Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:01-cv-02315-LTB-CBS

Document 485

Filed 08/25/2005

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO
Civil Action No. Ol- CV- 2315- REB- CBS

HARVEY SENDER, TRUSTEE OF THE LIFEBLOOD BIOMEDICAL , INC. LIQUIDATION
TRUST , and

HARVEY SENDER, TRUSTEE OF THE LIFEBLOOD BIOMEDICAL , INC. OPT- IN- TRUST
Plaintiffs

WILLIAM JEFFREY MANN , an individual; FREEBORN & PETERS , an Illinois partnership; MICHAEL SABlAN , an individual; DARWIN 1. POYFAIR, an individual; JAMES R. LEONE , P. , a Florida professional association; JAMES R. LEONE , an individual
Defendants.

FREEBORN DEFENDANTS' REPLY IN SUPPORT OF MOTION TO STRIKE PLAINTIFF' S FIFTH SUPPLEMENTAL DISCLOSURES PURSUANT TO RULE 26(a)(I)

Defendants Darwin 1. Poyfair , Michael Sabian and Freeborn & Peters (the " Freeborn
Defendants ) respectfully submit this reply in support of their Motion to Strike Plaintiff s Fifth

Supplemental Disclosures Pursuant to Rule 26(a)(1) (" Motion to Strike

INTRODUCTION
Contrary to Plaintiff s assertion , the Freeborn Defendants ' Motion to Strike does not ask

this Court to treat Plaintiff s Fifth Supplemental Disclosures as a motion to amend the pretrial

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order.

The Freeborn Defendants request this Court to strike the disclosures altogether

untimely and in violation of the Final Pretrial Order entered in this case.

The Freeborn Defendants are both surprised and prejudiced by this disclosure. And even

though there is no trial date set for this case , the specific manner by which Plaintiff is trying to
add the claims and damages ofMr. Webster after the Final Pretrial Order has been entered leaves

open the possibility that Plaintiff will try to add additional beneficiaries to the Opt- In Trust until
this case is set for trial.

The Freeborn Defendants believe Plaintiff should not be permitted to

add more claims and more damages in this back- door manner.

LEGAL ARGUMENT
The Addition of Mr.

Webster Is A Surprise.

Plaintiff claims he gave the Freeborn Defendants notice ofMr. Webster s claims by way
of his June 2003 supplemental discovery responses. Admittedly, Mr. Webster s name appears in

a spreadsheet attached to those discovery responses. However, as acknowledged by Plaintiff in
his response , as of June 2003 ,

Plaintiff had not received an assignment of claims from Mr.
Plaintiffs Response , p. 2 , fn. 1. Thus , as of June 2003 , the

Webster to the Opt- In Trust.

See

Opt- In Trust did not have standing to assert any claims on behalf ofMr. Webster. By not having

that assignment as of the date the Final Pretrial Order was entered , Plaintiff could not have had
standing to assert any claims on behalf ofMr. Webster then , either.
In addition , on October 31 ,

2003 , Plaintiffs damages expert , Peter Schulman ,
not

in his

expert report outlining Plaintiffs damages , indicated that Mr. Webster was
Opt- In Trust.
See

a member of the

Exh. E to Report of Peter Schulman , attached hereto as Exhibit A, p. 3. This

is directly contrary to the case Plaintiff cites as support for an amendment to a final pretrial order

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to increase a plaintiffs claimed
Emerson Electric Co.

damages.

See

Plaintiffs Response ,
1 In

p. 4

citing

Bennett

186 F. Supp. 2d 1168 (D. Kan. 2002).

Bennett

the plaintiffs expert

had disclosed in his report the damages amount that plaintiff had inadvertently left out of the
final pretrial order. That is clearly not the case here. Nor has Plaintiff offered any supplement to
Mr. Schulman

s opinion prior to the execution of the Final Pretrial Order to indicate otherwise.

In sum , as of the date of the Final Pretrial Order , Plaintiff did not have standing to assert

Mr. Webster s claims or damages , nor did the Freeborn Defendants have notice of any intention
to do so.

The Freeborn Defendants Are Prejudiced And Are At Risk For Further Prejudice.
The prejudice here is the addition of another individual' s claims and damages to this case

after the close of discovery. Mr. Webster s principal investment was $60

000. According

Plaintiffs damages expert , adding interest to Mr. Webster s principal investment yields either
$147 501.37 (simple interest) or $456 779. 77 (compound interest).
See

Exhibit A. p. 3. This is

substantial addition to the scope of damages in this case.

Because both fact and expert discovery is closed , the Freeborn Defendants will have no
opportunity to conduct any discovery as to Mr. Webster , the basis for his claims or the inclusion
of his damages. See Summers v.

Mississippi Pacific RR System 132 F. 3d

597 ,

605 (10th Cir.

1 Plaintiff apparently neglected to indicate this opinion is unpublished and therefore not
binding precedent pursuant to 10th Cir. R. 36. 3.
A copy of

this opinion is attached to this reply

as required by that rule.

2 While Plaintiff did disclose a supplement to Mr. Schulman s report on May 5 , 2005 there was no mention in that supplement of any purported damages ofMr. Webster as an opttrust beneficiary.

),

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1997)(no opportunity to cure prejudice where no opportunity to take further discovery). Nor will
the Freeborn Defendants ' expert be able to assess the additional claims/damages asserted by Mr.

Webster in his report.

Moreover ,

Plaintiff

now indicates

that his expert is " reviewing the assignments to

determine whether he needs to supplement his report.

See

Plaintiff s Response , p. 2 , fn. 1. This
disclosures of assignments

suggests that Plaintiff intends to offer even more supplemental
received after the fact , each one compounding

the prejudice to the Freeborn Defendants.

Plaintiff should not be permitted to do so. Bad Faith On The Part of Plaintiff.

Whether this circumstance rises to the level of bad faith on the part of Plaintiff is for the

Court to decide. There can be no dispute that the definition of the Opt- In Trust beneficiaries has
been conflicting and fluid throughout the discovery phase of this case. Compare

June 3 ,

2003

Supplemental Discovery Responses attached as Exhibit 1 to Plaintiff s Response to Motion to
Strike (identifying 110 individuals

as member of Opt- In Trust)

to

February 24 ,

2004 proposed
(stating that
Trust)

Final Pretrial Order prepared by Plaintiff, excerpt attached as Exhibit B ,
(aJpproximately 99

at 5- 6

of (Lifeblood' sJ

creditors "

assigned their claims to the Opt- In

and

Plaintiffs Motion for Leave to Conduct Trial Testimony by Contemporaneous Transmission or
Alternatively, for Leave to Conduct Preservation
2004 , at 2 (referring to " all of the
at 5- 6
(now stating there are 116 (de bene esse)

Depositions ,
with

dated Apr. 14

Opt- In

Trust beneficiaries

the Final Pretrial Order

approximately 103

individuals who assigned their claims to the
ever-

Opt- In Trust). The number of trust members and the sum of their damages is apparently
changing.

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This Court has already reprimanded Plaintiff s counsel once for a " transparent' after the
fact' rationalization " for

failure to contact the Lifeblood investors until after the close of
653 (D. Colo. 2004).

discovery.

Sender

v.

Mann 225 F. RD. 645 ,

This " after the fact"

submission of Mr. Webster s assignment appears to be more of the same. This Court need not
endorse an amendment necessitated purely by the tactical choices of counsel. Fashauer v.

New

Jersey Transit Rail Operations, Inc. 57 F. 3d 1269 , 1287 (3d Cir. 1995).

Plaintiff tries to justify the inclusion

of the

Webster Assignment by pointing to his
list attached to the Final Pretrial

designation of " various assignments of claim " in his exhibit

Order. Plaintiffs Response

, p. 2. The Webster Assignment is clearly dated after the Final

Pretrial Order and thus , it was not included in Plaintiff s vague description in its exhibit list.

Perhaps more troubling, the Freeborn Defendants note that they objected to this vague
description in Plaintiff s Exhibit list in their Motion to Strike and Preclude Plaintiff s Witnesses
and Exhibits Not Previously or Properly Disclosed , filed April 5 , 2004 , at p. 8. In his Response
to that motion , p. 4 , Plaintiff identified Exhibit 333 as " part
of Plaintiffs expert disclosures ,

as

they were among the documents
experts.
See

relied upon by Peter Schulman ,

CPA, one of Plaintiff
not

Exhibit C attached. Given Mr. Schulman identified Mr. Webster as
see

a member

of the Opt- In Trust

Exhibit A attached , Mr.

Schulman did not

rely on this Webster
the scenario the

Assignment and therefore , it was not included in Exhibit 333. This is exactly
Freeborn Defendants feared upon receiving

the " various assignments of claim

exhibit

description when they lodged their objection to that exhibit - that Plaintiff would try to sneak in
additional assignments , and thereby additional claims and damages , after the close of discovery

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and completion of expert reports.

Whether this conduct amounts to bad faith on the part

Plaintiff, the Freeborn Defendants leave for this Court to decide.

CONCLUSION
This is not a routine supplement under Rule 26. It is

another example of Plaintiff s

cavalier attitude in this case regarding the rights of the individuals he purports to represent - and

his obligations to these defendants in trying to recover damages from them on behalf of others.

The Court should not permit Plaintiff to add these claims and damages , or any others , after the
Court has already entered the Final Pretrial Order for this case.
s/ Julie M. Walker
Michael L. O' Donnell Julie M. Walker Carolyn 1. Fairless 1801 California Street , Suite 3600 Denver , Colorado 80202 Tele: (303) 292- 2525 Fax: (303) 294- 1879 walker~wtklaw. com

ATTORNEYS FOR DEFENDANTS DARWIN J. POYFAIR, MICHAEL SABlAN AND FREEBORN & PETERS

Case 1:01-cv-02315-LTB-CBS

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CERTIFICATE OF SERVICE (CM/ECF)

certify that on August 25 , 2005 electronically filed the foregoing FREEBORN DEFENDANTS' REPLY IN SUPPORT OF MOTION TO STRIKE PLAINTIFF' S FIFTH SUPPLEMENTAL DISCLOSURES PURSUANT TO RULE
I hereby
26(a)(I)

,I

with the Clerk of the Court using the CM/ECF system which will send notification of

such filing to the following e-mail addresses:

Herbert Anthony Delap
cdelap~duffordbrown. com ccarlson~duffordbrown. com

Carolyn J. Fairless fairless~wtklaw. com hart~wtklaw. com Furgason
David W.

dfurgason~duffordbrown. com ccarlson~duffordbrown. com
James R. Leone j rleoneattorney~yahoo. com

Kristi J. Livedalen klivedalen~colorado- Iaw. net chuss~colorado- Iaw. net
Michael L. O' Donnell odonnell~wtklaw. com pointer~wtklaw. com John C. Smiley j smiley~lindquist. com stoms~lindquist. com

Julie M. Walker
walker~wtklaw. com mcguire~wtklaw. com
I further certify that on this 25 th day of August , 2005 , I have placed a true and correct copy of the
foregoing

26(a)(I)

FREEBORN DEFENDANTS' REPLY IN SUPPORT OF MOTION TO STRIKE PLAINTIFF' S FIFTH SUPPLEMENTAL DISCLOSURES PURSUANT TO RULE in the U. S. Mail , postage prepaid , to the following non CM/ECF participants:

Daniel N. Brodersen Miller , South & Michaussen , P. 2699 Lee Road
# 120

Winter Park , FL 32789
Ward Meythaler Merkle & Magri , P. 550 North Reo Street , #301 Tampa , FL 33609

Case 1:01-cv-02315-LTB-CBS

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William Wells , II 14 Flicker Drive Greenville , SC 29609- 6644

s/ Julie M. Walker by Deborah 1. McGuire
Michael L. O' Donnell Julie M. Walker Carolyn 1. Fairless 1801 California Street , Suite 3600 Denver , Colorado 80202 Tele: (303) 292- 2525 Fax: (303) 294- 1879 walker~wtklaw. com

ATTORNEYS FOR DEFENDANTS DARWIN J. POYFAIR, MICHAEL SABlAN AND FREEBORN & PETERS