Free Response in Opposition to Motion - District Court of Arizona - Arizona

EXHIBIT 8
Case 2:02—cv—02036-I\/IHI\/I Document 289-11 Filed 08/22/2005 Page1 of 4

y .
I I
Steven C. Shanks (Prepared for: Ira M. Schwartz, Esq.) June 10, 2005
y Erchonia v. Moroney
L Pa e 1 Pa e 3 3-
8 8 ,
IN TIIE UNITED STATES DISTRICT COURT [ [ N D E X i
FOR THE DISTRICT OF ARIZONA 2 STEVEN C_ SHANKS 30(!3)(6) Q
Erchonia Medical. Inc., et al., ) 3 EXAMINATIEN I _
) nge ..111c
Plaintifk, ) BY MR. LIEB: 6 6 i
vs. ) No. CIV 02-2036-P1lX·M}·IM 5 ,
Robert Moroney, Li.C,eta1., ) 6 E X H I B I T S
mi-,,,d,m,_ ) 7 Number · l Page Line i
) 8 1 Categones Itsted for 30(b)(6) 15 10 ,
Erchonia Medical, Inc; et al., ) deposition
Plaintiffs, ) 9 . . Q
vs_ ) 2 9-20-2001 e-matl to Paul DeAnge1ts 20 8
Robert E. hfmcney, LLC, et al., 1 I0 from M0te Robinson (ERC04357 through r
Def his ) ERC04367 and REM02330)
{II . 1 I
3 Preferred Partnershi Ex I ` 118 19 I
aren · tt tr 1, ., ., P °}L""°
uma it M lm) H II ) 12 Manufacturing and Marketing Agreement .
Plaintiffs. ) between Majes-Tec and Tuco I
ts. ) 13 1
"°"°" LL L'°'°‘*°3· LLL`· °‘*'·· ’ 4 tzrentmia tueascat, tmc; and Kevin tsv 22 i
) . 1
Dc,-,,,6,,,,; ) I4 Tucek's Brief re Patent Claim i
) Construction (pleading) 1
15
. , RECESSES -
D1;POS;|l;1£;i¤OF C. SIIANKS 30(B)(6) 16 Page Unc
June 10,2005 17 (Recess at 10:30; resumed at 10:39.) 67 16 E
9:15 nm (Recess at 11:46; resumed at 12:55.) 118 13
Pmpmd for htpmd By 18 (Recess at 1:47; resumed at 1:56.) 158 I2 i
. ' ‘ 19 *
I . .
xmtysglixmn 1t¤gis;4:|l;ii¤c;d¤tE:(1ii;¤E:u 1 LZSEEIOUSLY MARKED EXYIIILEITE REFERENCED
Cenif d Realti Reporter 1 to cr e sition 3
§(g;§f§;$§:i;bKTmG LTD 22 4 to Leger depggition 149 1 ’
77 ra. 8........, sn. .0. ‘ ‘ 33 ’*¤ L=¤=*<*¤r>¤$·**¤¤ *3* 3 v
(Copy) Phoenix, AZ 85012-2351 24
25 ,
Page 2 Page 4
1
1 1 DEPOSITION OF STEVEN C. SHANKS 30(B)(6), l
2 Pursuant to Rule 39(f)(2) ofthe Arizona Rules of Civil 2 I
Procedure, which states, oUpon payment of reasonable charges 3 taken on June 10, 2005, commencing at 9:15 a.nt., at the law
3 therefor, tltc officer shall furnish a copy ofthe deposition 4 offices of Marlscal, Weeks, Mclntyre & Friedlander, PA., {
to any party or to the dep0nent,6 the 6Prepared foto 5 2901 North Central, Suite 200. Phoenix, Arizona, before [
4 attorney has received a copy of this proceeding. 6 Elaine M. Cropper, a Certified Court Reporter, Certificate '
5 7 No. 50491, for the State ol`Arizona.
l, thc officer, will provide a certified copy to each 8
6 ordering party at the same copy rate, thus corrplying with 9 APPEARANCES: ?
Section 7-206, Appendix A Standard 3(a) ofthe Arimna Code 10
7 of Judicial Administration (ACJA) Court Reporter Standard For Erchortia Medical, Inc.; George Leger and Gina Leger, Q
Certification (Effective January 1, 2003). 11 Steve Smiles and Debbie Sue Shanks, Kevin Tucek and Carolyn
8 Tucek:
9 Eachpurchascdoopyofthisuarmctiptvvillbesignedand 12 IRAM.SCHWARTZ, ESQ.
certified by mysclli thus complying with ACJA Section DcConcini, McDonald, Yetwin & Lacy, P.C. V
I0 7-206F(3). 13 7310 North 16th Street. Suite 330
11 Phoenix. AZ 85020 I
12 ARS. 32-4003(B) provides, oliegimring July 1, 2000, a 14 i
certified court reportershall sign and certify sch 15 For Robert F. Moroncy, ILC. Robert Moroney, and A Major »
13 transcript that the certified court reporterprepares before Ditferetme, Inc.: i
the transcript may be used in court. except for transcripts 16 BENJAMIN G. LIEB, ESQ. 1
14 thatthecourtreporterpreparesforprocccdingstlrat SberidanRoss,P.C. j
occurred before July 1, 2000.6 Thus, only an originally 17 1560 Broadway, Suite 1200
15 izggtcdyétsfmyworkprodttetcanbetrscdinmypmceeding Denver,CO 80202-5141 1
ore e urL 18 1
16 For John W. Brimhall and Claudette Brimhall: 3
17 Any copies of this transcript (paperor electronic) made for 19 TIMOTHY R. HYLAND, ESQ. 1
any other party in this case who has not paid Canyon State Kunz, Plitt, Hyland, Demlong & Kleifield i
18 Reporting, Ltd, (thus the reporter) for such copy of this 20 3838 North Central Avenue, Suite 1500
transcript, or received written permission for same, will be Phoenix, AZ 85012 *
19 considered theft of services. a tiolation ofpropeny 21 l
rights, and be considered restraint of trade with For Erchonia Medical, Inc: I
20 appropriate penalties sought. 22 MICHAEL WARZYNSKI. ESQ. ` `
21 Jardine, Baker, Hickman & Houston, P.1..L.C. 1
22 23 3300 Northentral Avenue, Suite 2600
gz Phoenix, AZ tsoo:-aszv V
24 r
25 25 I
1 (Pages 1 to 4)
Canyon State Reporting, Ltd.
602.277.8882 602.277.5576 (Fax)
Case 2:02—cv—02036-I\/IHI\/I Document 289-11 Filed 08/22/2005 Page 2 of 4

Steven C. Shanks (Prepared for: Ira M. Schwartz, Esq.) June 10, 2005
_ Erchonia v. Moroney
Page 77 Page 79 i
10:55:01 1 know of. 10:57:32 1 selling the Bio»C1eanse units at Erchonia seminars?
10:55:06 2 Q. How do you know that those phone calls weren't 10:57:32 2 A. Yes, he was.
10:55:08 3 customers that had purchased an ionCleanse from Bob Moroney 10:57:33 3 Q. So why wou1dn‘t a customer who received a unit E
10:55:17 4 and were aware ofthe prior relationship between Bob Moroney 10:57:38 4 from Bob not call Erchonia about that unit? 1
10:55:19 5 and Erchonia and, therefore, called Erchonia? 10:57:43 5 A. Why would a customer receive the unlt from Bob and
10:55:23 6 A. There's not one customer that called us to buy a 10:57:45 6 not call Erchonia? Because Miki gave hlm the phone number 1
10:55:25 7 Blo·Cleanse. We drop-shipped the product to Bob. Bob sent 10:57:48 7 and address where to purchase a better machine.
10:55:3l 8 lt out. Bob did all of the marketing. Bob sent lt all. 10:57:59 8 Q. You said a different and better machine?
10:55:34 9 Q. Therefore, my question again to you. how do you 10:58:00 9 A. According to Miki. Everything Bob makes is 1
10:55:35 10 know — did you ever ask the customers why they were calling 10:58:02 10 better. 1
10:55:39 1 1 Erchonia? 10:58:10 1 1 Q. So be ~· 1 don‘t understand how you suffered 1
10:55:41 12 A. At that point when we were coming out wlth the new 10:58: 14 12 damages from those Bio-Cleanse sales. Explain that. i
10:55:43 13 machine, they should have called Erchonia because we were 10:58:18 13 A. Wc're doing seminars. people know we're coming out 1
10:55:44 14 comlng out with the EB305. 10:58:21 14 with a new device. They purchase — when you come out with
10:55:51 15 Q. You'rejust assuming they would be calling you 10:58:24 15 the devlcc, we want to buy one. Mikl takes that lnformatlon 1
10:55:53 16 about the EB305 because that's what you were selling at that 10:58:27 16 on the sheet that he created, faxes it over to his house. ,
10:55:57 17 point? 10:58:32 17 llc gets to his house, he faxes it over to Bob. That‘s the
10:55:57 18 A. Yeah. They wouldn't be calling us about a 10:58:35 18 best that 1 could deduct that that happened.
10:55:59 19 B1o—(Z1eanse. We didn't sell it. They wou1dn't be calling 10:58:37 19 Q. What evidence do you have that he vias doing that?
10:56:02 20 us about an ionC1eanse. It was Bob's device. 10:58:38 20 A. The piece of paper that was in Miki'; office that E
10:56:08 21 Q. Arc there any notes or anything, any other 10:58:41 21 said Bio·Cleanse on it, slash, EB305. 1
10:56:16 22 documents that were generated as a result of these telephone 10:58:45 22 Q. Anything else? 1
10:56:19 23 calls that you just mentioned? 10:58:46 23 A. That's lt.
10:56:22 24 A. Agaln, 1 don't know. 10:58:46 24 Q. Just that flier and you deduced that Miki was
10:56:23 25 Q. So there's no any to identify who these people 10:58:50 25 engaged in this complicated scheme?
Page 78 Page 80 1
10:56:25 1 were calling? 10:58:55 1 A. And some of the — yes. And some phone calls. 1
10:56:26 2 A. 1fit’s not in the document, there's not. I0:59:01 2 Q. So there's also laser sales that are a part of
10:56:31 3 Q. All right. So thafs —- 10:59:07 3 this damages component? 1
10:56:33 4 A. There's a way to identify them. 10:59:09 4 A. Yes.
10:56:35 5 Q. How is that? 10:59:10 5 Q. How many laser sales are we talking about? }
10:56:36 6 A. Look at the people who purchased the devices 10:59:16 6 A. The laser sales that they generated, probably l
10:56:38 7 between February of 2002 and the time Mlkl left. 10:59:20 7 between the Brimhal1's June semlnar - 1
10:56:44 8 Q. Purchsed what device? 10:59:24 8 Q. June of what year?
10:56:45 9 A. B1o·Cleanse. 10:59:26 9 A. 2002 because I guess that’s when they first -1t
10:56:47 10 Q. Purchased from whom? 10:59:28 10 probably could have been from Aprll when hc started taking ·
10:56:48 11 A. Bob. 10:59:30 ll orders on the machine when Mr. Smith was telling them to 1
10:56:50 12 Q. How would you look at that information to 10:59:32 12 hold on. there was a better laser coming out that was
10:56:52 13 detemiine these customers? 10:59:37 13 cheaper. Jean Winter sale. Bonnie Phllllps sale. The
I0:56:58 14 A. Obviously, lf they were in my database, they 10:59:41 14 sales that Mlkl diverted to George Gonzales. The sales at
10:57:02 15 requested our lnfomtation and Bob sold lt to them. They got 10:59:44 15 our New Orleans seminar. sales at our Denver semlnar. I
10:57:06 16 an 1onC1eanse from somewhere — 10:59:52 16 Q. 1 apologize.
10:57:10 17 Q. Bob is out thae selling the Bio-Cleanse units; 10:59:53 17 (lntcrmption for telephone call.) I
10:57:13 18 right? 11:00:15 18 Q. All right You said the sales ofthe New Orleans 1
10:57:14 19 A. Bob ls out selllng Bio~C1eanse unlts at trade 11:00:17 19 seminar, sales at our Denver seminar. Anything else?
10:57:17 20 shows. We are selling them at seminars. 11:00:21 20 A. Br1mha1l's Atlanta seminar. There might have been 1
10:57:19 21 Q. He's selling them also at the Erchonia seminars; 11:00:24 21 some scmlnars ln there that are missing. ,
10:57:22 22 concct? 11:00:27 22 Q. All right. So how many laser sales did Miki
10:57:22 23 A. Bob, after February 2002, did not come to any more 11:00:32 23 divert in all of these seminars? 1
10:57:25 24 of our shows. 11:00:35 24 A. My best guess would be anywhere from 5 to 20.
10:57:26 25 Q. All right. But he was — before then he was 11:00:39 25 Q. Based on what?
20 (Pages 77 to 80)
Canyon State Reporting, Ltd.
602.277.8882 602.277.5576 (Fax)
Case 2:02—cv—02036-I\/IHI\/I Document 289-11 Filed 08/22/2005 Page 3 of 4

Stcvcn C. Shanks (Prepared for: Ira M. Schwartz, Esq.) June 10, 2005
Erchouia v. Moroney
Page 81 Page 83 i
ll:0O:40 l A. Based on what we would normally sell at a seminar. lli)3:47 l A. N0. Thnt’s probably lt that I can think of. f
I l:00:5l 2 Q. S0 it's your position that Miki diverted somcwhcrc l l:O3:57 2 Q. What cvidcncc do you have that Bob caused Miki
l 1:00:53 3 bctwccn 5 to 20 sales of lasers at these seminars and that I 1:04:03 3 Smith to allegedly breach his agmcmcnt with Erchunia?
l 1:00:57 4 thosc sales wcrc madc, then, to Bob Moroney? l 1:04:10 4 A. He handed him a laser.
l l;0l :02 5 A. Correct. I 1:04:10 5 Q. Hold on. As opposed to Miki Smith doing that on
l l :0l :08 6 Q. What evidence do you have to support that? ll:O4:l3 6 his — unilaterally and on his own'? _
ll:0l:ll 7 A. Jean Wlntcr document, Bonnie Phillips' namc on it. 11:04:17 7 A. Because Bob looked at Mlkl, asked him, according
1 l:0l :l 5 8 She wanted to purchase one. No snlcs at the New Orleans ll:04:l9 8 to B0b's testimony, if I'm ccrrcct, went tn Miki and asked
ll:0l:l8 9 seminar. Llmitcd sales at Denver seminar. It dldn't go ll:04:23 9 him — he was thinking about gcttlng into the laser
l l:0l :22 l0 along with what wc normally sold. The fact that Mlkl Smith l 1:04:26 10 business. Bob's web site that said hc started looking at
ll:0l :25 ll was showing a laser at our New Orleans seminar to JclT Olre 11:04:30 ll the business in 2001. If Bob is looking at the laser
ll:0l :28 I2 (phonetic) and Brett Brimhall asking them to come to work ll:04:32 12 buslnws in 2001, Miki ls an employee 0fErcl10nl¤. Th¤t's in |
l l:0l:34 13 with him and Bob while hc was working for mc. 11:04:37 I3 pretty good deduction in my opinion.
I l:0l:42 I4 Q. What evidence do you have that, in fact, these ll:O4:4l I4 Q. Okay.
l 1:01 :47 I 5 customers that were apparently diverted had purchased il ll:04:48 I5 All right. The last claim that Erchonia is I
l 1:01 :51 I6 laser from Bob Moroney? 1 l:O4:5l 16 alleging against Bob Moroney and his companies is under thc
l 1:01 :54 17 A. What cvldence do l have? l 1:04:55 17 Landham Act for — based on false statements. D0 you
11:01 :55 IS Q. Yep. 11:05:01 18 understand that?
11:01 :56 19 A. Bob Moroney's tcstlmony that he handed Mlkl Smith 11:05:03 19 A. Based on false statcmcutsl made?
11:01 :58 20 a prototype sometime in February- no, l'm sorry. somctlmc 11:05:05 20 Q. Analysis statements in Bob M0r0ncy's advertising.
11:02:02 21 in Aprll, Many. or June of whatever date he decided to plck 11:05:09 21 A. Ycs. Yeah. He made ia lot 0I` false statements ln
lI:02:O6 22 and that Mlkl was showing lt around at the seminars. l 11:05:11 22 his advertising. E
11:02:09 23 deducted |’rom that conversation with Mr. Moroney and 11:05:12 23 Q. All right. In your responsw to Moroncys {
l 1:02:1 l 24 M r. Gonzales that they were working before they left to take 11:05:29 24 discovery requests, the following statements are claimed to
11:02: I4 25 sales away from Erchonla and for their mm profit. ll:O5:39 25 be false and misleading by Emhonia. The first one is
Page 82 Page 84
ll;02:l7 I Q. Anything besides that? 11:05:47 l approved IRB study.
l|:02: I 9 2 A. N0. That's pretty good. 11:05:49 2 A. Yes.
l 1:02:24 3 Q. What evidence do you have that Bob Momncy was l 1:05:50 3 Q. Second one is more power than any other laser of
11:02:26 4 aware of a contract between Erchcnia and Smith? l l :05:52 4 its kind. Third one is works faster. Fourth one is works 3
11:02:34 5 A. l have no idea if Bob knew or not. 11:05:59 5 faster and morc cflicicntly. Next one is FDA registered.
11:02:37 6 Q. And you don't — you aren't aware of any evidence 11:06:07 6 Next onc is dclivcrs marc energy faster and more
l 1:02:40 7 that Bob knew that or nut'? 11:06: l0 7 cticicntly. Next one is our laser units are registered
l l:02:42 8 A. If lt was mentioned - I mean. It could have been 11:06:17 8 with the FDA and we are allowed to sell them. Last one is
ll:02:44 9 menrloncd. Did I say delinitlvcly that l told him? l dld 11:06:22 9 Steven Shanks, president 0fErch0nia, has threatened or ,
lI:02:48 10 not tell hlm dclinitlvely. l'm sure l did but! don'! know. 11:06:26 10 harassed Dr. Bob Stashko. Guy Amtcmziato, and Northwest L
l 1:02:52 l l Q. S0 thc only evidence you might have of that, of l 1:06:33 l I Cullcgc of Chiropractic.
I 1:02:57 l2 Bob M0r0ncy's awareness of a contract between Miki Smith and l 1:06:38 12 Are there any others?
l 1:02:59 13 Erchcnia, is your vague recollection that you might have l l:06:47 l3 A. That they are CE marked. Thut's probably all l
ll:03:06 I4 told him? 11:07:00 14 can think of. 1
11:03:07 I5 A. Well. he knew Miki was an employee ofErchonln l1:O7i)2 l5 Q. All right. What damages has Erchonia suffered as ·
11:03:10 I6 Medical and he knew he was working with him willingly. l 11:07:15 I6 a result ofthcsc alleged false and misleading statements? L
11:03:15 I7 would assume that most employees that slgn confldcntinllty 11:07:25 17 A. The kind of brand Erchonlu. Laser sales which - 1
11:03:20 18 agreements with companies, I would assume that Bob would 11:07:31 18 1 don't know how many laser salcs hc has. 1
11:03:23 19 have probably asked Miki that before they started this 11:07:36 19 Q. Anything else?
11:03:28 20 months previous. 11:07:36 20 A. To my name personally? I mean threatening my ,
11:03:29 21 Q. Anything clsc? 11:07:42 21 name. I thlnk the threat to my name ls worth a million .
11:03:30 22 A. That's lt. l1:07:46 22 dollars. l'm trylng to build a reputable company. Threaten F
11:03:37 23 Q. All right. Are there any other components to that 11:07:51 23 my reputation with a school, my name. I mean, he's numlng
l 1:03:41 24 damages calculation for the tonious interference with 1l:07:56 24 me personally. J
l l:03:43 25 contmct claim besides what wc'vc already talked about? ll:08:00 25 Q. Anything else? `
21 (Pages 81 to 84)
Canyon State Reporting, Ltd.
602.277.8882 602.277.5576 (Fax)
Case 2:02—cv—02036-I\/IHI\/I Document 289-11 Filed 08/22/2005 Page 4 of 4

Case 2:02-cv-02036-MHM

Document 289-11

Filed 08/22/2005

Page 1 of 4

Case 2:02-cv-02036-MHM

Document 289-11

Filed 08/22/2005

Page 2 of 4

Case 2:02-cv-02036-MHM

Document 289-11

Filed 08/22/2005

Page 3 of 4

Case 2:02-cv-02036-MHM

Document 289-11

Filed 08/22/2005

Page 4 of 4