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

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-CV-1124-JLK-MEH LINDA FORGACS, et al., Plaintiffs, vs. EYE CARE CENTER OF NORTHERN COLORADO, P.C. et al., Defendants.

DEFENDANTS' REPLY SUPPORTING MOTION FOR SANCTIONS

Defendants, through counsel, under Rule 11, F.R.C.P., 28 U.S.C. § 1927 and C.R.S. § 1317-102, file their Reply Supporting Motion for Sanctions Introduction Plaintiffs' Response to Motion for Sanctions makes a number of specious assertions in an attempt to excuse the utter lack of legal and factual support for Plaintiffs' claims that means Plaintiff Linda Forgacs ("Forgacs") and Plaintiffs' attorney, George Price, should be sanctioned both for bringing and then for persisting with claims that were substantially frivolous, groundless and vexatious. The legal and procedural arguments in Plaintiffs' Response are simply wrong. Plaintiffs' Response also makes a number of new factual assertions for which Mr. Price fails to provide any supporting evidence, such as an affidavit or contemporaneous written record. Thus, even if they were true, these new "facts" would be mere arguments of counsel and would not provide grounds to disregard the evidence in the record that compel sanctions. Many of the

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alleged new facts Mr. Price argues are also plainly false, and his assertions of the falsehoods to this Court are yet another example of the type of conduct by Mr. Price that forced Defendants to seek sanctions and that mean the Court should grant the Motion for Sanctions. Forgacs' and Price's Arguments The following are Defendants' replies to the Responses' arguments, using the numbers and order in the Response. 1. Whether Defendants Complied with Rule 11. The first argument in Plaintiffs'

Response is that the Motion for Sanctions did not comply with Rule 11(c)(1)(A) because a copy of "what was actually filed with the Court" was not served on Mr. Price 21 days before Defendants filed the Motion with the Court. Response at 2. Copies of the draft motion and its exhibits that Mr. Price acknowledges the undersigned served on him in December 21, 2005 are Exhibit A to the Motion for Sanctions. Thus, the draft motion was served on Mr. Price nine months before the final Motion for Sanctions was filed. The draft motion clearly addresses 90% of the same problems with Plaintiffs' claims as the final Motion. The final Motion differs somewhat from the December 2005 draft primarily because of developments in the case between when the draft was prepared and the date the final version of the Motion was filed. The main developments were: (1) the entry of summary judgment in August 2006 on the defamation claim, (2) Plaintiffs' opposition to summary judgment on many groundless claims and belated concession of other hopeless claims in their March 3, 2006 response and April 24, 2006 supplemental response to the December 2005 summary judgment motions, (3) the -2-

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settlements in May 2006 with four of the Plaintiffs (the "Settling Plaintiffs"), and (4) Mr. Price's failure to finalize those settlements for over three months, despite direct orders from the Court and Magistrate Judge to do so. Parts of the final Motion had to be revised in light of those intervening new facts. For instance, the fact that two of the Plaintiffs claiming they were defamed agreed to settlements and that the Court entered summary judgment on the defamation claim as to Forgacs are facts the Motion needed to reflect since both the draft and final Motion seek sanctions on that claim. Thus, these Plaintiffs' opposition to summary judgment and the Court's ruling against Forgacs is something the Motion needed to address. Likewise, the fact that Mr. Price would seek three extensions of time and take over four months to respond to the summary judgment motions and that the Plaintiffs would take that long to concede they did not have any support for many of their claims are developments wholly within Plaintiffs' and Mr. Price's control that the draft motion could not anticipate. The draft motion also sought sanctions against the Settling Plaintiffs on claims other than the defamation claim which was no longer appropriate after the settlements with them. In summary, the final Motion for Sanctions reflects the intervening developments so that it accurately states the procedural posture of the claims as they existed when the Motion was filed. The draft motion and the final Motion state the same essential underlying factual and legal problems with the claims they address that led to dismissals and summary judgment on several claims and that ultimately caused the Plaintiffs to drop other claims almost three years after bringing this action. The many problems with these claims existed in June 2004, when the -3-

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Complaint was filed, were easy to confirm and would have caused a responsible attorney meeting his duties under Rule 11 and §13-17-102, C.R.S., never to have filed the claims. These problems still existed when Forgacs and the other Plaintiffs were deposed in October 2005, and were so obvious then that any responsible attorney would have withdrawn the claims immediately after hearing his clients' deposition testimony. Rather than taking responsible actions, Mr. Price filed the Complaint without doing any factual or legal review. Then, after he finally served the Defendants five months later, he filed a losing opposition to the January 18, 2005 motion to dismiss that addressed four of the original claims he filed. Next, he filed a losing opposition to the Defendants' June 6, 2005 summary judgment motion on the COBRA notice claim using completely contrived factual assertions in Forgacs' affidavit and his brief about the Plaintiffs' "real" termination dates. Thus, Mr. Price and Forgacs caused this case to drag out for one and one-half years until Plaintiffs' October 2005 depositions. Then, despite the certain knowledge from his clients' deposition testimony that they never had grounds to assert several of their remaining claims, Mr. Price did not withdraw the claims and repeatedly postponed responding to summary judgment. When he finally filed his March 3, 2006 response, it was so unintelligible the Court entered its April 11, 2006 Order requiring Mr. Price to clarify his response to identify clearly the claims each of the Plaintiffs was still pursuing "and the specific evidence on which that Plaintiff relies." As clarified by the second response, Mr. Price and Forgacs finally conceded they had to drop all but two of her claims and the other Plaintiffs had to drop a few of their claims; however, Mr. Price and Forgacs still opposed summary judgment on the rest of the claims. -4-

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None of the claims Defendants moved to dismiss or for which Defendants moved for summary judgment is still in this case. Therefore, while there are some differences between the draft and final Motion, Mr. Price was well aware of each of the intervening developments that lead to those differences. The purpose of the advance notice provision of Rule 11(c)(1)(A) is not to create a procedural defense for irresponsible lawyers or plaintiffs. The purpose is to give an attorney at least three weeks to consider on his own and with his clients the risks of proceeding with frivolous claims. Here, Defendants gave Mr. Price and Forgacs many months to comply with Rule 11, §13-17-102, C.R.S. and 28 U.S.C. § 1927. Thus, Mr. Price and Forgacs may not use a flawed reading of Rule 11 to avoid the consequences of their refusal to meet their obligations to the Court and Defendants under those laws and that rule. 2. Whether Defendants' Settlements with Four Plaintiffs Waived the Claim for

Fees and Costs against Plaintiffs' Attorney. Next, Plaintiffs' Response asserts that the settlements with four of the Plaintiffs waived Defendants' claim against Mr. Price. The Response does not argue that there has ever been any release or waiver of the fees and costs Defendants seek from Forgacs based on her wage claim and other frivolous claims (for which she is subject to the mandatory attorney fee provisions of the Colorado Wage Claim Act and of her March 2003 Settlement Agreement with Eye Care Center) or against Mr. Price based on his role in filing Forgacs' claims and then persisting with them. Mr. Price concedes that the draft settlement agreements he received for the settling Plaintiffs on May 25 and 30, 2006, promptly after the May 22 settlement conference, all -5-

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contained express reservations of Defendants' claims against him. Response at 3. The Response asserts that Mr. Price objected to those reservations. The Magistrate Judge is well aware of the weeks that passed after May 30 without any word from Mr. Price, and that he only responded after the Magistrate Judge and Defendants' counsel were forced by his silence to make repeated calls trying to get Mr. Price to respond to those drafts so his clients could be paid and their claims could be dismissed. See Sept. 29, 2006, Recommendation for Dismissal (discussing Mr. Price's recalcitrance). After weeks of inaction by Mr. Price, Defendants' counsel finally learned that he would not approve agreements that contained express reservations of rights; so Defendants' counsel revised the settlement agreements to omit the express reservations. The final settlement agreements Mr. Price finally approved do not contain an express reservation of rights. However, they also do not contain any release of Mr. Price, and the releases they do state are strictly limited to the parties themselves. Consistent with the limitation of the releases in the final settlement agreements, neither the Motion to Dismiss the settling Plaintiffs or the Order for dismissal states that the Defendants must bear their own fees and costs. The actual Order for Dismissal entered by the Court on October 24, 2006 recognizes the parties' dispute about Defendants' attorney fees and costs is to be resolved in accordance with the Order ruling on the Motion for Sanctions. Mr. Price also knows that the motion to dismiss and status report he drafted and waited until after 4:00 pm on August 1, 2006, the day the Court and Magistrate Judge had set as the deadline for those filings,1 had standard recitals about the

July 18, 2006 Order requiring the parties to file a status report by August 1, and Magistrate Judge's July 18, 2006 Minute Order requiring settlement documents to be filed by August 1. -6-

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parties releasing claims and bearing their own fees and costs; e.g.: "with each party to pay his own attorney fees and costs." The undersigned would not sign these inaccurate pleadings because Defendants have consistently refused to release Mr. Price. Therefore, status report counsel put together jointly after 4:00 p.m. and filed on August 1, 2006 stated, in part: "The parties, however, do not agree about whether their settlement included a release of Defendants' claims for attorney fees and costs against Plaintiffs' attorney under Rule 11, 28 U.S.C. § 1927 and C.R.S. § 13-17-102." Thus, Mr. Price had known for over five months before the May settlement conferences, since receiving the draft motion for sanctions the previous December, that Defendants intended to seek sanctions against him and Forgacs. Whatever he thought the settlements involved during the May settlement conferences, he knew there was no settlement of any claim against Forgacs or him in regard to Forgacs' frivolous claims. He also clearly knew within days after the conferences, when he received the draft settlement agreements, Defendants' position they had agreed only to release the Settling Plaintiffs, had not agreed to release him and still intended to seek sanctions against him based on his role in bringing and persisting with the many frivolous claims. Therefore, Defendants did not do anything before or after the settlement conferences that waived their claims against Mr. Price. To the contrary, Defendants consistently communicated their intent to seek sanctions regardless of their agreements to release their claims against four of Mr. Price's clients. Nothing in the settlement agreements or Order for Dismissal waives Defendants' claims against Mr. Price or Forgacs.

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3.

The New and False "Facts" in Mr. Price's Assertions about the

"Background." In the third part of his Response, Mr. Price defends his role in bringing and persisting with Forgacs' and the Settling Plaintiffs' many groundless claims with a number of new background "facts" that are completely unsupported. Defendants have no way to know what really happened regarding some of the background facts because Mr. Price's assertions about those alleged facts involve previously confidential attorney-client communications. For example, Mr. Price now claims that Plaintiff Rogge was "adamant" with him that she worked overtime for which she was not paid. However adamant Rogge may have been when Mr. Price drafted the Complaint and made four separate claims for Rogge based on unpaid overtime, the Admission Request responses he served for her in on November 29, 2005 admitted: a. Rogge did not turn in a single time card showing any overtime she worked

in August or July that Eye Care Center failed to pay her; b. Rogge did not work any overtime in July or August 2003 that Eye Care

Center failed to pay her; and c. Before Eye Care Center terminated her employment, Rogge did not

complain to Eye Care Center about any overtime she actually worked in July or August 2003 that Eye Care Center had not paid her. Admis. Resp. ¶¶ 10, 11, 12.2

For Admission Request 12, Plaintiffs' responses mistakenly use "July or August 2005," the actual Admission Request used "July or August 2003." -8-

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Consequently, some of the unsupported new facts Mr. Price alleges may have excused the initial filing of certain claims. The record demonstrates that, whether or not he did any genuine review of the facts before filing the Complaint, Mr. Price certainly had reason to know the serious flaws with many of the claims he asserted for Rogge and the other Plaintiffs well before Defendants were forced to file the motion to dismiss and the motions for summary judgment. Where Mr. Price's arguments about new background facts do not involve his communications with his clients and can be verified, they are largely false. Specifically, Mr. Price asserts: "Prior to filing suit, Plaintiffs counsel contacted Defendants and attempted to resolve the problems. Meetings were set with counsel with the assurance Mr. Holms would appear ...." Response at ¶3, p. 5. The truth is that Mr. Price filed this action on June 2, 2004 but he did not serve it on Defendants and he made absolutely no effort on his own before or after that date to initiate any contact with Defendants or the undersigned. Consequently, Defendants had no knowledge of this case until July 8, 2004 when a third party attorney saw the complaint in the Court Clerk's office and faxed a copy to Eye Care Center. Eye Care Center sent a copy of the fax to the undersigned; so I contacted Mr. Price on July 9, 2004 and we agreed to meet on Thursday, July 15, 2004. We postponed that meeting because Eye Care Center was still gathering records. Then, on July 28, 2004, I sent Mr. Price a detailed letter about problems Plaintiff Link was causing with nude "art work" posted on his "Zombie Ranger" website, some of which he had drawn on Eye Care Center patient records. I enclosed and discussed copies of payroll and time sheet records, 401(k) records, Flex-spend records and other records related to Plaintiffs' claims. My letter asked Mr. Price to provide -9-

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copies of the statements for his clients' 401(k) accounts and Flex spend accounts. Mr. Price failed to respond to that letter or to do anything else until the Court entered its Order of October 25, 2004 stating that this case would be dismissed unless Mr. Price served the Complaint. Thus, Mr. Price did not communicate or meet with me or Defendants "Prior to filing suit." Mr. Price also uses new and untrue "facts" to argue that Forgacs' claims for unpaid wages under the Colorado Wage Claim Act and for breach of contract were not frivolous because: "prior to the filing of the complaint, work was done to determine, to the extent possible, the validity of the claims." Response at 8, ¶ 5. Forgacs' deposition testimony and responses to admission requests directly contradict Mr. Price's completely unsupported assertion. In the Complaint, Forgacs and Mr. Price alleged that Eye Care Center: "failed to pay all bonuses due and owing" to her. Complaint ¶ 19. Then, in Plaintiffs' Rule 26 Disclosures, at §C.h., Forgacs and Mr. Price identified her unpaid wages damages as follows: "Bonus allocation issue: Forgacs is owed an unknown amount." On November 11, 2005, Forgacs and Mr. Price served her Admission Request responses. Forgacs' response to Admission Request 25 admits that she sued Eye Care Center for unpaid wages and breach of contract without doing any calculation to determine whether those claims were correct. Earlier, in her October 2005 deposition, Forgacs admitted Eye Care Center paid her $511.19 as the incentive bonus for February 2003 and sent her a letter with financial records supporting the bonus calculation on April 24, 2003. Forgacs cashed the bonus check. At her deposition, she was unable to identify any error that was made in calculating her bonus. She also admitted that she had received all the financial records Eye Care Center used to calculate her bonus and that she had never used those -10-

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records to determine what she should have been paid. In fact, Forgacs admitted that, so far as she knew, it was possible that Eye Care Center had paid her a bigger bonus than she had actually earned. Ex. C. Fogacs Dep. Trans. at 69:14-70: 5; 87:4-21. Consequently, to the extent the Court considers Mr. Price's arguments based on these new alleged background facts, the record demonstrates that they are untrue. Mr. Price's willingness to urge these new "facts" only lends support to the reasons why he should be sanctioned. 4. Forgacs' and Price's Sanctionable Conduct regarding the COBRA Notice

Claim. Next, the Response argues that Forgacs and Mr. Price should not be sanctioned for bringing and then persisting with the claim that she and three other Plaintiffs could seek over $65,000 each in ERISA penalties based on the assertion they did not receive a COBRA notice regarding their Flex-Spend accounts. Defendants sought and won summary judgment on this claim based on the Court's finding it was time-barred because it was filed in June 2004, more than one year and two months after Forgacs' termination in March 2003 and more than one year after the other Plaintiffs were discharged. Defendants seek sanctions against Forgacs and Mr. Price under Rule 11 and §13-17-102, C.R.S., for bringing this claim and under §13-17-102 and 28 U.S.C.§1927 for refusing to drop this claim, which was clearly time-barred by the applicable one-year statute of limitations. In addition, Forgacs and Mr. Price not only refused to drop the claim, but they opposed summary judgment with the completely fabricated and false assertion of "facts" about the subject -11-

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Plaintiffs' "real" termination dates. To support this argument for Forgacs, they filed Forgacs' affidavit in which she testifies she had not "really" been terminated in March but had remained "employed" until May 2003 because Eye Care Center paid her three months' severance. March 7, 2003 is the date on which Forgacs signed her Settlement Agreement with Eye Care Center. That Agreement recites in its first numbered paragraph: "My last day of employment with the Clinic will be March 7, 2003." After March 7, 2003, in May and July 2003, Forgacs consistently represented in filings she made under penalty of perjury with the Colorado Department of Labor seeking unemployment insurance compensation that March 7, 2003 was the last day she worked for Eye Care Center and that: "March 7th was the last day I actually worked there." Second Holms Affidavit, August 2, 2005 Reply in Support of Summary Judgment at ¶¶ 12 ­ 13 and Exhibits B-2 and B-3. Consistent with these facts, in the Complaint, Forgacs alleged accurately that March 7, 2003 was her last day of employment with Eye Care Center. The March 7, 2003 termination date was also part of the stipulated facts in Section 3 of the Stipulated Scheduling and Discovery Order. The completely unsupported assertions of "fact" Mr. Price made about the other Plaintiffs' "real" termination dates were equally false and were contradicted by the Complaint, the Stipulated Facts and by these Plaintiffs' own submissions made under penalty of perjury with the Colorado Department of Labor. Therefore, Mr. Price knew or should have known before bringing the claim that it was time barred. After receiving Defendants' June 6, 2005 motion for summary judgment, he also should have recognized the import of this Court's decision in Adams v. Cyprus Amax Mineral -12-

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Co., 44 F.Supp.2d 1126, 1140 (D.Colo. 1999); Damon v. Unisys Corp., 841 F.Supp. 1094, 10961097 (D.Colo. 1994). Mr. Price's and Forgacs' failure to yield to the inevitable and their deliberate expansion of this case by opposing summary judgment with Forgacs' patently false affidavit and Mr. Price's frivolous arguments about the other Plaintiffs' termination dates warrant sanctions. On November 8, 2005, the Court entered its Order granting summary judgment on findings that the assertion by Forgacs and the other Plaintiffs about their "real" termination dates were not credible and were contradicted by Plaintiffs' own writings and other contemporaneous records. The Court ruled that no reasonable juror could conclude that any Plaintiff was terminated later than the date he or she received a termination letter, stopped working for Eye Care Center and started receiving severance and unemployment insurance. The moving target Forgacs and Mr. Price created by the deceitful affidavit and argument about the "real" termination dates is exactly the type of action the court found deserving of sanctions in Shackelford v. Courtesy Ford, Inc., 96 F.Supp.2d 1140, 1146 (D.Colo. 2000) (awarding sanctions against attorney for former employee/plaintiff under Rule 11: "As a result of plaintiff's pleadings, defendant was obligated to defend against `moving target' claims, sort through obfuscated issues and research and respond to the different claims plaintiff asserted to try to avoid summary judgment."). 5. Forgacs' Frivolous Bonus Claim. The Response argues Forgacs and Mr. Price

should not be sanctioned in regard to the claims for unpaid wages and breach of contract that were based on allegations she was not paid her full February 2003 incentive bonus. -13-

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The undisputed evidence shows they brought and then persisted with these claims without doing any review of the facts to see whether or not Forgacs was owed any additional payment. Thus, as an appropriate sanction, Forgacs and Mr. Price should be found liable, jointly and severally, for Defendants' fees and costs incurred in defeating these two claims under Rule 11, §13-17-102, C.R.S., and 28 U.S.C. §1927. As considered in Section 2 above, in Forgacs' October 2005 deposition testimony and November 2005 responses to Admission Request 25, she admitted that she sued Eye Care Center for unpaid wages and breach of contract without doing any calculation to determine whether those claims were correct. In fact, Forgacs admitted that, so far as she knew, it was possible that Eye Care Center had paid her a bigger bonus than she had actually earned. Ex. C. Fogacs Dep. Trans. at 69:14-70: 5; 87:4-21. In addition to these admitted facts that Forgacs knew and Price should have learned from her before filing her claims, the Response overlooks the two additional reasons Forgacs must be found liable for Defendants' attorney fees and costs for asserting this claim on which judgment has entered against her. First, she did not prevail on her unpaid wages claim based on the Colorado Wage Claim Act. Therefore, under that Act's mandatory attorney fee provision, now §8-4-110(1), C.R.S., she must pay the attorney fees and costs Eye Care Center reasonably incurred to obtain its judgment. Second, both the unpaid wages claim and breach of contract

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claim are subject to the mandatory attorney fee provision of the March 7, 2003 Settlement Agreement between Forgacs and Eye Care Center.3 6. Plaintiffs' Groundless Defamation Claim. Mr. Price's sixth argument is that he

and Forgacs should not be sanctioned for bringing and persisting with the defamation claim for Forgacs and two of the Settling Plaintiffs. First, the Response completely ignores the fact that the defamation claim was always factually frivolous and legally groundless as made against Defendant Olijnyk. Forgacs, the former Practice Manager, well knew that Dr. Olijnyk had resigned as a shareholder of Eye Care Center and was only an employee long before Defendants Holms and Benedict allegedly defamed Forgacs. Thus, Forgacs and Mr. Price knew or should have known that the "silent" communication argument Mr. Price made in an attempt to impose shareholder liability for communications by corporate officers could never apply to Dr. Olijnyk. In urging the Court not to award sanctions related to the defamation claim, Mr. Price argues that his "silent" communication argument stated a cause of action. Immediately after Plaintiffs' depositions, Defendants' attorney sent Plaintiffs' attorney a copy of Wilson v. Meyer, 126 P.3d 276 (Colo.App. 2005), certiorari denied, 2006 WL 381641 (Jan. 17, 2006) and asked Mr. Price to counsel his clients about the reasons why that case meant they must dismiss the

The Settlement Agreement Forgacs agreed to with Eye Care Center in February 2003, Exhibit A-1 to Dec. 9, 2005 Brief in Support of Sum. Judg. as to Colorado Wage Claim Act, etc., states at p. 5, ¶ 6.d.: "In addition to any relief, order or award that enters, the prevailing party in any arbitration or litigation between us, as determined by the arbitrator or court, will be awarded reasonable attorneys' fees, expert witness fees and costs." -15-

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defamation claim against Meyers, Tilden and Olijnyk. See Exhibit A to Motion for Sanctions at p. 14. Despite receiving a copy of that case, and in spite of the two opportunities the Court gave Mr. Price to file summary judgment responses, he neither dropped the defamation claim as asserted against the "nodding" Defendants or provided any authority or argument to distinguish the two cases on which Defendants relied in seeking summary judgment against Plaintiffs. The Court's August 10, 2006 Order confirms that, as a matter of law, simply being silent does not create liability for defamation, based on Wilson and Wayment v. Clear Channel Broadcasting, 116 P.3d 271, 287 (Utah 2005). In addition to ruling the Defendants who only nodded could not be liable for defamation, the Court's Order found the affidavit of a co-worker Forgacs submitted was "utterly insufficient to establish a cause of action for defamation." The Court further granted summary judgment on this claim for Defendant Holms because his statements in a staff meeting were privileged. 7. The was Never a Claim based on the Late 401k Payments. The Response

argues the 401k payment claims for the Settling Plaintiffs were not frivolous because "the issue continued to exist" about whether they were properly compensated. First, as confirmed in the Reply in Support of Summary Judgment, this claim for all five Plaintiffs concerned less than $100, and the account statements Plaintiffs had received showed that the payments had been made, and additional penalties had been paid. Second, applicable law clearly provides that Plaintiffs' only remedy was the late deposits and statutory penalties that Eye Care Center had voluntarily paid in 2003 when it realized the payments had not been made into their accounts. 29 CFR § 2510.3-102; Livers v. Wu, 6 F.Supp.2d 921, 930 (N.D.Ill. 1998). -16-

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From the very start of this case, Defendants' attorney has asked Plaintiffs' attorney to provide any authority for seeking damages under ERISA, which Mr. Price never provided. See Exhibit A to Motion for Sanctions at (d), p. 4; pp. 7, 9-11. Thus, the only reason the issue "continued to exist" is because Mr. Price continually refused to provide any authority for his position Plaintiffs could seek damages and other penalties based on this claim and continued to ignore his obligations under Rule 1 and 28 U.S.C. § 1927. 8. Rogge's Groundless Wage and FLSA Claims. The only argument Mr. Price

makes in opposing sanctions for bringing and persisting with Plaintiff Rogge's four claims based on allegedly unpaid overtime is that Defendants' settlement with Rogge waived Defendants' statutory claim for attorney fees and costs. That argument would apply if Defendants were seeking fees and costs from Rogge, but they are not. Defendants seek sanctions against Mr. Price because each of the four claims he asserted for Rogge was frivolous and groundless, and he should have known that long before filing the Complaint or discovered it by doing even a cursory review of the facts and law after filing the Complaint. Specifically, Mr. Price filed a common law wrongful termination claim based on the claim Eye Care Center fired Rogge in retaliation for her alleged demand for unpaid overtime. On January 18, 2005, Defendants moved to dismiss the common law retaliation claim, and the response by Mr. Price to this part of the motion to dismiss conceded there had never been legal grounds for the common law claim. Defendants also moved to dismiss Rogge's claims for unpaid wages and her two claims under the FLSA for unpaid overtime and retaliation as asserted against the individual Defendants -17-

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because individual liability may not be imposed against corporate business owners and officers for unpaid wages under the Colorado Wage Claim Act or the FLSA. Mr. Price's response opposed dismissal on grounds Defendants' motion was "hypertechnical" and not supported by the facts or law. He cited incorrectly only one case in support of that argument. He also made an improper request to amend the complaint which the Court denied on February 8, 2005. On March 1, 2005, the Court entered its Order granting the Motion to Dismiss and dismissing all Plaintiffs' unpaid wages claim and Rogge's FLSA claim against the individual Defendants. The Court also dismissed Rogge's common law retaliation claim against all Defendants. The Court observed that Plaintiffs' response was "of troublingly inexacting standards," but denied the request for attorney fees in the motion to dismiss stating: "I DENY Defendants; request for fees, but will revisit the issues of fee shifting and sanctions should the circumstances warrant." So, Rogge's FLSA claims and Wage Act Claims remained in the case only as asserted against Eye Care Center. Rogge admitted in her October 2005 deposition and November 2005 discovery responses that Eye Care Center paid all of her accrued vacation and all of the overtime she worked and that she did not complain about not receiving overtime pay before her termination. Admis. Resp. ¶¶ 10, 11, 12; Rogge Dep. 60: 18 ­ 63:4; 81: 4 ­ 89: 14 and Depo. Exh.s 20, p. 2-4; 22; 27, Exhibits G and H to Brief in Support of Motion for Summary Judgment as to Colorado Wage Claim Act Claims, FLSA Claims and Breach of Contract Claims. Those admissions meant her FLSA retaliation claim was factually and legally groundless. 29 U.S.C. §215(a)(3); McKenzie v. Renberg's Inc., 94 F.3d 1478, 1487 (10th Cir. 1996). -18-

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Rogge's admissions that Eye Care Center paid her for all of the overtime she worked and all of her accrued vacation confirmed that there had also never been any factual grounds for the unpaid wages claim and unpaid overtime claims Mr. Price filed for Rogge. Despite the clear import of those admissions, Mr. Price took no action to have these three claims dropped and they remained in the case long after Rogge's October 2005 deposition, compelling Defendants' December 2005 summary judgment motion and continued legal work on these claims until the May 2006 settlement. Defendants' attorney repeatedly pointed out to Mr. Price the problems with Rogge's wage claims. See Exhibit A to Motion for Sanctions at (c), pp. 3-4, pp. 7-8, 12-14. Therefore, Mr. Price should be sanctioned under Rule 11, 28 U.S.C. §1927 and C.R.S. §13-17-102 for his role in bringing and persisting with Rogge's wage-related claims. 9. The Other Plaintiffs' Frivolous Wage Claims. Here, again, Mr. Price defends

his role in bringing and persisting with the claims for unpaid wages for Plaintiffs Link and Jones with the argument those claims were settled. He also argues that he should not be sanctioned with the new and unsupported factual assertion these Plaintiffs were "adamant" they were owed wages and makes a completely unsupported reference to some documentation he alleges was filed with the Department of Labor. First, the Response ignores the fact that the unpaid wages claims were made against all of the Defendants. On January 18, 2005, Defendants moved to dismiss the unpaid wages against the individual Defendants because individual liability may not be imposed against corporate business owners and officers for unpaid wages under the Colorado Wage Claim Act. Mr. Price's response conceded that the unpaid wages claim could only be asserted against Eye Care Center. -19-

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After dismissal of this claim against the individual Defendants, the unpaid wages claim for the other Plaintiffs remained in the case as asserted against only Eye Care Center. For the reasons considered above and in the Motion for Sanctions, all of the unpaid wages claims, with the sole exception of Moreno's claim for unpaid vacation, were demonstrably frivolous and groundless. Consequently, by bringing the claims for unpaid wages for Plaintiffs Link and Jones, Mr. Price violated Rule 11 and §13-17-102, C.R.S. Then by persisting with this claim for these Plaintiffs, he needlessly prolonged and expanded this case, meriting sanctions under 28 U.S.C. §1927 and §13-17-102, C.R.S. 10. Plaintiffs' Counsel should be Sanctioned based on his Failure to Finalize

Settlements. The Response ignores the final reason Mr. Price should be sanctioned ­ his expansion of this case through his inexcusable neglect after May 22, 2006 to finalize the settlements. The record and repeated orders from the Court and Magistrate Judge demonstrate the number of times after the May settlement conference Mr. Price was ordered to finalize the settlements and dismissals. He received multiple drafts of agreements and pleadings that would permit him to do just that. He did not contact Defendants' counsel until at 4:00 pm on the August 1, one hour before the deadline to file dismissals and a status report. His repeated and continuing refusal to finalize the settlements so four of his clients could be paid and dismissed from this case needlessly prolonged this litigation, forced everyone else to waste time, and compelled Defendants to incur still more legal expenses. Mr. Price's inexcusable recalcitrance was recognized by the Magistrate Judge's September 29 Recommendation for Dismissal.

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Authorities Governing Sanctions The Response does not challenge the authorities cited in the Motion for Sanctions that establish the standards under which parties and their attorneys may be sanctioned. As applied here, Forgacs and Mr. Price should be sanctioned under Rule 11 because they brought claims that were not "formed after an inquiry reasonable under the circumstances" and "warranted by existing law" or a rational argument to change the law." No reasonable and competent attorney would believe that there was merit in the claims Mr. Price filed for his clients or in the arguments by Mr. Price for which Defendants seek sanctions. Fransen v. Terps Ltd. Liability Co., 153 F.R.D. 655, 659 (D.Colo. 1994)(quoting Dodd Ins. Servs., Inc. v. Royal Ins. Co. of Am., 935 F.2d 1152, 1155 (10th Cir.1991). See also Morrow v. Countrywide Home Loans, Inc., 2006 WL 2666040, *1 (D.Colo. 2006)(Babcock, C.J.)(awarding sanctions under Rule 11 where: "the record demonstrated beyond dispute that his allegations had no merit; [and] no rational argument based on the evidence or law appears in favor of [plaintiff's] claims" (citing Harrison v. Luse, 760 F.Supp. 1394, 1400 (D.Colo.1991), aff'd, 951 F.2d 1259 (10th Cir.1991)). Mr. Price should also be sanctioned under 28 U.S.C. § 1927 because he unreasonably and vexatiously multiplied the proceedings this case. Braley v. Campbell, 832 F.2d 1504, 1511 (10th Cir. 1987); see also Dominion Video Satellite, Inc. v. Echostar Satellite L.L.C., 430 F.3d 1269, 1278 (10th Cir. 2005); Drake v. City and County of Denver, 953 F.Supp. 1150, 1157 (D.Colo. 1997). Finally, both Forgacs and Mr. Price should be sanctioned under Colorado's frivolous pleadings law, C.R.S. § 13-17-102, which prohibits filing or persisting with claims in any court -21-

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in this state, including federal courts, that are substantially groundless, frivolous or vexatious. Brammer-Hoelter v. Twin Peaks Charter Academy, 81 F.Supp.2d 1090, 1103 (D.Colo. 2000); O'Connor v. Check Rite, Ltd., 973 F.Supp. 1010, 1019 (D.Colo. 1997). Conclusion Plaintiff Forgacs and Plaintiffs' attorney, George Price, waited more than one year after the Plaintiffs' terminations to file a sloppy, "throw it against the wall and see if anything sticks," complaint. Three claims were so defective they could not survive a Rule 12(b)(6) motion. The complaint's truthful allegations about the Plaintiffs' actual discharge dates confirmed that the failure to give COBRA notice claim, by far the largest dollar claim, was time-barred for four of the five Plaintiffs. Thus, there was no legal basis for that claim for anyone except Plaintiff Rogge. Rather than concede their claim was time-barred, the other four Plaintiffs (including Forgacs), with Mr. Price's obvious encouragement, opposed dismissal with contrived and patently false assertions about their "real" termination dates. Thus, sanctions are warranted against Forgacs and Mr. Price for the three claims asserted in the Complaint that were not claims at all and for the fourth COBRA notice claim that stated a cognizable cause of action but that was clearly time-barred and that they opposed with manufactured and untrue "facts." There were similar obvious problems with the ERISA claim for damages, penalties and attorney fees based on the late deposits into their 401k accounts. Plaintiffs' 401k account reports showed the late deposits had been made in full and that they had also received the statutory penalties. The first time we communicated in July 2004, Defendants' counsel asked Mr. Price to provide any authority for the damages he was seeking based on this claim. Mr. Price did not -22-

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have authority then, and he never responded to repeated requests to drop the late deposit claim during the next two years while the case dragged on. Forgacs and Mr. Price waited until the response opposing the summary judgment finally to concede that Plaintiffs had been paid all they were owed and had never had any legal basis to seek damages or any penalty other than the penalties the Plan Administrators had paid in 2003. The defamation claim by Forgacs, Link and Jones against the three silent individual Defendants was contrary to law and completely lacking in any factual support, yet Forgacs and Mr. Price filed and persisted with that claim. After the Plaintiffs' depositions confirmed they had no support for this claim against these Defendants, Forgacs persisted with her claim. Instead of causing Forgacs, Link and Jones to drop the defamation claim against the silent Defendants, Mr. Price expanded the case by opposing summary judgment. Plaintiffs' wage claims were even more frivolous than their ERISA and defamation claims. Rogge's, Forgacs', Link's and Jones' deposition testimony and admission responses demonstrated beyond dispute that they had been fully paid for all the time they worked and, thus, never had factual support for the five wage-related claims Mr. Price filed for them. The deposition testimony cited in the Motion for Sanctions also confirms that none of these four Plaintiffs or Mr. Price had met their Rule 11 obligations to review the facts before bringing the claims for CWCA unpaid wages, FLSA unpaid overtime, FLSA retaliation, public policy wrongful discharge, or breach of contract. They then continue to ignore their obligation to review the facts during the two years that followed. Even a cursory review of the Plaintiffs' time sheets, pay records, a calendar and applicable law would have given a prudent attorney reason to -23-

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know he could not file these claims. No reasonable attorney would have persisted with the unpaid wages claims after hearing his clients in their October 2005 depositions review those records and admit they had all been fully paid. Forgacs and Mr. Price also knew she would be liable for Eye Care Center's attorney fees under her settlement agreement's attorney fee provision if she brought this action and lost her litigation based on claims she had released in February 2003. For all these reasons, Defendants respectfully request the Court to grant the Motion for Sanctions and to enter its Order entering sanctions against Plaintiff Forgacs and Mr. Price as requested in that Motion. Dated: November 22, 2006. Respectfully submitted, By:. .s/ John R. Paddock, Jr. . . . . . . . . . . . John R. Paddock, Jr. Attorney for Defendant Eye Care Center of Northern Colorado, P.C. and Joel Meyers, M.D. CERTIFICATE OF SERVICE I certify that on this 22nd th day of November, 2006, a copy of the foregoing Defendants' Reply Supporting Motion for Sanctions was served by ECF filing on the following: George Price, Esq. 1115 Grant Street, Suite 106 Denver, CO 80203 Fax: 303-484-2421 s/ Marisa Showalter __________________________________ paralegal to John R. Paddock, Jr. -24-