of this hearing only 7:15 yesterday morning."

Sells' attorney, John G. Young Jr. of St. Louis, said he had had the papers served at Burnett's home and had written letters to all defendants notifying them of the restraining order and the hearing.

Young called as a witness Private Investigator James M. Sestina, who said he gave notice of the earlier hearings to Burnett's wife, Carolyn, on June 1.

"I asked her for Frank Burnett and she said he wasn't home and she didn't know when he would be," Sestina testified. "She said she would accept service of the papers and see that Mr. Burnett got them."

Frank Burnett did not attend the hearing on doctor's orders, White said.

"I have a letter from Mr. Burnett's psychiatrist saying he should not participate in stressful situations," White said.

Stafford said he will put down an order on the July 19 hearing in the next few days.

He said he considers the questions before him as threefold:

? whether the notification of the hearings was proper.

? if yes, whether Burnett is in contempt, and

? whether irreparable harm, as argued by Sells, can be claimed in strictly monetary issues or whether a monetary issue simply places the creditor in line with other unsecured creditors.

Stafford told the attorneys he considers the restraining order and contempt motions side issues.

"I hate these hearing notices and side motions, the judge said. "We're going to get this lawsuit back on track."



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