Free Appeal of Magistrate Judge Decision to District Court - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 03-cv-2669-MSK-PAC LEPRINO FOODS COMPANY, Plaintiff,
v.

BIG-D CONSTRUCTION CORP. - CALIFORNIA, a Utah corporation; BIG-D CONSTRUCTION CORP., a Utah corporation; BIG-D CORPORATION, a Utah corporation; BIG-D CAPITAL CORP., a Wyoming corporation; and Does 1-100, inclusive, Defendants/Counterclaimants, BIG-D CONSTRUCTION CORP. - CALIFORNIA, a Utah corporation; BIG-D CONSTRUCTION CORP., a Utah corporation; and Does 1-100, inclusive, Third Party Plaintiffs,
v.

MARELICH MECHANICAL CO., INC. dba UNIVERSITY MARELICH MECHANICAL, a California corporation, Third Party Defendant. MARELICH MECHANICAL CO., INC. dba UNIVERSITY MARELICH MECHANICAL, a California corporation, Third Party Plaintiff/Counterclaimant,
v.

BIG-D CONSTRUCTION CORP. - CALIFORNIA, a Utah corporation; FEDERAL INSURANCE COMPANY, an Indiana corporation; FRICK COMPANY, and Roes 20 through 80, inclusive, Counterdefendant/Third Party Defendants. PLAINTIFF' OBJECTION TO MAGISTRATE JUDGE' NOVEMBER 1, 2005 ORDER S S (Docket No. 152)

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Plaintiff Leprino Foods Company (" Leprino" or " Plaintiff" through its counsel, ), hereby objects, pursuant to Fed. R. Civ. P. 72(a) and 28 U.S.C. § 636, to Magistrate Judge Patricia A. Coan' written order, entered November 1, 2005. s I. INTRODUCTION On November 1, 2005, Magistrate Judge Patricia A. Coan held a hearing on, among other things, Plaintiff' Second Motion To Compel Discovery From Defendants s Big-D Construction Corp.-California And Big-D Construction Corp. ­ And ­ Certificate of Compliance with Fed. R. Civ. P. 37(a)(2)(A) and D.C.COLO.LCivR 7.1A (doc. 135) (" Second Motion to Compel" 1 ). That day, the Magistrate Judge entered her

November 1, 2005 " Courtroom Minutes / Minute Order" (doc. 152) (the " November 1, 2005 Minute Order" in which she ruled on, among other things, the nondispositive ), issues raised in Plaintiff' Second Motion to Compel. (A true and correct copy of the s November 1, 2005 Minute Order is attached hereto as Exhibit 1). As detailed herein, the Magistrate Judge erred by entering the November 1, 2005 Minute Order. Specifically, Plaintiff objects to the denial of its Second Motion to Compel and the denial of Plaintiff' request for an award of its attorneys'fees and costs incurred in connection s with its Second Motion to Compel. II. BACKGROUND This action arises from the delay in the completion of construction of Leprino' s cheese manufacturing and dairy storage facility in Lemoore, California (hereinafter

1

On November 8, 2005, a certified copy of the transcript of the November 1, 2005 hearing was filed with the Clerk of the Court and is available to all parties.

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referred to as the " Lemoore West Project" Leprino entered into a general contract with ). Big-D (" General Contract" by which Big-D was responsible for, among other things, the ), timely completion of construction of the Lemoore West Project and the timely delivery of the Lemoore West Project to Leprino. Leprino' claims include various breaches of s contract by Big-D resulting from its failure to timely complete construction of the Lemoore West Project. Big-D caused the delay by failing to properly manage the

building schedule, and failing to manage and insure that certain subcontractors provided the requisite labor for the job and efficiently performed the work. In a nutshell, Big-D failed to properly coordinate the construction work and otherwise perform its contractual obligations in a timely manner, thus breaching the General Contract' requirement to s deliver the Lemoore West Project by a date certain. Big-D' breach of the General s Contract caused Leprino to incur nearly $27 million in losses. In its initial Complaint and Jury Demand, Plaintiff asserted claims against Big-D California and Big-D Construction, which Leprino believed to be the parent company of Big-D California. Leprino maintains that the parent corporation is responsible for

damages in this case pursuant to the alter ego doctrine. On November 24, 2004, Leprino propounded Plaintiff' First Set of Interrogatories and Second Set of Requests s for Production of Documents and/or Tangible Things (" Second Set of Discovery" to ) Big-D, seeking discovery through interrogatories concerning the relationship between the various Big-D entities, including Big-D Construction and Big-D California. Big-D served Defendants'Responses to Plaintiff' First Set of Interrogatories and Second Set s of Requests for Production of Documents and/or Tangible Things (" Big-D' Responses" s )

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on or about January 3, 2005.

In response to Plaintiff' Interrogatory No. 2, which s

requested the identification of the majority stockholders of Big-D California, Big-D stated the following: Big-D Capital Corp., a Wyoming Corporation (formerly Big-D Corporation) acquired 100% of the stock of Big-D Construction Corp.-California when it was organized on November 19, 1998. On January 1, 2001, 100% of the outstanding stock of Big-D Construction Corp.-California was transferred to Big-D Corporation, a Utah Corporation (Formerly Big-D Management Corp.). s (See, Big-D' Responses, Interrogatory No. 2 (emphasis added)). Then, on May 26, 2005, Big-D filed " Defendants'Corporate Disclosure Statement," which identified Big-D Capital Corp. as the parent S-Corporation of Big-D California and Big-D Construction. Based in part on that conflicting information, on July 1, 2005, Leprino filed its " Motion of Plaintiff for Leave to File Supplemental and Amended Complaint and Jury Demand" and Leprino' " s Supplemental and Amended Complaint and Jury Demand," which sought, among other things, to add Big-D Corporation, a Utah Corporation and Big-D Capital Corp., a Wyoming corporation as defendants under the alter ego theory of liability. Despite objection by Big-D, the Court granted Leprino leave to file its Supplemental and Amended Complaint and Jury Demand on August 24, 2005, and accepted Plaintiff' Supplemental and Amended Complaint and Jury Demand as filed. s Also, on July 1, 2005, Big-D filed an amended corporate disclosure statement entitled " Defendants Big-D Construction Corp.-California' and Big-D Construction s Corp.' Corporate Disclosure Statement," which stated that Big-D California is a s privately held corporation that is wholly owned by its parent affiliate, Big-D

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Corporation, a Wyoming corporation, and that Big-D Construction is a privately held corporation that is wholly owned by its parent affiliate, Big-D Corporation, a Wyoming corporation. However, even with that amended corporate disclosure statement, Big-DCalifornia continued to give conflicting information and failed to accurately identify its parent entity, i.e., on January 3, 2005, it is Big-D Corporation, a Utah Corporation, on May 26, 2005, it is Big-D Capital Corp., and on July 1, 2005, it is Big-D Corporation, a Wyoming Corporation. Accordingly, since there is still confusion as to the identity of Big-D California' parent corporation, further amendment to Plaintiff' Supplemental and s s Amended Complaint and Jury Demand may become necessary when Big-D California accurately identifies its parent entity. Moreover, during the course of the Lemoore West Project, at least one Big-D related entity agreed to accept financial responsibility for another when Big-D Construction provided the security and acquired a lien release bond in favor of Big-D California. In that sense, the Big-D entities treated the related entity' assets as their s own. III. PLAINTIFF' SECOND MOTION TO COMPEL S Big-D' failure and refusal to produce documents in response to Leprino' s s Requests for Production of Documents No. 3, 4, 5, 9, 10, 11, and 17 contained in Plaintiff' Second Set of Discovery necessitated the filing of Leprino' Second Motion to s s Compel. The documents sought pursuant to those requests are critical to Leprino' s ability to prove its claims of alter ego liability against Big-D Construction, Big-D Capital

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Corp. and Big-D Corporation.2 The Court should also note that Big-D waived many of the objections it raised in its argument at the November 1, 2005 hearing and in its response to Plaintiff' Second Motion to Compel, by failing to timely raise those s objections in Big-D' Responses to Leprino' Second Set of Discovery. Below, for each s s request for production of documents raised in its Second Motion to Compel, Leprino sets forth the documents not produced by Big-D and the reasons why those documents are vital to its claims of alter ego liability and its piercing of Big-D California' corporate s veil. A. Request for Production of Documents No. 3 1. Documents NOT produced by Big-D California: (a) (b) 2. Any federal and state tax returns for 2000-2004. Any financial information whatsoever for 2004.

Relevance of requested documents: (a) Federal and state tax returns for 2000-2004. Those documents are

vital to the alter ego analysis in the following two ways: (i) Analysis of Capitalization, i.e., whether it is an adequately capitalized entity, what cash balances it has, and what equity cushion it has to compensate for a low point in sales or income; and (ii) Analysis of Flow of Funds, i.e., the disposition of profits and dividends.

2

As stated in its Second Motion to Compel, Leprino respectfully requests that the types, nature and extent of the discovery sought through the Second Motion to Compel be required from the other Big-D entities that have been added to this case as Defendants, i.e., Big-D Corporation and Big-D Capital Corp. It would seem a waste of judicial and client resources to require Plaintiff to serve those newly added Defendants with requests for the same information sought herein, when the parties would undoubtedly again appear before the Court on another motion of Plaintiff to compel discovery from those Defendants.

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Presuming that the company is a United States " corporation that filed a C" Standard Form 1120 Federal Tax Return, Leprino' consulting expert has stated that s only the following portions of the returns would be required for the alter ego analysis: (1) Page One of Form 1120, Standard Form for U.S. " Corp. C"

(" Cover Page" will show, among other things, the following: Receipts; Cost of Goods ) Sold; Gross Profits; Interest on Debt; Compensation to Officers (as an aggregate total only); Wages; Advertising Budget; Employee Benefits; Taxes; Depreciation of Fixed Assets. (2) Schedule C will show Dividends Received. This indicates

whether or not it is holding any assets, i.e., it shows whether it has ownership in other companies or owns stock in other companies, which is indicative of whether it is a shell or a substantive company. (3) Schedule L shows a Balance Sheet. This balance sheet is

filed with federal government and is presumably more reliable, because Plaintiff is unaware as to whether the financial statements provided are audited financial statements. (4) Schedule M1 shows how profitability and the corporate

capital structure are depicted in the tax returns, which can be different than in the Financial Statements. (5) Schedule M2 shows the unappropriated retained earnings

per books and will indicated how much money is being made and how much money is being passed back up the corporate ladder to a parent company in the form of a

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dividend. Only that money that stays in the company will be retained earnings. This information is directly relevant to the corporate veil analysis. (b) The 2004 Financial Documents complete the picture on whether

the company is a shell to filter money for the parent entity or whether it is a substantive company in and of itself. 3. Alternate source that would provide the same information sought in

the portions of the tax returns outlined in Section III, A, 2, above: Leprino would also accept Transaction Level Detailed Accounting Records with Source Documents of All Equity Accounts, All Cash Accounts and All Intercompany Payables and Receivables Accounts. B. Request for Production of Documents No. 4 1. Documents NOT produced by Big-D Construction: (a) (b) 2. Any federal and state tax returns for 2000-2004. Any financial information whatsoever for 2004.

Relevance of requested documents:

See Section III, A, 2, above in connection with Request for Production of Documents No. 3. 3. Alternate source that would provide the same information sought in

the portions of the tax returns outlined in Section III, A, 2, above: See Section III, A, 3, above in connection with Request for Production of Documents No. 4.

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C.

Request for Production of Documents No. 5 1. Documents NOT produced by Big-D California:

Any payroll account or bank account statements utilized for the payment of employee payroll, wages or salary for Big-D California for the preceding five (5) years, which would necessarily include payroll account or bank account statements that show the amounts paid for wages and/or salary for the employees it " leases." (Big-D claims that since it only leases employees, it does not have any payroll account or bank account statements utilized for the payment of employee payroll, wages or salary. However, since it has to pay money to lease its employees, it must still have payroll account or bank account statements that show the amounts paid for wages and/or salary for the employees it leases.) 2. Relevance of requested documents:

The fact that Big-D California does not have its own employees indicates it is likely a shell company. Plaintiff needs to look at the records of how much is paid for the " leased" employees to understand the Flow of Funds between those entities. Those records could show that Big-D California is siphoning money to its parent corporation under the auspices of leasing employees. D. Request for Production of Documents No. 9 1. Documents NOT produced by Big-D California:

Any meeting notes or reports (as opposed to meeting minutes) codifying board meeting for Big-D California, or a representation that no other documents responsive to the request exist.

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2.

Relevance of requested documents:

They indicate whether the directors and officers fail to treat the corporation as a separate legal entity. E. Request for Production of Documents No. 10 1. Documents NOT produced by Big-D California:

Any bank statements, reconciliation reports, cancelled checks, check stubs, deposit slips, receipts, ledgers, or journal entries of Big-D California. While Big-D

California provided a spreadsheet, Plaintiff is still entitled to inspect the underlying documentation. 2. Relevance of requested documents:

Those documents evidence the Flow of Funds issues between the various Big-D entities, and specifically whether any of the Big-D entities co-mingled funds. F. Request for Production of Documents No. 11 1. Documents NOT produced by Big-D Construction:

Any bank statements, reconciliation reports, cancelled checks, check stubs, deposit slips, receipts, ledgers, or journal entries of Big-D Construction. While Big-D Construction provided a spreadsheet, Plaintiff is still entitled to inspect the underlying documentation. 2. Relevance of requested documents:

Those documents go to the Flow of Funds issues between the various Big-D entities.

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G.

Request for Production of Documents No. 17 1. Documents NOT produced by Big-D California:

None of the documents produced identify Big-D California' allocation of its s profits, i.e., to whom the profits went. 2. Relevance of requested documents:

These documents are very important to the alter ego analysis, specifically, the Flow of Funds issue to the parent entity and Capitalization issue. The limited financial documents provided to Plaintiff show that any profits were not retained by Big-D California, but were distributed elsewhere, either to the unknown parent entity as a dividend or possibly to someone or something else. Again, this suggests co-mingling of funds and may explain why a so-called separate legal entity would post a $10 million bond for another. IV. THE NOVEMBER 1, 2005 MINUTE ORDER ON PLAINTIFF' S SECOND MOTION TO COMPEL WAS IN ERROR A. Legal Standards For 28 U.S.C. § 636 And Fed. R. Civ. P. 72(a) Objections, And The United States District Court Judge' Review Of A Magistrate s Judge' Written Order. s Objections to orders issued by United States Magistrate Judges on pretrial matters not dispositive of a claim or defense are governed by 28 U.S.C. § 636, which states, in part, as follows: [A] judge may designate a magistrate judge to hear and determine any pretrial matter pending before the court . . . . A judge of the court may reconsider any pretrial matter under this subparagraph (A) where it has been shown that the magistrate judge' order is clearly erroneous or contrary to s law.

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28 U.S.C. § 636(b)(1)(A).

The Federal Rules of Civil Procedure provide further

guidance on this issue and state, in part, as follows: Within 10 days after being served with a copy of the magistrate judge' order, a party may serve and file s objections to the order . . . . The district judge to whom the case is assigned shall consider such objections and shall modify or set aside any portion of the magistrate judge' s order found to be clearly erroneous or contrary to law. Fed. R. Civ. P. 72(a). This objection is to the Magistrate Judge' November 1, 2005 Minute Order, s which concerned, among other things, the denial of Plaintiff' Second Motion to Compel s brought pursuant to Fed. R. Civ. P. 37. As the Court is aware, the standard for

discovery are set forth in Fed. R. Civ. P. 26(b)(1), which provides that, " Parties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party . . . . Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence." Fed. R. Civ. P. 26(b)(1) (emphasis added). The party who resists discovery has the burden to establish that discovery should not be allowed, and has the burden of clarifying, explaining, and supporting its objections. See, e.g., Simpson v. University of Colorado, 220 F.R.D. 354, 359 (D. Colo. 2004). B. The Magistrate Judge Erred By Denying Plaintiff' Second Motion To s Compel, Which Sought Discovery To Prove The Alter Ego Theory And Pierce The Corporate Veil Of Big-D California. The Magistrate Judge erred by denying Plaintiff' Second Motion to Compel, thus s precluding Leprino from obtaining the discovery necessary to prove its alter ego liability theory at trial. The alter ego theory of liability, or piercing the corporate veil as it is 12

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sometimes called, is the proper way for a plaintiff to seek to have the court disregard the corporate form and hold the parent entity or shareholders liable for the obligations of the corporation. Lowell Staats Mining Co., Inc. v. Pioneer Uravan, Inc., 878 F.2d 1259, 1262 (10th Cir. 1989); Micciche v. Billings, 727 P.2d 367, 372-73 (Colo. 1986). However, the Magistrate Judge did not allow Plaintiff discovery on the alter ego issue when she incorrectly interpreted the law and ruled that establishment of alter ego liability is limited to post judgment proceedings. It is not a post-trial matter; rather, it is properly brought in a plaintiff' case in chief. See, Boughton v. Cotter Corp., 65 F.3d s 823 (10th Cir. 1995); Frank v. U.S. West, 3 F.3d 1357 (10th Cir. 1993); Lowell Staats Mining Co., Inc. v. Pioneer Uravan, Inc., 878 F.2d 1259 (10th Cir. 1989); Cherry Creek Card & Party Shop, Inc. v. Hallmark Marketing Corp., 176 F. Supp. 2d 1091 (D. Colo. 2001); Micciche v. Billings, 727 P.2d 367 (Colo. 1986). As noted above, the issue of alter ego liability was properly pleaded in Plaintiff' initial complaint. Subsequently, s Plaintiff was granted leave to file Leprino' " s Supplemental and Amended Complaint and Jury Demand," which added Big-D Corporation, a Utah Corporation and Big-D Capital Corp., a Wyoming corporation as defendants, also under the theory of alter ego liability. It also appears that the Magistrate Judge confused the standard for proof at trial with the standard for discovery. In making the ultimate determination at trial whether recognition of the separate corporate entity would result in injustice in a given case, which is primarily a question of fact, the trier of fact must consider the factors set forth in Fish v. East, 114 F.2d 177, 191 (10th Cir. 1940). Lowell Staats Mining Co., Inc. v. Pioneer Uravan, Inc., 878 F.2d 1259, 1262 (10th Cir. 1989). The Tenth Circuit further

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held that the Fish v. East criteria must be examined in light of the principles and policies underlying the doctrine of piercing the corporate veil. Boughton v. Cotter Corp., 65 F.3d 823, 837 (10th Cir. 1995). Significantly different is the standard for discovery, which allows a party to obtain discovery regarding any matter, not privileged, that is relevant or that is reasonably calculated to lead to the discovery of admissible evidence. Fed. R. Civ. P. 26(b)(1). A party must be allowed to obtain the discovery necessary to meet its burden of proof at trial. Denying a party the ability, opportunity and right to obtain discovery on the alter ego issue prevents that party from bringing, let alone proving the alter ego liability theory at trial. The Big-D entities are the only ones that have the documents requested by Plaintiff. Since there is no other way for Leprino to obtain the documents it

requested, the Magistrate Judge' November 1, 2005 Minute Order precluding Leprino' s s discovery clearly constitutes reversible error. Nonetheless, Leprino' Supplemental and Amended Complaint and Jury s Demand has sufficiently put the Big-D entities on notice of Plaintiff' alter ego theory of s liability. Therein, Plaintiff alleged, in part, as follows: Big-D Construction, Big-D Corporation or Big-D Capital [Corp.] is the parent corporation of wholly owned subsidiary Big-D California; that Big-D Construction, Big-D Corporation or Big-D Capital undercapitalized Big-D California and freely commingled funds; that Big-D Construction, Big-D Corporation or Big-D Capital exerts total control over the day to day operations of Big-D California to such a degree that the corporations often interchangeably refer to one another and hold each other out to the public by the name of the parent and subsidiary without regard to form; and effectively ignore the corporate formality of being separate entities but instead act as one. 14

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(See, Supplemental and Amended Complaint and Jury Demand at pp. 2-3). Additionally, Plaintiff' consulting expert who is analyzing the alter ego liability issue s has, based on the discovery already produced in this action by Big-D, observed several things about the Big-D entities that indicate one or more of them are likely the alter egos of other Big-D entities. Those observations include the following: (i) Big-D Corporation and Big-D Construction share the same website; are used

(ii) Big-D Corporation and Big-D Construction interchangeably though out the Big-D Corporation profile;

(iii) In the Big-D Corporation profile, Big-D Construction discusses the Leprino Lemoore West Project as one of their projects; (iv) The Big-D Corporation / Big-D Construction website lists Leprino as a client; (v) The officers and directors of Big-D Construction are also the officers and directors of Big-D California; (vi) Big-D Construction has advertised that it is the " proud builder of Leprino Foods'world-class mozzarella cheese plant in Lemoore, CA" ; (vii) (viii) Big-D California leases its employees; and Big-D California does not retain any of its profits.

The allegations in Plaintiff' complaint, the preliminary observations provided by s Leprino' consulting expert, and Big-D California' refusal to accurately identify its s s parent entity, are more than a sufficient basis to allow Plaintiff discovery on the alter ego liability theory asserted in this action. Among the other errors made by the Magistrate Judge, it was error to deny Plaintiff' requests for the Federal and State tax returns of Big-D California and Big-D s

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Construction. A two prong test for determining whether to order the production of tax returns has been applied by another District Court in this Judicial District. The test requires the following: (1) a finding that the returns are relevant to the subject matter of the action; and (2) there is a compelling need for the tax returns, because the information is not otherwise readily obtainable. Hawkins v. South Plains Int' Trucks, l Inc., 139 F.R.D. 679, 681-82 (D. Colo. 1991). As detailed above in Sections III, A and B, Leprino has shown that the requested tax returns are relevant to the subject matter of this action and that there is a compelling need for the tax returns. In Sections III, A and B, Leprino did identify alternate sources that would provide the information necessary for the alter ego analysis. However, because of the voluminous nature of those

alternate sources, which would undoubtedly be objected to by Big-D, Leprino maintains that the requested tax returns would more easily and succinctly provide the necessary discovery. Furthermore, the Magistrate Judge incorrectly concluded that, despite Big-D' s refusal to answer written discovery regarding alter ego information, because Leprino did not also ask those same alter ego theory questions in a deposition, Leprino was precluded from obtaining that information through its Second Motion to Compel. It is axiomatic that the different avenues of discovery are mutually exclusive. A party does not need to exhaust all of them before it can file a motion to compel. The Magistrate Judge' ruling precluding Leprino' discovery of issues related to s s its alter ego theory of liability places Leprino in a procedural quandary. Big-D

Construction, Big-D Corporation and Big-D Capital Corp. are all parties to this lawsuit,

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but now Leprino has been prevented from obtaining the discovery necessary for it to prove the alter ego liability of those various Big-D entities. The November 1, 2005 Minute Order denying Plaintiff' Second Motion to Compel must be reversed. s C. Other Discovery Orders Concerning Plaintiff' Second Motion To Compel s By The Magistrate Judge Are Incorrect And Inconsistent. In addition to the orders related to Plaintiff' alter ego theory of liability, which s were clearly erroneous and contrary to the law, the Magistrate Judge entered other discovery orders that were incorrect and inconsistent with her previous orders on Plaintiff' alter ego theory. First, in the November 1, 2005 Minute Order, the Magistrate s Judge ordered Plaintiff' Second Motion to Compel denied; however, she also ordered s Defendants to " supplement their answers to Requests for Production #9, #10, and #11 with a statement saying that all documents have been produced." (See, November 1, 2005 Minute Order at p. 2). In one instance the Magistrate Judge is saying that it is premature to seek discovery on alter ego liability and piercing the corporate veil, and in the next instance she orders Defendants to supplement their responses to the purportedly premature and irrelevant discovery requests. Second, the Magistrate Judge erred by refusing to order Big-D to provide supporting documents that were used by Big-D California and Big-D Construction to create the spreadsheet that they tendered in response to Leprino' Requests for s Production of Documents Nos. 10 and 11. The Magistrate Judge stated that the

summary would provide more information than the underlying, supporting documents used to create the spreadsheet. That ruling is counterintuitive. Clearly, the underlying documents contain information not contained in the summary. Moreover, that ruling by 17

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the Magistrate Judge is contrary to Federal Rule of Evidence 1006, which provides for the right of a litigant to inspect the documents from which a summary spreadsheet was made, and states in pertinent part, as follows: " The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at reasonable time and place." Federal Rule of Evidence 1006 (emphasis added). The November 1, 2005 Minute Order' denial of Plaintiff' Second Motion to s s Compel was clearly erroneous and contrary to law. As such, it must be reversed. D. Plaintiff Complied With Fed. R. Civ. P. 37(a)(2)(B) And D.C.COLO.LCivR 7.1A Prior To Filing Its Second Motion To Compel. Contrary to the Magistrate Judge' misapprehension of the discussions had s between the parties prior to Plaintiff filing its Second Motion to Compel, Plaintiff did comply with Fed. R. Civ. P. 37(a)(2)(B) and D.C.COLO.LCivR 7.1A. At the November 1, 2005 hearing, Leprino' co-counsel, Patrick T. Markham, stated that while he could s not remember the specific date or dates he discussed with Big-D' counsel the s documents sought by Plaintiff' Second Motion to Compel, those conversations did take s s place prior to the filing of that motion. Moreover, Plaintiff' counsel is mindful of the reasons underlying the conference requirements in those rules. However, in this case, in addition to the earlier conversations, the parties had extensive discussions regarding the Second Motion to Compel on October 31, 2005, and again an hour before the hearing began on November 1, 2005. Despite all of those conferences, the parties could not reach a resolution on any of the issues in the Second Motion to Compel and had to seek the intervention of the Court.

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V. CONCLUSION For the reasons set forth herein, Leprino respectfully requests the following of this Court: (i) reverse the November 1, 2005 Minute Order of Magistrate Judge Patricia A. Coan, which denied Plaintiff' Second Motion to Compel and denied s Plaintiff' request for sanctions; (ii) order Big-D California, Big-D Construction, Big-D s Corporation and Big-D Capital Corp. to produce all of the types, nature and extent of the discovery sought through the Second Motion to Compel and that are detailed herein; and (iii) award Plaintiff its attorneys'fees and costs incurred in prosecuting its Second Motion to Compel and this objection.

Respectfully submitted this 16th day of November 2005. LEPRINO FOODS COMPANY

By:

s/ Bret M. Heidemann One of Its Attorneys Michael G. Bohn Bret M. Heidemann Campbell Bohn Killin Brittan & Ray, LLC 270 St. Paul Street, Suite 200 Denver, Colorado 80206 Telephone: (303) 322-3400 Facsimile: (303) 322-5800 [email protected] [email protected] Patrick T. Markham Jacobson & Markham 8880 Cal Center Drive, #100 Sacramento, California 95826 Telephone: (916) 854-5969 Facsimile: (916) 854-5965 [email protected]

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CERTIFICATE OF SERVICE I hereby certify that on the 16th day of November 2005, I electronically filed the foregoing PLAINTIFF' OBJECTION TO MAGISTRATE JUDGE' NOVEMBER 1, S S 2005 ORDER (Docket No. 152) with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses: Francis (Frank) J. Hughes at [email protected] Patrick Quinn Hustead at [email protected] Peter J. Ippolito at [email protected] Richard Carl Kaufman [email protected] John David Mereness at [email protected] C. Michael Montgomery at [email protected] Daniel James Nevis at [email protected] Laurence R. Phillips at [email protected] N. Kathleen Strickland at [email protected]

s/ Cori Atteberry Cori Atteberry, Legal Assistant

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