Free Motion to Strike - District Court of Arizona - Arizona

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Morgan & Morgan, P. A.th 20 N. Orange Avenue, 16 Floor Orlando, FL 32801 Clay M. Townsend, Esquire Bar No.: 023414 Brandon S. Peters, Esquire Bar No.: 022641 Keith R. Mitnik, Esquire Bar No.: 436127 Attorneys for Neal Plaintiffs UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA MEADOWLARK LEMON, a married man, Plaintiff, vs. Case Nos.: CV 04 0299 PHX DGC and CV-04-1023 PHX DGC

HARLEM GLOBETROTTERS 11 INTERNATIONAL, INC., et al.; 12 13 Defendants. FRED "CURLY" NEAL, et al. Plaintiffs,

14 vs.

15 HARLEM GLOBETROTTERS INTERNATIONAL, INC., et al.; 16 Defendants. HARLEM GLOBETROTTERS 18 INTERNATIONAL, INC., an Arizona corporation, 17 19 20 21 22 23 24 25 26 vs. MEADOWLARK LEMON, a married man, Counter-defendant. PLAINTIFFS' JOINT MOTION TO STRIKE GTFM DEFENDANT'S UNTIMELY DISCLOSURES, TO PRESENT EVIDENCE TO THE JURY AND FOR SANCTIONS Counter-claimant,

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Plaintiffs, Neal, Rivers, Thornton, Hall, Haynes, Sanders and Lemon (collectively referred to as "Plaintiffs"), respectfully request that the Court issue an Order: (i) striking GTFM's Third Amended Initial Disclosure Statement (Doc. #432) from this action pursuant to Fed. R. Civ. P. 26(e)(1) and 37(c) and preventing GTFM from taking a contradictory position after close of discovery as to insurance availability;

6 (ii) allowing additional limited discovery as to insurance availability ; 7 8 9 10 11 12 13 14 15 16 by Alliance Worldwide, Inc., (Bates stamped GTFM, LLC #000380-#000557), and 2) a Commercial Excess 17 Liability (Umbrella) Insurance Policy (hereinafter "Umbrella Policy") from Travelers Property Casualty, 18 19 20 21 22 23 24 25 26 27 28
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(iii) sanctioning GTFM including for costs and attorneys' fees associated with the filing of this motion. (iv) permitting evidence to be presented of GTFM's lawsuit and settlement with HGI as well as their discovery abuse to the jury (GTFM has filed an In Limine Motion to Exclude all Evidence of Discovery Abuse (Doc. # 460). INTRODUCTION 1. On January 28, 2005, GTFM provided to the Plaintiffs in its production of that date two

insurance policies as follows: 1) a Commercial Insurance Policy from Travelers Property Casualty prepared

prepared by Alliance Worldwide, Inc. The Umbrella Policy is Bates stamped GTFM, LLC #000558#000836 and stated on Bates page #000560 aggregate limits of liability of $5,000,000 for a policy period of May 29, 2002 to May 29, 2003. Both of the aforementioned policies list GTFM, LLC as an insured on the named insured endorsement. (Doc. #447, Ex. C) 2. The insurance policies also insure two former Defendants which the FUBU Defendants

successfully had dismissed from this action arguing to this Court that they had no role at all in the claims-- i.e. FUBU The Collection, LLC and GTFM of Orlando, LLC. These supposedly innocent and

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inappropriate Defendants are specifically listed in the Umbrella Policy at Bates #000562, and FUBU The Collection LLC is listed in the Commercial Policy at Bates #000388. (Doc. #447, Ex. C). 3. On September 16, 2005, GTFM served an Amended Initial Disclosures and expressly

represented to the Plaintiffs that there was insurance coverage for the damages, claims or actions that are the subject of this litigation. (Doc. # 447, Ex. D).

6 4. 7 8 9 10 11 12 13 14 15 16 deadline on September 30, 2005. GTFM's dilatory shift to a completely contradictory position nearly one 17 year after the close of discovery, while knowing that Plaintiffs would be prevented from obtaining further 18 19 20 21 22 23 24 25 26 settlement of the lawsuit between HGI and GFTM (HGI sued GTFM for unpaid royalties due under the 27 28
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On July 13, 2006, GTFM served a Notice of Service of Third Amended Initial Disclosures

(Doc. # 432, hereinafter "Third Amended Disclosure") on Plaintiffs. Paragraph 4 of the Third Amended Disclosure included a reversal of GTFM's previous position regarding the existence of insurance coverage (Doc. #447, Ex. A). 5. Specifically the Third Amended Disclosure states that "GTFM is NOT insured for the

damages, claims, or actions that are the subject of this litigation." This is contrary to GTFM's position where it previously represented that there was insurance coverage for damages, claims, or actions that are the subject of this litigation (Doc. #447, Ex. D). 6. This disclosure was not made until over nine months after the close of the discovery

discovery on the matter, is highly prejudicial to Plaintiffs. Moreover, GTFM gave no explanation as to why it failed to disclose such a material fact until after Plaintiffs filed their Joint Motion to Enforce Settlement Conference Order (Doc. #447) when it subsequently filed a Declaration of Ira Sacks in Opposition to Plaintiffs' Joint Motion to Enforce Settlement Conference (Doc. # 442). 7. Sacks in his Declaration (Doc. # 442) at ¶ 3, line 15 states that striking the Third Amended

Disclosure would have no effect. Notwithstanding this self-serving position, the fact remains that Plaintiffs were prevented from obtaining further discovery on this important matter as well as the related matter of

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very same licensing agreement giving rise to Plaintiffs' claims). Sacks admits in ¶ 7 of the Declaration that HGI and GTFM resolved the lawsuit that HGI filed against GTFM, the GTFM Counterclaims, and that GTFM released the Insurer from any claims, except in the event of a default by HGI, and since February 8, 2006, GTFM has supposedly been uninsured in connection with this action. 8. GTFM had a duty to disclose the settlement with HGI as well as the change in their pretrial

6 ability to pay a judgment to Plaintiffs as soon as possible after the settlement was reached, yet they waited 7 8 9 10 11 12 13 14 15 16 10. 17 request to allow additional discovery on the insurance issue, to strike GTFM's third amended disclosure, 18 19 20 21 22 23 24 25 26 discovery as to why GTFM waited until five months after the settlement to disclose this to Plaintiffs. For a 27 28
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over five months until July 13, 2006 (after summary judgment rulings) to notify the Plaintiffs as to this important fact. This delay alone is indicative of bad faith and ongoing discovery abuses on the part of GTFM. 9. In the interim, Plaintiffs continued to rely upon GTFM's representation that a Commercial

Insurance Policy and an Umbrella Policy providing for $5,000,000 in insurance was available for Plaintiffs' alleged damages in formulating its litigation strategy (first Plaintiffs learn from the news that HGI has sold off 80% ownership, now HGI's indemnitee GTFM, has no insurance and Plaintiffs have no information as to whether they are judgment proof). This Court has indicated in its order of September 8, 2006 that it would address Plaintiffs'

and to impose sanctions at the Final Pretrial Conference (this Court denied Plaintiffs' Motion to Enforce Settlement Conference Order to compel GTFM's insurer to attend the failed settlement conference). ARGUMENT I. THE COURT SHOULD ALLOW ADDITIONAL DISCOVERY 11. At a minimum, Plaintiffs should be permitted to conduct very brief discovery, including

depositions, of GTFM's insurance company representatives to confirm whether or not the coverage originally disclosed and relied upon by Plaintiffs is indeed unavailable as indicated by GTFM, and conduct

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case that has been pending for years and in which discovery and motion practice closed almost one year before the disclosed change, the Third Amended Disclosures was certainly not filed at an "appropriate" interval. It was filed five months after the Defendants achieved a settlement of their lawsuit amongst themselves, and they did not bother to disclose this material fact to Plaintiffs, a fact which they claim in ¶ 13 of the Declaration was of no consequence to any party. Additional discovery is within this Court's

6 discretion. In Equal Employment Opportunity Commission v. Lennar Homes of Arizona, Inc., 2006 WL 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 discovery and disclosure, especially when such an effort is untimely or made after the close of discovery. 22 Cambridge Elecs. Corp. v. MGA Elecs., Inc., 227 F.R.D. 313, 321 (D. Cal. 2004)(Rule 26(e) requires 23 24 25 26 27 28
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1734594 (D. Ariz. 2006), this Court allowed additional discovery after discovery cutoff and before trial. II. THE COURT SHOULD STRIKE THE THIRD AMENDED DISCLOSURE 12. The Court should exclude Defendant's July 13, 2006 untimely Third Amended Disclosure.

Fed. R. Civ. P. 26(e)(1) provides that: A party is under a duty to supplement at appropriate intervals its disclosures under subdivision (a) if the party learns that in some material respect the information disclosed is incomplete or incorrect and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process or in writing. Here the Third Amended Disclosure should be stricken. The dramatic shift in position by GTFM is highly prejudicial to the Plaintiffs, and is suspect given that such disclosure could have been made much earlier thereby allowing Plaintiffs to ask the court back in February 2006, to conduct limited discovery to investigate this matter. 13. The courts of the Ninth Circuit have found that sanctions are appropriate for parties who

file amended disclosures which attempt to contradict or withdraw evidence or positions taken in previous

continuing duty to seasonably correct disclosure at appropriate intervals if party learns a previous disclosure is incorrect, and sanctions for failure to disclose under Rule 26(e) in a timely fashion are automatic and mandatory); Stone v. River, 1992 U.S. App. LEXIS 2616 (9th Cir. 1992) (when a party obtains information

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upon the basis of which the party knows that the response was incorrect when made, the party is under a duty seasonably to amend a prior response or otherwise be subject to sanctions). III. DEFENDANTS SHOULD BE SANCTIONED Finally, Plaintiffs request that the Court impose sanctions against GTFM for untimely filing the Third Amended Disclosures, or issue an order to show cause as to why they should not be sanctioned. Fed.

6 R. Civ. P. 37(c)(1) allows for the award of fees and costs incurred by the failure to make a timely disclosure. 7 8 9 10 Plaintiffs should be permitted to present them to the jury. 11 CONCLUSION 12 13 14 15 16 17 18 19 20 21 22 By: 23 24 25 26 27 28
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IV.

PLAINTIFFS SHOULD BE PERMITTTED TO PRESENT EVIDENCE OF GTFM'S DISCOVERY BEHAVIOR TO THE JURY. Lastly, these facts are relevant to the issues of GTFM's continuous disregard of Plaintiffs' rights and

WHEREFORE, Plaintiffs respectfully request this Court 1) strike GTFM's Third Amended Initial Disclosure Statement dated July 13, 2006 from this action pursuant to Fed. R. Civ. P. 26(e)(1) and 37(c) and prevent GTFM from taking a contradictory position after close of discovery as to insurance availability; 2) allow additional limited discovery as to the insurance matters; 3) sanctioning GTFM, including for costs and attorneys' fees associated with the filing of this motion; and 4) permitting Plaintiffs to present evidence of GTFM's lawsuit and settlement with HGI, and its discovery behavior to the jury. DATED this 15th day of November, 2006. ROSENQUIST & ASSOCIATES

____/S/ Anders Rosenquist___________ Anders Rosenquist, Jr. Florence M. Bruemmer Attorneys for Plaintiff Meadowlark Lemon

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MORGAN & MORGAN, P.A.

By:

____/S/ Clay M. Townsend___________ Clay Townsend Keith Mitnik Attorneys for Plaintiffs, Fred Neal, Larry Rivers, Robert Hall, Dallas Thornton, Marques Haynes and James Sanders

PLEASE TAKE FURTHER NOTICE that copies of the above-referenced documents have been served via first class mail on the following attorneys: Joel L. Herz, Esq. LAW OFFICES OF JOEL L. HERZ La Paloma Corporate Center 3573 E. Sunrise Dr., Suite 215 Tucson, AZ 85718-3206 Attorneys for Defendants GTFM, LLC, FUBU the Collection, LLC and GTFM Of Orlando, LLC Ira S. Sacks, Esq. Safia A. Anand, Esq. DREIER, LLP 499 Park Avenue New York, NY 10022 Attorneys for Defendants GTFM, LLC, FUBU the Collection, LLC and GTFM of Orlando, LLC Edward R. Garvey, Esq. and Christa Westerberg, Esq. GARVEY McNEIL & McGILLIVRAY, S.C. 634 W. Main St. #101 Madison, WI 53703 Attorneys for Defendants Harlem Globetrotters Int'l, Inc., Harlem Globetrotters Int'l Foundation and Mannie L. & Catherine Jackson Anders Rosenquist, Jr., Esq. Florence M. Bruemmer, Esq. ROSENQUIST & ASSOCIATES 80 E. Columbus Phoenix, AZ 85012 Attorney for Plaintiff Lemon

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Ray K. Harris, Esq. Fennemore Craig PC 3003 N. Central Avenue, Suite 2600 Phoenix, AZ 85012-2913 Attorneys for Defendants Harlem Globetrotters Int'l. Inc., Harlem Globetrotters Int'l Foundation, and Mannie L. & Catherine Jackson

Certificate of Service 7 8 9 10 11 Safia A. Anand ­ [email protected] 12 Florence M. Bruemmer ­ [email protected], [email protected] 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
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Vanessa Braeley, declares as follows: 1. I hereby certify that on November 15, 2006, a true and correct copy of Plaintiffs' Joint Motion to Strike GTFM Defendant's Untimely Disclosures, to Present Evidence to the Jury and For Sanctions was electronically transmitted to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants:

Edward R. Garvey ­ [email protected] Robert Williams Goldwater, III ­ [email protected] Ray Kendall Harris ­ [email protected] Joel Louis Herz ­ [email protected], [email protected] Anders V. Rosenquist, Jr. - [email protected] Ira S. Sacks ­ [email protected] 2. I am and was at all times mentioned herein a citizen of the United States and a resident of

Orange County, Florida, over 18 years of age and not a party to the within action or proceeding. My business address is 20 N. Orange Avenue, 16th Floor, Orlando, FL 32801, and I am employed as a legal assistant by Morgan & Morgan, P.A., Clay Townsend is an attorney admitted to practice in Florida and has been admitted pro hac vice in the District Court of Arizona, and directed that service be made. 3. I hereby certify that on November 15, 2006, a true and correct copy of Plaintiffs' Joint

Motion to Strike GTFM Defendant's Untimely Disclosures, to Present Evidence to the Jury and For Sanctions was sent by postage-prepaid first-class U.S. Mail to the following parties, at the addresses listed, to-wit:

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Joel L. Herz, Esq. LAW OFFICES OF JOEL L. HERZ La Paloma Corporate Center 3573 E. Sunrise Dr., Suite 215 Tucson, AZ 85718-3206 Attorney for Defendants, GTFM, LLC, FUBU the Collection, LLC and GTFM OF Orlando, LLC Ira S. Sacks, Esq. Safia Anand, Esq. DREIER LLP 499 Park Ave. New York, NY 10022 Attorneys for Defendants, GTFM, LLC, FUBU the Collection, LLC and GTFM of Orlando, LLC Edward R. Garvey, Esq. Christa Westerberg, Esq. GARVEY McNEIL & McGILLIVRAY, S.C. 634 W. Main Street, Ste. 101 Madison, WI 53703 Attorneys for Defendants Harlem Globetrotters Int'l. Inc., Harlem Globetrotters Int'l Foundation, and Mannie L. & Catherine Jackson Anders Rosenquist, Jr., Esq. Florence M. Bruemmer, Esq. ROSENQUIST & ASSOCIATES 80 E. Columbus Phoenix, AZ 85012 Attorney for Plaintiff Lemon Ray K. Harris, Esq. Fennemore Craig PC 3003 N. Central Avenue, Suite 2600 Phoenix, AZ 85012-2913 Attorneys for Defendants Harlem Globetrotters Int'l. Inc., Harlem Globetrotters Int'l Foundation, and Mannie L. & Catherine Jackson

3. I declare under the penalty of perjury under the laws of the United States that the foregoing is true and correct. DATED: November 15, 2006.

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Signed: ____/S/Vanessa L. Braeley_________ Vanessa L. Braeley Legal Assistant to Clay Townsend MORGAN & MORGAN 20 N. Orange Avenue, 16th Floor Orlando, FL 32801 Attorneys for the Plaintiffs Curly Neal, Larry Rivers, Dallas Thornton, Marques Haynes, Robert Hall and James Sanders

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