Bank of America NA v. Ztar Mobile Inc et al

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
BANK OF AMERICA, N.A., 	§
§
Plaintiff, 	§
§
V. 	§ 	No. 3:23-cv-826-BN
§
ZTAR MOBILE, INC. and KEVIN T. 	§
HADDAD, LLC, 	§
§
Defendants. 	§
MEMORANDUM OPINION AND ORDER
After 	granting 	Plaintiff 	Bank 	of 	America, 	N.A.’s 	motions 	for 	summary
judgment, see Dkt. Nos. 80 & 92, the Court entered judgment on November 6, 2025,
awarding $7,141,290.14 in damages against Defendants Ztar Mobile, Inc. and Kevin
T. Haddad, an amount that includes neither post-judgment interest under 28 U.S.C.
§ 1961 nor Plaintiff’s attorneys’ fees and costs, see Dkt. No. 93.
Defendants noticed an appeal on December 5, 2025. See Dkt. No. 96.
And, on January 21, 2026, Haddad moved for leave to proceed in forma
pauperis (“IFP”) on appeal. See Dkt. No. 102.
The Court denies Haddad’s IFP motion for the following reasons.
Legal Standards
“[A] party who did not proceed in forma pauperis in the district court, but who
wishes to so proceed on appeal, must file a motion with the district court” that
complies with Federal Rule of Appellate Procedure 24(a)(1). Owens v. Inc. Vill. of
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Garden City, 23-CV-07730 (JMA) (ST), 2025 WL 27466, at *1 (E.D.N.Y. Jan. 3, 2025);
compare id., with FED . R. CIV. P. 24(a)(3)(A) (“A party who was permitted to proceed
[IFP] in the district-court action, … may proceed on appeal in forma pauperis without
further authorization, unless … the district court – before or after the notice of appeal
is filed – certifies that the appeal is not taken in good faith or finds that the party is
not otherwise entitled to proceed in forma pauperis and states in writing its reasons
for the certification or finding.”).
And “[a] claimant may appeal in forma pauperis only if he meets three
requirements.” Evans v. Fisher, 669 F. App’x 259, 260 (5th Cir. 2016).
First, he must submit “an affidavit [stating that he] is unable to pay
such fees or give security therefor.” [28 U.S.C.] § 1915(a)(1); accord FED .
R. APP. P. 24(a)(1)(A). Second, the claimant must “state[ ] the issues that
the party intends to present on appeal.” FED . R. APP. P. 24(a)(1)(C);
accord § 1915(a)(1). Third, the litigant’s appeal must be “taken in good
faith.” § 1915(a)(3).
Id.
“A claimant appeals in ‘good faith’ when he seeks review of an issue ‘arguable
on [its] merits (and therefore not frivolous).’” Id. (quoting Robinson v. United States,
812 F.3d 476, 476 (5th Cir. 2016) (quoting Howard v. King, 707 F.2d 215, 220 (5th
Cir. 1983))); accord Cruz v. Hauck, 404 U.S. 59, 60 (1971) (Douglas, J., concurring)
(“‘Good faith’ has been defined as a requirement that an appeal present a nonfrivolous
question for review.”).
And, “[a]lthough a plaintiff seeking IFP status need not demonstrate probable
success on the merits, Jackson v. Dallas Police Department, 811 F.2d 260, 261 (5th
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Cir. 1986), his complaint will be deemed frivolous ‘if it lacks an arguable basis in law
or fact,’ Harper v. Showers, 174 F.3d 716, 718 (5th Cir. 1999).” Donaldson v. Ducote,
112 F. App’x 329, 331 (5th Cir. 2004) (per curiam).
“A complaint lacks an arguable basis in law if it is based on an indisputably
meritless legal theory, such as if the complaint alleges the violation of a legal interest
which clearly does not exist.” Id. (quoting Harper, 174 F.3d at 718 (quoting Davis v.
Scott, 157 F.3d 1003, 1005 (5th Cir. 1998))).
Analysis
Haddad’s affidavit provides that his “issues on appeal are” that “[t]he Court
erred in granting [the motions for summary judgment] because a genuine issue of
material fact existed as to whether the Loan Agreement and the Guaranty were
fraudulently induced and are unenforceable.” Dkt. No. 102-1 at 2.
That’s conclusory. But it’s not frivolous. That is, if fleshed out with facts,
Haddad’s conclusions could raise “an issue arguable on its merits.” Evans, 669 F.
App’x at 260 (cleaned up).
Where Haddad falters, however, is his financial affidavit.
The IFP statute, 28 U.S.C. § 1915, “was designed to ensure that litigants would
not be deprived of meaningful access to the federal judicial system due to their
financial circumstances.” Bucklew v. St. Clair, No. 3:18-cv-2117-N-BH, 2019 WL
2250886, at *2 (N.D. Tex. May 15, 2019) (citing Neitzke v. Williams, 490 U.S. 319, 324
(1989)), rec. accepted, 2019 WL 2249718 (N.D. Tex. May 24, 2019).
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“[A] district court’s determination of whether a party may proceed in forma
pauperis must be based solely upon economic criteria.” Gibbs v. Jackson, 92 F.4th
566, 569 (5th Cir. 2024) (citing Watson v. Ault, 525 F.2d 886, 891 (5th Cir. 1976); Bell
v. Children’s Prot. Servs., 506 F. App’x 327, 327-28 (5th Cir. 2013) (per curiam)).
And, so, to gain access to federal court, “[a] litigant seeking IFP status must
submit an affidavit identifying all assets he possesses, as well as a statement that he
is unable to pay the necessary fees of bringing a federal civil action.” Smith-Garcia v.
Harrison Cnty., 776 F. App’x 226, 227 (5th Cir. 2019) (per curiam) (citing 28 U.S.C. §
1915(a)(1)).
The Court must then examine the financial condition of the applicant to
determine whether the payment of fees would “cause undue financial hardship.”
Prows v. Kastner, 842 F.2d 138, 140 (5th Cir. 1988).
“This entails a review of other demands on individual [applicants’] financial
resources, including whether the expenses are discretionary or mandatory.” Id.
And, while “[t]he term ‘undue financial hardship’ is not defined and, therefore,
is a flexible concept[,] ... a pragmatic rule of thumb contemplates that undue financial
hardship results when prepayment of fees or costs would result in the applicant’s
inability to pay for the ‘necessities of life.’” Walker v. Univ. of Tex. Med. Branch, No.
1:08-CV-417, 2008 WL 4873733, at *1 (E.D. Tex. Oct. 30, 2008) (citing Adkins v. E.I.
DuPont de Nemours & Co., 335 U.S. 331, 339 (1948)); see also Williams v. Louisiana,
Civ. A. No. 14-00154-BAJ-EWD, 2017 WL 3124332, at *1 (M.D. La. Apr. 14, 2017)
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(noting 	that 	the 	applicable 	standard 	“requires 	a 	showing 	of 	more 	than 	an
inconvenience to the applicant” (citations omitted)).
The Court cannot find that requiring Haddad to pay to pursue this appeal
would result in his inability to pay for the “necessities of life” where Haddad’s
financial affidavit provides that he earns $50,000 per month (and reports monthly
expenses totaling less than that ($34,812)); lives in a nearly $3 million dollar home;
and drives a $100,000 Cadillac Escalade. See Dkt. No. 102-1.
Conclusion
The Court DENIES Defendant Kevin T. Haddad’s Motion for Leave to Proceed
In Forma Pauperis [Dkt. No. 102].
SO ORDERED.
DATE: January 22, 2026
_________________________________________
DAVID L. HORAN
UNITED STATES MAGISTRATE JUDGE
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